From NJBIZ:
A $400M Tax Hike Could Be On the Way
The unemployment insurance fund is dangerously low
Scott Goldstein
Trenton Bureau
5/14/2007
The fund that pays unemployment benefits to New Jerseyans has dipped so low that it is close to triggering an automatic $400 million-per-year tax increase to employers, according to David Socolow, commissioner of the Department of Labor and Workforce Development.
The tax hike, which would cost businesses about $100 per worker a year, could be averted if the state receives sufficient revenue when it completes first-quarter payroll and business tax collections.
“We are very close to the threshold that would have triggered a tax increase,” Socolow testified last month before the Senate Budget and Appropriations Committee. “We are playing it very close to the edge here.
“This trust fund is not at the level we would like it to be in order to prepare for an economic downturn,” added Socolow, who noted that neither Gov. Jon Corzine’s current-year budget nor his proposal for fiscal 2008 shifts money from the fund, which is supported by employer and payroll taxes.
The fund has fallen from $3.1 billion four years ago to its current total of $260 million because the state diverted money from the fund for other purposes between 1993 and 2006. Business advocates say the state funneled about $4.6 billion from the fund mostly to health care for the working poor and the uninsured.
“The state stole money out of the pockets of the business and employee community,” says Jim Leonard, lobbyist for the New Jersey Chamber of Commerce. “Why should the business and the employee community have to pay for that?”
Concurs Kathleen Davis, executive vice president of the Chamber of Commerce Southern New Jersey: “All along, the business community has testified and warned the Legislature that they can’t keep digging into this fund because it will reach a point where it triggers the tax. It seems to me that the practices of the past of siphoning off the surplus to balance the state budget is catching up with us.”
From the Star Ledger:
Green aid legislation cut off by governor
Opposed to additional state debt, Gov. Jon Corzine and aides worked behind closed doors yesterday to kill legislation that would have asked voters to approve a referendum to provide $175 million annually for a decade to re-fund the state’s open space and historic preservation efforts.
Instead, the Garden State Preservation Trust will be temporarily re-funded in the 2008-09 state budget with $30 million under an agreement worked out between Corzine and Assembly Speaker Joseph Roberts (D-Camden). Future funding for the GSPT would depend on the governor’s effort to sell or lease state assets, such as toll roads, air rights, the PNC Arts Center and the state lottery.
The GSPT, which finances farmland and historic site preservation and Green Acres parkland and open space, is expected to run out of money next year.
We can sell more assets …
Great idea Corzine, lets start by selling of Drumthwacket to Hovnanian or Toll Brothers.
jb
so lets get this straight. the deadbeats
have bk’d the fund. the taxpayers bail
it out. nice. Only in NJ
and I see where rice has introduced
a bill to bail out the deadbeats who
can’t pay their mortgage. It’s the taxpayers
fault. Only in NJ the welfare state.
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