The state Senate unanimously approved a bill Thursday meting out the automatic unemployment insurance fund tax increase over three years instead of a one-time July 1 jump.
The move saves employers approximately $200 per employee in 2011, and if signed into law by Gov. Chris Christie, could save business owners $450 million statewide.
"Once it is signed into law, employers will breathe a collective sigh of relief because they will be spared a huge tax increase that could have triggered layoffs and undermined the job creation that our state needs to recover from the recession," said John Galandak, president of the Commerce and Industry Association of New Jersey.
The tax would increase again in 2012 and 2013 to refund the insolvent program, which has been borrowing from the federal government to meet payments, and shifts the employer tax column in a way that is more predictable to business owners. Just as important, the legislation "implements long-term reforms that will make a crisis less likely in the future," said Laurie Ehlbeck, state director of the National Federation of Independent Business. The so-called UI fund was raided by lawmakers of both parties for years, creating the shortfall.
The legislation, which was proposed by Joseph Egan (D-New Brunswick) and Elease Evans (D-Paterson) in the Assembly and Fred Madden (D-Turnersville) and Michael Doherty (R-Washington) in the Senate, was supported by both business and labor groups. The recommendation for a change to the current system came from a task force commissioned by Christie.
"Preserving a healthy and viable unemployment trust fund while ensuring continued assistance for out-of-work New Jerseyans, and keeping New Jersey as an affordable place to do business, is a sacred trust and an a absolute must," Egan said in a statement.
The bill was approved 76-0 on May 9 in an Assembly vote.