Illinois isn’t only lagging the nation in recovering jobs from the pandemic, it’s also one of few states that has a large unemployment debt, leaving taxpayers on the hook for millions of dollars in interest. More interest payments could be on the way if the debt isn’t addressed.
Illinois Retail Merchants’ Association President and CEO Rob Karr said the state’s unemployment trust fund debt will be up to $5 billion by the end of the year.
“Interest began accruing on the borrowing that occurred under Title 12 on Sept. 6th,” Karr said. “The state will owe somewhere short of $10 million by the end of the year.”
If the debt isn’t paid by the end of the next year, the interest could be up to $60 million, depending on if any of the debt is paid off.
He said there are consequences beyond increased interest costs if the debt isn’t paid off.
“Certainly higher costs for employers, initially you would see some sort of benefit cuts for employees as well,” Karr said. “And under federal rules, the longer that debt is in place, the higher the employer taxes will go.”
Statehouse leaders should pay down the debt with about $5 billion in leftover federal COVID-19 aid, Karr said.
“We would like to see a significant portion of those monies used to either eradicate or significantly pay down that debt,” Karr said. “To date anyway, the governor has suggested that he doesn’t want to use any of the money for that.”
Gov. J.B. Pritzker’s office didn’t immediately respond when asked for comment. House Speaker Emanuel “Chris” Welch’s office also didn’t respond.
Illinois Senate President Don Harmon’s office said the issue is “under review.”
Originally published at The Center Square. Republished with permission.