(The Center Square) – Replenishment of the New Jersey’s unemployment insurance fund by businesses can be offset with federal dollars if a bill advanced by the Senate Labor Committee becomes law.
The state’s businesses are paying $252 million to replenish the UI fund in fiscal 2022. In fiscal 2023, businesses are slated to pay another $296.6 million into the fund.
S-733 would eliminate the third year of payments, roughly $336.4 million for fiscal 2024.
“Nearly $1 billion in new taxes is a difficult added burden for employers as our economy tries to [recover] from the impact of COVID-19,” New Jersey Business & Industry Association Vice President of Government Affairs Christopher Emigholz said in written testimony. “That tax increase was only necessitated because businesses were forced to lay people off due to shutdowns and restrictions.
“UI payroll taxes are not a tax on income or property or corporate profit or wealth. They are a tax on the mere existence of a job. At a time when we want to recover jobs, the state should not be in the business of making job creation and retention less affordable.”
According to Emigholz, at least 20 other states have used federal Coronavirus Aid, Relief, and Economic Security Act, commonly called CARES Act, money to replenish their UI funds. Another 18 have used American Rescue Plan funds for the purpose. Some lawmakers showed support last year for using federal dollars to replenish the fund, but ultimately, the state did not.
“Unemployment insurance helped many workers during the height of the pandemic; replenishing the fund should not now be a financial burden on businesses that are just starting to recover,” said state Sen. Fred Madden in a statement. He’s a Democrat from Gloucester/Camden and chairman of the Senate Labor Committee.
The measure would also pay back money New Jersey borrowed to keep the UI fund solvent amid the COVID-19 pandemic.
“New Jersey is now paying millions of dollars in interest to the federal government, while we are sitting on billions of rescue/recovery dollars from the federal government,” Emigholz said. “This would be akin to putting money under your mattress instead of paying off credit card bills to avoid unnecessary and burdensome interest.
“Paying off this loan more quickly will also expedite the replenishment of the fund, and potentially lead to a quicker improvement in its health and a quicker payroll tax decrease down the road,” Emigholz added.
This article was published by The Center Square and is republished here with permission. Click here to view the original.
