Push on for tax credits for hiring unemployed, more help with unemployment claims

Lawmakers agreed to bills they say will help jobless workers, boost aid to struggling businesses, nonprofits
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State lawmakers want to offer New Jersey’s small businesses a new incentive for hiring unemployed workers as the coronavirus pandemic continues to take its toll on the state economy.

Legislation that would give a tax credit to employers that hire residents who’ve been out of work for at least a month was among a number of economic relief bills that were cleared Monday by the Senate Budget and Appropriations Committee.

The legislative efforts come as unemployment has continued to be a significant issue in New Jersey more than a year after the first COVID-19 cases were detected.

Also approved by the committee Monday, a measure that seeks to give more help to legislative offices to bolster their efforts to assist unemployed residents seeking jobless benefits during the pandemic.

The committee also passed legislation that would direct more federal aid to businesses and nonprofits that are still struggling for survival amid the ongoing public health crisis.

A little over a year after COVID-19 was first identified in New Jersey, the state has recorded nearly 870,000 cases; more than 24,000 fatalities have been linked to the disease, according to the latest data tracked by the Department of Health.

COVID-19: the economic toll

In addition to the health crisis itself, the pandemic has also triggered a record-setting economic downturn in New Jersey. While there’s been some improvement in recent months, boosting the state economy has remained as key concern for lawmakers.

The latest jobless data from the Department of Labor and Workforce Development showed a slight uptick in the state’s unemployment rate between December and January, pushing it to 7.9%. New claims for unemployment benefits in New Jersey also increased slightly during the week that ended March 13, according to labor officials.

Meanwhile, business advocates have estimated about 30% of New Jersey’s small businesses have closed down because of the pandemic and a series of shutdown orders issued by Gov. Phil Murphy to help slow the rate of new infections.

The legislation that would give small businesses a new incentive to hire out-of-work residents cleared the Senate committee with unanimous bipartisan support.

Tax credits for new hires

The new tax credit would be called “New Jobs for New Jersey.” It would be offered to businesses with 100 or fewer full-time employees for each individual they hire after April 1, 2021 who has not had full-time employment in New Jersey for 30 or more days.

“Through this program, we can assist businesses as they fight to stabilize their companies while hiring back laid-off workers,” said Sen. Nilsa Cruz-Perez (D-Camden), a primary sponsor of the bill.

The tax credit would be refundable, applying to either the corporation-business tax or the gross-income tax for each worker hired above the number of workers employed by the same business in the previous year. It would be equal to the amount the employer paid in withholding taxes for eligible employees, starting with the 2021, 2022 or 2023 tax years, according to the bill.

The credits would be provided for up to four tax years, and employers could apply for the incentive through December 2023.

Helping hand with unemployment claims

Another measure cleared unanimously by the committee would require the Department of Labor and Workforce Development to bolster efforts to help residents receive unemployment benefits, including by assigning an unemployment claims handler to each legislative district office.

That effort comes after many staffers working in lawmakers’ district offices have devoted considerable time to help constituents navigate backlogs and other lingering issues with the state’s unemployment system, which was swamped by new benefits claims as tens of thousands were losing their jobs.

“With additional individuals working to file these claims, this bill would alleviate some of this stress, allowing for claims to be filed at an increased rate,” said Sen. Nicholas Scutari (D-Union), a primary sponsor of the bill.

The measure calls for legislative staff to have “view-only” access to the state’s unemployment claims system and to also be trained on confidentiality and information-security rules. It would also appropriate $1.8 million from the state’s General Fund to cover any costs associated with the bill.

The committee also approved several bills that would appropriate a combined $100 million in federal funding to support businesses, child care centers, food and beverage establishments, microbusinesses, arts and culture organizations and other nonprofits.

“These bills target relief to the businesses that have been hurt most over the past year by government-ordered closures and operating restrictions related to the pandemic,” said Christopher Emigholz, vice president of government affairs for the New Jersey Business & Industry Association, an organization that strongly supported the bills.

But even as those measures and another one earmarking $10 million for food banks were advancing on Monday, Republicans on the committee faulted majority Democrats for not holding a vote on a separate measure that would appropriate another $300 million to support similar efforts.

“There’s no time to wait,” said Sen. Declan O’Scanlon (R-Monmouth). “Every passing day means more employers will reach the end of the line and be forced to shut down and dump their dedicated workers in the unemployment lines.”