N.J. businesses oppose tax proposal

TRENTON - A group representing New Jersey's businesses said yesterday that a payroll tax of about $90 per employee should not be forced on businesses during a recession to make up for the billions of dollars that lawmakers have diverted from the state's unemployment-insurance fund.

The tax increase would ultimately be borne by customers and hurt them and businesses, said Paul Tyahla of the Commerce and Industry Association of New Jersey.

"Don't tax New Jersey's jobs," he said. "Raising business taxes during a recession is counterproductive."

He was speaking as a member of the New Jersey Taxpayers Alliance, a group of business and civic groups.

Gov. Corzine's $29.8 billion budget proposal includes the tax, expected to raise about $400 million.

Lawmakers have poached $4.7 billion from the fund since 1993 to pay for charity care for hospitals and other programs. Now the jobless fund is short on reserves, triggering an automatic tax increase on the state's 250,000 businesses.

Corzine said he would infuse the fund with $270 million this year, but that won't be enough to stop tax increase July 1.

The fund is paying $75 million a week in claims, nearly twice as many as last year, according to the state Department of Labor and Workforce Development. As of Feb. 28, the fund's balance was below $127 million.

The taxpayers' group also announced a 17-point agenda that includes requiring voter approval on all future state debt, imposing a moratorium on new taxes and fees, and eliminating the tax on residents earning more than $500,000.