TRENTON, N.J. (AP) - The Senate is poised to act Thursday to avoid a tax
increase on employers -- at least for now -- by pumping $260 million into the
state fund that pays benefits to out-of-work New Jerseyans.
Democratic and Republican legislators and governors have diverted $4.7
billion from the fund over the last 14 years to help hospitals pay for treating
the uninsured. As a result, the fund is close to falling below the level that
would trigger an automatic $350 million increase in employer payroll taxes as of
July 1.
The money was diverted before Democratic Gov. Jon S. Corzine took office in
January 2006, and Corzine proposed putting in the $260 million in surplus money
to avoid a tax increase.
The Assembly hasn't considered the bill, but Senate Budget Chairwoman
Barbara Buono, D-Middlesex, said the move "will help right the wrongs of the
past."
"This is the right fix for these tough times," Buono said.
The fund has currently $977.3 million.
Legislative staff estimate the cash infusion proposed by Corzine would put
the balance at $1.05 billion by March 31, 2009, again leaving it close to the
threshold for the tax increase. So depending on factors such as economic
conditions and new unemployment filings, an employer tax increase could be
triggered starting July 1, 2009.
The Senate is also considering a measure that would lower unemployment taxes
by as much as 50 percent if the fund reaches a certain level. That level would
be $3.7 billion, so legislative staff said a reduction would be unlikely at
least through 2011.
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