State Sen. Troy Singleton sent an open letter to Gov. Phil Murphy on Monday, urging him to dedicate a portion of the billions of dollars in federal aid the state received to help replenish the state’s unemployment insurance trust fund.
Late Friday, the Department of Labor & Workforce Development announced that employers should use Column C when figuring their tax for fiscal year 2022 — which will result in a $252 million increase in cost. (See the full story here.) It is the first of a three-year tax that potentially could cost businesses $1.7 billion without assistance from the state.
More than 30 states across the country are using federal funds to help to replenish unemployment funds. Singleton (D-Moorestown) said Murphy and New Jersey should do the same.
“I am contacting you today to respectfully request that you immediately dedicate a portion of New Jersey’s federal relief funds to offset the $250 million unemployment insurance tax hike that New Jersey businesses will face in the coming months,” Singleton wrote.
“This increase comes at a particularly difficult time for many of our state’s businesses, who are just beginning to reestablish their economic footing.”
Singleton went on to say that this type of relief is what the federal government intended when it allocated funds to states. New Jersey received $6 billion earlier this summer from the American Rescue Plan.
Read more from ROI-NJ:
- Why N.J. businesses will pay an extra $252M in UI tax now — potentially billions more later
- The big ($252M) tax increase for UI: How much more will my company pay?
“As you are aware, the American Rescue Plan was created to assist state and local governments with their economic recoveries,” he wrote. “Specifically, the money can be used to support the public health response; replace public sector revenue loss; invest in water and sewer infrastructure; address negative economic impacts; provide premium pay for essential workers; and invest in broadband infrastructure.
“Certainly, an increase in the unemployment insurance tax would qualify as a steep negative economic impact. In fact, other states have used federal assistance to replenish the funds, and it is my hope that New Jersey will do the same to avoid this unwelcome and untimely burden on our businesses.”
Singleton copied Senate President Steve Sweeney (D-West Deptford) and Assembly Speaker Craig Coughlin (D-Woodbridge) on the letter.
And Singleton is holding out hope that the Joint Budget Oversight Committee, or JBOC, will help steer federal funds to the UI trust fund as soon as this year.
“We have time to fix it, we have the resources to fix it and I believe we will fix it,” Singleton told ROI-NJ.
That might be easier said than done. The JBOC approves recommendations the governor makes, but it cannot force allocation on the governor, said Sen. Steve Oroho (R-Sparta), who is on the committee.
The complete letter from Singleton to Murphy is below:
Dear Gov. Murphy,
As the state senator of the 7th Legislative District, I am contacting you today to respectfully request that you immediately dedicate a portion of New Jersey’s federal relief funds to offset the $250 million unemployment insurance tax hike that New Jersey businesses will face in the coming months.
Recently, the New Jersey Department of Labor announced an increase in the unemployment insurance tax that businesses will pay come Oct. 1. This increase comes at a particularly difficult time for many of our state’s businesses, who are just beginning to reestablish their economic footing.
As you are aware, the American Rescue Plan was created to assist state and local governments with their economic recoveries. Specifically, the money can be used to support the public health response; replace public sector revenue loss; invest in water and sewer infrastructure; address negative economic impacts; provide premium pay for essential workers; and invest in broadband infrastructure. Certainly, an increase in the unemployment insurance tax would qualify as a steep negative economic impact. In fact, other states have used federal assistance to replenish the funds and it is my hope that New Jersey will do the same to avoid this unwelcome and untimely burden on our businesses.
I recognize that there are many competing needs for the funding our state will receive. Furthermore, my office is all too familiar with just how many people in our district and beyond needed to rely on their unemployment benefits during the pandemic. That being said, we must take action now to avoid this impending disaster that could arrive on the doorsteps of our business community on Oct. 1.
Thank you for your immediate attention to this matter. I am available to discuss this further, if necessary.
Most sincerely,
The Hon. Troy Singleton
Senator, 7th Legislative District
