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November 2010 NJ Ballot Initiative |
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November 2, 2010 Ballot Question #1
Diversion of Funds from Employee Benefit Programs
CONSTITUTIONAL AMENDMENT TO DEDICATE ASSESSMENTS ON WAGES BY THE STATE TO THE PAYMENT OF EMPLOYEE BENEFITS
Shall the amendment to Article VIII, Section II of the State Constitution, agreed to by the Legislature, which: prohibits collection by the State of assessments based solely on employee wages and salaries for any purpose other than providing employee benefits; dedicates all employer and employee contributions collected for any employee benefit fund, and all returns on investments of those contributions, to the purpose of that fund; and prohibits any transferring, borrowing, appropriating or using of those contributions or returns for any other purpose, be approved?
Fact Sheet
On November 2nd, New Jersey voters will be asked to vote up or down an amendment to the New Jersey State Constitution that will prevent the Legislature and the Executive Branch from diverting funds from employee-funded benefit programs like Temporary Disability Insurance (TDI), Unemployment Insurance (UI), and Family Leave Insurance (FLI) in order to cover shortfalls in the State’s budget. These programs are funded by deductions from workers’ wages with the understanding that in return for paying into the program, workers will be able to draw benefits when they needed to.
New Jersey has a long history of routinely moving funds from employee benefit programs to the State’s General Fund to pay for nonrelated costs. According to the NJ Office of Legislative Services, since 1992 the State has diverted over $5.4 billion -- $4.7 from Unemployment Insurance; $598 million from TDI, and another $95 million from other funds related to workers’ compensation.
As a result of the diversion of funds, last year the NJ Unemployment Insurance Program went bankrupt and had to borrow from the federal government in order to provide benefits to New Jersey workers who lost their jobs because of the downturn in the economy. According to a Christie transition team report, “Were it not for the diversions, the [UI] fund would be solvent.”
A “Yes” Vote will amend the NJ State Constitution to stop the diversion of employee benefit funds. The Legislature and Executive Branch would not be allowed to borrow the funds nor use them for any other purpose. A “Yes” vote will help these programs replenish their reserves and assure that New Jersey workers and their families will be able to receive the benefits they pay for when they need them.
A “No” Vote will allow the Governor and state legislature to continue its practice of diverting funds –a practice that has eroded the solvency of benefit programs that were built with the hard-earned dollars of New Jersey’s workers and their families, and threatens the future of these programs and the availability of benefits for workers and their families.
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