CHICAGO – Gov. JB Pritzker and the Illinois Department of Employment Security will be making a payment of $450 million toward the remaining $1.8 billion borrowed under Title XII of the Social Security Act.
On Tuesday, Pritzker said due to continued historic low unemployment insurance claims, the unemployment insurance trust fund has capacity to make this payment without impairing the department’s ability to pay benefits.
This is the second significant contribution to the outstanding loan balance.
In March of 2022, Pritzker signed legislation which provided a $2.7 billion contribution from American Rescue Plan recovery dollars to assist the state’s unemployment trust fund. This payment cut the original $4.5 billion loan balance down to $1.8 billion.
“This contribution is direct evidence of labor market strength in Illinois,” Pritzker said. “With unemployment claims levels continuing to reach historic lows, the State’s Unemployment Trust Fund is able to contribute to the loan repayment and save Illinois taxpayers in interest costs.”
“This contribution is another significant step toward paying down the federal loan,” said IDES Director Kristin Richards. “The Department will continue to work with business and labor representatives through the agreed bill process to support this critical resource.”
Illinois has remained below the previously recorded low of just more than 70,000 continued claims for twenty consecutive weeks, unprecedented since the beginning of the series in January 1987.
State Republican lawmakers are criticizing the fund balance announcement, saying the Pritzker administration hasn’t gone far enough to pay down the UI Trust Fund debt.
In an emailed statement of response to today’s announcement, central Illinois Republican State Sen. Win Stoller (R-Germantown Hills), one of the Senate Republicans’ chief Unemployment Insurance (UI) Trust Fund negotiators, said, ““While it is always good for the state of Illinois to make down payments on its outstanding debt, today’s announcement comes on the verge of the largest tax increase on businesses in Illinois history and does little to nothing to prevent it.”
Republicans argue that with a massive wave of more than $8 billion in federal assistance due to the pandemic, Illinois employment security officials should have paid off the debt much sooner, alleviating the future burden for Illinois business owners.
Since the start of this year, Illinois has gained nearly 120,000 jobs statewide, with the most significant increases seen in the hotels and food services, manufacturing, healthcare and social assistance, construction, and transportation and warehousing industries.
Federal funds borrowed under Title XII were necessary to supplement the state’s unemployment insurance trust fund and provide economic relief to unemployed workers throughout the duration of the Covid-19 pandemic.
A plan to pay off the remaining balance on the loan will need to be developed through the agreed bill process.
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