State Sens. Sue Rezin (R-Morris) and Win Stoller (R-Germantown Hills) have released the following statements regarding Gov. JB Pritzker’s use of $450 million to pay back a portion of the state’s $1.8 billion borrowed under Title XII of the Social Security Act.
Pritzker announced a plan Tuesday to reduce a $1.8 billion Unemployment Insurance Trust Fund deficit by $450 million through an infusion of unemployment-related revenues.
Rezin and Stoller were the Senate Republicans’ chief Unemployment Insurance Trust Fund negotiators.
“While it is always good for the state of Illinois to make down payments on its outstanding debt, (Tuesday)’s announcement comes on the verge of the largest tax increase on businesses in Illinois history and does little to nothing to prevent it,” Rezin said. “No matter how the governor and his allies try to spin this, Illinois is one of only five states to still owe money on its UI Trust Fund loan. This $450 million already paid by Illinois businesses will have no impact on future taxes that they will be forced to pay if we don’t completely repay our loan. We should have and could have filled this hole with the unexpected money we received from the federal government. Instead, the majority party waited for that money to be depleted on other proposals and programs, including personal pork projects.”
The state of Illinois received $8.1 billion from the American Rescue Plan Act of 2021, which was designed to be used for COVID-19 relief, according to a joint press release from the senators.
“It is disingenuous and a disservice for the governor and Democratic lawmakers to be patting themselves on the back for (Tuesday)’s payment when they know that the burden of paying the remaining debt of $1.3 billion will be placed on struggling Illinois businesses,” Stoller said. “Illinois businesses did not create the lockdowns or give out billions of dollars of unemployment benefits to fraudsters that helped create our state’s nearly $5 billion UI Trust Fund debt. Now, Democratic lawmakers expect businesses to fix a problem of their own creation, which they could’ve easily fixed with the billions of dollars that the federal government provided them.”
Failure to repay the remaining UI Trust Fund debt by Nov. 10 will cause Illinois employers to lose Federal Unemployment Tax Act credit in 2023, according to the press release. The General Assembly is not expected to return to Springfield until the fall veto session Nov. 15.
According to Capitol News Illinois, the “deficit” figure represents money Illinois must repay to the federal government. It was borrowed under Title XII of the Social Security Act so the state could continue to pay unemployment claims amid the COVID-19 pandemic and is accruing interest at a rate of 1.59% annually.
While that balance exceeded $4.5 billion as the unemployment rate reached 16% at the height of the pandemic, lawmakers in March dedicated $2.7 billion in federal American Rescue Plan Act funding to pay down the deficit to the balance of roughly $1.8 billion. While Democrats lauded that action as a stop gap to allow for continued negotiations on the trust fund deficit, Republicans criticized the majority party for not allocating more of the state’s $8.1 billion in ARPA funds to the deficit.