Bill to cut jobless tax headed to Christie

TRENTON - A bill to reduce an unemployment-insurance tax increase set to kick in for employers July 1 received final legislative approval Thursday.

The bill, sponsored by Democrats, now heads to Gov. Christie, but it is unclear whether the governor will sign it. In February, Christie, a Republican, proposed an alternative plan that also would have reduced the unemployment-insurance tax increase.

If no change is made to existing law, employers would pay an average of $400 more per employee beginning in July, an increase of 52 percent. Under both Christie's and the Democrats' proposals, the average increase would be cut to about $149 per employee.

Under Christie's proposal, the maximum benefit for the unemployed would fall from $600 to $550 a week; the newly unemployed would face a one-week waiting period before benefits could be claimed; employees who lost their jobs because of misconduct would be required to work at another job for a certain period before qualifying for unemployment benefits; and extended benefits would be contingent upon federal funding.

Democrats say that the state should not be cutting unemployment benefits during difficult economic times and that their bill does not change benefits, only the level of tax increase for employers.

Christie said Thursday that he had spent the day focusing on the "millionaires tax" bill that he vetoed after passage by the Legislature.

"When the bill gets delivered, I'll take a look at it, I'll sit down with the legislative leadership, and we'll see what we're going to do," Christie said of the unemployment insurance bill.

"A plan that ends up cutting benefits for all out-of-work New Jerseyans would just add more pain to an already difficult situation," said Assemblyman Joseph Egan (D., Middlesex), a sponsor of the bill. "This bill meets the needs of both workers and businesses."

Sen. Fred Madden (D., Camden) said the bill would "prevent a drastic tax hike, which could do irreparable harm to the state's already fragile business climate."

Democratic and Republican administrations have raided the unemployment insurance fund to pay for other things. According to the Christie administration, the state diverted $4.6 billion of employer and employee contributions from 1992 to 2006, forcing the state to borrow $1.2 billion from the federal government to pay unemployment benefits.