Jeffrey Perlman, chairman; Michele N. Siekerka, president and CEO, MRCC
The Mercer Regional Chamber of Commerce is calling for legislation that will prohibit the future diversion of money for the Unemployment Trust Fund. The New Jersey Unemployment Trust Fund is the means through which unemployment claims in the state are satisfied. New Jersey pays out $45 million weekly in unemployment insurance benefits and collects a total of $1.9 billion annually in employer and workers’ contributions to the fund. The fund is nearing bankruptcy as the need to tap surplus is at all time high due to the increase in unemployment claims. In fact the only money currently in the fund is money provided through the federal stimulus and it is almost depleted.
The fund’s surplus is suffering a shortfall due to the repeated diversion of billions of dollars from the fund as a regular government practice in order to finance other state programs. The government has been warned in the past that such a diversion would result one day in the fund being bankrupt…and here we are. So who does the government now turn to in order to “bail out” the fund — the business community, at a time when businesses can ill afford it.
The governor’s proposed budget includes a $400 million payroll tax increase on employers to fill the shortfall. This is a 20 percent increase, effective July 1, 2009 equating to an average of almost an extra $90 per employee per year. It is new costs like this that will be the last straw for businesses just getting by. They will either close up shop or move out to more business friendly states.
The legislature must act now to ensure that this never happens again. The legislature must also seek out alternative ways to replenish the Fund in order to minimize the impact on our businesses. On behalf of the 1200+ businesses that we represent who employ over 60,000 employees in the greater Mercer County region, the Mercer Regional Chamber of Commerce calls on its legislators to take action now!
