S-3011 (Madden) Unemployment Taxes
TO: Members of the Senate Labor Committee
FROM: Hilary Chebra, Manager, Government Affairs, CCSNJ
RE: S-3011 (Madden)
DATE: October 8, 2020
The Chamber of Commerce Southern New Jersey (CCSNJ) would like to voice our support for S-3011 (Madden). This bill would reduce or delay increases in employer unemployment taxes related to benefits paid during coronavirus disease 2019 pandemic state of emergency.
Unemployment insurance is made up of both employer and employee payroll taxes and should the overall unemployment insurance experience rating rise due to a rise in unemployment claims, the employer contribution increases – amounting to a tax increase on employers. S-3011 (Madden) would exclude the cost of unemployment benefits paid to employees during a health emergency in this overall calculation.
Due to state mandated closures, many employers were forced to lay off workers through no fault of their own. Nearly 1.6 million New Jersey workers have sought unemployment benefits since the COVID-19 pandemic impacted the state six-and-a-half months ago, during which time New Jersey’s unemployment rate reached 16.2 percent, the highest level since record keeping began in 1976.
As New Jersey continues its economic recovery, many businesses still face uncertainty. With some businesses struggling to stay afloat, any increase to their bottom line could be the final cost that puts them out of business. While we enter a new season, fear of a resurgence of the virus in the form a second wave has created great uncertainty for businesses and residents alike. This bill will give business owners the peace of mind that they will be able to afford to reopen as the state navigates the economic recovery.
The recently signed FY2021 revised 9-month budget had no good news for businesses: new taxes, increased existing taxes, added borrowing, and meager spending cuts within state government. Following the tax increases in the budget, an additional increase to the employer contribution to the unemployment fund is one businesses can ill-afford.
The CCSNJ appreciates the Legislature’s continued focus on assuring that businesses have the proper tools to mitigate the looming economic crisis a result of COVID-19. This bill will give businesses the protection they need as they continue to navigate the pandemic’s impact on their operations.
We respectfully urge you to vote yes on S-3011 (Madden).