By: Ted Dabrowski and John Klingner

The record 178,000 Illinoisans who applied for jobless benefits last week are learning that the state’s unemployment trust fund is one of the nation’s least prepared. With just $2 billion set aside at the beginning of 2020, Illinois’ fund was the 4th-least solvent in the nation. 

Gov. J.B. Pritzker says the money Illinois received from the recent federal stimulus package dedicated to unemployment won’t be enough to cover needed payments. Illinois will have to borrow additional money from the federal government, the governor said.

Only the trust funds in California, New York and Texas were less prepared than Illinois, based on a solvency metric measured by the Department of Labor.

In contrast, 2nd-most solvent Oregon had more than $5 billion set aside to pay unemployment benefits, even though its labor force is a third the size of Illinois’.

The shortfall in Illinois’ fund comes as the state’s new unemployment claims rose from 10,000 to nearly 180,000 in the past two weeks. Across the nation, 6 million Americans applied for unemployment benefits this last week.

This isn’t the first time the Illinois trust fund has run out of money. In 2011, Illinois had to borrow $2.4 billion from the Feds to refill the fund’s coffers.

Illinois didn’t learn much from its experiences during the Great Recession. Before the Coronavirus crisis hit, the state had no rainy day funds set aside. Its pension debts were at record levels. It was billions behind on its payments to vendors. Now it turns out, the state can’t make unemployment payments without having to borrow from the Federal government.

Read more about the impact of the Coronavirus on Illinois:

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Susan
7 months ago

Illinois is asking for retired medical professionals to volunteer. This is ironic. One high-demand need at present is volunteers for nursing homes: housekeeping, laundry, kitchen and ADL patient care. Why? Regular staff is sick/scared/overworked beyond reason/at high risk for low pay/have their own families to protect/offered big money by temp agencies to go work at McCormick place for a couple months. Anyone volunteering for any of that? One impediment is that at-risk populations such as nursing homes cannot accept any random volunteers, there needs to be at minimum criminal background checks. So what cohort exists in Illinois that can afford… Read more »

Riverbender
7 months ago
Reply to  Susan

Why not ask the State, County, Township, and municipality workers who areb getting paid days off to volunteer and if they refuse…cut off their pay?

Rick
7 months ago

Never hear from Madigan anymore, is he a leader? I wonder if he goes to bed at night proud of the condition he’s put the state in?

Fed up neighbor
7 months ago
Reply to  Rick

Never hear or see the lieutenant governor Stratton either. She just fell off, not even by her best buddy Pritzker side at any of his news conferences, what gives

DantheMan
7 months ago

Does Illinois do anything correctly? Wouldn’t the country be better off without it?

Poor Taxpayer
7 months ago

Feel like you are being screwed? It is because you are.

Riverbender
7 months ago

Illinois doesn’t deserve loans.
The loans are a part of the problem.
Cut the State off once and for all.

Dan
7 months ago

Illinois will be insolvent when this is over. I mean truly insolvent and unable to function anymore without the pensions being bailed out or cut.

Rick
7 months ago

This state will let unemployment checks bounce long before they will let a pension check bounce. Even though the unemployment fund is funded with fiscal responsibility by compulsion by the private sector. And the pension funds are funded on borrowed money irresponsibly by a Ponzi scheme.

7 months ago

This is the trend now. The Governor supposed to be “successful business professionals”, lets see if he can balance a checkbook. Nevertheless, we have the new generations growing up Socialists or worse – SJWs who put the best interest of cunning and hostile illegals above the interest of their own families. I grew up in Socialism, and I recognize Socialism when I see it – Illinois is coming very close to it.

Freddy
7 months ago

Illinois taxpayers have been near insolvent for years. This is no different when the lottery was started that was supposed to help the schools but that money was put into the general fund. The lottery proceeds were never “In addition to” but in replacement of. The unemployment money was probably shifted to pensions or salaries or in a special account somewhere in the Cayman Islands.

Kane County Frank
7 months ago

You mean tax money isn’t actually going to fund one of the basic services of government? Who woulda thunk?

Poor Taxpayer
7 months ago

Why would this surprise anyone?
Illinois is the most mismanaged State in the Union.
Most people will not tell other people where they live because they are embarrassed and they should be.
Run for your economic life and tell anyone that asks where are you from, lie and tell them anything but Illinois.
Only the mentally challenged will stay in Illinois after this crisis is over.

Dee
7 months ago

Mr Pritzker needs to get it together and stop avoiding the inevitable. Also why did he do really dumb things like say the state would fund college tuition for LGTB
Community and why was he spending so much money in his first year in office? The people of Illinois are fed up with the property overtaxation. He has to solve the crisis via Bk and lower property taxes to less then 1% to even have people think about living here, staying here or moving here. Stop spending money you don’t have!!

DantheMan
7 months ago
Reply to  Dee

Dee, that’s good advice however states aren’t allowed to declare bankruptcy.

Dan
7 months ago
Reply to  DantheMan

They will be when this is over.

Admin
7 months ago
Reply to  DantheMan

I expect the talk about bankruptcy-for-states federal legislation will rekindle soon.

DantheMan
7 months ago
Reply to  Mark Glennon

I see 3 choices for the nation. A fed bailout, allow bankruptcy, or watch an entire state decay as it’s population relocates. I’m fine with the last 2 choices.

Poor Taxpayer
7 months ago
Reply to  Dee

Illinois is toast, DOA. The exodus will be huge when this is over. Only the mentally challenged will stay.

DantheMan
7 months ago
Reply to  Poor Taxpayer

I wish there was a way the nation could force the liberal voters of Illinois to stay in Illinois. That would be justice.

Mike Williams
7 months ago

How do governments in socialist/communist countries treat the common person? They distort and cover up the truth. How does the media in a socialist/communist country treat the common person? It’s knowingly tells them half truths and lies. What is the difference between a socialist/communist country and Illinois? Not much.

7 months ago
Reply to  Mike Williams

The difference is in the billionaire-owned media and technology corporations. The ignorant Democrat in Illinois cannot make the connection between the self-serving corrupt MSM, Social Media and State-run Socialist Propaganda. The multi-billionaires tell them to impose taxation upon themselves to “help the less fortunate” and the mentally ill Progressive Population does just that. They surrender their hope for a better life to feed the cunning, deceptive, the drug-addicted refuse, the criminal. Amazing.

DantheMan
7 months ago

The only question remaining is, “Is it already too late to get out?”

Hank Scorpio
7 months ago
Reply to  DantheMan

If you are a renter, no. If you own property or rely on a public pension, you are in a very precarious situation. I feel sorry for my fellow Illinoians who were sold the American Dream but did not read the fine print on state finances and pensions. Good luck folks.

mqyl
7 months ago
Reply to  DantheMan

One of the main attributes I look for in a state to where I may retire is long-term financial stability. In such studies, IL always ranks at or near the bottom of the 50 state list. I wonder if the relatively few people moving to IL are aware of what they’re getting into. Who would buy a house that’s not appreciating and already has very high property taxes that will increase over time at a rate higher than that of the cost of living or of family income?

Admin
7 months ago
Reply to  mqyl

Well, here’s one: A friend selling a house in Chicago just managed this week to get it under contract. Who is the buyer? A Chicago public school teacher. Buying makes sense if you are held harmless from all aspects of the current crisis and are clueless about economics.

James
7 months ago
Reply to  Mark Glennon

Chances are that you are more interested in the topic you’ve mentioned than they are. We all make our choice and reap both the benefits and harm of doing so. Whose to say what their reasons are really? I would’t necessary assume they are clueless; they might simply have priorities you’ve not been able to ascertain or imagine, perhaps.

mqyl
7 months ago
Reply to  Mark Glennon

Yep, I forgot. You always need State of IL employees or retirees buying houses in IL. If they stop doing so, IL’s population shrinks even more quickly, if that’s possible.

Mike Williams
7 months ago
Reply to  Mark Glennon

The knowledge difference between Wirepoint readers and the typical Illinois resident is easily overlooked. I still think the average resident knows things are bad in Illinois but has no concept of how bad.

FYI, I think it’s entirely possible that a Chicago public school teacher is clueless about economics. Actually, that kind of explains a lot.

Admin
7 months ago
Reply to  Mike Williams

Mike, you are so right when you say most Illinoisans know its bad but have no concept how bad it is. Ted and I have talked to many of the top civic, government and business people and you would be surprised how true it is for them, too. It’s a very serious problem. They think they know, but they really don’t. They are often surprised by what we show them and we are surprised that they are surprised. But they end up agreeing with us, in private at least.

Mike Williams
7 months ago
Reply to  Mark Glennon

If you and Ted struggle to convince people of the truth, imagine how challenging it is for the rest of us (without credentials) to convince anyone.

DantheMan
7 months ago

Comment deleted by self for being too harsh, even though well reasoned.

Poor Taxpayer
7 months ago

Solution, just run for your economic life. Leave Illinois to the greedy cops, teachers, and firemen.
Go to Florida just like all of the huge pensioners do.

Tom Paine's Ghost
7 months ago

How is this fund insolvent? Workers pay into this fund with every paycheck. As a business owner I pay into this fund every quarter. We have had a growing economy since 2014 and a booming economy since 2016. So with roughly six years of booming economy, workers and employers paying into the fund and few workers drawing from the fund should result in a surplus of money. How has the state of Illinois screwed the pooch on this?

Let me guess, Illinois politicians took these contributions and spent it on something else. How can that not be criminal?

Fed up neighbor
7 months ago

You hit the nail on the head, they raided the fund. But don’t worry are lazy ass states attorney won’t do sh-t. They figured nobody would ever notice, wrong caught red handed

NB-Chicago
7 months ago

Yup, there’s an unexplained mystery of where all the funds went? Was reading ides ran out of unemployment funds in 2008 and had to get a federal loan/bailout which they just paid off in 2017. And in mean time state should have raised funding requirements to replace finding.. but maybe were reluctant to do so as it would be yet another greated burden on ill employers

Old Spartan
7 months ago

I cant figure out who has been successful in filing a claim. There are three ways to file– on line, by phone, or in person at an IDES office. Six days in a row a friend has shown me how the on line filing portal shows “temporarily unavailable” or “Please try again at a later time”. None of the phone numbers are answered– busy signals all day long. And don’t we have a shelter in place order statewide telling us not to go out. Didn’t the state have at least 45 days warning that this surge was on the way… Read more »

Rick
7 months ago
Reply to  Old Spartan

That’s the basis of their cost saving plan! We won’t answer the phone!

Truth in Cook County
7 months ago

Does Illinois have to repay the Feds, or is the game to stick the Fed’s with the tab?

NB-Chicago
7 months ago

Why is illinois unemployment trust fund so low? I’ve read other articales that say it because the required contabution rates by employers are very low compared to other state….or ie, does illinois give employers a break on required unemployment contrabution rates because all the other taxes are so high to pay for the machine gravey train and gigantic wc settlements & lawyers claims..no moral hazard

long gone
7 months ago
Reply to  NB-Chicago

The start charges a very high unemployment rate relative to other states. One problem is that unions have a streamline way to file thought their union halls and union sectors have a higher unemployment rate in sectors than open shop companies during the so called good times. I ran a union construction company in Illinois for many years, paying over 8% was not uncommon due to the nature of the work. As a point of reference, the Tennessee rate ( where I moved the company) is half of Illinois. Also workman’s comp insurance is close to half the rate also