Steven J. Dundas
Advocates: Payroll tax ‘not the way to lead’
Business groups plan to make Corzine proposed last week that he said calls for the Legislature by June 30, proposes spending
“shared sacrifice” during a recession year that he around $3 billion less than the current budget.
their appeals to Legislature said has New Jersey facing a $7 billion shortfall. Democratic legislators, who hold majori-
BY SCOTT GOLDSTEIN “We all have to share the responsibility of ties in both houses, said the bad-news budget is
TRENTON — Gov. Jon S. Corzine’s decision to keeping our financial house in order,” Corzine the offspring of the recession.
raise payroll taxes on employers by an estimated said in his March 10 budget address to a joint “I think the governor did a good job of
$70 to $95 per worker to help close the state session of the Legislature. prioritizing,” said Senate President Richard J.
budget gap has galvanized business advocates, The governor said he worked hard to Codey (D-West Orange).
who say they’ll appeal to the Legislature to shoot spread the pain. His spending plan calls for The state has lost 98,000 jobs, or 3 percent
down the levy before it is instituted July 1. suspending property tax rebates for households of its private-sector jobs, since the recession
“Business should be rewarded for keeping making more than $75,000, a one-year income began in December 2007, said Joe Seneca, econ-
people on the payroll and paying good wages, tax increase on individuals making more than omist at the Edward J. Bloustein School of Plan-
not taxed on it,” said Philip Kirschner, presi- $500,000, “small” tax increases on cigarettes ning and Public Policy at Rutgers University.
dent of the New Jersey Business & Industry and alcohol, and a wage freeze and furloughs “Obviously, difficult decisions have to be
Association. “It’s cer- for state employees. made for the state budget from an unappetiz-
tainly not the way to Adding fuel to ing menu of options,” Seneca said. “Adding to
lead New Jersey out “Nothing kills more jobs the business com- the cost of labor at a time when labor markets
of the recession.”
during a recession than a tax munity’s frustration, the budget extends a
are extraordinarily weak is inevitably going to
have a negative impact at a time when the gov-
Gov. Jon S. Corzine’s move to hike the payroll tax
is intended to shore up the state’s ravaged
the state director of increase on business.” three-year-old tem- ernor’s economic stimulus package is trying to Unemployment Insurance Trust Fund.
the National Federa- Sen. Kevin O’Toole (R-Wayne)
porary surcharge that increase hiring.”
tion of Indepen- businesses pay on The proposed payroll tax increase has and preserving property tax relief.”
dent Businesses, said, the corporation busi- businesses especially incensed because it will Joan Verplanck, president of the New Jer-
“Raising taxes in the midst of a severe econom- ness tax — which was to expire at the end of raise funds to beef up the Unemployment sey Chamber of Commerce, said she hopes the
ic downturn is part of a what-not-to-do chapter June. The surcharge brings the state Corpora- Insurance Trust Fund, maintained mostly governor will support legislation to ban future
in the history of the Great Depression.” tion Business Tax from 9 percent to 9.36 per- through payroll taxes on employers. The trust raids on the trust fund and cap the amount of
A pair of Republican state senators blasted cent, among the highest rates in the nation, fund is dwindling because an estimated $4.7 money that can accumulate there, at which
the payroll tax. “Nothing kills more jobs during a Kirschner said. It’s expected to generate $80 billion was siphoned off by previous adminis- point the payroll tax would be suspended.
recession than a tax increase on business,” said million next year, according to the budget. trations and Legislatures for other purposes “The employer community is willing to do
Sen. Kevin O’Toole (R-Wayne). And Sen. Steven “That’s another $80 million on business and over the past 15 years. its part to get us through this economic crisis,
Oroho, (R-Sparta) called the tax hike “a heavy another broken promise,” Kirschner said. “How Corzine s