November 18, 2008
Contact: Robbie Kenney / (609) 654-1498Assemblyman Scott Rudder (R-8), Assemblywoman Dawn Addiego (R-8)
$100 Million in New Payroll Tax on New Jersey Families Will Add to the Current Economic Crisis
Assemblyman Scott Rudder and Assemblywoman Dawn Marie Addiego have introduced legislation to delay the implementation of a law providing for family temporary disability benefits which will place a financial burden on businesses and employees in the state.
The new law is scheduled to take effect in January, when an additional payroll tax kicks in.
“This is absolutely the wrong time to be rolling out this law, and the $100 million in new payroll taxes on New Jersey families,” said Rudder. “Now is not the time to initiate a new income tax, and it is not the time to be asking private sector and public sector employers to endure the tremendous costs of implementing this bill.”
The legislation written by Assemblyman Rudder and Assemblywoman Addiego will delay enactment of the law by 24 months.
“These are uncertain times, and we are facing a cloudy economic future. Postponing the law for two years will give the economy a chance to snap back,” Rudder said.
A report in the Wall Street Journal’s June 20, 2007 edition quoted a federal Department of labor estimate that paid family leave programs cost employers an average of $1.76 per hour per full-time employee. That means, a company with just 10 full-time employees will see expenses grow by $36, 608.
“We just heard projections from the state treasurer for a revenue shortfall of $1.2 billion this year. State revenue was off by $200 million in October, alone. We are looking at a $5 billion projected budget deficit for the next fiscal year,” Assemblyman Rudder said. “The timing is all wrong.”
New Jersey ranks 50th in the nation in business tax climate, businesses are closing up and leaving the state in record numbers, and the unemployment rate reached its highest rate in 14 years in October, when it climbed to 6.5 percent.
“Families are struggling, businesses are failing, and the state is reeling from an economic ‘perfect storm.’ Clearly, we can not afford this law under these conditions,” said Assemblywoman Addiego. “I don’t think people realize this is a tax being deducted from our paychecks at a time when we can not afford it.”
“We are working with Trenton to find ways to help the state and its residents weather this financial crisis,” said Assemblywoman Addiego. “Applying even more pressure on employers and their workers is not the way to do that.”
New Jersey has lost 14, 900 private sector jobs since December 2000, and depending on the severity of the current economic downturn, a study projects an additional loss of almost 250, 000 jobs.
“This law will cost businesses money, and it will cost New Jersey jobs. We must improve the conditions for business and put more people to work. Postponing the law for two years is a start, a small step in the right direction,” said Assemblyman Rudder.
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