DeCroce: 'I'm one of the few people here ... who feel that benefits are too good for these people'
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Assembly Minority Leader Alex DeCroce, shown in a May file photo says residents collecting $550 a week in unemployment might not be motivated to look for work.TRENTON — New Jersey's jobless benefits are too generous and should be reduced, a Republican leader in the Assembly told business owners today.
Residents collecting $550 per week have little incentive to look for a job, Assembly Minority Leader Alex DeCroce told the Business and Industry Association. He said cutting benefits is one way to prop up the unemployment fund, which is now $1.7 billion in the red to the federal government.
"I'm one of the few people here ... who feel that benefits are too good for these people," said DeCroce of Morris County. "Why go to work? If you can go for 26 weeks collecting $550 a week, and you get an extension for another 26, that's close to $27,000 a year or $30,000 a year, and a lot of people figure, 'Why go to work?'"
Senate President Steve Sweeney disagreed. The Democrat said people in the construction trades, where unemployment is around 50 percent, would "go to work tomorrow."
The state's unemployment rate overall is 9.2 percent, .4 percent below the national average.
New Jersey's once-flush unemployment insurance fund was raided of $4.6 billion from 1992 to 2006 to pay for programs other than unemployment claims, according to the governor's office. Growing joblessness as a result of the recession also put a massive strain on the fund. It's now among nearly three dozen states that have to borrow from the federal government to meet their unemployment claims.
Earlier this year, Gov. Chris Christie proposed trimming unemployment benefits by $50 per week to help cover some of the shortage. A task force is due to make recommendations on the long-term solvency of the fund soon.
Business owners face an automatic unemployment insurance payroll tax increase in July unless something is done. The additional tax could be as high as $400 per employee, said Phil Kirschner of the NJBIA.
"That would be devastating to our economic recovery efforts in the state," said Kirschner. "Basically, it's a tax on jobs. Every person that you employ you will now have to pay $300 to $400 more to hire them. That's a disincentive to hire them."
He said such a heavy tax increase would drive up the unemployment rate.
New Jersey businesses faced a similarly steep tax hike last year, but it got knocked down to about $130 per employee when the Legislature agreed to limit claims by those who had been fired for extreme misconduct.
A constitutional amendment passed in November prohibits future raids from any fund with a dedicated purpose.
Related coverage:
• N.J. Senate panel advances bill rewarding businesses that hire ex-prisoners
• U.S. Labor Department reports lowest jobless claims in more than 2 years
• Hundreds of thousands of N.J. residents expect to lose federal unemployment benefits
• N.J. unemployment benefits cut to 26 weeks, from 99 weeks, for first-time filers
