Illinois House Democrats pass plan to use $2.7 billion in federal funds to reduce unemployment insurance fund debt

SPRINGFIELD (WGEM) — The Illinois General Assembly is working quickly this week to use one-time federal dollars to settle debt in the state’s unemployment insurance trust fund. House Democrats passed a plan late Wednesday to direct $2.7 billion from the U.S. bailout to the unemployment fund to fill the current $4.5 billion shortfall.

House Majority Leader Greg Harris (D-Chicago) noted that this bill also includes investments for retirement bonds, group health insurance and student aid.

$230 million of the general revenue fund is earmarked for the College Illinois program. Meanwhile, $300 million from the GRF could go to the state pension stabilization fund. An additional $898 million from the General Revenue Fund will go to the state employee group insurance plan.

Still, Republicans are upset that Democrats won’t fully cover the $4.5 billion hole in the unemployment insurance fund.

“It’s a lose-lose scenario,” said rep Tom Demmer (R-Dixon). “Taxes go up, benefits go down because the fund is in debt.”

Harris pointed out that the $4.5 billion is due to the federal government by Nov. 10. Yet an interest payment of nearly $80 million is due on September 30. Harris said Republicans have consistently talked about the unemployment insurance debt at press conferences, but they’ve never presented a solution of their own.

“Ladies and gentlemen, this is what fiscal responsibility looks like. Paying your bills, taking care of your obligations — that’s what it looks like,” Harris said. “I know it’s a sad night because you want the talking point, not the solution. But tonight we bring the solution.

Several Republicans booed and laughed at Democrats’ comments during the debate. Rep. Dan Caulkins (R-Decatur) joined several GOP members in saying there is still time to file an amendment and commit to contributing the full $4.5 billion to the fund.

“We have to pay this debt. We need to get out of debt,” Caulkins said. “We have to make our unemployment fund solvent because we are most likely going to have another race.”

This plan was adopted by a partisan vote of 68 to 43.

Democrats say there is still time to pay off the remaining $1.8 billion in debt before it increases with interest. MPs on both sides of the aisle continue to meet with business and labor leaders on agreed-upon bills. Negotiations will resume in the coming days.

“This process should be bipartisan,” Rep. Marcus Evans (D-Chicago) said. “It should be business, labor, Republicans and Democrats. This is what he will continue to advance. Hopefully future votes will take this into account. We have made great strides here in this state to help people.

Republicans argue that some states have decided to devote much of ARPA funding to their own deficits. Top Democratic negotiators explained that most states spend an average of 20 to 30 percent of their ARPA dollars on the unemployment insurance fund.

“In the Midwest, the closest state to doing what we’re doing is, I believe, Ohio, which has invested $1.4 billion in this trust fund,” said Rep. Jay Hoffman (D- Swansea). “So we’ve far surpassed any state in the Midwest in making this commitment.”

Now the bill must return to the Senate for consideration. Democrats say the plan must reach Gov. JB Pritzker’s office for approval this week to meet a federal deadline for the spending.

“Choosing to leave a $1.8 billion hole in this critical social safety net program – with no plan to pay off the remaining balance – leaves taxpayers responsible for future increases and does nothing to stabilize the fund in the event of a ‘other emergency,’ Rep. Ryan Spain (R-Peoria) and Sen. Sue Rezin (R-Morris) said.

Pritzker celebrated the passage of the bill Wednesday night and thanked the Democrats who worked at the negotiating table to make it possible. The governor said Illinois is getting its finances in order by paying down that debt.

“I’m disappointed that Republicans are putting politics ahead of fiscal responsibility as Democrats in the General Assembly take the lead in getting our fiscal house in order,” Pritzker said.

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