New Jersey lawmakers are considering a measure that would phase in a tax increase on employers in order to replenish the state’s unemployment insurance fund.
The unemployment trust fund has been depleted for several years because of the recession and the diversion of money for other uses.
To replenish it, employers now face the prospect of paying another $300 per worker into the fund. The legislation would phase that in over three years.
Assembly Labor Committee chairman Joseph Egan, the bill’s main sponsor, said no one wants to pay higher taxes.
“And we certainly don’t want the employers to pay more, but we certainly don’t want the employees that are out of work and suffering to have reduced benefits or to put more strain on them while they’re out of work,” Egan said.
Laurie Ehlbeck, state director of the National Federation of Independent Business, said the legislation gives some predictability to small businesses that are still not seeing relief from hard times.
“Any small amount that their taxes will increase will have a major impact on their business. So it’s really stopping them at this point from hiring, growing business, adding machinery that they need, she said. “At least now, going forward three years, they’ll know what to expect. They’re not happy about an increase in their tax, but at least they can plan for exactly how much it’s going to be.”
New Jersey is one of several states that have borrowed money from the federal government to pay unemployment insurance benefits. The measure still faces action in the state Senate.