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February 18, 2004

Governor’s proposal for Illinois Department of Employment Security will net millions of dollars in savings
IDES turns to technology to streamline administrative costs and promote job opportunity

SPRINGFIELDGovernor Rod R. Blagojevich announced today new management techniques and restructuring at the Illinois Department of Employment Security (IDES) that will lead to millions of dollars in savings.  Cornerstones of the Governor’s plans for Fiscal Year 2005 include restructuring the disbursement network for unemployment insurance and creating new ways to support the Governor’s Opportunity Returns economic blueprint.
Pursuant to legislation signed by the Governor in December, IDES will implement a six-year plan to save the state’s General Revenue Fund more than $250 million in potential borrowing costs, while restoring solvency to the Unemployment Insurance Trust Fund.  IDES will execute an innovative issuance of revenue bonds to cover shortfalls in the fund as it returns to a sound fiscal footing. 
“This landmark legislation created by the state’s business and labor communities will benefit both employers and workers,” said IDES Director Brenda A. Russell.  “The legislation allows employers to avoid an estimated $1 billion in federal tax penalties. It allows for the payment of benefits to people who leave their jobs due to domestic violence. And due to a change in eligibility calculations, it will enable more people to qualify for unemployment insurance benefits beginning in 2008.”

The Governor’s FY05 budget proposal for IDES is $296 million, of which more than 90 percent is federal funding.  The FY05 level is down from $310 million the previous fiscal year.  IDES operating expenses are virtually 100-percent federally funded and do not include funding for unemployment insurance benefits.  Benefits are funded through state employer tax dollars and held in the state’s Unemployment Insurance Trust Fund. They are not appropriated by the state.  The agency headcount is expected to remain at nearly 2,000. 

The state’s liability in its role as an employer is projected to increase, from $16.8 million to $21.6 million to fund unemployment benefits for state government employees who are laid off from their jobs. The state also is projected to pay $1.9 million for jobless benefits from other funds, mostly for Department of Transportation employees.
Greater efficiency is expected from the upcoming redesign of the agency’s Benefits Information System, the computer network used to administer hundreds of thousands of unemployment insurance payments made each year.  IDES is requesting an appropriation of $10 million of federal funds in FY05 for this continuing project to replace its 28-year-old system.
To provide faster and better service to businesses while improving department efficiency, IDES will continue to improve its recently activated Illinois TaxNet, used by employers to calculate and pay via the Internet both unemployment taxes and withholding taxes.
Enhancements are also projected for the IDES Internet job matching system, Illinois Skills Match, which provides the link between qualified job applicants and the hiring needs of the state’s employers.  Illinois Skills Match serves not only unemployment insurance claimants, but thousands of other workers seeking occupational upgrades.  
In support of the Governor’s economic program Opportunity Returns, IDES will continue to provide labor market information to support economic planning in the ten regions that have been defined by economic data.    In conjunction with other state agencies, IDES will pilot an industry-specific business-service team in the state’s Northeast and West-Central regions. IDES will also continue using its data to provide career information via the Internet to primary and secondary school students, guidance counselors and the rapidly growing ranks of adult career-changers. 
In addition to its many Internet applications, IDES provides in-person services through the 56 full-service offices of the Illinois Employment and Training Center (IETC) network.  In these centers, laid-off workers file for unemployment insurance and receive a wide array of employment services, while employers recruit workers, attend seminars and consult with IDES economists on local labor market conditions. 
Also available, both online and at local IETCs, are other specialized services such as apprenticeship program referrals and placements and referrals for veterans, farm workers, youth and ex-offenders. In addition, IDES administers employer tax credits for disadvantaged workers and the Hire the Future program for youth. 


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