SPRINGFIELD, Ill. (IRN) — Illinois taxpayers are about $450 million less in debt to the state’s unemployment trust fund, but some worry banking on job expansion to pay off the remainder may be a fool’s errand.
The state had already used about $2.7 billion of federal COVID-19 relief tax dollars to pay down some of the $4.5 billion unemployment trust fund debt. The state racked up debt after economic restrictions Gov. J.B. Pritzker enacted during the COVID-19 pandemic led to surges in unemployment filings.
For the remaining $1.8 billion, Pritzker on Tuesday announced another $450 million was being paid.
“Frankly as the economy continues stabilized, we believe that we’ll be able to reduce that even more and the agreed bill process working with the legislature, we’ll be able to pay that off by year end,” Pritzker said at a news conference in Chicago.
The remaining debt that accumulates interest is now about $1.3 billion.
State Rep. Dan Ugaste, R-Geneva, said the most recent payment comes from taxes paid into the trust fund, not from federal COVID relief dollars. He said that’s problematic as economists are predicting a recession ahead, indicating slow or no job growth.
“Which means that the money they’re using which should be there in a reserve then is not going to be there in the event of a recession,” Ugaste told The Center Square.
Ugaste said the state should use the remainder of its federal COVID-19 relief tax dollars to pay down all of the trust fund debt. He criticized the Democratic majority for instead using those federal dollars elsewhere.
Nationwide, a recent federal report shows more than $45.6 billion of unemployment benefits were paid out fraudulently. However, the amount Illinois paid in fraudulent benefits is unknown. The Illinois Auditor General recently indicated there was a contingent number of $1.8 billion in fraud from the federal program in Illinois. However, due to poor internal controls at the state unemployment agency, the auditor said they were “unable to extend our auditing procedures sufficiently to determine the extent to which the financial statements may have been affected by these conditions.”
The governor’s office didn’t immediately respond to how much fraud there’s been, or how to get that money back. Ugaste said that’s unacceptable.
“We have an idea of the federal amount from the Auditor General’s report on how much federal money went out, but we have no idea how much of our own money went out as fraud,” Ugaste said.
Something has to be done with the debt, Ugaste said, because next year a so-called “speed bump” kicks in that could increase taxes on employers, reductions of unemployment benefits or both.
Pritzker said lawmakers could come back in the fall session after the Nov. 8 election to deal with the rest of the unemployment trust fund debt.
By GREG BISHOP for the Illinois Radio Network