Today, Democrats in the Illinois House passed legislation, Senate Bill 2803, that will place a tax hike on jobs in Illinois. Despite knowing for months that Illinois faced a deadline to pay back a $4.5 billion debt in the Unemployment Insurance Trust Fund to the federal government, the Democrats chose to only pay back $2.7 billion of that debt.
“We’ve been warning Democrats for months that we face a deadline to pay back unemployment insurance debt to the federal government,” said State Representative Chris Bos (R-Lake Zurich). “We could use $4.5 billion in ARPA funds today to pay that money back and avoid a penalty, just like other states across the country have done. Instead, Democrats passed a bill that only pays off $2.7 billion of that debt so they can use the rest of the ARPA money for pet projects.
“Now, when we can least afford it, they are forcing a tax hike on jobs, cuts to future benefits and leaving the fund vulnerable to a future emergency. This is completely irresponsible.”
The COVID-19 pandemic led to the deficit in the state’s Unemployment Insurance Trust Fund that the state owes to the federal government. Until March 31, 2022, federal rules allow the state to deposit remaining federal ARPA money into the fund, of which the state has $6.9 billion that has not yet been spent. Since the Democrats’ legislation does not fill the complete $4.5 billion hole, the state faces interest penalties that will raise unemployment insurance taxes, making it a tax hike on jobs.