More bad news about the state’s fiscal stability from today’s Star-Ledger:
Dwindling assets have pushed the fund that bankrolls unemployment benefits for jobless New Jerseyans to the brink of fiscal collapse, but have stayed just shy of the line that would trigger a $400 million-a-year business tax hike, state Labor Commissioner David Socolow told lawmakers yesterday.
“We are very close to the threshold that would have triggered a tax increase,” Socolow told members of Senate Budget and Appropriations Committee. “We are playing it very close to the edge here.”
Over the past five years, the Unemployment Insurance Trust Fund has plunged from $3.1 billion to its current value of $260 million, largely as a result of regular raids to prop up state budgets. Between 1993 and 2006, lawmakers tapped the unemployment fund for more than $4.6 billion.
So, add the state’s unemployment fund to the long list of bank accounts raided by governors and legislators of both parties over the years to balance the budget (pension, temporary disability) without asking for any sacrifices from anyone — whether they be taxpayers, state workers or the many constituencies who receive money from the state.
The fund, according to Socolow, will be OK so long as the state does not fall into recession. It is due to get a bump in contributions shortly, but that will only get the fund to the minimum level needed to ensure its solvency.
“Any kind of economic downturn puts us into the situation of either having a badly timed increase in business taxes or emptying the fund to the point where we would have to borrow from the federal government and pay a surcharge,” he said.
Not an impending catastrophe, just more of the same in a state that seems to prefer living on credit cards to crafting sane fiscal policy.
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Hank Kalet 