As Gov. J.B. Pritzker announced plans to appropriate $1.8 billion dollars to cover the state’s unemployment trust fund debt, the question remains of how much fraud took place.
After months of negotiations in working groups throughout the year, an agreement was announced in November out by representatives from business, labor and members of the General Assembly. The state still owes over $1.3 billion dollars that would have hit taxpayers with an additional $20 million dollar interest payment next September.
The remaining $450 million will be placed into the trust fund from other state funds as an interest-free loan. Then, according to a news release, funds will be deposited directly into the state’s rainy-day fund as the loan is repaid over the next ten years.
“We have a good agreement,” said state Rep. Dan Ugaste, R-Geneva. “It’s good for labor, it’s good for business, it’s good for the people of the state of Illinois.”
For months, Republican lawmakers and business leaders have been calling on the state to repay the loan to avoid paying interest. Rob Karr, president and CEO of the Illinois Retail Merchants Association, said this agreement is crucial for Illinois businesses.
“It will ensure greater stability in the unemployment insurance systems, and means Illinois employers will face at least $900 million less in taxes over five years than they would have otherwise,” said Karr.
Unemployment spiked during the early weeks of the pandemic after the governor issued stay at home orders and limited economic activity by prohibiting in-person service for businesses he declared nonessential.
A federal report said more than $45 billion has been stolen in the U.S. from fraudulent unemployment claims, but the state of Illinois still isn’t revealing how much was stolen.
“Let’s be clear why we are here today. We are here because Governor Pritzker locked down our economy creating a raid on the Unemployment Insurance Trust Fund we have never seen before,” said the Illinois Freedom Caucus in a statement. “We are also here because JB Pritzker could not figure out how to stop fraud and waste as the state paid out $2 billion in fraudulent unemployment claims.”
The final plan is expected to be approved during the final session days early next month, just before the end of the current 102nd General Assembly and the beginning of the 103rd General Assembly Jan. 11.
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