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Civic Federation's Laurence Msall: Staggering Unemployment Claims Will Put Major Strain On Illinois, Chicago Budgets

CHICAGO (CBS) -- The math is staggering – according to the U.S. Department of Labor, < there were 114,663 unemployment claims in Illinois alone last week amid the coronavirus crisis.

That is up more than 10 times for the week prior, when there were 10,870 jobless claims in the state.
Illinois unemployment claims began to rise dramatically after Gov. JB Pritzker ordered all bars and restaurants to shut down dine-in service starting March 16. From March 16 through March 18, Illinois received more than 64,000 claims for unemployment benefits. That number for March 17 and 18 was 41,000. In the same two days in 2019, the state reported 4,445 claims.

The state pays for unemployment benefits, while at the same time losing out on all the income tax.

Laurence Msall, president of the Civic Federation, joined CBS 2's Brad Edwards and Irika Sargent Thursday to about what the staggering unemployment claims mean for state and city budgets.

In short, the news for those budgets is not good;

"It clearly means that there's going to be a lot of pressure on the budget. We're going to see a very significant drop in state and local government revenue," Msall said. "I think, though, the important point is this is just the very beginning of the tip. We're seeing a phenomenal drop in employment in Illinois."

This does not come as a surprise, given that the economy has essentially been stopped in the effort to fight COVID-19. And that fight needs to take precedence for now, Msall said.

"That's the important thing right now – following the governor's advice to socially isolate so we can stop this virus so it doesn't overwhelm our hospitals and our economy even more," he said.

Meanwhile, the state and city did not enter the fight against coronavirus from a point of fiscal strength. As Edwards noted, Illinois already has untenable pension obligations and junk bond-level ratings.

Msall said the coronavirus fight will leave the state and city in a "very difficult place," but noted that they are not alone in the fight.

"They look to the federal government – not only for help with the unemployment insurance and now the third stimulus package – if it's passed by the House – will provide significant relief. But there's going to need to be a much bigger federal response going forward in order to restart the economy; in order to help people get through this," he said.

Still, this kind of massive halt to the economy is unprecedented, Msall said. But he reiterated that the mission for now has to be fighting the virus.

"We have never seen the economy stopped like this. You can go back 40, 50 years and you won't see this level of unemployment in one week, and sort of the growth of it," he said. "So it's a sign of how serious the matter is. It's a sign of how important it is that we limit the spread of this virus so we can get the economy restarted when it's safe."

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