The last year for which annual employer payments into the Illinois Unemployment Trust Fund account were sufficient to cover the state's benefit obligations was 1998. Illinois had to begin borrowing from the federal government to continue paying unemployment benefits in early 2003. Department of Employment Security projections suggested that, without corrective action, the state's only option would have been to rely on billions in federal loans to maintain the system. Taxpayer-borne debt service likely would have exceeded $250 million and federal penalty taxes assessed on Illinois employers likely would have exceeded $1 billion.

Legislation negotiated by the state's business and labor communities will restore the system to solvency on a measured basis through shared sacrifice. While it will require employers to pay more up front over the next few years than they otherwise would have, it will also restructure the system, eliminating more than $2 billion in "surprise" mid-year surcharges that employers would otherwise have faced through 2009. In addition, employers can avoid over $1 billion in federal tax liabilities they would otherwise have incurred through 2009. The average combined state and federal unemployment insurance liability, per employee, will be less than it would have been without the law change beginning in 2007,

The package also requires more than $150 million in benefit concessions on the part of jobless workers over the next several years, as well as authority for a state bond issuance expected to save the state over $100 million in interest liability.