Oroho Calls for Murphy Administration to Dedicate Pandemic Relief Funds to Prevent $1 Billion Payroll Tax Increase

Senate Republican Leader Steven Oroho called for the Murphy administration to dedicate pandemic relief funds to the Unemployment Insurance (UI) Fund to prevent $1 billion of cumulative payroll tax increases on New Jersey employers.

“Today’s budget committee meeting with the Department of Labor confirmed that New Jersey employers will be hit with a massive $700 million payroll tax increase on July 1 to help replenish the UI Fund,” said Oroho (R-24), a member of the Senate Budget & Appropriations Committee. “That increase follows a $300 million increase that took effect less than a year ago and would push the total payroll tax increase borne by employers to well over $1 billion. There is absolutely no reason the Murphy administration can’t dedicate or repurpose some of the unspent $5 billion of pandemic relief funds at its disposal to prevent this looming and unnecessary tax increase.”

Dozens of other states have used the federal pandemic relief funds they received to prevent replenish their unemployment funds in the wake of massive payouts resulting from pandemic-related unemployment.

In 2021, Senate Republicans proposed using $2.5 billion of the more than $6 billion New Jersey received through the American Rescue Plan Act (ARP) for this purpose.

According to a recent report by the State Auditor, just $1 billion of the state’s ARP funds have been spent to date.

Oroho warned there is a very real risk that the Biden administration could reclaim unspent pandemic relief funds from states as part of an agreement to raise the federal debt limit.

“The longer the Murphy administration sits on unspent pandemic relief funds, the greater the risk those funds will be clawed back by the federal government,” added Oroho. “It would be fiscally irresponsible for the Murphy administration to not take action to protect these funds by dedicating them quickly to continuing needs like our unemployment fund.”