Bill Atkins
New Jersey employers can expect to pay about $1 billion more beginning in July to replenish the unemployment trust fund, Gov. Chris Christie said Thursday.The increase, more than three times more than they paid last year, could cause employers to either pass along the cost to consumers or rein in their plans to expand, a small business owner said.
"It seems like any time anything goes on, the shift of burden goes on the taxpayer, either personally or a business," said Bill Atkins, owner of Red Bank Limo, a limousine company which recently won The 2010 Operator of the Year Award.. "And it's a shame. That's not how you and I do our own personal budgets."
The unemployment trust fund has been dwindling for more than a decade as lawmakers have dipped into it to pay for other projects. The practice, ended when Christie's predecessor Jon S. Corzine took office, backfired when the unemployment rate climbed from 4.6 percent to 10.1 percent in just two years.
Like other insurance programs, employers pay different rates depending on how many of their workers file for unemployment. But state law requires a rate increase if the trust fund falls below an adequate capital level. Last year, employers' taxes increased by $350 million.
Christie spoke about a looming rate increase at a news conference earlier this week. And he provided more details Thursday in a note to investors that outlined the state of the unemployment compensation fund.
The note said the state paid $3.3 billion in claims last year and received $1.8 billion in contributions. The state has borrowed $1.14 billion from the U.S. Labor Department to continue benefits.
"The state expects to continue to borrow funds from the federal government as needed," the note said. And the amount could be significant.
The final amount of what employers will owe will be based on the trust fund's level on March 31.
Business advocates said they hoped to offset the rate hike. The federal government, which contributed $207 million to the fund last year, has begun discussing another economic stimulus.
Photo:
http://www.prlog.org/
