Illinois Democrats Praise Paying $4 Billion Bill; GOP Says Jobless Fund Shorted – NBC Chicago
Springfield Democrats celebrate the approval of legislation that wipes out $4.1 billion in debt.
In less than 24 hours last week, lawmakers and Gov. JB Pritzker agreed to a package that dramatically cuts the state’s tab in the pandemic-plagued Unemployment Insurance Trust Fund, wipes out $898 million of unpaid employee group health insurance obligations, sets up $230 million — the state’s missing portion of the College Illinois savings program — and pumps an additional $300 million into the retirement program at short term.
“We’re dealing in a day with what took years and years to build,” Democratic Majority Leader Greg Harris sang during the House debate on a major boost of the state spending plan proposed by Pritzker – paying overdue bills.
They took care of itbut not without substantial help from the federal government and the $8.1 billion it provided to Illinois through the American Rescue Plan Act of 2021. Nearly two-thirds of arrears reduced – 2, $7 billion — is coronavirus cleanup funds from Washington, intended to shore up the unemployment account, which is $4.5 billion in the hole.
Lawmakers meeting with business and union representatives must find another $1.8 billion just for revenge. This likely means companies, which fund the program through a conventional tax, will pay more and workers will sacrifice some of the country’s most generous benefits in terms of the amount of money or time they are paid. .
Republicans, who voted against the measure, questioned why more ARPA money is not being used to mitigate the impact on businesses whose workers are potential future beneficiaries.
“What happens when our unemployment insurance fund is in debt? Two things,” said Deputy Minority Leader Tom Demmer, a Republican from Dixon. “One, a significant tax increase on every job in the state of Illinois and two, a reduction in benefits for every worker in the state of Illinois. It’s a lose-lose scenario. Taxes are rising. Benefits are diminishing.
The GOP has a simpler solution. Use ARPA funds to fill the whole hole — an idea they floated a year ago when most states were fixing their unemployment fund problems. Republicans say $4.5 billion isn’t enough because it still leaves the account empty. The generally accepted target balance of the unemployment insurance fund is $1 billion. It was around $1.2 billion at the start of the pandemic, according to Demmer.
The amount available to fix the problem varies according to GOP critics. Demmer said $6.9 billion in ARPA money was unspent. On Thursday in the Senate, Minority Leader Dan McConchie of Hawthorn Woods said up to $16.7 billion was available by pooling federal relief allocations and a real windfall from unanticipated tax revenue increases. states.
But Pritzker’s Office of Management and Budget says that even if the money is on the books, that doesn’t mean it isn’t planned. OMB records show that statutory appropriations, including those expected for the coming year, leave only $800 million.
“I want to remind everyone how the rest of the federal dollars … were used: to keep daycare centers open, to keep people at home, to provide money to small businesses on the brink of disaster, many of which were closed from the federal small business loan program,” Pritzker said.
Of course, $1 billion was also set aside for capital construction projects chosen by Democrats, the spendthrift Republicans were quick to publicize when debating the legislation.
The pandemic’s damage to the fund is more than double what it was in 2008-09, when the Great Recession dealt a $2 billion hit to the account. A chief negotiator on the issue then and now, Democratic Representative Jay Hoffman of Swansea, said businesses had been hit by debt after the Great Recession. They covered it by borrowing money from government bond sales, which took years to pay off.
For a single person who was working full-time, current unemployment benefits are just under half the previous salary – capped at around $480 a week – and last for 26 weeks.
Democrats, including Senator Linda Holmes of Aurora, the Senate negotiator, said the $2.7 billion down payment was critical to fueling the talks and provided substantial protection against further sacrifices.
“We are working … to protect employers from higher taxes and to prevent employees from losing much-needed benefits,” Holmes said. “As we prepare for the work ahead, the proposed solution reduces attention and provides a solid starting point for business and constructive negotiations.”