Urge NJ Lawmakers to Use Federal Funds to Alleviate Massive UI Tax Increase

Recently the New Jersey Department of Labor posted its employer contribution rates for FY21-22, changing it from Tax Table B to Tax Table C – meaning a $252 million increase for employers in the state this year. 

Since then, multiple media outlets reported the tax increase – which could ultimately amount to a UI tax increase of almost a billion dollars over three years from what employers paid before COVID-19 if no federal funds are used to offset it. 

In response to the reports, several state legislators urged Gov. Phil Murphy to use some of New Jersey’s $6.2 billion in federal COVID-19 aid to reduce the unemployment payroll tax on employers. 

Senator Troy Singleton (D-7) noted in a letter to the governor that the American Rescue Plan was created to assist state and local governments with their economic recovery from the coronavirus pandemic and that a steep increase in the unemployment insurance tax would hurt businesses trying to recover.  

Senator Dawn Addiego (D-8) issued a statement saying: “We have plenty of federal dollars to go around, and there is no reason businesses should be burdened with an unemployment tax hike when laying off employees was the only way they could stay afloat through last year’s shutdown.” 

Assemblyman Roy Freiman (D-16) also voiced support in the New Jersey Globe.

These asks were in addition to the more predictable public requests from Republican lawmakers such as Sens. Steven Oroho, Anthony BuccoMike TestaJim Holzapfel and Assemblymen Greg McGuckin, John Catalano, Hal Wirths and Parker Space. 

Senator Declan O’Scanlon went a step further urging the Legislature, currently in summer recess, to reconvene to pass legislation to “force the Governor to do the right thing and stop this tax from going into effect.” 

In an NJ Spotlight News story, spokespeople for Senate President Steve Sweeney and Assembly Leader Craig Coughlin were both non-committal about using federal dollars to offset the tax, pointing to aid that has already been provided to New Jersey’s business community during the pandemic. 

Thus far, the New Jersey Economic Development Authority has disbursed more than $400 million in grants and loans to help New Jersey businesses. 

However, if the three-year phase-in of an $885 million unemployment tax is not lessened, New Jersey’s business community will be looking at a net loss in comparison to that NJEDA aid. The federal American Rescue Plan money should be used to help those most impacted by the pandemic, and that definitely includes businesses that were forced to close and limit their operations.  

The New Jersey Business Coalition recently sent a letter to Gov. Phil Murphy and the Legislature urging the state of New Jersey to apply federal recovery money currently available to replenish the state’s Unemployment Insurance (UI) Trust Fund, as many other states have done.

If you feel, as we do, that New Jersey printing businesses continue to need assistance in recovering from the Covid 19 pandemic, weigh in here with Governor Phil Murphy and your local NJ legislator. 

Tim Freeman, President
Printing Industries Alliance

Melissa Jones, President
Graphic Arts Association

 

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