Trying to spare businesses a major tax hike
A billion dollar tax hike is scheduled to automatically take effect on July 1st to build up New Jersey’s depleted unemployment insurance fund. But businesses may be getting a break.
The state used money from the unemployment insurance fund for years for other programs and has borrowed more than a billion dollars from the federal government to pay unemployment benefits. A state senate committee has approved a measure that would increase the tax rate by $300 million over the next year and then consider whether another hike is needed.
New Jersey Retail Merchants Association President John Holub says sparing businesses a huge increase all at once could prevent some companies from having to reduce their workforce.
“We’re in a jobless recovery right now and I think first and foremost we need to be focused on creating jobs and this could have a significant impact in businesses’ ability to create jobs.”
The bill that now advances to the full Senate does not include a reduction in new unemployment claims that Governor Christie proposed.
Christie says he’s willing to compromise, but wants to ensure the future solvency of the unemployment insurance fund.