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Illinois unemployment insurance debt is becoming a hotter topic: Juice Springfield Memo

As Springfield prepares for a shortened term this spring, an issue that hasn’t received much attention beyond the Crain pages will come to the fore. In doing so, the state – and its employers and employees – will pay off a $ 4.5 billion debt from Illinois’ unemployment insurance program.

The debts are owed to the federal government. It was amassed at the height of the COVID pandemic, when initial jobless claims in a state with a normal workforce rose from about six million to more than 500,000 per month.

Unemployment has since fallen, with the Illinois unemployment rate now at 5.7%. But the state still owes Uncle Sam, and as hopes of Congress waning, the Feds are entitled to their money and about $ 2 million a week in interest.

This reality caught the attention of the Illinois Comptroller Susana Mendoza.

“I don’t like paying such high interest rates,” she told me on the phone. “We’ll probably have to pay it off.”

But how?

Mendoza says the state will likely need to tap into some of the roughly $ 3.2 billion in funding left over from the federal COVID relief act known as the American Rescue Plan Act of 2021, or ARPA.

Governor JB Pritzker has struggled, hoping the debt will be canceled, but it may weaken.

“We’ll go ahead and see what we can do at the state level,” said a spokeswoman.

The focus is now also on the fact that statutory reductions in benefits for employees and tax increases for companies automatically come into force, unless management and employees come to an agreement in an agreed accounting procedure. Sources on both sides of the table assume that at least initial talks are underway.

In any case, look for a solution to the problem, possibly within the proposed 2023 budget, which Pritzker will soon publish.

More on the UI situation: How will Illinois defuse this ticking time bomb?

More about public finances: Illinois is prepaying its $ 2 billion Fed loan

Legislators hope to be able to leave the city early this year, around April, which would allow them to start the campaign early in their new districts.

Legislators held a one-day session yesterday to resolve a number of open issues, including the passage of new forensic sub-district maps in Cook County and elsewhere in the state. This lawsuit was pending at the time of going to press yesterday evening, but is expected to pass.

Another treat: With Chicago Ald. Pat Dowell, 3rd, is stepping out of the running for the Illinois Secretary of State to run for the seat of retiring US Congressman Bobby Rush, and see that the race heats up on both sides.

In the hunt for the Democratic nomination, former state treasurer Alexi Giannoulias, the treasurer of the city of Chicago, Anna Valencia, and Chicago Ald remain. David Moore, 17. Vying on the GOP side is veteran State Representative Dan Brady and former Springfield Attorney John Milhiser, who reportedly has the support of GOP mega-donor Ken Griffin.

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