U.S. Reps. Darin LaHood (R-IL) and Kevin Brady (R-TX) are urging the State of Illinois to pay back federal unemployment trust fund loans taken out during the pandemic.
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“Illinois is among only four states that have not yet acted to eliminate outstanding state unemployment trust fund account loan balances. Without repayment, Main Street businesses are at risk of facing higher taxes that will undercut job creation and drive prices higher just as families and small businesses are struggling with record-high inflation and a looming recession, the Republican lawmakers wrote in a letter to Illinois Gov. J.B. Pritzker.
The lawmakers urged Pritzker to address this delinquency promptly by tapping into the state budget surplus or applying for federal coronavirus aid. LaHood and Brady pointed out that if the states don’t repay these loans, employers are at risk of seeing higher taxes.
Specifically, the outstanding loan balances mean businesses in Illinois could face a Federal Unemployment Tax Act (FUTA) tax credit reduction – resulting in a FUTA tax increase. Thus, employers could see an increase in their net federal unemployment taxes in 2023, with the maximum rate going from $42 per covered employee up to $63 per employee.
LaHood and Brady, the ranking member on the House Ways and Means Committee, also sent similar letters to governors in California, Connecticut, and New York.
