| A few days ago, I wrote about the stimulus bill as it related to the state's unemployment reserve fund, which is dwindling rapidly. In that post, I pointed out how "Jersey Jindal" would cost all NJ employers tens, if not hundreds of millions of dollars by declining stimulus funds that would help the NJ unemployment system, which just so happens to be in dire shape.
I said the following: But here is where the kicker lies: by rejecting these funds, he would break the backs of ALL New Jersey employers with additional taxes. As I said the other day:
Put simply, if Christie would not accept money that will help with unemployment benefits, this will further deplete the unemployment fund, causing higher employer and employee unemployment tax rates, and most likely will either require New Jersey to borrow money from the Federal government, or have all New Jersey employers pay a higher Federal unemployment tax due to its depleted unemployment fund.
So how does this happen? Well, an article in the NY Times from December 2008 pointed out that NJ's unemployment reserve fund is dangerously low - meaning that it may be in a position where it needs to borrow money from the Federal Government to continue making unemployment benefit payments. New Jersey's unemployment rate in December was close to 7% - a 15 year high, and the state is 49 out of 53 when it comes to the level in the state unemployment reserve fund.
Using that as a backdrop, if NJ has to borrow money from the Federal government, that means more people are collecting unemployment benefits - and this in and of itself will drive unemployment tax rates that employers pay up for ALL employers. Additionally, if NJ has to borrow money and can't pay it back timely, then ALL New Jersey employers will have to pay an additional $42 PER EMPLOYEE for Federal Unemployment Tax (calculated at the additional 0.6% surcharge on the first $7,000 paid to each employee).
And sure enough, it was just announced that New Jersey will be the first state to need a loan from the Federal government to shore up its' unemployment reserve fund.
If Christie were Governor, he would have declined much needed stimulus funds (hundreds of millions, frankly) that would have helped employers by not imposing an additional federal employment tax burden on all of them. However, instead of dealing with this in a mature manner, he decided to play "buzzword Mad Libs" with yet another statement that says absolutely nothing about what he would do about the multi billion dollar deficit this state has to close in its budget. Instead of solutions, we get finger pointing. Instead of an adult discussion about the real fiscal crisis this state is facing, we get talking points.
It is long past time for Chris Christie to start saying what he WILL propose to do if he was in charge of the budget. Sadly, we are only "treated" to irresponsible statements such as this one: "Governor Corzine has a responsibility for putting together this budget and my responsibility is to critique what he's done."
Sorry, Mr. Christie - if you want to be called the Governor, you have to act like you can understand what the job entails. |
