Christie’s business tax cut dips into unemployment insurance trust fund
Gov. Chris Christie traveled to New Jersey Manufacturers Insurance Group in Ewing on Wednesday to announce a tax cut for businesses.
“The growing health and solvency of the (Unemployment Insurance) Trust Fund, which now has a positive balance of $1.8 billion, will allow for yet another tax cut to be realized by our employers,” he said.
Christie had announced a few weeks ago a $200 million business tax cut effective July 1.
That tax break will cost the state another $180 million, for a total of $380 million.
The trust fund is what is used to pay for the benefits checks sent to unemployed workers.
Christie noted this is the largest unemployment insurance tax relief in New Jersey history.
“On average, New Jersey companies will pay nearly a hundred dollars less per employee in taxes. It’s a tremendous benefit for everybody in the state,” he said. “It will allow private sector companies, not the government, to continue growing our economy and creating jobs.”
He said state unemployment is now down to 4.4 percent, six-tenths of a point below the national average of 5 percent, and is at its lowest point in many years.
He also pointed out the state labor force participation rate is climbing, now up to 64.3 percent, and “our employees, our citizens here, are more optimistic about being able to get a job, and are putting themselves back into the workforce at an even higher rate than we are across the nation. People feel more optimistic, and as a result, more active on the workforce than they’ve been at any time in recent history.”
Christie noted “the total number of people employed in New Jersey is at an all-time high" with 4.38 million people with jobs.
"We have never had more of our citizens employed in New Jersey than we have today.”
“It’s always good to be governor and announce taxes going down in New Jersey, not many of my predecessors got a chance to do that.”
When Christie first took office 6 ½ years ago, the state’s Unemployment Insurance Trust Fund was insolvent, billions of dollars in debt, and the state of New Jersey was forced to borrow $2 billion from the federal government to keep unemployment insurance checks going out to the unemployed.
To build the fund back up at the height of the Great Recession, he said New Jersey employers faced huge, annual tax increases. A constitutional amendment was passed to stop the trust fund from being raided for other purposes. Other reforms were enacted and extensive anti-fraud efforts and other measures were put in place.
“To date, nearly $800 million has been saved because of efforts by New Jersey Labor Commissioner Hal Wirths and his team to cut down fraud,” said Christie.