April 13, 2006

CONTACT: Kevin McCormick 202-637-3465

WASHINGTON, D.C., April 13, 2006 – UWC President Eric J. Oxfeld released the following statement:

"UWC commends New Jersey Governor Jon Corzine for proposing to end the diversion of unemployment payroll taxes from the state Unemployment Trust Fund in order to pay for charity hospital care. New Jersey is the only state in the nation to engage in such a practice. In his 2006 Budget Address, Governor Corzine proposed financing charity care out of the state’s general funds, instead.

"The diversion of UI funds adds needless and increasing complications to the system and puts jobless workers at risk. Over the past 10 years, New Jersey has diverted more than $4.7 billion from its Unemployment Trust Fund to support charity care, leaving the Fund balance at a 20 year low. A report issued by Governor Corzine’s office projects that, even without further diversions, an automatic payroll tax increase will be triggered in July, 2007. At the end of 2005, New Jersey’s trust fund balance was less than 1/3 of the U.S. Department of Labor’s recommended solvency level test for state UI trust funds.

"We applaud Governor Corzine’s proposal, which restores common sense to New Jersey’s unemployment insurance system. If enacted by the legislature, workers in New Jersey can sleep a little better knowing that, if they lose their jobs, the money collected to ease their transition to new employment will no longer be siphoned off for an unrelated purpose. However well intentioned the system may have been, there is nothing charitable about the economic hardship increased payroll taxes and dwindling Trust Fund balances will create for the unemployed.

-UWC-