Thompson Calls for Accountability as Governor Continues $60 Million-Per-Week Borrowing Spree to Fund Unemployment Benefits

Says Federal Relief Money Should be Used to Restore UI Fund and Save Jobs

As the Murphy Administration continues to borrow almost $10 million every day from the federal government, Senator Sam Thompson called on the Governor to provide an accurate estimate of how much debt employers in the state will be left to repay through the massive tax increase coming next 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,” said Thompson, a Republican member of the Senate Budget and Appropriations Committee. “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.”

To pay benefits, New Jersey’s insolvent Unemployment Insurance Trust Fund is borrowing the money from the federal government at 2.3 percent interest.  At almost $60 million per week, the debt has more than quadrupled in the last month, today exceeding $300 million.

Only eight states – California, New York, Illinois, Hawaii, Minnesota, Pennsylvania, New Jersey, and Texas – in the nation continue to borrow money from the federal government to make unemployment payments, and only California and New York are borrowing at a faster rate. In the past month, New Jersey leveraged more than Texas and Illinois combined.

“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,” said Thompson. “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.”

Murphy has estimated the State’s unemployment insurance debt would climb to $1 billion by June 30, but Thompson said he doubted the accuracy.

“At this rate, Murphy will borrow more, far more, than he has estimated. It is time to update his projections and be straight with New Jersey residents who will be impacted by this capricious borrowing tactic. It’s like this Governor is hell-bent on being the biggest borrower and having the worst unemployment in the country,” Thompson said, adding that only four states have unemployment rates higher than New Jersey’s current 7.2 percent.

Thompson also noted that the Governor has been sitting on a $2.5 billion fund that has been available to pay down debt since it was created in June and has not been expended. Not one dime of debt has been satisfied.

Every Republican Senator and Assemblymember signed a petition that would constitutionally force the Legislature to meet to use federal funds to stop the escalating debt and prevent a tax increase scheduled for October 30.

It would only take signatures of seven Democrats in the Senate and 13 in the General Assembly to force action to stop the job-killing tax increase.  None have signed it though many have issued hollow press releases stating they oppose the Governor’s tax increase.