Testa: Not a Single Democratic Legislator Has Signed Petition to Stop Gov. Murphy’s Payroll Tax Increase Next Month

Senator Michael Testa (R-1) said that nearly two weeks after a petition was sent to their offices, not a single Democrat in the New Jersey Legislature has signed on to an effort to convene a special legislative session to prevent an upcoming payroll tax increase on employers, repay debt, and restore stability to the state’s Unemployment Insurance (UI) Fund.

The petition, signed by every Republican member of the Legislature, would constitutionally require Governor Phil Murphy to call a special session if signed by a majority of the members of each house of the Legislature.

“It’s extremely disappointing that none of the Democratic legislators who put out press releases bemoaning Governor Murphy’s looming payroll tax increase were brave enough to sign the petition that was presented to them,” said Testa, a member of the Senate Budget & Appropriations Committee. “Their inaction when offered a clear opportunity to work in a bipartisan manner to stop the tax increase on New Jersey’s struggling employers speaks louder than their empty words.”

With all Republicans on board, it would take the signatures of just seven Democrats in the Senate and 13 in the General Assembly to provide the majority needed in each house to force Governor Murphy to call a special session of the Legislature pursuant to Article IV, Section I, paragraph 4 of the New Jersey Constitution.

Since March, Republicans have been calling for Governor 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 dozens of other states.

Instead, Governor Murphy will impose an unnecessary payroll tax increase on employers in October as his solution to maintain the solvency of the UI Fund.

“Unfortunately, Governor Murphy refuses to take the painless route we proposed months ago and insists on imposing tax increases that could send more workers into his broken unemployment system,” said Testa. “We already have a 7.3% unemployment rate with only four states worse off than New Jersey. It’s unbelievable that Democrats in the Legislature would sit back and do nothing as this unnecessary harm is inflicted upon their constituents, but the empty signature boxes on the petition to call a special session show just how unwilling they are to stand up to Governor Murphy.”

According to the nonpartisan Office of Legislative Services, just 2% of the $6.2 billion received by New Jersey in May from the federal government through the American Rescue Plan (ARP) Act has been spent by the Murphy administration.

“With billions in the bank, the only reason for Governor Murphy to raise taxes on struggling employers is because that’s exactly what he wants to do,” added Testa. “Any suggestion by the Murphy administration that it’s too late to stop the pending tax increase on small businesses is completely false. During a special session, we can address any deadlines or provisions of state law that need to be changed. We just need a few brave Democrats to work with us, if any are out there.”

Despite having billions in pandemic relief funds that could stabilize the UI Fund immediately, the unemployment fund’s deficit has more than tripled over the past month to $235 million, with borrowed funds accruing interest as of September 6.

Other states, including Nevada and Ohio, repaid their federal unemployment loans in full prior to September 6 using monies they received through ARP to avoid unnecessary interest charges.

In contrast, the Murphy administration has projected New Jersey’s UI Fund deficit will grow to more than $1 billion by the end of the fiscal year, with New Jersey taxpayers stuck with the bill.