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State OKs plan to extend jobless benefits

SPRINGFIELD – The Illinois Legislature and Gov. Pat Quinn scrambled this week to keep unemployment benefits flowing for about 44,000 people in the state.

By Andrew Thomason

SPRINGFIELD – The Illinois Legislature and Gov. Pat Quinn scrambled this week to keep unemployment benefits flowing for about 44,000 people in the state.

Without a legislative plan, which Quinn signed shortly after it passed out of the Legislature on Thursday, emergency unemployment benefits would have stopped in May for 32,000 people, and in June for another 12,000 people, according to Greg Rivara, spokesman for the state's Department of Employment Security.

The federal government allowed states to change how it determines who is eligible for extended unemployment benefits because of the recession.The change in eligibility makes benefits available to people for a longer period.

"Clearly, the state is moving in the right direction, economically speaking. What also is clear is that this recovery has not touched every doorstep. We're talking about a group of people whose doorstep the recovery has not touched," Rivara said.

The plan also diverts money from a specific fee businesses pay the state in regards to unemployment insurance to cover an $80 million interest payment on a $2.9 billion loan from the federal government.

Every state borrowed money from the federal government to pay growing unemployment costs during the recession, according to the Department of Labor. Illinois is one of 32 states that have yet to pay back the loans.

Illinois needs to pay by Sept. 30, or the federal credits that businesses receive will be rolled back and used to make the payment.

"The business community very much has a vested interest in coming up with a short-term solution," said Kim Clarke Maisch, Illinois director at the National Federation of Independent Businesses.

The state made a similar payment earlier this year.

The reason for the relative speed that this plan went from legislation to law? Employers only pay unemployment insurance taxes on the first $12,470 an employee earns, making the checks from businesses early in the year much larger than any others.

State Rep. Frank Mautino, D-Spring Valley, said the legislation had to be signed into law Thursday to use money from those checks for the $80 million interest payment.

He and others said what happened Thursday was just the first step in a two-step process.

"The bigger issue, and probably the more difficult issue to negotiate, is going to be taking a look at the deficit within that fund itself where we're looking at a $2 billion problem," Mautino said.

Negotiations are taking place behind closed doors between the state, businesses and unions to figure out what combination of unemployment benefit cuts, larger contributions from businesses, and bonding might be used to pay back Washington, D.C.

It'd be nice if the state didn't have these issues to deal with, but they are problems that are a symptom of a sick economy healing, Rivara said.

"Had we not had falling unemployment rates for the past 13 months, we wouldn't be faced with these decisions," he said.

In fact, local unemployment numbers released Thursday show that the unemployment rate dropped in every Illinois county for the third month in a row. That is the longest stretch all counties' rates have dropped since statistics started being collected in 1976, according to Rivara.

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