NJ Republicans Try To Force Murphy’s Hand On Business Taxes

NEW JERSEY — The Republican members of the New Jersey Senate and Assembly say they want Gov. Phil Murphy to put the brakes on a potential payroll tax hike that could affect businesses across the state.

Earlier this week, all 14 Republican members of the Senate and 28 Republican members of the Assembly signed a petition that would constitutionally require the governor to call a special session. It would take the signatures of seven Democratic members of the Senate and 13 in the Assembly to provide the majority needed in each house to force Murphy to call a special session.

Read the petition here.

The goal of the potential work session? To adopt legislative solutions to “prevent a payroll tax increase on employers, repay debt and restore stability to the state’s Unemployment Insurance (UI) fund.”

Here’s the problem, according to a joint statement from the lawmakers:

“Since March, Republicans have been calling for Gov. Murphy to stabilize New Jersey’s UI fund with a portion of the billions in federal pandemic relief funds that have been delivered to New Jersey, a solution since employed by many other states. Instead, Gov. Murphy has borrowed hundreds of millions of dollars from the federal government and will impose an unnecessary payroll tax increase on employers in October as his solutions to maintain the solvency of the UI fund. Interest on approximately $160 million of UI fund debt will begin accruing on Sept. 6 at a rate of approximately 2.3 percent. The Murphy administration has projected borrowing will grow to $1 billion by the end of the fiscal year under the governor’s current approach to managing the fund, leading to tens of millions of dollars of interest payments at the expense of New Jersey taxpayers.”

According to a separate report from the New Jersey Business Coalition, the need is urgent. If something isn't done, New Jersey employers are facing a potential $252 million UI tax increase in October and a nearly $1 billion increase over three years.

• See related article: NJ Should Use Fed Aid To Soften $1B Business Tax Hike, Group Says

“We have billions of federal aid that could be used to avoid massive tax increases on businesses still trying to survive the pandemic,” Assembly Republican Budget Officer Hal Wirths said.

“It would be unconscionable for Democrats in the Senate and Assembly to let Gov. Murphy get away with yet another tax increase on businesses, when the state has the funds to avoid it,” Wirths added.

Send news tips and correction requests to eric.kiefer@patch.com

Sign up for Patch email newsletters. Learn more about posting announcements or events to your local Patch site.