How can N.J. fight the coronavirus’ financial toll? Tax holidays, extended unemployment benefits floated
Below is an article written by Samantha Marcus and published by NJ Advance Media on March 14, 2020.
New Jersey’s top state lawmaker on Saturday called for a package of emergency measures to help residents and businesses offset steep financial losses feared during a prolonged pandemic.
State Senate President Stephen Sweeney introduced 13 proposals designed to keep more money in peoples’ pockets and ease burdens on businesses as the coronavirus threat worsens. His plan includes temporarily suspending sales and payroll taxes, creating a tax credit for businesses with quarantined workers, temporarily extending unemployment benefits and boosting SNAP benefits.
“Protecting the health and safety of the public is the top priority, but we should also take what actions we can to minimize the economic impact on individuals, families and businesses in New Jersey,” Sweeney, D-Gloucester, said in a statement, noting “the financial consequences can have a real and lasting impact.”
As of Saturday afternoon, at least 69 people in New Jersey have tested positive for the coronavirus. Fear of the virus and social distancing recommendations are expected to hit small businesses particularly hard and layoffs are likely.
The Senate is still developing legislation, and any proposals would still have to get through the full state Legislature and be signed by Gov. Phil Murphy to become law. Some of the steps can be taken administratively without legislative action, Sweeney said.
Some of the steps, including the unemployment compensation extension and sales tax holiday, mirror governments’ response to economic downturns, though the days and weeks ahead will look and act much different, said Tom Bracken, president of the New Jersey Chamber of Commerce.
“An economic problem, you can kind of understand the parameters of it and put measures in place to stop things from happening and to correct things,” he said. “This, there’s no real end you can identify here.”
But New Jersey’s business leaders seem to agree that job losses are inevitable as revenue slumps and owners struggle to meet payroll.
Other states already are reporting layoffs at ports and hotels and in entertainment. Here, small businesses in university towns that rely on student traffic and event workers are already feeling the pinch.
The National Federation of Small Businesses surveyed 300 businesses with one to 120 employees earlier this week and found almost a quarter were experiencing negative impacts. More were concerned the effects would spread and harm supply chains and sales.
Give it a few more days and those results will likely look worse, said Eileen Kean, director of the state group.
Sweeney’s proposals are “a start” toward helping businesses weather the financial turbulence that’s in store, Michele Siekerka, president of the New Jersey Business and Industry Association, said in a statement.
Still, Bracken said businesses’ troubles will go much deeper.
“A lot of what they’re talking about is deferring tax payments and tax relief. All that’s good because it helps cash flow,” he said. “But they’re going to be experiencing revenue shortfalls. A lot of businesses have loans with banks and they’re going to be having difficulty making payments, paying their employees. Keeping their employees employed. I have to believe that people will be laid off.”
The proposals include:
- Tax holidays, including a two-month sales tax holiday to stimulate consumer spending and a break from payroll taxes paid by employers and employees in the state.
- A temporary extension of unemployment benefits in the state, which Sweeney called “a tried and true method of boosting an existing program to get money into the hands of the people who need it most so that it can quickly begin to circulate.” He also wants to boost the number of state employees processing applications.
- A small business sales tax remittance reduction that would allow some businesses in the state to keep a portion of the sales tax revenue they typically pass onto the state.
- A tax credit for businesses in the state that keep paying their quarantined workers.
- Extend the state’s tax filing deadline, which Sweeney said could be done without a legislative assist.
- Put more money into the SNAP Supplemental Nutrition Assistance Program and into free and reduced school lunches to make more people in the state eligible and increase the benefit levels.
- Limit retail returns of food and supplies, or any product that “could result in the continuation of the spread of disease.”
The state Assembly will move on its own bill package related to the coronavirus on Monday, including one authorizing no-interest, short-term loans to businesses in the state struggling to make payroll and another ensuring insurance carriers in the state provide coverage for business interruption.
On Saturday, Murphy declined to say whether he supported any of the legislative offerings.
“We take each one seriously,” the governor said during a telephone briefing with reporters. “Conceptually, some of them are completely consistent with what we’re talking about and doing 24 hours a day. … Beyond that, I have no particular comment.”
Money on the table. Grab it.May 4, 2020