Dems call for compromise on NJ unemployment fund
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Dems call for compromise on NJ unemployment fund
The Democrats who lead the Senate and Assembly labor committees said today they want a compromise with Gov. Christie on a plan to fix to the state's unemployment fund: namely, lessening the tax increase on businesses without cutting any benefits for workers who lose their jobs.
Sen. Fred Madden (D., Gloucester) and Assemblyman Joseph Egan (D., Middlesex) said in a news release they are drafting a bill to limit the tax hike facing businesses July 1, keeping it to the same level Christie has proposed. That would mean a $300 million tax increase on businesses instead of the $1 billion hike set by current law. But unlike Christie's plan, the Democrats would not reduce any benefits.
Christie had called, among other steps, for reducing the maximum unemployment check to $550 a week, from $600. But if that cut was allowed, people on unemployment would also lose $25 per week that comes from federal funds, according to a note from the non-partisan Office of Legislative Services, Madden and Egan said. And while Christie's plan would impact only people who lose their jobs after the changes were approved, Madden and Egan said the $25 cut would impact everyone who receives unemployment benefits.
"Right now, the unemployed and their families need every penny to keep their heads above water. This makes it even more important for us to work with the administration to strike an agreement that properly balances the needs of the unemployed and the business community," Madden said in the release.
The Democrats' plan may be more politically palatable, but it also has risks. If benefits stay at the current level and tax increases are limited, the fund could struggle to keep up with demand, potentially forcing the state to go farther in debt to pay for promised benefits. Even under Christie's plan, with a combination of a tax increase and benefit cuts, it would take years for the unemployment fund to return to the black.
Businesses' unemployment tax rates are set by law based on the amount of money in the unemployment fund; after years of raids and the recession's soaring job losses, the fund is scheduled to move to the highest tax rate allowed. That would mean employers would pay an extra $1 billion, or $400 more per employee, on average, in the next fiscal year. Christie's plan would limit the tax hike to $300 million, or $130 more per employee.
Madden and Egan backed that smaller increase.
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Memo to NJ Democrats - your state is broke. No matter how noble your intentions, or how sympathetic the recipient, you must cut these benefits. You are already putting an even greater burden on businesses, and even with the cut in benefits, it will take the unemployment compensation fund years just to get back to a "zero balance".— erformc1- Memo to NJ Republicans - your robbed our state blind. You stole from our pension fund and stole from our unemployment fund. Now you steal from our school districts. It will take year to get to "zero balance" because of you, not the unemployed!— MJMcDevitt
- MJMcDevitt - I'm not going to defend Christie Todd Witman (because there is no defense to her foolishness), but if I recall correctly the pension fund was robbed first by Florio, and then not funded fully (or at all) by McGreevey, Codey and Corzine. Aren't they Democrats?— erformc1
- Why not split the tax increase between employers and employees by slightly increasing the unemplolyment tax paid by employees? For example, increase the employee UI contribution by $25. Going forward, they should also place some type of restriction on being able to use any surplus for other purposes. I know we are FAR way off on that one but still, robbing Peter to pay Paul always comes back to bite you. RE: Social Security.— sunnynsj
- Create jobs. FAST! When will the banks start loaning to small business and what are you doing address the issue? Do all regulations in whatever area work when measured against their original intent? I'm guessing that pretty much every government agency, program, or regulation could be simplified and refined. Bloated, over staffed, ineffective, cumbersome. Everyone knows it's a fact and 99% of Republicans and Democrats would support doing something about it. Government runs on other people's money and their purpose is to serve the tax payers. That calls for a efficient, effective, focused operation that is careful not to waste money. The same old partisan immitation of government is really getting stale. I feel like I'm watching a bunch of 2nd graders. "Anwser quick! What was the original reason you ran for office?!"....."Uhmmmm, I'll have to get back to you on that one. I haven't thought about that in years."— MikeP
- sunny, are you crazy? Where have you been the last 20 years? There's no room for reasoned thought, common sense or practical solution in politics. You're ideas don't have a snowball's chance in hell. Only comment is that when the employee pays it's essentially a salary decrease. On the employer, it's a fixed cost that is passed along to their customer. But companies would probably asked to start paying before they have a chance to recoup and cash is tight already. Things are tight. Under the current condition, I would focus on job creation and judge the options based on that. Cutting the sales tax might help but I think retail sales won't see consumers until they provide better value. It's still the same overpriced stuff that we saw when we were living in finacial fantasy land.— MikeP
Comment removed.- I am a NJ resident and have several close friends in this state who have all been unemployed for at least several months and are all collecting unemployment. In all but one case, those individuals have refused to take any job which pays substantially less than they earned prior to the recession. In all cases, they could easily live for many months or even years off their nonretirement savings. Christie needs to pare back these benefits, except for those who are truly seeking work (and I recognize that such folks exist, my friends notwithstanding) and who cannot otherwise afford to get by. I'm tired of the argument that "I paid into the fund, so I'm entitled to take from the fund." The fund is going bankrupt, folks.— Seaner
- Comment removed.
- eformc1 - get your facts straight before you write. Whitman was the 1st NJ Gov to play with the NJ PERS surpluses and while the Govs who followed did the same - it was her "new way of business" that began put the pension system on the slippery slope. Until her administration, the NJ Public Employees Pension System was a model for the nation on how to fund/maintain a pension system.— golpher300
