As an employer, I’ve been paying into New Jersey’s unemployment insurance trust fund for over 30 years. Plus, my employees have been doing their part. That way, if we hit hard times and I had to do layoffs, my employees would be able to receive unemployment checks until I could bring them back or while they looked for employment elsewhere. Right?
In the 1990s, when economic conditions were far more favorable than they are today, apparently it was just too easy for the governors and legislators to borrow against the future to pay for budget shortfalls. As a citizen, I simply do not understand how it was legal for them to dip into the unemployment insurance funds. But that’s what they did. They depleted the $4 Billion dollar unemployment fund. The State of New Jersey has been forced to borrow money from the federal government to pay its unemployment claims. In an attempt to help people, Congress has recently extended eligibility for unemployment benefits. An individual can collect unemployment checks for up to 99 weeks! New Jersey couldn’t afford the previous mandated levels, so…
New Jersey’s “solution” is to create a new tax so employers like me will be required to keep contributing at previous levels PLUS replenish the unemployment insurance fund. That’s the same fund we financed in the first place, and no changes have been instituted to prevent the legislators from dipping into the unemployment fund again!
The same thing happened to New Jersey’s pension fund…only more so. Year after year, New Jersey’s governors and legislators stole money from “protected” trust funds and chose getting re-elected over restructuring or negotiating with the powerful unions. The total unfunded liability for New Jersey pensions and benefits is now $130 Billion! ($80 Billion pension shortfall and $50 Billion in unfunded postretirement medical and prescription drug benefits.)
New Jersey’s response? The most recent Administration passed more mandates. Who will be expected to pay for it? Proponents quickly point out that the mandated 6 weeks of paid family leave is funded by the temporary disability fund. Based on the long term pattern, that fund will also soon be depleted and employers like me will be expected to pay the costs associated with paid family leave and mandated health insurance. New Jersey employers already pay an average of $10,522 for health insurance per employee, but that isn’t considered when more mandates are being considered.
New Jersey’s employers now also face increased corporate and income taxes … all while the WHITE ELEPHANT IN THE ROOM continues to go unaddressed.
To be continued…