State Director Laurie Ehlbeck was recently appointed by Governor Chris Christie as one of the six voting members on the New Jersey Unemployment Insurance Task Force. The Task Force was initially convened last October when New Jersey’s unemployment insurance trust fund became insolvent, triggering a fiscal crisis for the state. The goal of the Task Force is to assess the State’s current unemployment insurance program and recommend changes that will provide an equitable tax formula for employers as the UI fund returns to solvency, while balancing the impact of any changes in revenue collection and benefit payments with the interests of workers, employers and the overall growth of the State’s economy.
The Task Force, which will meet for three years to study and assess the current deficit crisis of the State’s unemployment insurance system has released its first report and offered initial recommendations to support the achievement of long-term trust fund solvency and the protection of NJ employers from severe increases in their tax liability during challenging economic times.
The unemployment Insurance Fund has already borrowed $1.6 billion from the federal government to pay claims, which will trigger a significant
automatic increase in employer payroll taxes. To help shield employers from the harsh economic impact of a scheduled tax increase, the Task Force recommends a three year phase in of this tax.
The report, in part includes the following recommendations:
- Phase in of annual employer tax increases over the next three years. This phase in is expected to reduce an employers’ tax liability from $300 to $130 per employee on average, a savings of approximately $300 million.
- Achieve long term fiscal stability by returning UI Fund tax bands to the tax structure that was in place in FY2003.