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GOVERNOR CORZINE SIGNS LEGISLATION TO BYPASS TAX INCREASE, RESTORE SOLVENCY TO UNEMPLOYMENT INSURANCE TRUST FUND
TRENTON - Governor Jon S. Corzine today signed legislation to redirect $260 million to the Unemployment Insurance Trust Fund. The action will prevent a tax increase on New Jersey businesses and ensure the solvency of the fund for unemployed workers during this national recession.
The fund is set to automatically increase unemployment taxes on businesses if the balance falls below a predetermined level. Over the past 14 years approximately $4.7 billion in revenues has been diverted from the fund to other purposes. That has led to a diminished balance.
“Allowing financial sins of the past to trigger a tax hike on businesses facing a recession today would be counter productive,” Corzine said. “This contribution to the Unemployment Trust Fund not only allows us to move forward with the budget process, but is also a signal that we’re going to balance budgets without raiding trust funds or using one-shot gimmicks.”
The bi-partisan legislation (S1698/A2801) was sponsored in the Senate by Senator Barbara Buono (D-Middlesex) and Senator Sean T. Kean (R-Monmouth). It was sponsored in the Assembly by Assemblyman Greenwald (D-Camden), Assemblyman Milam (D-Cumberland/Atlantic/Cape May) and Assemblyman Schaer (D-Passaic).
“Too often in the past we have used the unemployment insurance fund to balance the budget," said Senator Sean T. Kean (R-Monmouth). "I am pleased that Governor Corzine is signing this bill that will avert a massive tax hike on businesses throughout New Jersey.”
“Defusing this tax hike today sends a strong message that New Jersey will do all it can to help employers and employees weather the current economic storm,” said Greenwald (D-Camden). “It would be unfair for New Jersey’s businesses and families to be punished by a tax increase that is so readily avoidable.”
“Keeping the state’s Unemployment Insurance fund solvent without a tax increase is a win-win situation for New Jersey,” said Milam (D-Cumberland/Atlantic/Cape May). “Not only are we protecting New Jersey businesses from shouldering the burden of a tax hike, but we are ensuring much-needed financial help will be available to residents who need it while they look for a new job.”
“Meeting needs of New Jersey's unemployed should not come at the expense of weakening our business community,” said Schaer (D-Passaic). “It is incumbent upon the state to ensure that we have the necessary funds to help those who are separated from employment through no fault of their own.”
The legislation also has the support of the business community.
"For the past decade we've been encouraging government to put the trust back in trust funds, based on the consistent raiding of the UI fund for unrelated purposes," said Joan Verplanck, president, New Jersey Chamber of Commerce. "Money collected from employers to protect those unemployed through no fault of their own was routinely used to balance the budget and for other purposes. The necessity for this legislation should remind us that stewardship is an important part of government, and trust is at the heart of stewardship. Kudos to the governor for restoring not only some of the previously diverted funds, but for restoring trust."
“Make no mistake, without this bill, the state would be imposing a tax increase on jobs at a time of great economic weakness,” said Philip Kirschner, president of the New Jersey Business & Industry Association. “This tax increase would have had a very damaging effect on our economy and the ability of people to keep and find jobs. The Governor and the Legislature deserve credit for moving so swiftly to avert it.”###
Photos from Governor Corzine's public events are available in the Governor's Newsroom section on the State of New Jersey web page.
