Joined by a bipartisan group of lawmakers, Gov. JB Pritzker announced Tuesday an agreement to rid the state of its unemployment insurance loan debt.
The $1.36 billion in Unemployment Trust Fund debt will be eliminated through a contribution of $1.8 billion in state funds where the extra $450 million will be an interest-free loan to be repaid over the next 10 years.
The investment allowed the state to clear the debt that grew to as much as $4.5 billion during the COVID-19 pandemic, Pritzker said, calling it a fiscal win for Illinois businesses and residents.
“We’ve restored our unemployment system to good, working order after the most serious economic downturn since the Great Depression,” the governor said during his first visit to the state Capitol since his re-election.
That downturn forced the state to borrow $4.5 billion from the federal government, of which $3.1 billion was repaid.
The agreement would increase an employee’s “taxable wage base” – which is the amount of an employee’s wages for which an employer must pay unemployment taxes – by 2.4 percent for each of the next five years. It would also increase the target balance of the fund’s reserves from $1 billion to $1.75 billion.
The final payment eliminates the debt while maintaining no reductions to the number of weeks and amount of unemployment benefits an unemployed person can receive.
Three weeks have since passed the contentious midterm elections, which lawmakers on both sides said made the bipartisan agreement all the more important.
“In my brief tenure as Senate president, what I’m most proud of is the work