Federal unemployment funds likely safe through September, commissioner says

Yahoo

30-04-2025

Labor Commissioner Robert Asaro-Angelo told Assembly lawmakers he expected no federal cuts through September. (Photo courtesy of New Jersey Assembly)
New Jersey's Department of Labor is unlikely to see its federal funding cut through the end of the U.S. government's October-to-September fiscal year, but officials remain concerned about the prospect of future cuts, state Labor Commissioner Rob Asaro-Angelo told Assembly lawmakers Wednesday.
'In my mind, we are status quo through the end of September. At that point, we'll see what Congress does,' Asaro-Angelo told the panel. 'It's hard to predict what's going to happen, clearly. I think most of the cuts being talked about are not in labor. Traditionally, workforce development has been more of a bipartisan issue.'
Federal dollars account for a significant portion of the department's annual budget. In the coming July-to-June state fiscal year, the $603.2 million in federal monies the department expects to receive would account for 48.5% of its proposed operational budget.
The impact of federal funding on department staffing is greater. Such monies are set to fund roughly 72.6% of the department's 3,184 positions in the coming 2026 fiscal year, including all positions administering unemployment insurance, according to budget materials and the commissioner's testimony.
The department, along with all others receiving federal dollars, faced a federal funding freeze earlier this year under an executive order issued by President Donald Trump that called for the U.S. government to stop to all disbursements of federal financial assistance.
'Remember, the week after inauguration, basically our access and many departments' access to federal funding ceased,' the commissioner said. 'It was, no doubt about it, the craziest time in our department since COVID.'
That order has since been paused under a preliminary injunction issued by a Rhode Island District Court judge.
New Jersey's unemployment fund is still recovering from record-high jobless claims seen during the pandemic. Asaro-Angelo said the state's Unemployment Compensation Trust Fund had a balance of $1.6 billion, which he expected would rise to roughly $2 billion after unemployment taxes billed in the first quarter of 2025 were collected.
'We're very healthy. I give major credit to the folks around me, but also to be clear: We're healthy because we have ever-increasing employment in New Jersey,' the commissioner said. 'These contributions come from workers who are working and employers who are employing people, and as I said in my remarks, we have more workers than ever before, more businesses than ever before.'
Still, the department, in separate responses to lawmakers, cautioned that employers' unemployment tax rates would remain elevated through fiscal 2027.
It said rates would have been lower in both fiscal 2026 and 2027 were it not for a 2020 law that phased in employer unemployment tax increases in a bid to defray the tax impact of high joblessness.
The overall health of the unemployment trust fund determines the range of employer unemployment tax rates used in a given fiscal year, while an individual employer's use of unemployment benefits determines their rate within that range. Rates for fiscal 2025 ranged from 0.6% to 6.4%.
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