Trenton Makes Businesses Pay For Its Own Incompetence

Save Jerseyans, I am livid.

Because New Jersey government mismanaged it’s unemployment program to the point of insolvency, the federal government is taxing all New Jersey businesses $21 per employee this January.

Because New Jersey government mismanaged it’s unemployment program to the point of insolvency, New Jersey is  raising the unemployment tax on all New Jersey businesses to the tune of, on average, $180 in unemployment taxes per employee.

Because New Jersey government mismanaged it’s unemployment program, New Jersey businesses are getting reamed.

This is a slap in the face to every employer in New Jersey.

A little background.

New Jersey has run a deficit in its unemployment fund since well before the Great Recession (can’t blame the economy, folks). In the past when this has happened, the federal government has given the state a loan. New Jersey would, at the end of the year, pay back the principle and interest to the feds, and divide the principle by the number of businesses in New Jersey (simplified version), and send each of those businesses a bill for the interest.

(Now, considering that employers AND employees are already paying into the unemployment fund, AND are charged by the unemployment fund if their former employee’s claims EXCEED their contribution, one must wonder how we ran a deficit to begin with AND why businesses would then billed for interest.)

However, for the past two years, lifelong government employees in the Department of Labor have so mismanaged things that we’re in hock to the feds for over $1.7 billion. That’s not what unemployment paid out, that’s just the amount of the forced loans needed to close the deficit. Years and years of mismanagement have led us to this. The state treasurer says it is due to raiding of the fund that went on between 1992 and 2007 that left nothing in reserve when stuff hit the fan in 2008.

So we now find ourselves in a situation where the state of New Jersey has to leech $2 billion ($1.7 billion in loans, $300 million to get the fund solvent) from New Jersey businesses.

Trenton created this problem but is punishing businesses instead of itself!

And yes, the state created this problem through years of mismanagement and years of incompetence. It’s not the recession’s fault.

I don’t blame Governor Christie for this. He’s cleaning up the mess, and you don’t blame the guy cleaning up the mess; you blame the person who made the mess. When they announce a clean up in aisle 5, you don’t see people yelling at the guy with the mop, do you? And to his credit, Christie came up with a painful plan that, frankly, could have been much more painful.

But I do blame the people who made the decisions which put us in a $1.7 billion hole. Most still draw a paycheck from the state yet haven’t gotten so much as a slap on the wrist for their poor performance.

My opinion? They owe New Jersey businesses an apology, and New Jersey businesses owe them a pink slip in return.

And they shouldn’t be eligible for unemployment.