Michael Egenton, the well-respected longtime head of government relations for the New Jersey Chamber of Commerce, often finds a small — and personal — way to put legislation into perspective.
That’s why, when he talks about the bill that would save business owners more than $300 million of the more than $1.6 billion that’s needed to replenish the unemployment insurance fund that was ravaged by the pandemic, he doesn’t get into issues concerning $300 million or $400 million — and he doesn’t try to explain the difference between Column D and Column E on the form.
Egenton talks about a random small business owner.
“Imagine if you were one of the thousands of restaurants who were crushed by the pandemic and dipped into your own pocket to pay for upgrades that would help you serve customers indoors and out — keeping even some of your employees on the payroll,” he said. “Can’t we help them?”
This isn’t a case of corporate welfare or giveaways, as some at Monday’s hearing said. This is a matter of the state using federal funding — funding provided specifically to help fight the economic disaster caused by the pandemic — to help replenish the UI fund.
Egenton — and many others — hopes Gov. Phil Murphy will address the issue during his state budget address Tuesday afternoon. One in which numerous spending programs will be proposed.
The hope is that replenishing the UI fund will be mentioned. No one is confident it will be.
The simple reason: This is something Murphy could have done long ago, had he wanted.
Chris Emigholz, the vice president for government affairs at the New Jersey Business & Industry Association, said the concept has been the norm around the country for some time.
Emigholz said 20 states have done it using federal CARES Act money (either fully or partially), and 18 other states have used federal American Rescue Plan Act funds for the same purpose.
He explained it this way.
“UI payroll taxes are not a tax on income or property or corporate profit or wealth — they are a tax on the mere existence of a job,” he said. “At a time when we want to recover jobs, the state should not be in the business of making job creation and retention less affordable.”
Here is what New Jersey businesses are being asked to do to replenish the $1.6 billion shortfall in the UI fund. The increase comes as the state moves columns (from C to D to E) on the UI fund form:
- Fiscal Year 2022: New Jersey businesses are currently paying $252 million more to the UI fund that they did pre-pandemic;
- FY2023: An additional $296.6 million will be added to that total, meaning New Jersey businesses will be asked to pay $548.6 million more than they did pre-pandemic;
- FY2024: An additional $336.4 would be added, meaning New Jersey businesses would be on the hook for $885 million more than they paid pre-pandemic.
A bill to help (S733) is being sponsored by state Sens. Fred Madden (D-Turnersville) and Troy Singleton (D-Moorestown). The bill wouldn’t erase all of the cost (again, as some states have done). It would simply eliminate the final bump in Year 3, at a savings of $336.4 million.
The bill also calls for New Jersey to allocate funds to pay off a federal loan advanced to ensure the state UI fund stayed solvent during the throes of the pandemic. The federal government waived interest on the loan through most of the pandemic, but recently started charging interest again.
“New Jersey is now paying millions of dollars in interest to the federal government, while we are sitting on billions of rescue/recovery dollars from the federal government,” Emigholz said. “This would be akin to putting money under your mattress instead of paying off credit card bills to avoid unnecessary and burdensome interest.”
The bill made it through the Labor Committee on Monday morning. Emigholz and Egenton are hoping it can go further. A similar bill will likely soon make its way through the Assembly.
Emigholz said it’s the right thing to do.
“Nearly $1 billion in new taxes is a difficult added burden for employers as our economy tries to recovery from the impact of COVID-19,” he said. “That tax increase was only necessitated because businesses were forced to lay people off due to shutdowns and restrictions.”
Egenton said he’s cautiously hopeful. He said he understands the situation — understands that everyone has their hand out, hoping to get some of the massive amount of federal funds. He’s hoping the business community isn’t forgotten.
“It’s the simple gesture that really resonates and means a lot,” he said.
It’s a way to say to thousands of small business owners, “Thanks for doing all you could during the pandemic.”
