SPRINGFIELD — Thanks to the leadership of the Illinois Senate Democratic Caucus, the state will soon see a bipartisan plan to eliminate pandemic-related unemployment debt and protect benefits for workers.

“In my brief tenure as Senate President, what I’m most proud of is the work we’ve done to restore fiscal stability, said Senate President Don Harmon (D-Oak Park). “This agreement is yet another step forward. I applaud everyone involved for coming to the table with workable ideas and the desire to be part of a solution.”

The unemployment trust was forced to borrow $4.5 billion in federal funds to provide economic relief to an unprecedented number of unemployed workers throughout the COVID-19 pandemic. This payment is the third significant contribution to the outstanding loan balance. $2.7 billion was contributed in March, and $450 million in September from the unemployment fund itself due to ongoing historically low unemployment claims.

“This action is just the latest building block in our efforts to improve the financial status of our state,” said State Senator Linda Holmes (D-Aurora). “By paying what we owe and continuing to pass responsible budgets, our state’s fiscal status only continues to improve.”

Over $1.8 billion in state funds will be contributed to the unemployment insurance trust funds under legislation agreed upon by all four caucuses and representatives from business and labor industries. Of those funds $1.36 billion will pay the remaining federal loan balance borrowed under Title XII of the Social Security Act. The remaining $450 million will be placed into the trust fund from state funds as an interest-free loan. This will replenish the fund for the future, and protect benefits for working families.

“Responsible fiscal decisions and new lows in unemployment claims have put our state in an advantageous position,” said State Senator Bill Cunningham, a Democrat who represents portions of Chicago and the Southwest Suburbs. “Thanks to the collective work of so many, our budgets are balanced, and we have the opportunity to fully pay down our debt in a timely manner.”

This agreement will save taxpayers an estimated $20 million in interest costs and preserves hundreds of millions of dollars in future federal tax credits for Illinois Employers. The payment will strengthen the state’s trust fund, alleviate a burden looming over businesses, and ensure that there are no reductions in both the standard number of weeks of unemployment benefits and the amount a person can claim. The agreement is expected to pass via bipartisan legislation during upcoming legislative sessions.

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