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NJBIA applauds unemployment trust fund’s return to solvency

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While members of Congress spent most of the month arguing in Washington, lawmakers in Trenton were getting the job done in a bipartisan manner, says New Jersey Business and Industry Association president Philip Kirschner.

That's evident, he says, by an announcement made last week by Gov. Chris Christie that his administration would be rendering the state's unemployment trust fund solvent by the end of this week.

"It would be easy to miss in the midst of a government shutdown and partisan bickering in Washington, but here in New Jersey, government got it right," Kirschner said Tuesday.

The Christie administration says the move will spare employers from "drastic tax increases" under the Federal Unemployment Insurance Tax Act, ultimately saving them $211 million.

"We have managed to get a very important safety net for our workers solvent well before anyone thought possible," Christie said in a release last week. "We've accomplished this without imposing disastrous annual tax increases on the very same businesses we are relying upon to improve the prosperity of our economy and continue delivering jobs to our state."

Kirschner agreed today that getting the fund straightened out was in the best interest of businesses in New Jersey.

"This is an issue we can all agree on," Kirschner said. "A fiscally sound (unemployment insurance) fund will lead to lower payroll taxes for business, uninterrupted benefits for those out of work and peace of mind for employees statewide."

Kirschner said the NJBIA worked closely with Christie, the Legislature and other state agencies on the issue.

"The business community is grateful for the hard work of the governor, the Legislature and the (state) Department of Labor, which implemented many of the reforms," Kirschner said.

For decades, governors in both parties had raided the fund for over $4.5 billion. That practice was only made worse by the 2008 recession, which forced the state to borrow federal funds to help it make its benefit payments to the then-growing number of out-of-work residents.

The Christie administration now expects the fund to come into a positive balance next month. By meeting federal obligations for its employers to be spared the FUTA tax increase, the administration has said that the FUTA tax rate will fall to "pre-deficit levels for employers."

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Andrew George

Andrew George

Andrew George covers the Statehouse from NJBIZ's Trenton bureau. Born and raised in N.J., Andrew has also spent time as a reporter in D.C., Texas and Pa. His email is andrewg@njbiz.com and he is @AndrGeorge on Twitter.

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