Governor Reveals Proposals for Fixing Unemployment Insurance Fund

On February 25, Governor Chris Christie outlined his proposals to the state legislature for the state’s insolvent Unemployment Insurance Fund. Governor Christie’s proposals include:

• Reducing the 50 percent increase in unemployment insurance taxes (to $390 per employee) scheduled for July 1, 2010 down to $130 per employee.
• Phasing in future increases (which allows employers to prepare for them in advance).
• Reducing the maximum weekly benefit from $600 to $550.
• Requiring a one-week waiting period before benefits can be claimed.
• Requiring employees dismissed for “misconduct” to obtain other employment for a prescribed period of time before qualifying for an unemployment benefit.
• Making the “extended benefit” provision dependent on the continuation of 100 percent federal funding of benefit costs.

According to the Governor, if his proposals are passed by the legislature and signed into law, borrowing from the federal government for the Unemployment Insurance Fund would cease in 2013, and New Jersey would be in a position to pay back the federal funds by 2015.