New Jersey Leader Preps for Furloughs in Benefit-Boosting Bill
New Jersey Leader Preps for Furloughs in Benefit-Boosting Bill
(Bloomberg) --
New Jersey’s highest-ranking state lawmaker is preparing for the layoffs of as many as tens of thousands of state and local government employees by ensuring they will be able to qualify for the enhanced unemployment benefits extended by the federal government.
The provision, included in a bill proposal from Senate President Stephen Sweeney, would potentially soften the blow to civil servants and shows the scale of the deficits that officials are expecting because of how deeply the shutdown of the state’s economy is hammering tax collections.
The legislation seeks to provide employees the “maximum possible benefits” while generating budget savings if the state and its municipalities move to furlough workers amid massive budget gaps from the coronavirus pandemic.
The Employee Job-Sharing Furlough Protection Act that will be introduced by senators Sweeney, Nellie Pou and Steven Oroho seeks to capitalize on the federal CARES Act that they say would put more money into the pockets of employees who are furloughed and secure federal financing of unemployment benefits, according to a draft of the bill.
The legislation would save state and local governments in New Jersey $750 million over a three-month period if 25% of 400,000 state and local employees are furloughed, according to a memo summarizing the proposal. The state hasn’t instituted any furloughs as of Monday.
States and cities are grappling with plummeting tax revenues as businesses are shuttered amid the coronavirus outbreak. More than 22 million people have been thrown out of work in the past four weeks alone. At the same time, the demand for municipal resources is soaring. The Center on Budget and Policy Priorities projects a historic $500 billion shortfall for states through June 2022, while a survey of 2,400 local officials found nearly all of them expect deficits.
The proposed legislation would guarantee that future pension benefits won’t be affected by furloughs and seniority will continue to accrue and also provide a “pre-qualification” for unemployment benefits to avoid any income interruption.
A segment of the Federal Pandemic Employment Compensation legislation provides for an unemployment payment of $600 per week in addition to the amount of state unemployment benefits determined by state law. Under New Jersey furlough law, employers must pay employees between 40% and 90% of their previous salary and continue pension, health coverage and other benefits during the period of the furlough.
For employees making $76,500 or less, wages combined with state unemployment benefits and the additional $600 federal payment would provide more take-home pay than they would receive from working, according to the memo.
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