By CAPITOL NEWS ILLINOIS

SPRINGFIELD – Lawmakers on Tuesday announced a bipartisan plan to use state revenues to pay down the remaining $1.4 billion in debt taken on by the state’s Unemployment Insurance Trust Fund amid the COVID-19 pandemic.

The unemployment trust fund is generally funded by the state’s businesses through insurance premiums collected via payroll taxes.

A $1.8 billion state cash appropriation – the funding backbone of the bipartisan agreement between business and labor – would be included in a supplemental funding plan to spend the current year’s anticipated budget surplus. That action won’t come until some time next year as lawmakers look to spend an estimated surplus of about $2.9 billion for the current fiscal year, which ends June 30, 2023.

Over the next five years or more, the agreement announced Tuesday is expected to save businesses from approximately $915 million in tax increases they would have otherwise seen had the state not taken any action.

That’s according to Rob Karr, president and CEO of the Illinois Retail Merchants Association, who was one of the lead negotiators on the business side of the bill.

Part of the agreement is expected to move through the General Assembly this week before lawmakers adjourn for the year. It would increase an employee’s “taxable wage base” – which is the amount of an employee’s wages for which an employer must pay unemployment taxes – by 2.4 percent for each of the next five years. It would also increase the target balance of the fund’s reserves from $1 billion to $1.75 billion.

It does not decrease the number of weeks or maximum amounts of benefits an unemployed person can receive.

It’s the final step in paying down approximately $4.5 billion in debt to the federal government that the state’s unemployment trust fund incurred since 2020, when the COVID-19 pandemic and associated stay-at-home orders shut down the state’s economy and sent unemployment rates skyrocketing.

Pritzker was flanked by several Republicans to announce the agreement between parties and business and labor interests.

Even with the latest announced action, Karr said, Illinois businesses are likely to see an increase of $114 million for the upcoming fiscal year. That’s because the state missed a Nov. 10 deadline that would have prevented it from becoming a “credit reduction state” in the eyes of the federal government.

What that means is a Federal Unemployment Tax Act tax credit for Illinois businesses will decrease by 0.3 percent, resulting in an increase of $21 in federal taxes per employee.

But, Karr said, if the actions announced by lawmakers this week become law, those increased tax payments from Illinois businesses will be directed to the state’s trust fund balances, rather than to the federal government.

Also as part of the agreement, the $450 million in state revenue to supplement the trust fund balance will be in the form of a no-interest loan. It is to be repaid over 10 years as a deposit in the state’s “rainy day” fund.

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OLD STATE CAPITOL: People walking through downtown Springfield on Monday morning looked up to an unusual sight – a helicopter hovering over the Old State Capitol, dropping a rope and lifting away the flagpole that sat atop the bronze-colored dome.

“We took off the flagpole of at the Old State Capitol today in preparation for a new automated one that will be going up probably in a few months,” said Troy Gilmore, assistant site superintendent for the Springfield State Historic Sites with the Illinois Department of Natural Resources.

The operation took fewer than 15 minutes and was part of an ongoing renovation project that has kept the historic building shrouded behind scaffolding for about two years. The project involves repairing roof leaks, repairing and replacing windows, and replacing portions of the columns known as “capitals” – the decorative portions at the top of Corinthian columns.

Gilmore said replacing the manually controlled flagpole with an automated one will improve safety for workers who raise and lower the flag to half-staff or full staff when occasions call for it.

The Old State Capitol, located a few blocks northeast of the current Statehouse, was used by lawmakers from 1840 to 1876. It was the Capitol when Abraham Lincoln served in the Illinois House and it is where he delivered his famous “House Divided” speech in 1858 after accepting the Republican Party nomination for the U.S. Senate.

Gilmore said that when the legislature left the building in 1876, it was purchased by Sangamon County, which operated it for the next 90 years, during which time it made several substantial changes.

“The most drastic change that the county made was in 1900, when they raised the building up 11 feet taller than it even stands today,” he said. “And that was to add another level of offices on the ground floor. So, after 1902 you walked straight into the building off of the street level, you didn’t even walk up the steps as you would have today.”

The state of Illinois purchased the building in 1966 and launched a three-year restoration project to return the building to its original state, a project that involved taking the building apart and rebuilding it piece-by-piece.

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to more than 400 newspapers statewide, as well as hundreds of radio and TV stations. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.