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 full Senate, by a vote of 28 to 9.
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.
“This bill would prevent a drastic tax hike which could do irreparable harm to the State’s already fragile business climate,” said Senator Madden, D-Camden and Gloucester. “Consumers can only purchase goods if they have jobs, and jobs can only exist in a healthy business climate. The economy is on the upswing, and passage of this legislation would help to continue the process by allowing businesses and the jobs they create to remain right here in New Jersey.”
“Through this legislation, we are taking the steps necessary to protect the State’s unemployment insurance system for businesses and workers here in New Jersey,” said Senate President Sweeney, D-Gloucester, Cumberland and Salem. “A thriving business climate is important to the economy of any state, and enactment of this bill would make our state a more attractive place to do business for companies that currently call New Jersey home, and for those looking to make a move.”
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%.
This measure now heads to the Assembly for consideration. #