Two Republican state senators have accused Gov. Phil Murphy of covertly implementing a $250 million unemployment insurance tax, while a Democratic senator joined them in urging the use of federal Covid relief funds to pay for it.

State Sens. Anthony M. Bucco (R-Boonton) and Steve Oroho (R-Franklin) said on Friday that the new tax was “coyly unveiled with a vague update” on the state Department of Labor website.

“After promising no new tax increases this year and watching other states use federal funds to avert massive tax increases on struggling employers, the Governor put through a stealth tax increase at the close of business on a hot Summer Friday,” Bucco said.  “He didn’t want anybody to notice a destructive increase that will hit hard in a state with one of the highest unemployment rates in the nation.”

The new tax would be effective on October 1.

Oroho says that an increased payroll tax while the state has a 7.3% unemployment rate “will kill more jobs.”

“This was avoidable by using federal funds from the American Recovery Plan. We should have used COVID relief money that the state already has in its possession instead of adding burdens to job creators,” Oroho said. “Even while he is vacationing in Italy, the Governor is showing no respect for the employers crushed by his excessing closures.”

Today, State Sen. Troy Singleton (D-Delran) asked Murphy to allocate monies from the American Rescue Plan to sidestep the payroll tax increase.

“An increase in the unemployment insurance tax would qualify as a steep negative economic impact. In fact, other states have used federal assistance to replenish the funds and it is my hope that New Jersey will do the same to avoid this unwelcome and untimely burden on our businesses,” Singleton said.  “We must take action now to avoid this impending disaster that could arrive on the doorsteps of our business community on October 1st.”

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