TRENTON – It could get harder to collect unemployment benefits if you are fired, thanks to a move by Gov. Chris Christie last week.
The governor placed a conditional veto on a bill which would reduce an automatic tax increase on businesses that takes effect on July 1 to help replenish New Jersey’s unemployment fund. Businesses could face an unemployment tax increase that averages $400 per employee, though the bill would reduce that hike to an average of $130 per employee.
Christie supports the main purpose of the bill. “This would be a terrible time for businesses to have to absorb such a financial shock,” the governor said. “We want businesses to be able to create new jobs, not worry about how they’ll meet payroll tax obligations for existing employees.”
However, he doesn’t feel that it does enough to reform the state’s insolvent unemployment system. Christie wants to prevent workers fired for gross misconduct for collecting unemployment benefits at all and increase the waiting time for those fired for lesser misconduct. Misconduct could range from lateness to criminal behavior. The move is expected to save $150 to $175 million per year.
In February, the governor proposed reducing unemployment benefits, but the Democrat-controlled Legislature would not accept his plan.
New Jersey’s unemployment fund went broke in March 2009, largely because previous administrations had spent $4.6 billion from the unemployment insurance trust fund for other purposes. The state has been borrowing money from the federal government to pay benefits, with the loan now totaling $1.75 billion.
Both the Assembly and state Senate will need to pass a new version of the bill with the governor’s amendments, or the full unemployment tax increase will take effect.