New Jersey’s Republican members of the Senate and General Assembly called for a special session of the Legislature in an effort to prevent a payroll tax increase on employers.
Additionally, the meeting would focus on ways to repay debt and to restore stability in the state’s Unemployment Insurance (UI) Fund, including using available coronavirus federal funds.
In an attempt to force the issue, Republicans from both parts of the Legislature circulated a petition to their Democrats counterparts that would constitutionally require Gov. Phil Murphy to call the special session, provided a majority of members in each house signed the petition.
“We’re calling on our Democrat colleagues who have witnessed the struggles of Main Street employers and listened to the desperate pleas of their constituents begging for help with unemployment to join us in petitioning the governor to call a special session of the Legislature,” said Senate Republican Leader Tom Kean (R-21).
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In order to force the session, seven Democrats in the Senate and 13 in the General Assembly would need to sign the petition.
Calls to Stabilize UI Fund Began in March
State Republicans began calling on Gov. Murphy to stabilize the UI Fund in March, arguing a portion of the billions in federal pandemic relief funds apportioned to New Jersey could be used. GOP lawmakers pointed out that such solutions were employed by many other states.
Instead, Murphy borrowed hundred of millions from the federal government, and will impose a payroll tax increase on employers in October to maintain the solvency of the UI Fund.
“The Murphy administration seems content on imposing the most expensive, irresponsible, and destructive solutions possible to fix our UI Fund,” said Senate Republican Budget Officer Steven Oroho (R-24).
“It doesn’t have to be that way, we don’t have to put more employers and jobs at risk when reasonable alternatives are waiting for the Legislature’s consideration,” he continued. “Our petition provides Democrats opposed to the payroll tax increase an opportunity to help our businesses and the residents they employ.”
Interest to Accrue at 2.3% Rate
Republicans noted starting Sept. 6, interest on approximately $160 million of UI Fund debt will begin accruing at an approximately 2.3% rate. Under the current managing of the fund, projected borrowing is expected to jump to $1 billion by the end of the fiscal year.
Assembly Republican Budget Officer Hal Wirths (R-24) said the funding available through pandemic assistance should be used to alleviate the deficit.
“It would be unconscionable for Democrats in the Senate and Assembly to let Gov. Murphy get away with yet another tax increase on businesses when the state has the funds to avoid it,” he said.