Illinois businesses to see tax increase in 2012

By Associated Press
Posted April 11 at 12:29 p.m.

Starting next year, Illinois businesses will see a tax increase and the recently unemployed will lose a week of jobless benefits, according to a compromise bill passed earlier this month in the Illinois Legislature.

The deal is part of a longer-term plan to help contribute to Illinois’ depleted unemployment trust fund, which owes $3 billion to the U.S. Treasury, according to a story published Monday in the Rockford Register Star.

Illinois Department of Employment Security spokesman Greg Rivara said the tax increase and benefit cut are expected to generate about $100 million for the unemployment fund next year, or about 3 percent of its debt.

Illinois is among more than 30 states that have borrowed money from the federal government to keep jobless benefits going and the state isn’t alone in reducing unemployment benefits to help funding. Michigan recently did something similar and other states are considering it.

“You’re going to see different states employ different money management tools that best suit their specific condition,” Rivara said.

Illinois has borrowed more than $40 billion so far to pay for the state portion of jobless benefits. The money doesn’t affect the jobless benefit extensions, which the federal government pays for.

Most state debts get charged interest starting Jan. 1. Since that time, Illinois has accumulated about $30 million in charges. If the state has a balance as of Jan. 1 next year, businesses might lose a federal tax credit on unemployment insurance.

Rivara said the new law will divert $90 million in unemployment tax receipts to pay interest on the loan. If federal officials extend the interest payment deadline, the money goes back to the trust fund.

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  1. Jim T April 11 at 1:57 pm

    Well as they say lol leave the fail state of Illionis. as Mitch Daniels has said are you guys Illionnoyed? Move to Indianapolis the fastest growing region in the midwest and one of the fastest in the US. Indy has the strongest economy/lowest cost of living compared to any city in America. Tax Rates are as follows. 3.4% income flat rate/7% sales/20 cent lower gas tax than chicago and 1% capped propety taxes (lowest in the nation). Corporate Business tax is 6.5%

  2. Jim T April 11 at 1:57 pm

    also keep in mind total job listings here.

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