Christie's plan to cut jobless benefits, taxes for employers, criticized by labor, praised by business

I found this recently at NewJerseyNewsroom.com and thought some Gadfly readers might be interested in this.

I hope that any of the soon-to-be-unemployed saps didn’t vote for this guy. What irony, then.

Gov. Chris Christie plan to reduce benefits for future jobless New Jerseyans and reduce employer contributions to the state unemployment insurance fund Thursday drew criticism from the state's highest ranking union leader and praise from the association representing business.

"With unemployment in New Jersey at record highs, our elected officials should be fighting to protect the needs of unemployed New Jersey residents, not abandoning them,'' said Charles Wowkanech, president of the New Jersey AFL-CIO. "Our elected officials should oppose attempts to reduce unemployment benefits for unemployed workers. Workers have paid into the fund with the understanding that they would be getting a certain level of benefits, and it would be a betrayal to now reduce benefits when they are most needed‘'
Philip Kirschner, president of the New Jersey Business & Industry Association, sees the proposal as benefiting employers.

"Right now, businesses face an average tax increase of $400 per employee," Kirschner said. "Businesses already struggling to survive this recession would have no choice but to lay off workers. Those workers would collect unemployment benefits, and the layoffs would reduce contributions to the UI fund, putting us in an even deeper hole. It's a vicious cycle.

"Doing nothing is not an option," Kirschner added. "This plan breaks this cycle before it starts by avoiding the layoffs that a tax increase of this magnitude would cause. Then it puts the unemployment insurance fund on a path to solvency, returning it to fiscal health while protecting the state's private-sector employers from a brutal tax hike in this recession."

Sal Risalvato, director of the New Jersey Gasoline, Convenience, Automotive Association, also praised Christie's action.

"Small business owners that operate gasoline service stations, auto repair shops, and convenience stores appreciate the effort that Governor Christie has made to reduce the mandatory tax increase that is set to trigger in order to continue paying unemployment claims".

Wowkanech said that at the federal level, Congress has recognized the to help the jobless, and provided supplemental unemployment insurance benefits to workers. "Here in New Jersey, we should not be going in the other direction by reducing benefits,'' he said. "We are sensitive to the needs of businesses during this difficult economic time. But employers in New Jersey have already received enormous tax cuts reducing their obligation to properly fund the unemployment trust fund.''

Wowkanech said that according to budget reports issued by the state Department of Labor and Workforce Development, corporations have received four unemployment tax cuts since 1998, with savings to corporations ranging from $250 million to $450 million - per year. Additional, he said, steps have been taken recently on behalf of employers, including diverting $300 million from the general fund to the unemployment insurance fund to delay an employer tax increase.

"In total, corporations have benefited from these unemployment insurance fund changes to the tune of billions of dollars,'' Wowkanech said. "We cannot let corporate executives once again avoid their responsibility to the unemployment insurance fund. Workers have responsibly paid their share, employers must do the same.

"Christie to stick to his original position prior to taking office in January, in which he stated he would not ask for legislation to put off changes to properly fund the unemployment insurance fund. We also urge legislative leadership to stand with workers on this issue and reject any reduction to unemployment benefits. ‘'

Kirschner said a tax increase on employers would be devastating to the economy.

"Everyone agrees that our economy is fragile right now; we cannot risk damaging it further and delaying an economic recovery by enacting a huge tax on jobs,'' he said. "By phasing it in, we will soften the blow to companies, minimize the economic impact and avoid making the situation much worse. In the short-term, New Jersey must borrow more money from the federal government to cover ongoing unemployment benefit costs.''

Kirschner said the NJBIA is urging the federal government to extend a waiver of interest payments on unemployment insurance loans, to forgive the federal loans that have already been accrued, and provide additional money for extended benefit payments to replenish the state's fund.

"This would ensure that unemployment insurance contributions are used to improve the solvency of the fund and to pay for benefits instead of loans and penalties," he said.

Risalvato added, "...Without Governor Christie's intervention to reduce the amount paid by employers, my members would have been forced to pay an increase that was beyond unpalatable, would have put jobs at risk, and would have been obscene."