Dupage Policy Journal

Breakthrough Ideas CEO Jeanne Ives is slamming Gov. J.B. Pritzker and the state’s Democrats for backing a bailout out of public sector employee deficits, and prepaid tuition is a program run by the state.

Ives refers to a bill that according to her included plus-up payments, “with NO REFORM — to pension systems, employee retirement healthcare insurance systems for which nothing has been set aside, and then the real zinger, $250 million for the state’s prepaid tuition program. This program is bankrupt and should be closed.”

“End of last week, the Democrats passed SB2803, a bill that paid back a portion of the money we owe the federal government for funds borrowed to cover unemployment costs incurred from the COVID lockdowns,” Ives said in the Breakthrough Ideas weekly newsletter. “Read below about how this bill doesn’t actually pay back the full amount even though we have windfall revenues of $4.5 billion and in fact spends money on other items without any reform.”

The bill, SB2803, appropriated $2 billion in COVID relief funds for paying down the state’s debt to the Department of Employment Security for payment to the Illinois Unemployment Insurance Trust Fund.

“In both 2011 and 2017, the Illinois Prepaid tuition program was closed to new entrants because the program had insufficient funds to pay future obligations and state taxpayers were going to be on the hook for millions to cover the cost of future tuition from lackluster investment returns," Ives said. "This Chicago Tribune article from 2017 lays out the details. (I have copied it below in case you do not have a subscription.) It is worth reading. We cannot forget the policy debates that occurred, and were ignored, from the past.” 

Ives is concerned with how state businesses "could be left with a major tax hike and Illinoisans with fewer jobs.”

“When Illinois received billions of dollars in federal COVID aid, Gov. J.B. Pritzker’s administration had more than enough chances to pay off its $4.5 billion unemployment insurance (UI) fund debt to the federal government, but they didn’t," she said. "Instead, they spent most of that federal aid and ignored the unemployment fund issue altogether." 

Illinois Senate Minority Leader Dan McConchie (R-Hawthorn Woods) also panned SB2803 which appropriated $2 billion in COVID relief funds for paying down the state’s debt to the Department of Employment Security for payment to the Illinois Unemployment Insurance Trust Fund. 

Illinois House Majority Leader Greg Harris announced the bill only days before it blitzed through the General Assembly in a partisan effort. The payments "represents an agreement between" House and Senate Democratic leaders and Pritzker on "what the state of Illinois would fund toward solving that $4.5 billion problem," Harris said. 

The state is one of many using the one-time American Rescue Plan Act for bailouts. The plan provided for $86 billion in such bailout funding. Critics have said the funding is really going to bail out failing public union pension plans.