Senator Fred Madden and Assemblyman Joseph Egan, chairmen of the Senate and Assembly labor committees respectively, said they are committed to seeking a compromise that would protect the state’s jobless from seeing any cut to their current unemployment benefits while also insulating businesses from a scheduled increase in their unemployment insurance taxes.
Madden and Egan said such an agreement is necessary after they received notice from the nonpartisan Office of Legislative Services that a proposed cut in state benefits would negate a 2009 agreement with the federal government and would lead to an immediate loss of $25-per-week in federal funds to all current and future beneficiaries.
Under a 2009 Federal Additional Compensation (FAC) agreement between the state and the federal Department of Labor, each New Jersey resident collecting unemployment receives a $25-per-week federal benefit. Reducing unemployment benefits for future beneficiaries, however, would also immediately void the agreement, leading to a loss in funds to the currently unemployed.
Governor Christie has called for reducing the maximum unemployment check to $550 a week, from $600 which would mean a $300 million tax increase on businesses instead of the $1 billion hike set by current law. The Democrats’ plan would keep benefits at the current level. However, the state could continue to go further into debt to pay for promised benefits.
NJ businesses’ unemployment tax rates are set by law based on the amount of money in the unemployment fund. After years of raids and the recession’s soaring job losses, the fund is scheduled to move to the highest tax rate allowed at the end of June. That would mean employers would pay an extra $1 billion, or $400 more per employee, on average, in the next fiscal year. Christie’s plan would limit the tax hike to $300 million, or $130 more per employee.
NJSA members are encouraged to contact their state representatives to voice their concerns about increasing the unemployment tax in the face of companies striving to add workers and jobs.
Unemployment Tax Fight in New Jersey Legislature
Madden and Egan said such an agreement is necessary after they received notice from the nonpartisan Office of Legislative Services that a proposed cut in state benefits would negate a 2009 agreement with the federal government and would lead to an immediate loss of $25-per-week in federal funds to all current and future beneficiaries.
Under a 2009 Federal Additional Compensation (FAC) agreement between the state and the federal Department of Labor, each New Jersey resident collecting unemployment receives a $25-per-week federal benefit. Reducing unemployment benefits for future beneficiaries, however, would also immediately void the agreement, leading to a loss in funds to the currently unemployed.
Governor Christie has called for reducing the maximum unemployment check to $550 a week, from $600 which would mean a $300 million tax increase on businesses instead of the $1 billion hike set by current law. The Democrats’ plan would keep benefits at the current level. However, the state could continue to go further into debt to pay for promised benefits.
NJ businesses’ unemployment tax rates are set by law based on the amount of money in the unemployment fund. After years of raids and the recession’s soaring job losses, the fund is scheduled to move to the highest tax rate allowed at the end of June. That would mean employers would pay an extra $1 billion, or $400 more per employee, on average, in the next fiscal year. Christie’s plan would limit the tax hike to $300 million, or $130 more per employee.
NJSA members are encouraged to contact their state representatives to voice their concerns about increasing the unemployment tax in the face of companies striving to add workers and jobs.