Illinois officials still mum on pandemic unemployment fraud totals

[January 19, 2022]  By Greg Bishop

(The Center Square) – While other states have revealed how much fraud there’s been in their unemployment system since the start of the COVID-19 pandemic, Illinois officials have yet to reveal such information to taxpayers. But some available data indicates its at least $430 million.

Following Gov. J.B. Pritzker's months long stay-at-home order in the spring of 2020, the state’s unemployment filings skyrocketed. The state borrow money from the federal government to help pay for the required benefits, and $4.5 billion in debt is still owed, costing taxpayers tens of millions in interest.

Illinois Manufacturers’ Association President and CEO Mark Denzler said something has to be done with the debt.

“Forty-two states have balanced their [unemployment insurance] trust funds,” Denzler told The Center Square in December. “Illinois has not done so.”

If the debt isn't addressed, it could lead to increased taxes on employers and decreased benefits for the unemployed.

It’s possible the state could use billions in unspent federal tax dollars the state received for COVID-19 relief, but such an effort hasn’t transpired.

State Rep. Tim Butler, R-Springfield, said taxpayers still don’t know how much fraud there’s been.

“How we cannot track that, in today’s day and age where everything is tracked, all these cards that have gone out that are electronically activated and all that, we should be able to track that stuff and nail these people that are committing this fraud, and prosecute them,” Butler told WMAY.

Oregon reported $24 million in unemployment fraud in 2020. The amount was much greater in Michigan, where the state reported $8.5 billion in suspected fraudulent claims during the pandemic.

In Illinois, state officials haven’t announced fraud totals. The Illinois Department of Employment Security didn’t respond to messages seeking a status of how much fraud there’s been, or when such information will be available.

In early 2021, IDES said they’ve stopped 1.7 million fraudulent claims. In the summer, an Illinois Auditor General report covering the first few weeks of the pandemic showed nearly $155 million in improper payments.

“Failure to accurately document PUA eligibility resulted in potentially ineligible claimants receiving benefits totaling $154,906,354,” the audit summary said.

From the third quarter of 2020 through the second quarter of 2021, a spreadsheet from the U.S. Department of Labor shows Illinois’ fraud rate for unemployment payouts was 8.4% of $5.1 billion paid out, an indication of nearly $430 million in fraud during that time period. It's unclear when that report was published. A spokesperson from USDOL couldn't immediately be reached.

Butler is frustrated there’s no apparent action at the statehouse to address the issue.

“In the General Assembly, we should be in session trying to get a handle on programs that we can [enact] to address this and really we’re doing nothing about it,” Butler said. “I think it does start with the Department of Employment Security coming out and being forthright with the people of Illinois with how much fraud there is and what the program is going to be to try to tackle this situation.”

While Illinois House Speaker Emanuel “Chris” Welch, D-Hillside, told Crain’s Chicago Business he expects some kind of deal to address the $4.5 billion in unemployment debt, his office didn’t respond to messages Tuesday about whether there’d be hearings into how much fraud there’s been.