Illinois Senate sends debt repayment bill to Pritzker’s desk
SPRINGFIELD (WGEM) - A proposal to invest federal COVID-19 relief money into the Illinois unemployment insurance trust fund passed out of the Senate on a partisan 39-17 vote Thursday afternoon.
That vote came less than 24 hours after House Democrats approved the plan to address the fund’s $4.5 billion deficit. The bill is now on Gov. JB Pritzker’s desk and he plans to sign it into law as soon as possible.
Illinois Democrats said they want to use $2.7 billion from American Rescue Plan funds to address the unemployment insurance fund debt, but the supermajority also used this opportunity to address longstanding debt.
Senate Bill 2803 earmarks $230 million from the state’s general revenue fund for the College Illinois program and $898 million to pay off old state employee group insurance bills. A separate $300 million could go to the pension stabilization fund.
“They are the last interest-bearing debt that we have in the state,” said Sen. Linda Holmes (D-Aurora). “So, we’re going to go ahead and address that and it will save us a lot of money in interest payments.”
Some Republicans said they support those portions of the bill, but wished it could have passed as separate legislation. Most GOP members said they are worried there will still be a $1.8 billion deficit in the unemployment fund.
“Illinois will still have the fourth largest UI trust fund deficit in the entire country,” said Senate Republican Leader Dan McConchie (R-Hawthorn Woods). “And this proposal is only going to get us to the point that we were in the Great Recession of 2008.”
Democrats worked for several months to get to an agreed bill with top business and labor groups. Republicans also had members at the table.
Sen. Terri Bryant (R-Murphysboro) said she couldn’t vote for a plan that allows Democrats to keep more than a billion dollars in federal funds for new projects in Democratic districts.
“We’re voting to vote no because we’re taking some crazy stuff that we’re funding at a crazy level instead of funding the one thing that we should be funding right now after practically destroying our state by closing these businesses,” Bryant said.
The Gray TV Illinois Capitol Bureau asked Democratic leaders if they considered running two separate bills to have more bipartisan support. Gov. JB Pritzker said it doesn’t make sense to see Republicans vote against a bill that could help address debt and help businesses in the long run.
“On the Republican side, it seems like they have perhaps more support from big business,” Pritzker said Thursday. “And I would just say that businesses across the state, small and large, benefited mightily from the work that was done through this bill to reduce their tax burden.”
Democrats noted Republicans should be willing to come back to the negotiating table to work on solutions to bond out the remaining $1.8 billion in debt.
While Democrats are calling this strong fiscal management, Republicans called the process “a trainwreck.” Still, Senate President 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, outside money which spares employers a tax increase and spares employees benefit reductions. We should be proud of the work we’re doing,” Harmon added.
Sen. Win Stoller (R-Peoria) said this will still create one of the “largest tax increases on employers in Illinois history.” He said the move to only use $2.7 billion from the ARPA funds to address the debt will cause significant benefit cuts for unemployed Illinoisans. Stoller said the state will try to borrow money to get out of the problem through bonding and create more debt.
“That’s one, actually, that we know how to do in this state, and that’s going into debt,” Stoller said. “Even with all of our practice going into debt, we’re even screwing that up. If we had decided to bond just six months ago, and had gone down that path, we would be facing an interest rate of about 1.5 percent.”
Stoller, and other Senate GOP members, project the state could see an interest rate of nearly four percent by the time the state starts the bond process this summer.
Democratic Comptroller Susana Mendoza quickly congratulated her colleagues in both chambers for passing the plan saying the legislation is something to celebrate.
“I’d like to join business and civic groups around Illinois praising the General Assembly and Gov. Pritzker for a great step in the right direction to responsibly pay down $4 billion of Illinois’ bills with the passage of SB 2803 today,” Mendoza said. “I will continue to work with Illinois’ congressional delegation on their effort to extend the interest waiver on the Unemployment Insurance Trust Fund.”
Mendoza said extending that waiver could help save taxpayers an estimated $70 million or more in interest.
The Illinois legislative session is set to end on April 8.
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