Illinois’ Unemployment Insurance Trust Fund has deficit of more than $4 billion. This deficit, which piled up during the 2020-21 COVID-19 pandemic and associated spike in unemployment insurance (UI) payments, is money owed to the United States Treasury. The federal Treasury loaned the Illinois UI system the money needed to pay unemployment benefits, and the UI system promised to pay the money back. These payments will have to be made through higher UI taxes on employer paychecks, lower benefits paid to future Illinois jobless workers, or both. The Institute of Government and Public Affairs (IGPA) at the University of Illinois has examined the reason for this deficit, and this week submitted a report on the large UI deficit.
The IGPA found that Illinois’ UI deficit is among the largest such debts owed by any state in the U.S. This was the consequence of two separate forces that operated in tandem with each other. First, Illinois, prior to the pandemic, practiced a UI policy that handed out benefits without saving enough money to continue paying out these benefit levels in the event of a severe recession or downturn. Secondly, when the COVID-19 pandemic hit, Illinois, for structural reasons, was hit harder and posted higher unemployment numbers than most other U.S. states. This higher unemployment level led to more Illinois residents getting laid off and qualifying for benefits.
In addition to legitimate benefit qualifiers, much of this $4 billion may have been paid out to persons who did not actually qualify for benefits. In some of these cases, money may have been paid out to financial accounts that did not represent real people. Many reports have come in of identity theft in Illinois, the setup of fake Illinois “unemployed” identities, and the payment of Illinois UI money to fraudulent accounts. The U.S. Department of Labor has criticized Illinois for failing to publicly compile or report data on these fraudulent payouts. The Illinois Auditor General has estimated that the Illinois UI system may have paid out as much as $1.9 billion during the COVID-19 pandemic to fraudulent accounts. Much of these payments were made to fake accounts that had stolen the names of real Illinois residents. The IGPA report on the Illinois UI deficit was released on Thursday, August 18.
AGRICULTURE
Current crop report confirms healthy status of Illinois corn, beans. The U.S. Department of Agriculture’s crop report for early August confirms that our fields of corn and soybeans are on course to generate good-to-excellent Year 2022 returns for Illinois farmers. For corn, 73% of the field conditions were rated good-to-excellent (51% good, 22% excellent), paced by warm temperatures and, in some regions, drenching late-summer rainfall to bring the corn from silk into dough. For soybeans, 69% of the fields were rated good-to-excellent (50% good, 19% excellent), with 73% of the beans setting pods. All of these figures are as of Sunday, August 14.
The heavy rains of early August have caused some property damage in specific regions of Illinois, including southeastern Illinois. In addition, other regions of Illinois, including the east-central county of Champaign, have reported dry or drought conditions. The overall Illinois crop outcome will continue to be dependent on future weather events as the season moves towards harvest time.
CRIME
In latest violation of Move Over Law, an Illinois State Police trooper was injured and hospitalized. The traffic collision, which occurred on August 12 on I-355, was the fifteenth violation of the Illinois’ Move Over Law upon a State Police squad car so far in 2022. The trooper injured in the collision, who was not immediately identified after the incident, was hospitalized with injuries. The Move Over Law is often called “Scott’s Law” by first responders in honor of Scott Gillen, a lieutenant with the Chicago Fire Department. In a DUI-related incident, Gillen was killed on duty on the Dan Ryan Expressway on December 23, 2000.
The Illinois State Police urges all Illinois motorists to pay attention and move over when approaching any stationary vehicle on the side of the road. This is intensified for first responders, especially first-responder vehicles that have their lights flashing on active duty as was the case in the I-355 incident. The vehicle that rammed the squad car was a Toyota pickup truck driven by 24-year-old Evan Johnson, and police say that charges are pending. Violations of Scott’s Law can result in substantial fines and restrictions of driving privileges. Furthermore, a violation of Scott’s Law that causes injuries or death is a Class 4 felony (1 to 3 years in State prison).
GAMBLING
Bally’s files application to build Chicago casino. After a lengthy selection procedure that was delayed by the 2020-2021 COVID-19 pandemic, Chicago’s Mayor Lightfoot and the City Council chose Bally’s as the preferred applicant for a central-city Chicago casino. The location will have more than double the gaming space of other Illinois-licensed casinos. Bally’s has now filed an official application with the Illinois Gaming Board for a license to operate 4,000 gaming positions in Chicago. The Gaming Board will have to scrutinize the specific elements of the proposed new $1.7 billion gaming and entertainment facility, to be located on a former industrial riverfront location at Chicago Avenue and Halsted Street. The approval process is expected to take at least twelve months. Bally’s has an established presence within Illinois as the operator of Bally’s Quad Cities Casino & Hotel, a conventional 1,200-gaming-position casino resort in northwest Illinois.
Other new casino facilities authorized by the 2019 gaming expansion bill are in various stages of development. In Rockford, a temporary casino space is open adjacent to the Jane Addams toll road as a permanent gaming facility is built, with opening scheduled for fall 2023. In Waukegan, Full House Resorts reports that its temporary facility is nearing opening, with utilities being installed to operate 1,000 slot machines. In Danville, a ceremonial groundbreaking celebrated approval of the ownership consortium that has been granted approval to build a Golden Nugget-themed facility adjacent to Interstate 74. Ground has also been broken for a casino to be located at southern Illinois’ Walker’s Bluff in Williamson County. The Wind Creek casino in the South Cook suburbs, on Interstate 80 and Halsted, has received Gaming Board approval.
JOBS
Illinois unemployment rate at 4.4%, still higher than national average. The Illinois Department of Employment Security (IDES) announced Thursday that the unemployment rate fell -0.1 percentage point to 4.4 percent, while nonfarm payrolls increased by +31,200 in July, based on preliminary data provided by the U.S. Bureau of Labor Statistics (BLS) and released by IDES. The June monthly change in payrolls was revised from the preliminary report, from +18,800 to +16,000 jobs. The June unemployment rate was unchanged from the preliminary report, remaining at 4.5 percent. The July payroll jobs estimate and unemployment rate reflect activity for the week including the 12th.
In July, the industry sectors with the largest over-the-month gains in employment include: Professional and Business Services (+10,000), Manufacturing (+6,300), and Trade, Transportation and Utilities (+5,700). The industry sectors that reported monthly payroll declines include: Construction (-1,400) and Educational and Health Services (-1,400).
The state’s unemployment rate was +0.9 percentage point higher than the national unemployment rate reported for July, which was 3.5 percent, down -0.1 percentage point from the previous month. The Illinois unemployment rate was down -1.8 percentage points from a year ago when it was at 6.2 percent.
Key firms leaving Illinois. During the first half of 2022, three major U.S. business firms with headquarters operations located in Illinois – Boeing, Caterpillar, and Citadel – all announced their decision to leave the state. All three firms will move their headquarters to states in the American South – Boeing to Virginia, Caterpillar to Texas, and Citadel to Florida – which have lower taxes and a perceived pro-business enterprise climate. Neither Florida nor Texas charge State individual income taxes against residents. The three firms say that all three of their new homes have “world class” personnel that will enable them to continue and enhance their respective market shares.
The Wall Street Journal described the overall situation facing high-tax states such as Illinois. The movements of Boeing, Caterpillar, and Citadel match migration patterns among young, highly-educated U.S. workers, who are flocking to major metropolitan areas such as Atlanta, Dallas, and Houston that are located in low-tax, job-creating states. A key insight currently being shared among business analysts is that every departure of this type increases the pressure against those businesses that remain in a high-tax state. It is speculated that, at some point, these departures may create a ‘tipping point,’ with lasting damage to the business enterprise climate of the high-tax states.
SHAWNEE NATIONAL FOREST
Retired state naturalist sees changes in Shawnee National Forest. Illinois’ only national forest has been protected since the 1930s. Much of its land is second-growth woodland; in the 1800s, pioneers had tried to farm large pieces of the land now designated as Shawnee National Forest. Naturalist Michael Jeffords, an insect specialist, calls attention to the declining numbers of some kinds of butterflies and beetles in Southern Illinois woodlands. Many insects and other invertebrates live, for long sections of their lives, underneath the surface of the soil, and their lives are essential to soil health. Fire suppression, overuse of some soils by trail vehicles, and the harvesting of some sections of the Forest for commercial pulp and timber have affected the life cycles of the Shawnee Forest and all of the creatures who live there. Entomologist Michael Jeffords is the retired outreach director of the Urbana-Champaign-based Illinois Natural History Survey.
DUQUOIN STATE FAIR
Southern Illinois’ State Fair set to begin. With the Illinois State Fair drawing to a close Sunday in Springfield, attention shifts to the Du Quoin State Fair, which will be held from Friday, August 26 (Twilight Parade) through Monday, September 5. Held annually since 1923 with breaks for war and pandemic, the Du Quoin State Fair features musical events, harness racing, agricultural exhibits, the Twilight Parade, and a horse show. Located 85 miles southeast of St. Louis, the Du Quoin Fairgrounds is only a few miles from Illinois’ Interstate 57.