Unemployment, TRANSFORMING OUR BUSINESS CLIMATE
Center Square NJ: After years of draining unemployment insurance fund, New Jersey lawmakers scramble to slow $1 billion tax hike on businesses
By Todd DeFeo
(The Center Square) – A proposal to slow the implementation of a $1 billion unemployment insurance (UI) payroll tax increase is a prudent policy that eases the burden on Garden State businesses, experts say.
For years, lawmakers and elected officials diverted money from New Jersey’s Unemployment Insurance Trust Fund to pay for unrelated projects. While the fund was on solid footing before COVID-19, job losses stemming from the pandemic and protracted business closures have weakened the foundation.
The current state of the UI fund automatically triggered a payroll tax increase. Rather than taxing businesses the $1 billion at one time, lawmakers want to implement the tax in smaller increments over three years.
“This tax is going to happen, and there’s nothing we can do to unilaterally stop the tax, but what the Legislature can do is they can soften it,” Christopher Emigholz, vice president of government affairs for the New Jersey Business and Industry Association, said in an interview with The Center Square.
The proposed legislation, A-4853 and S-3011, is similar to action lawmakers took in 2010 in the wake of the Great Recession. A decade ago, the fund was operating at a deficit and borrowing federal funds to pay unemployment benefits.
“Policy wise, it’s the right thing to do,” Regina Egea, president of the Garden State Initiative, said of the current proposal in an interview with The Center Square. The goal is “to not create extraordinary burden on the businesses in New Jersey, particularly now.”
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