TRENTON — The state Senate approved a bill today that would lessen a tax increase businesses have to pay to make the state’s unemployment insurance fund solvent. The bill, which passed 28-9, raises the tax on businesses by $300 million instead of the $1 billion increase that would automatically kick in without the Legislature’s intervention. “This bill would prevent...
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New Jersey Sen. Fred Madden (D-Gloucester) in the Statehouse in this 2002 file photo.TRENTON — The state Senate approved a bill today that would lessen a tax increase businesses have to pay to make the state’s unemployment insurance fund solvent.
The bill, which passed 28-9, raises the tax on businesses by $300 million instead of the $1 billion increase that would automatically kick in without the Legislature’s intervention.
“This bill would prevent a drastic tax hike which could do irreparable harm to the state’s already fragile business climate,” said state Sen. Fred Madden (D-Gloucester), the bill’s sponsor.
Employers and employees both pay into the fund that provides unemployment insurance. When that fund dwindles, taxes on employers go up to once again build up the reserves. New Jersey has already borrowed $1.75 billion from the federal government to keep the fund solvent, and will continue to do so.
Gov. Chris Christie and his Republican allies in the Legislature support lessening the impact of the tax increase on businesses, but say the current bill does not do anything to reform the system.
“I appreciate Sen. Madden’s concern about the issue, I’m just concerned about the logic with which he’s proceeding,” said state Sen. Joe Pennacchio (R-Morris).
Christie has not said whether he will sign the bill.
Previous coverage:
• N.J. Senate panel approves borrowing from federal government to prevent $1B business tax hike
• N.J. lawmakers work to fix $1.7B unemployment fund deficit, avert 52 percent tax hike for businesses
• N.J. unemployment fund will not be bailed out by federal money, Menendez says
• N.J. Gov. Christie proposes cuts to unemployment benefits to lessen business tax hike
• Gov. Chris Christie warns N.J. companies of tax hike to cover unemployment fund
