Good morning, Chairman Madden and members of the Senate Labor Committee. Thank you for this opportunity to share my testimony. I’m Sheila Reynertson from New Jersey Policy Perspective (NJPP), a nonpartisan think tank focused on providing state residents with economic security.
New Jersey’s economy works best when it works for all of us. An inclusive recovery is one where those hit hardest by the pandemic — workers of color, and Black and brown women in particular — reach full employment and are the priority they deserve to be in state policymaking. That’s why it’s so important for New Jersey to its spend Fiscal Recovery Funds (FRF) in ways that reflect the principles President Biden set down: to directly address the public health crisis, help the people who need it most, and reduce racial and economic inequities exposed and worsened by the ongoing pandemic.
S733, by using FRF dollars to protect businesses from taxation, is inconsistent with the American Rescue Plan’s spirit. It undermines a just and equitable labor market recovery.
The sharp rise in joblessness early in the pandemic depleted New Jersey’s unemployment insurance (UI) trust fund, but the finances of the trust fund are not in crisis. Yet, a year ago lawmakers unnecessarily intervened on behalf of business to reduce or delay increases in employer unemployment taxes related to benefits paid during the state of emergency.[i] It’s also worth noting business recipients of assistance through the Paycheck Protection Program got a tax cut on both sides of the ledger – one for receiving the money, and another for spending it – costing New Jersey $1.2 billion needed to fund public support and services that help communities and families thrive.[ii]
Another corporate tax cut – offering to wipe out a federal low-interest loan to the UI trust fund – is shortsighted. Paying back the $580 million loan[iii] with federal emergency aid meant for the more immediate needs of workers who experienced a substantially more severe impact from the pandemic is worse than shortsighted. It is inequitable and insulting to the essential workforce – workers who put their lives at risk when COVID swept through the state, health care workers who now suffer from PTSD, and child care workers who are indispensable to the workforce yet are still severely underpaid.
In light of the moral obligation to fund an equitable pandemic recovery, lawmakers giving the green light to yet another business tax cut raises serious concerns about the state’s commitment to support other, arguably more urgent, needs of households facing immediate hardships and neglects the opportunity these dollars present to address structural inequities.
If the goal is to assist businesses harmed most by the pandemic, there are more direct and targeted ways to provide that aid. This overly broad proposal serves as a giveaway to profitable businesses to cover a cost they are tasked with paying already and diverts emergency federal aid that people, including laid-off workers, need right now.
NJPP urges committee members to vote no on S733.
Thank you.
[i] P.L.2020, c.150.
[ii]https://www.njpp.org/publications/blog-category/tax-break-on-ppp-loan-expenses-will-cost-new-jersey-more-than-1-billion/
[iii] US Treasury’s Title XII Advance Activities Schedule as of March 3, 2022. https://www.treasurydirect.gov/govt/reports/tfmp/tfmp_advactivitiessched.htm
