SPRINGFIELD (WGEM) – A proposal to invest federal COVID-19 relief money in the Illinois Unemployment Insurance Trust Fund passed the Senate in a 39-17 partisan vote Thursday afternoon.
This vote took place less than 24 hours after House Democrats approved the plan to close the fund’s $4.5 billion shortfall. The bill is now on Governor JB Pritzker’s desk and he plans to sign it into law as soon as possible.
Illinois Democrats have said they want to use $2.7 billion of U.S. bailout funds to settle unemployment insurance fund debt, but the supermajority also took the opportunity to settle long-standing debt.
Senate Bill 2803 allocates $230 million from the state’s general revenue fund to the College Illinois program and $898 million to reimburse old group insurance bills for state employees. A separate sum of $300 million could go to the pension stabilization fund.
“They’re the last interest-bearing debt we have in the state,” said Sen. Linda Holmes (D-Aurora). “So we’re going to go ahead and fix that and it’ll save us a lot of money in interest payments.”
Some Republicans said they supported those parts of the bill, but wished it could have been passed as separate legislation. Most GOP members said they feared there was still a $1.8 billion shortfall in the unemployment fund.
“Illinois will still have the fourth-largest Unemployment Insurance Trust Fund deficit in the entire country,” said Republican Senate Leader Dan McConchie (R-Hawthorn Woods). “And this proposal will only take us to the point where we were in the Great Recession of 2008.”
Democrats worked for several months to reach an agreed bill with major business and labor groups. The Republicans also had members at the table.
Sen. Terri Bryant (R-Murphysboro) said she couldn’t vote for a plan that lets Democrats keep more than $1 billion in federal funds for new projects in Democratic districts.
“We’re voting to vote no because we’re taking crazy stuff that we’re funding to a crazy level instead of funding the only thing we should be funding right now after we pretty much destroyed our state by shutting down these businesses,” Bryant mentioned.
The Gray TV Illinois Capitol Bureau asked Democratic leaders if they would consider introducing two separate bills to gain more bipartisan support. Gov. JB Pritzker said it makes no sense to see Republicans voting against a bill that could help reduce debt and help businesses in the long run.
“On the Republican side, it looks like they might have more big business support,” Pritzker said Thursday. “And I would just say that businesses across the state, large and small, have benefited mightily from the work that has been done through this bill to reduce their tax burden.”
Democrats noted that Republicans should be willing to return to the negotiating table to work on solutions to pay off the remaining $1.8 billion in debt.
While Democrats call this sound fiscal management, Republicans have called the process a “sinkhole.” Still, Senate Speaker Don Harmon (D-Oak Park) said GOP members should go back to their districts and explain how they voted against such a proposal.
“For the first time ever, we are introducing $2.7 billion in new funds from outside, saving employers from tax increases and employees from benefit cuts. We should be proud of the work we do,” added Harmon.
Sen. Win Stoller (R-Peoria) said it would still create one of the “largest tax increases for employers in Illinois history.” He said the decision to use only $2.7 billion of ARPA funds to settle the debt would result in significant benefit reductions for unemployed Illinois workers. Stoller said the state would try to borrow money to fix the problem through bail and create more debt.
“It’s one, actually, that we know how to do in this state, and getting into debt,” Stoller said. “Even with our whole practice going into debt, we are even screwing it up. If we had decided to create bonds just six months ago and had gone that route, we would have faced an interest rate of around 1.5%.
Stoller and other Senate GOP members predict the state could see an interest rate of nearly 4% by the time the state kicks off the bond process this summer.
Democratic Comptroller Susana Mendoza was quick to praise her colleagues in both chambers for passing the plan, saying the legislation was something to celebrate.
“I would like to join Illinois business and civic groups in commending the General Assembly and Governor Pritzker for taking a big step in the right direction to responsibly pay $4 billion in US government bills. Illinois with the passing of SB 2803 today,” Mendoza said. . “I will continue to work with the Illinois congressional delegation on their efforts to expand the interest waiver on the Unemployment Insurance Trust Fund.”
Mendoza said extending this waiver could help taxpayers save about $70 million or more in interest.
The Illinois legislative session is scheduled to end on April 8.
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