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 Illinois House members voted on
party lines to approve a plan using funds from the federal American Rescue Plan
to pay down $2.7 billion of Illinois’ $4.5 billion in unemployment debt.
Illinois took out a $4.2 billion federal loan when unemployment funds were
depleted at the peak of the pandemic. State leaders missed the deadline to repay
it in September 2021, triggering $60 million in annual interest.
Failing to repay the remaining balance means taxpayers are on the hook for an
additional $100 million in interest.
Republican lawmakers want to avoid that penalty and pay off the entire loan,
arguing there’s nearly $7 billion in relief money to do so. State Rep. Mark
Batinick, R-Plainfield, said there needs to be a plan to repay the remaining
debt.
“It has to be plugged by either tax increases on jobs or benefit cuts on people
who get unemployment insurance,” Batinick said.
House Democrats contend the $2.7 billion is a step in the right direction to
repaying the debt before the deadline Nov. 10.
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“In the Midwest, the closest state to doing what we
are doing is, I believe, Ohio which put $1.4 billion into this trust
fund,” said Rep. Jay Hoffman, D-Swansea. “So we greatly have
exceeded any state in the Midwest by making this commitment.”
Except Ohio repaid the loan in full before the September deadline. If there’s
still a balance on the loan come Nov. 10, Illinois businesses will face an
increase in federal payroll taxes until the balance is paid off. Ohio Gov. Mike
DeWine prevented any interest by paying back the loan before the deadline.
“By repaying this loan in full, we ensure that Ohio businesses won’t see
increases in their federal unemployment payroll taxes,” DeWine said in September
2021.
The Illinois General Assembly is set to adjourn April 8. The Senate has until
then to approve the plan before it goes to Gov. J.B Pritzker for his signature.
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