Senate Republican Leader Tom Kean said that the restoration of the New Jersey Unemployment Insurance Trust Fund to full solvency and a resulting $200 million tax cut just announced for employers started with the approval of a constitutional amendment he sponsored to prohibit the fund from being raided to pay for other budgetary items.
“In the years before Public Question No. 1 was approved by voters in 2010, more than $5 billion had been diverted from the state’s UI fund to support other spending,” said Kean. “We warned before 2008 that what seemed to be large UI fund surpluses could quickly turn negative in an economic downtown. Unfortunately, we were proven right.”
Following the 2008 recession and a high number of claims by unemployed workers, the UI fund was emptied forcing the state to borrow from the federal government to continue making payments. The deficit peaked at $2.1 billion.
Kean sponsored SCR-60, which appeared on the 2010 ballot as Public Question No. 1, which requires contributions collected from assessments on wages to be used for employee benefits, and prohibited the use of the contributions for any other purpose.
The measure was approved by New Jersey voters on November 2, 2010 by a vote of 1,197,956 to 293,886, an 80 percent to 20 percent margin.
“Our ballot measure to prohibit the state from raiding the UI fund was the first step in restoring the fund to solvency,” added Kean. “That forced discipline has brought us to today, with a $1 billion surplus and a tax cut that will boost the New Jersey economy.”