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Governor Phil Murphy

Plan to Partially Furlough Public Employees Awaits Governor’s Signature


Proposal easily clears Legislature, but Murphy has been hard to read on plan that taps new federal benefits allowing furloughed workers to offset lost wages with unemployment claims

This story was written and produced by NJ Spotlight. It is being republished under a special NJ News Commons content-sharing agreement related to COVID-19 coverage. To read more, visit njspotlight.com.

Full story link – HERE.

By John Reitmeyer

A plan that would pave the way for state and local governments in New Jersey to cut costs by partially furloughing public employees — without hitting the workers in their wallets — is now on the governor’s desk awaiting final action.

The bipartisan proposal, which builds on prior state law and also seeks to take advantage of enhanced unemployment benefits available during the COVID-19 pandemic, won overwhelming support in both houses of the Legislature on Thursday.

However, the fate of the bill remains uncertain as Murphy, a first-term Democrat, has not taken a firm position for or against the proposal since it was first introduced earlier this month.

Some lawmakers have raised concerns that the measure could end up sending even more workers into a state unemployment system that has been overwhelmed in recent weeks under a crush of new benefit claims.

But the pressure to enact the legislation may also have increased as revenue losses continue to pile up in municipalities, counties, school districts and the state itself during a pandemic that has raged for two months in New Jersey.

“We have to do everything we can to save tax dollars now to avoid a bigger budget crisis later, and this program will save hundreds of millions of dollars,” said Sen. Steve Oroho (R-Sussex), a primary sponsor of the bill.

Furloughs, not firings

New Jersey already has a “job-sharing” law designed to reduce the need for mass layoffs during times of economic downturn by offering employers — both public and private — with incentives to only reduce employee hours, including via partial furloughs.

The legislation that’s now on Murphy’s desk would enact a number of policy changes to tailor existing law to take full advantage of enhanced federal unemployment benefits that are being provided through the end of July. Those benefits, funded by the $2 trillion federal CARES Act, are providing unemployed workers with an additional $600 a week until the July deadline.

The proposed policy changes include language that would protect seniority rights and pensions for workers whose employers choose to implement a job-sharing program. The measure would also increase, from 20% to 40%, the amount of income that can be earned by workers without crimping their unemployment benefits. It also allows for precertification of unemployment benefits for workers who are scheduled to be furloughed.

For many workers, the supersized federal benefits would allow them to collect the same or better pay even as they miss time at work — with the federal government picking up a large share of the tab. In fact, the bill’s bipartisan sponsors estimate that any worker making $89,000 or less in annual salary would be kept whole or even make out better, even as they miss up to three days of work a week.

Significant savings statewide

Meanwhile, the sponsors also estimate their proposal could ultimately save as much as $750 million spread across state, local and county governments, including school districts. That’s based on an assumption that 100,000 out of a total of 400,000 public workers in New Jersey would end up being furloughed for three days each week over a three-month period. But the bill wouldn’t force any employers to furlough workers, including the state, if they choose not to.

In addition to passing unopposed in the Legislature — the margins were 80-0 in the Assembly and 36-1 in the Senate, with no abstentions — the bill has also picked up support from both business-lobbying groups and labor in recent weeks.

“Launching a statewide job-sharing furlough program is the ultimate win-win for public and private employers whose revenues have been plunging because of the coronavirus recession, and for furloughed employees who would get more money in their pockets without any loss of health or pension benefits,” said Senate President Sweeney (D-Gloucester), another primary sponsor of the bill.

The bill’s adoption on Thursday coincided with the release of the latest unemployment data by the state Department of Labor and Workforce Development that indicated 70,000 new claims for jobless benefits were filed in New Jersey last week. That helped push the total number of new claims filed since mid-March above 1 million.

While a total of $2.7 billion in unemployment payments have gone out over the past nearly two months, the Murphy administration has continued to be barraged by complaints about backlogs and other problems that New Jersey residents have faced while trying to obtain jobless benefits.

Adding claims to overworked unemployment system

Assemblywoman Holly Schepisi (R-Bergen) was among the lawmakers who raised concerns on Thursday about the potential for sending more workers into the unemployment system even as it continues to be strained by the pandemic. Schepisi said her own legislative staffers have been “essentially working as caseworkers for the Department of Labor” over the past few weeks.

Asked about the partial-furlough bill during a media briefing in Trenton last week, Murphy didn’t directly shoot down the idea, but he also didn’t offer any kind of endorsement. He said the pandemic has only heightened the importance of the services that many public workers provide in New Jersey.

“On furloughing, I would just say this: As a conceptual matter, it’s something that we’re open to,” Murphy said.

During a briefing on Thursday, Murphy also addressed his administration’s latest revised revenue forecasts, which were released late in the day on Wednesday. They include a projected budget shortfall for the remaining months of fiscal year 2020 that totals $2.75 billion, or roughly 7% of the original spending plan. For fiscal year 2021, the Murphy administration is lopping another nearly $3 billion in revenue from the revised estimate for fiscal 2020.

“Could the budget shortfall get worse? Yes,” Murphy said in response to a reporter’s question. “It could, in particular, if we stop complying (with social-distancing measures).”

A statement issued by Oroho and several other Republican senators later in the day urged Murphy — who has been seeking approval of emergency borrowing legislation — to consider enacting “reasonable spending restraints and creative nontax solutions first, as part of a more common-sense and pragmatic approach.”

“We fear the Governor is on a path of simply repeating his past irresponsible demands,” the statement said. “If he does, we will work with Senate Democrats to advance a different approach to solving the budget challenge.”

 

Header: Courtesy Governor Phil Murphy’s Facebook page

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Murphy Gives Local Officials Option to Push Back Property-Tax Deadline


Governor gives cities, towns ability to lengthen grace period by a month to June 1, but concerns already being raised about next payment deadline on August 1

This story was written and produced by NJ Spotlight. It is being republished under a special NJ News Commons content-sharing agreement related to COVID-19 coverage. To read more, visit njspotlight.com.

Full story link – HERE.

By John Reitmeyer

An executive order issued by Gov. Phil Murphy just days before May 1 property-tax payments are due is enabling local officials to push back the payment deadline by a full month.

Murphy’s 11th-hour executive order doesn’t automatically extend the May 1 payment deadline, but instead gives New Jersey’s municipalities the option of lengthening a statutory grace period to help taxpayers struggling with the coronavirus pandemic.

The executive order was announced during a media briefing on the pandemic held in Trenton on Tuesday. It drew immediate praise, including from officials who represent the state’s many cities and towns, some of which are facing their own financial hardships amid the still-unfolding pandemic.

State of grace for taxpayers

In communities that choose to take advantage of the executive order, taxpayers will be able to wait until June 1 to submit their May 1 payments, without facing the penalties and interest that local officials can charge after the grace period, which typically lasts 10 days.

“I think it was wise to make this permissive,” said Michael Cerra, the assistant executive director of the New Jersey State League of Municipalities. “It’s in the hands of local officials.”

New Jersey has been among the hardest-hit states as the pandemic has spread across the country in recent weeks, trailing only New York in reported COVID-19 infections and fatalities. In addition, strict social-distancing measures ordered by Murphy to prevent further spread of the disease have shut down many businesses that have been deemed “nonessential,” and unemployment claims have reached record highs in recent weeks.

In response to the economic hardships, Murphy, a first-term Democrat, had already taken action to delay the state’s April 15 income-tax deadline. Other newly enacted measures have also assisted homeowners struggling to pay mortgages and tenants in danger of falling behind on their rent.

Murphy’s ‘additional measure of relief’

Murphy described his latest executive order as “an additional measure of relief” as he discussed it during Tuesday’s briefing.

Under a quarterly-payment schedule established in state law, property taxes are due on the first day of February, May, August and November. They can be paid directly to a municipality or through a mortgage company, which is something many homeowners do as they pay down home loans over the long term.

State law allows for the 10-day grace period for property owners to make their payments without facing penalties or being charged interest.

Lt. Gov. Sheila Oliver, who leads the state Department of Community Affairs, said the payment delay for taxpayers that will be allowed under Murphy’s executive order will help property owners who “need extra time to get their finances in order.”

“We understand that many property owners are coping with financial challenges they’ve never had to face before because of this pandemic,” she said during the briefing.

Stephanie Hunsinger, New Jersey state director for AARP, said she hopes “all New Jersey municipalities act immediately to provide relief to their residents.”

“On behalf of AARP New Jersey’s nearly 1.3 million members, we applaud Gov. Murphy and his administration for issuing today’s executive order,” Hunsinger said.

But many communities are also getting hammered themselves by the pandemic as social-distancing regulation have restricted many activities that generate significant revenue. And while New Jersey is notorious for having some of the nation’s highest property taxes, those bills fund much of the frontline services that are being leaned on heavily during the pandemic, including police and other first responders, as well as municipal health officials and sanitation workers.

In addition, while municipalities collect property taxes, they must turn over a large portion of the revenue to local schools and county governments in transfers that are due by the 15th of every month.

Can local officials afford the extension?

Making it an option for a town to extend the 10-day grace period allows local officials to work with their professionals to assess whether they can afford to offer the extension, especially since the deadline for turning over tax collections to school districts and counties still remains in effect, Cerra said.

With the intervention coming from Murphy so close to the May 1 deadline, many local officials had already begun to take action on their own to give their residents a break. In some cases, officials passed local resolutions that lowered the interest rates that can be charged for late payments to the lowest amount allowed under state law, which is less than 1%.

The executive order creates a uniform way for municipal officials to provide taxpayers with a break during the pandemic, just as Murphy has by doing things like delaying the April 15 income-tax deadline, said Cerra, whose organization will likely be drafting a model resolution to distribute to local officials.

“I think local officials were looking to do same,” Cerra said.

Legislation had been proposed in recent weeks in the state Assembly to push back the May 1 deadline for many homeowners to July 15, which would have matched the state’s new deadline for filing income taxes. But that bill has stalled since its introduction.

Despite Tuesday’s action from the governor, Cerra said the next quarterly payments, which will be due on August 1, have already been flagged as a looming concern. Many homeowners may have had enough in escrow accounts to cover their May 1 property-tax payments, but they may still be facing economic hardships several months from now.

“We’re a little bit concerned about August 1,” he said.

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Can State, Local Governments Save Hundreds of Millions by Furloughing Workers?


Proposed plan from two Senate Dems would save money by furloughing workers while ensuring they qualify for enhanced federal unemployment benefits

This story was written and produced by NJ Spotlight. It is being republished under a special NJ News Commons content-sharing agreement related to COVID-19 coverage. To read more, visit njspotlight.com.

Full story link – HERE.

By John Reitmeyer

Two New Jersey lawmakers are proposing a new way for state and local government to save millions of dollars by partially furloughing workers during the coronavirus pandemic.

At the same time, their plan seeks to ease the blow on those furloughed workers by ensuring they can qualify for enhanced federal unemployment benefits even as they miss time at work.

New Jersey appears to be the first state to consider this approach to COVID-19 furloughs.

The proposal detailed in draft legislation provided to NJ Spotlight on Monday is a twist on the state’s existing “job-sharing” law, which is designed to reduce the need for mass layoffs during times of economic downturn by providing employers with incentives to only reduce employee hours.

It also relies on beefed-up unemployment checks that are being funded by the federal government through the end of July under the $2 trillion stimulus bill that was enacted by the Congress late last month in response to the pandemic.

The projected savings

The legislation is sponsored by Sens. Steve Sweeney (D-Gloucester) and Nellie Pou (D-Passaic), and savings estimates range from $150 million for the state to potentially three times that amount combined for local governments, depending on how many would participate.

“The purpose of this bill is to facilitate the providing of the maximum possible benefits for employees and savings for employers in the State from the federal financing of unemployment benefits,” the draft legislation said.

The bill’s pending introduction comes as Gov. Phil Murphy has repeatedly warned that New Jersey’s revenue projections are taking a tumble as COVID-19 infections continue to increase, and as the state continues to adhere to strict social-distancing measures in an effort to prevent further spread of the virus. They include closing many businesses that have been deemed “nonessential” by the governor.

Murphy, a first-term Democrat, has in recent days called for direct financial aid from the federal government to offset projected revenue losses, and he has also submitted to legislative leaders draft legislation that calls for the state to attempt to use emergency bonding powers that are written into the state Constitution to help fortify coffers during times of war or natural disaster.

The Murphy administration has yet to publicly detail how much lost revenue it is expecting through the end of the current fiscal “year,” which has been extended on emergency basis by three months to the end of September.

COVID-19 losses, a moving target

In a recent bond disclosure, the administration said only that it would be “some time before the State is able to fully assess how the varying impacts of COVID-19 will impact its revenues and expenditures, both for this fiscal year and for future fiscal years.”

The Murphy administration indicated in the same bond disclosure that it has extended the term of a $1.5 billion short-term borrowing issue to the end of September. The disclosure also suggested the administration is seeking legislative approval for as much as $5 billion in an emergency bonding in response to the pandemic.

While Assembly Speaker Craig Coughlin (D-Middlesex) has indicated a willingness to work with the Murphy administration on its borrowing proposal, Sweeney has yet to go that far. Instead, he’s announced the formation of a new bipartisan working group to study the economic fallout from the coronavirus led by Sens. Paul Sarlo (D-Bergen) and Steve Oroho (R-Sussex).

Sweeney is also co-sponsoring the measure with Pou that would seek to generate as much as $750 million in savings for state, local and county governments in New Jersey by allowing for the temporary furloughing of some public-sector employees to occur through the end of July. The sponsors’ savings estimates are based on an assumption that one-quarter of the 400,000 workers who are employed by state, local and county governments in New Jersey at various pay grades will end up being furloughed for three days each week over a three-month period.

Thanks to the provisions of the state’s 2011 job-sharing law — which also applies to private-sector employers — temporarily furloughed employees can still qualify for unemployment benefits under plans approved by the state. Under the draft legislation, furloughed public employees would be able to get about the same, or in some cases, better pay even as they miss time at work during the pandemic, thanks to the federal stimulus bill, which is funding enhanced unemployment benefits worth an extra $600 a week for many workers through the end of July.

Furloughed workers would also still qualify for full benefits, and their employers may see a benefit in the form of lower unemployment taxes, under the state law. At the same time, the sponsors are proposing protections for workers to ensure all pension credits and seniority rights continue to accrue as they would under more normal circumstances, according to the draft legislation.

While most of the savings would accrue to local and county governments, the $150 million in estimated savings for the state is roughly equal to the amount of funding for Homestead property-tax relief benefits that were due to go out in May before being pulled back by the Murphy administration as part of a nearly $1 billion spending freeze announced late last month.

Asked for comment on the draft legislation on Monday, Murphy press secretary Alyana Alfaro Post said, “While the governor’s office does not comment on specific or pending legislation, Gov. Murphy remains committed to ensuring that as many New Jerseyans as possible remain gainfully employed as we combat the COVID-19 pandemic.”

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Is Jersey City’s Buyout Offer to Hundreds of Employees A Sign of What’s to Come for Other Municipalities?


As COVID-19 lockdown continues, and with relief from federal CARES Act yet to arrive, municipalities in NJ are facing fiscal emergency and tough choices

This story was written and produced by NJ Spotlight. It is being republished under a special NJ News Commons content-sharing agreement related to COVID-19 coverage. To read more, visit njspotlight.com.

Full story link – HERE.

By Andrew S. Lewis

On Monday and Tuesday, Jersey City sent out emails and letters to some 400 employees, offering them voluntary separation packages in an effort to stanch what the city estimates will be a $70 million budget impact due to the COVID-19 health crisis.

“We’re hemorrhaging money,” said Mayor Steven M. Fulop. “Every year we have a lot of employees, like every municipal government, that are kind of on the fence about whether they should retire or not, and we think that this structure might help them make that decision and ultimately save us money long-term.”

Only employees who are nonessential and have worked for the city for 15 years or more are eligible for the separation packages, and, if vacated, Fulop said, many of those positions will not be refilled. The mayor declined to specify what city departments or positions received notices of eligibility, other than to say, “it’s across the board.” He added that there has already been interest. “Maybe this environment today has changed their perspective on what they want to do with the rest of their lives.”

Fulop estimates that the combined total salary of the eligible employees is $22.7 million, though he said he doesn’t expect everyone to take a buyout, which offers $20,000 or 25% of their salary, whichever is greater. “If we could get $5 or $6 million out of this process, I’ll take it and then we’ll move on,” he said. “The next conversation is going to be around furloughs, if need be.”

First in the state but unlikely to be the last

Jersey City is one of the state’s hardest-hit municipalities by COVID-19. According to Fulop, the city now has “well over 2,000 cases at this point and 54 fatalities that are documented.” On April 6, one of its city council members, Michael Yun, died of complications from the disease.

The city is the first municipality in the state to broach employee buyouts in an effort to mitigate the staggering — and still mounting — financial fallout from the COVID-19 pandemic. It is likely not the last to face such tough choices. Fulop confirmed that other urban New Jersey municipalities have contacted him with questions about how the city is structuring the buyouts.

One of them is Newark, the state’s largest municipality. Earlier this week, city councilman Anibal Ramos Jr. reached out to Fulop to discuss the fiscal impact of the COVID-19 crisis on their cities. “We had our council meeting this week, and I talked about having the opportunity to discuss with our business administrator some measures that we can agree on here in Newark that would better prepare the city to weather the storm,” Ramos Jr. said. “I did raise the issue about the Jersey City buyout program and that it’s something the [Newark] administration should look at as well.”

“Any municipality not considering this today is probably going to make their life much more difficult,” Fulop said. “The sooner you can start making decisions around where to cut and how to restructure the budget, the better you’re going to be.”

But John Donnadio, executive director of the New Jersey Association of Counties, expressed some concern with Jersey City’s decision to shed employees in an effort to mitigate budget impacts. Donnadio pointed to Gov. Phil Murphy’s April 4 executive order allowing retirees to return to state and local government employment without impacting their retirement pensions.

“From the staffing level, we are really struggling to continue, because government is open and we’re struggling to provide the services that we need to provide,” Donnadio said. “I would advise municipalities to talk to their financial officers and look at staffing levels and maybe reassigning staff as opposed to [buying them out].”

When asked in his daily briefing on Wednesday, Murphy said he had “no insight into Jersey City’s voluntary separations,” but added, “we need all hands on deck, I’ll say on behalf of the state.”

Increasing stress, extra costs

“Some of the same unfortunate responses that were necessary following 9-11, the 2008 recession, and Sandy are going to be looked at again, which included consideration of early retirement, furloughs, layoffs, outsourcing service, adjusting work hours,” said Mike Cerra, assistant executive director of the New Jersey League of Municipalities. “I think Jersey City is a little bit ahead because of the very significant impact of [COVID-19] in the city and on its work force.”

The Jersey City buyouts highlight the increasing fiscal stress that municipalities across the state are facing since New Jersey’s lockdown order went into effect on March 21.

On March 23, the Murphy administration froze nearly $1 billion in planned fiscal year 2020 spending, some of which includes a combined $186 million freeze on municipal aid programs and Homestead property-tax relief benefits. With nearly 577,000 unemployment claims since the lockdown, many residents are facing financial hardship and could lapse on bills like property taxes, which are vital to municipal coffers.

On top of that, municipalities large and small are having to invest in personal protective equipment (PPE), additional cleanings of firehouses and police stations, overtime for essential employees, and other unexpected measures to operate within the state and federal directives that have so far been changing on a near-daily basis. The smaller the municipality gets, the more impactful even the most trivial expenses, like signage to indicate park closures, become.

Too early to assess impact at Jersey Shore

In the tiny beach towns of the Jersey Shore, mayors and municipal administrators have gradually come to grips with the fact that they must close their boardwalks and beaches — places that attract crucial visitor dollars, even in the much-quieter winter months. But in the offseason, the vast majority of traffic in these tourist enclaves is that of nonessential construction workers, and now they too have been ordered to stay home. A lockdown that extends into the summer season would be disastrous for these fragile, tourism-based municipalities.

“If this cuts into the summer season, then all of a sudden a lot of Shore communities might be looking at dramatic responses” like Jersey City’s, said Cerra. “There’s going to be impacts — it’s to what degree at this point.”

So far none of these municipalities have reported the kind of measures that Jersey City has taken. “Some part-time employees have been furloughed because of the statewide closing of nonessential facilities,” said Doug Bergen, public information officer for Ocean City, in South Jersey. “It’s still too early to assess the financial impact overall.”

“I’ll be the happiest guy in the state if the Shore is able to be on its feet by the time summer comes around,” Murphy said in Wednesday’s briefing. “But, again, please stay in your primary residencies — the Shore does not have the infrastructure, particularly health infrastructure, to be able to withstand the sort of challenges we have right now.”

So far, little help from CARES

Following the passage, on March 27, of the $2 trillion CARES Act, there was mounting concern among state and federal lawmakers that the record-breaking aid package would be insufficient in supporting local governments like Jersey City, the state’s second largest municipality with a population of about 270,000, not to mention those of tiny towns like Ocean City.

The catch is that, in the CARES legislation, localities with populations under 500,000 cannot receive stabilization funds directly — despite being the most populous state in the nation, none of New Jersey’s 565 municipalities come close to having a population of a half-million or more. (Newark, the state’s largest, has a population of 285,000.)

New Jersey Rep. Tom Malinowski (D-7th) is among the sponsors of H.R. 6467, introduced in the House on April 7, which specifically addresses the need to provide “an enhanced Coronavirus relief fund for units of government with a population of 500,000 or less.” The bill would provide $250 billion in direct payments to these localities. “Hopefully this will be done sooner rather than later,” Cerra said.

Fulop has been among the New Jersey officials who have been vocal about the need for additional coronavirus legislation that addresses municipalities with populations of less than 500,000. “As it stands today, no municipality in New Jersey would have any direct aid,” he said. “It’s really a pass-through from Trenton, and any time there’s another layer of government involved, the pot gets less and less.”

 

Header:  Jersey City Times file photo

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Jersey City Projected to Lose $70M in Coronavirus Crisis


As cities and states across America battle the ongoing health crisis due to COVID-19, they will also have to brace for the economic impact that is coupled with it. Jersey City, which has 101 confirmed cases as of March 25, according to Mayor Steven Fulop, is no exception.

“It’s going to take time for us to recover, for our restaurants and small businesses to bounce back from this unimaginable crisis,” said the mayor. “That’s why we need help from the state and federal level.”

On Wednesday, March 25, Fulop shared that the anticipated budget impact for the city is expected to total $70 million consisting of $50 million in lost revenue loss and $20 million in added expenses.

The revenue loss comes from significantly decreased payroll tax collection, from the absence of municipal court fines, construction code fees and parking enforcement fines and from “other critical financial factors,” according to Fulop.

“There’s no playbook for us to follow on this, and we are looking to save money wherever possible to minimize the impact for residents,” he continued.

The $20 million in added expenditures is expected to be comprised of emergency purchases, increased health benefit costs and overtime.

Jersey City is not the only municipality facing economic hardship amidst the coronavirus outbreak. According to a tweet posted by the United Nations, the COVID-19 outbreak could cost the global economy a whopping $2 trillion in 2020.

Michael J. Hicks, an economist for Ball State University in Indiana, predicts that 17 percent of U.S. workers (1 in 6) will be laid off due to the impending economic crisis.

As the future seems uncertain, Jersey City is preparing for the worst.

“The City Council is not only focusing on our response to this current crisis and what our residents are going through, but we also need to plan for what lies ahead, and that reality comes with some really tough decisions,” said City Council President Joyce Watterman. “I’m really proud of how Jersey City has been a leader for those to turn to during times of hardship, and I know we’ll tackle the next difficult phase that we all inevitably face. It’s the unfortunate truth, but it’s better to be prepared than be blindsided.”

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