After a two-year pandemic-incurred debt in the state’s unemployment fund, Illinois lawmakers have passed a bill to pay off a portion of that debt using federal American Rescue Plan Act dollars. The bill passed through the House on Wednesday evening and passed the Senate on Thursday afternoon.
Republicans say the bill does not go far enough to pay the state’s debts, and unanimously voted against it in both chambers.
Capitol News Illinois reported Wednesday evening that the bill, passed along party lines in the House, allocates $2.7 billion in federal American Rescue Plan Act (ARPA) funds to pay down roughly two-thirds of the state’s outstanding $4.5 billion Unemployment Insurance Trust Fund debt. The remaining $1.4 billion allocated by this bill is split between pensions, unpaid group health insurance bills, and the College Illinois program.
The pension spending would create $1 billion in savings to the state’s pension system over its life, while the group health insurance payments would save over $100 million in interest and the College Illinois payment would create a $75 million savings, according to estimates from House Democrats, reported by CNI.
State Sen. Win Stoller, R-Germantown Hills, led the GOP charge against this bill on the Senate floor Thursday afternoon, where he repeatedly called the bill a “train wreck.”
Stoller argued that if the state has the money to pay off the Unemployment Insurance Trust Fund in full, it should do so, rather than appropriate the funds elsewhere. Stoller shared the views of House Republicans who, as Capitol News Illinois reported, urged reallocating other ARPA funds – particularly a $1 billion sum allocated last year to capital projects – to pay down the entire debt and stave off the negative consequences for employers and workers.
"We are trying to pass a bill that does not come close to fixing this problem and we still have no agreement in place. There is still no plan,” Stoller said of the remaining unemployment deficit.
Joining Stoller in voting against the plan were Republican state Sens. Sally Turner and Jason Barickman, who represent parts of Bloomington-Normal. Democratic state Sen. Dave Koehler of Peoria voted in favor.
In a press conference Thursday afternoon, after the bill had passed both chambers, Republicans again described the bill as inadequate for the Illinois economy. It has three possible consequences, Stoller said, to “which voters must hold Democrats accountable.”
“We're facing the possibility of one of the largest tax increases on employers in Illinois history. We're facing the possibility of significant benefit cuts to people who need them most: unemployed workers. And we're facing the possibility of trying to borrow our way out of this problem with additional bonding debt,” said Stoller.
Republican lawmakers, while calling to pay off the trust fund in full, said they blamed Pritzker for the COVID-19 shutdown that forced businesses to close, and the resultant increase in workers needing unemployment benefits over the past two years.
In a later press conference, Democratic leaders from both chambers joined Gov. JB Pritzker to refute these claims. Senate President Don Harmon, D-Oak Park, said the unemployment allocation in particular benefits both small business and unemployed workers.
“For the first time ever, we are introducing outside money into the unemployment insurance system. Every dollar that we invest in that from the outside of the system spares the dollar tax increase or reduction in benefits. And we've invested $2.7 billion to protect employers and employees from those sorts of cuts,” said Harmon.
Pritzker said that he would sign this bill into law “as soon as it reaches [his] desk,” which he says he hopes will be by the end of this week.
“I’m disappointed that Republicans are putting their politics ahead of fiscal responsibility while Democrats in the General Assembly are taking the lead to put our fiscal house in order,” Pritzker said in a statement.
