SPRINGFIELD — Gov. J.B. Pritzker on Tuesday announced a deal that will allow the state to pay off the rest of its pandemic unemployment insurance debt, a payment that will save taxpayers an estimated $20 million in interest costs that would have been due next year.
Flanked by the Illinois Retail Merchants Association, the AFL-CIO and Democratic and Republican lawmakers, Pritzker announced the state had reached a deal via the agreed bill process to contribute $1.8 billion and add $450 million as an interest-free loan to the Unemployment Insurance Trust Fund.
The funds previously allocated to help pay down the debt will now go to the state’s Rainy Day Fund. The agreement is expected to pass during an upcoming legislative session.
“The resolution of this matter alleviates a burden looming over the heads of workers and businesses alike,” Pritzker said in his Springfield office. “And crucially, it’s been done with no reduction to the standard number of weeks of unemployment benefits and with no reduction to the amount of benefits a person can claim. We’ve restored our unemployment system to good working order after the most serious economic downturn since the Great Depression.”
At its height, the state was forced to borrow $4.5 billion from federal funds to provide relief for an unprecedented amount of unemployed Illinois workers during the COVID-19 pandemic.
Democratic lawmakers earlier this year agreed to use $2.7 billion in federal pandemic relief funds to cut into the pandemic unemployment insurance debt. Republicans wanted more — arguing more federal funds should have been used to soften the blow on businesses.
Republicans, business groups and labor unions were concerned over a Jan. 1. automatic deduction that would have been incurred if the federal debt had remained. The unemployment insurance fund is funded by a formula, with businesses replenishing it by paying more taxes, and benefits being increased or decreased in order to fund it.
Pritzker’s news conference in Springfield was only the second he’s held since winning reelection three weeks ago. After a bruising election cycle for Republicans, Pritzker said the agreement showed “we can find common ground despite our differences.”
Lawmakers are in Springfield for the second week of the fall veto session — and changes to the massive criminal justice package known as the SAFE-T Act are still anticipated. Although there had been rumblings lawmakers could potentially move the bill’s effective date from Jan. 1 back to June 1, Pritzker said he believed a trailer bill would be filed this week that would address proposed changes.
“I’m going to let the negotiators do the work here and come up with their presentation,” Pritzker said. “We’ve got our people in the room, as well. I don’t want to mess with that. But you know, I think there will be a good bill.”
Asked for specifics, Pritzker said language should be changed to clear up “misinformation” about the bill.
“It is very important that we address the misunderstandings, the misinformation that exists about the SAFE-T Act. Changes to the SAFE-T Act certainly would and should include making clear what the purpose of no cash bail is, making sure that we’re not having people across Illinois led to believe that they should be flinging the jail doors open on Jan.1,” Pritzker said. “That’s not what the legislation says.”
