TRENTON – Senate Labor Chairman Fred H. Madden today issued the following statement after the governor’s announcement yesterday regarding the progress of the Unemployment Insurance Trust Fund, which now has a balance of $1.8 billion, and as a result New Jersey employers will receive another $180 million in tax relief on top of the $200 million tax cut announced in April. This is the largest cut to unemployment business taxes in history and will cut taxes by nearly $100 per employee:
“Because of our efforts, we are now able to provide a substantial tax break to employers in the state. This is a remarkable achievement and is the result of the work we did on the UI Task Force in collaboration with business and labor and the subsequent legislation that we passed to stabilize the fund. A lot of hard work went into this and the steps we took allowed us to repay our debt to the federal government while ensuring residents continued to receive critical jobless benefits. Finally, after bringing our fund back to solvency we were able to provide a tax cut to business. I am pleased that our work has led to an even larger tax cut than was previously announced, and that employers will reap the benefits of several pieces of legislation that were signed into law over the last six years aimed at providing these tax breaks and boosting our economy. Our federal debt has been entirely paid off and we now have a positive balance in the UI Trust fund of $1.8 billion. This is legislation that is working. Our efforts are paying off and I look forward to seeing the continued progress.”
The UI trust fund became insolvent in 2009 due to a rise in unemployment claims and past diversions of $4.7 billion in UI tax revenue in the 1990s and early 2000s. New Jersey began borrowing from the federal government to continue paying UI benefits in March 2009, with the debt reaching $1.99 billion in March 2011. The debt was entirely paid off in 2014 and the governor announced today the positive fund balance will trigger a $380 million tax cut for businesses.