TRENTON – A measure sponsored by Senator Fred H. Madden and Senate President Steve Sweeney which would reduce the unemployment insurance (UI) tax rate for employers, was approved today by the Senate Labor Committee, by a vote of 4 to 2.
The Senators said the measure is necessary to prevent the potentially devastating effects of a scheduled massive increase in the business share of the UI tax. Under triggers written in the UI law – which requires the tax rate to increase incrementally when the system runs in deficit – the tax rate is scheduled to jump by multiple increments this year, resulting in a $1 billion dollar increase, which figures out to be $400 per employee.
“With New Jersey just now beginning to recover from the recent recession, we need to protect businesses from experiencing a huge tax hike that could prevent them from ever being able to get back on their feet,” said Senator Madden, D-Camden and Gloucester, who chairs the Senate Labor Panel. “Holding the limit on the UI tax makes good sense in this economic climate. It will help us promote business and economic growth when we need it most.”
“Unless we act now to stem this tax increase, businesses will be forced to close, and the unemployment insurance system will be left totally exposed,” said Senate President Sweeney, D-Gloucester, Cumberland and Salem. “An important part of the road to financial recovery is ensuring that there are jobs available for those who need them, and this legislation would help to make sure that these jobs and companies can remain right here in the Garden State.”
The Senators’ bill, S-1813, would allow the state’s unemployment insurance to increase by only one increment over the next year. Absent the legislative fix, the tax rate would automatically increase to its highest possible level, plus add an additional 10%.
“The economy is on the rebound, but we have to make sure that it continues. The way to do that is to make sure that people have jobs, so that they can pay bills, purchase goods and do their part to continue to stabilize the economy,” said Senator Madden.
This measure now heads to the full Senate for approval. #