(The Center Square) – A Republican lawmaker wants Gov. Phil Murphy to clarify how much New Jersey has borrowed to fund its Unemployment Insurance Fund.
According to state Sen. Sam Thompson, R-Old Bridge, the state borrows roughly $10 million per day from the federal government. The loan has a 2.3% interest rate.
According to Treasury Direct, the state has borrowed $299.1 million from the feds for the unemployment fund, including $132.7 million this month.
“New Jersey is racking up debt at an alarming pace, and Murphy’s only plan is to pass the cost on to employers, many who are barely surviving in the COVID economy,” Thompson, a member of the state Senate Budget and Appropriations Committee, said in a news release. “This is a dangerous fiscal scheme that could trigger the failure of countless small and mid-sized employers and the loss of hundreds of thousands of jobs. It’s reckless and unjustifiable.”
New Jersey businesses could pay roughly $885 million in additional unemployment insurance (UI) taxes over three years, including a $252 million increase starting in October. Republican lawmakers want Murphy to use federal American Rescue Plan (ARP) money to avert the increase.
A spokesperson for Thompson told The Center Square that more than 40 states have used ARP dollars to stabilize their UI funds.
“This outrageous borrowing was necessitated only because of Murphy’s refusal to utilize a portion of the billions of dollars New Jersey received in federal pandemic relief funds to keep the unemployment fund solvent,” Thompson added. “Nearly every other state with a high unemployment rate has used federal funds to avoid borrowing money to pay unemployment claims. New Jersey is once again stacking up debt it will force taxpayers to pay back through tax increases.”
Between $2 billion and $2.5 billion of the $6.2 billion in ARP funds New Jersey received have been “spoken for,” Murphy previously said. However, Republicans, citing Office of Legislative Services (OLS) numbers, say just a small portion of the money has been spent.
On Tuesday, the New Jersey Department of Labor and Workforce Development said the agency has paid nearly $35 billion in UI benefits to 1.6 million claimants between March 2020 and the week ending Sept. 4. Regular state UI and extended benefits provided nearly $9 billion of those payments.
Spokespeople for Murphy did not immediately respond to a request for comment from The Center Square. The governor has previously declined to commit to using federal money to avert a tax increase on New Jersey small businesses to replenish the state’s UI fund.