SPRINGFIELD, Ill. (WCIA) — The state is paying off a debt it racked up from the pandemic.
Governor Pritzker announced Tuesday he will pay back $450 million of the state’s loans from the federal unemployment trust fund.
Pritzker credited Illinois’ record low number of unemployment as the reason the state can use $450 million to pay off the debt. Illinois’s unemployment rate was 7% in August.
“This contribution is direct evidence of labor market strength in Illinois,” said Governor JB Pritzker. With unemployment claims levels continuing to reach historic lows, the State’s Unemployment Trust Fund is able to contribute to the loan repayment and save Illinois taxpayers in interest costs.”
Legislators said any payoff to the debt is good for the state’s residents.
“The more we stabilize the finances of Illinois, the more we can help the working class and the poor,” Rep. Marcus Evans (D-Chicago) said.
The state had a $4.5 billion loan at the start of 2022 from outstanding unemployment loans, but paid off $2.7 billion using American Rescue Plan Act dollars in March. Several Republicans in Illinois criticized Democrats for not paying off the entire loan back in March using ARPA funds.
According to the Federal Unemployment Tax Act, an outstanding balance to the federal government will affect businesses by increasing the federal unemployment tax rate for businesses in the state. At a news conference Tuesday, Pritzker said he believed the state could pay off the rest of the debt before the end of the year.