CCSNJ Supports Bill to Assure NJ Gets UI Federal Stimulus Funding
Monday, March 16, 2009

MEMORANDUM

TO: Members of the New Jersey General Assembly

FROM: Christina M. Genovese, Manager, Government Relations

RE: A-3818 (Pou/Vainieri Huttle/Gusciora)

DATE: March 16, 2009

The Chamber of Commerce Southern New Jersey strongly supports A-3818 (Pou/Vainieri Huttle/Gusciora), which would eliminate the “off-trigger” for additional unemployment benefits during job training programs. The passage of this bill would guarantee New Jersey’s full share of federal Unemployment Insurance (UI) Stimulus funds

This bill repeals the “off-trigger” provision of the State’s existing program that provides up to 26 weeks of additional UI benefits during training (ABT) for laid-off or displaced workers who are making satisfactory progress in State-approved job training programs. The current law establishing the ABT program provides an off-trigger to reject any new applications for ABT whenever the total amount of ABT payments exceeds 2% of the cumulative annual balances of the UI fund.

Together with other existing provisions of the State’s UI law, A-3818 (Pou/Vainieri Huttle/Gusciora) satisfies enough of the requirements of the federal “American Recovery and Reinvestment Act of 2009” to qualify the State’s UI fund to receive a total of $207 million in federal funds, which will help prevent increases in the UI taxes of New Jersey employers.

As you are aware, the UI Fund was designed to be forward-funded, building up surpluses during strong economic times to carry it through down periods of the business cycle, such as the one we are experiencing today. However, since 1993, $4.7 billion in employer and employee tax contributions to the UI Fund have been diverted to pay for other expenses, such as charity care.

As a result of this continuous siphoning of funds, the UI fund is now in crisis. Over the years, our Chamber has voiced its concerns over continually diverting money from the UI fund and the impact these diversions have upon the fund balance. Today, we are faced with the grave reality that federal funds, combine with a $270 million State contribution promised by Governor Corzine, is still not enough to stave off the automatic payroll tax increase, which will go into effect on July 1, 2009.

Although it seems the automatic tax hike cannot be avoided, the full supplement of federal UI stimulus money will certainly help improve the current condition of New Jersey’s UI fund. For these reasons, we ask that you vote “yes” on A-3818 (Pou/Vainieri Huttle/Gusciora).