By MARK GRANT
I’m beginning to think Governor Pritzker doesn’t really care about the health and well-being of Illinois’ small businesses.
Unemployment in the state skyrocketed after the COVID-19 pandemic reached us a little over a year ago. Illinois’ jobless rate shot from 3.7% in March 2020 to 16.5% in April, and while the numbers have improved, but the rate is still at 7.1% — nearly twice what it was before the pandemic began.
The jump in unemployment has emptied the state’s Unemployment Trust Fund, forcing the state to borrow over $4 billion from the federal government. The loans helped Illinois get through one crisis, but it created another: How will Illinois pay that money back.
One solution that the Pritzker administration seems to like is raising taxes on employers. Hardest hit will be the tens of thousands of small employers in every industry across the state. This will damage local businesses and impact workers who could see smaller pay increases or fewer benefits as employers pay higher taxes to cover the billions owed.
There is a better solution, however.
Illinois stands to receive over $8 billion in federal aid for recovery costs created by the pandemic. The administration is thinking of contributing only $100 million toward the trust fund debt, but that will barely cover the first interest payment due this fall.
The governor’s Department of Employment Security has made it clear this will be an unprecedented financial burden on employers in Illinois. Many other states have already used federal pandemic recovery funds to pay some or all of their trust fund debt.
Using more of that $8 billion in federal money to repay our debt and shore up our unemployment trust fund will relieve some of the pressure on lawmakers to raise taxes on small businesses and other employers, making it easier for them to recover from the COVID-19 recession.
There’s something else the governor could do if he really wanted to help employers.
Governor Pritzker has refused to consider foregoing the $300 weekly federal unemployment supplement, and he won’t end his order waiving the requirement that beneficiaries have to be looking for work.
This is shortsighted and only makes things worse. Businesses are hiring and paying higher wages, but owners say hardly anyone is applying. The latest NFIB Small Business Economic Trends survey found that 44% of small businesses nationwide report having positions they can’t fill.
Last spring, businesses had to reduce hours and limit services because of the pandemic. This spring, it’s happening because businesses can’t find enough people to work.
Disregarding this impending financial calamity that will surely ruin vulnerable small businesses is unacceptable. Governor Pritzker and our leaders in the General Assembly have resources to prevent this from happening. They have plenty of warning. Now they must demonstrate the will to provide a financial lifeline to Illinois small businesses.