Keeping a Watchful Eye on Lame Duck Voting Session

By Michele N. Siekerka, NJBIA President and CEO On Oct 1, 2021

Once a term for an 18th century London stockbroker unable to settle his debts, the phrase “lame duck” eventually crossed the pond to America, where it resurfaced as a 20th century description for a politician whose successor had been elected, but not yet sworn into office.

Lame ducks, however, are not as ineffectual as the term’s imagery suggests. On the contrary, they are often emboldened to do what is otherwise politically difficult because they are only weeks away from leaving public office or, if reelected, years away from facing voters again.

NJBIA will be keeping a close watch on the 10-week lame duck period that falls between New Jersey’s Nov. 2 general election and the conclusion of the 219th legislative session in January because that could be the time legislators vote on hot-button issues with far-reaching consequences for residents, businesses and the state’s economy.

We do not know yet exactly which bills will be voted on in those weeks between the counting of the ballots and the swearing in of the next Governor and Legislature. However, here are a few possibilities that are of particular concern to NJBIA and our members.

Tax Hikes. The state’s current $46.4 billion state budget is unsustainable because it spends $4.3 billion more than the state collects in revenue – a structural imbalance that is about 9% of the total budget. A big surplus produced by under-projecting revenues in the prior budget keeps the FY22 budget in the black. Knowing that state spending levels cannot be supported going forward once that huge surplus is gone, lawmakers could look to raise taxes to keep paying for it all. New Jersey already has the highest corporation business tax and among the highest property taxes and incomes taxes in the nation. Further tax increases will only make New Jersey less competitive and more unaffordable.

Bad Faith Bill. Consumers and businesses will end up paying more for auto insurance under the so-called “bad faith” legislation, which narrowly passed the Senate by a 21-9 vote last January. If the Assembly passes S-1599 during the lame duck session and the governor signs it, the law will incentivize meritless insurance lawsuits filed by lawyers hoping to obtain settlements from insurers concerned about costly litigation. Consumers and businesses will pay the price in the form of higher insurance premiums.

Independent Contractor Bill. This legislation, if enacted, would make it more difficult for people to earn a living as an independent contractor because it would narrow the criteria used to determine if someone is an employee or an independent contractor. The practical effect would be to discourage the use of gig workers – a growing number of whom are women who left the traditional workforce during the pandemic and prefer the flexible hours that freelance and app-based delivery work affords.

Unemployment Insurance Trust Fund. On the positive side, lawmakers have an opportunity to help New Jersey’s economic recovery by using federal coronavirus relief funds to replenish the state’s Unemployment Insurance (UI) Trust Fund. Employers face a $252-million increase in UI taxes this month – and nearly $1 billion in total UI tax increases over the next two years. By using the federal money New Jersey already has, lawmakers can reduce what is essentially a tax on job creation. The actual tax assessments and the phase-in schedule are statutory constructions that can be addressed legislatively. They are not an excuse for inaction.

NJBIA will be making sure the concerns of the business community are front and center during the upcoming lame duck session.

To access more business news, visit NJB News Now.

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