**Special edition**

FEBRUARY 19, 2009

FEDERAL STIMULUS- WHAT IT MEANS FOR NEW JERSEY

The following information, provided by the NJ Chamber of Commerce, FMI and the Star-Ledger, gives some specific information on how the $787 Billion federal stimulus package will benefit the New Jersey business community and food industry. NJFC will update members as more information becomes available. Among the areas that affect New Jersey businesses that will receive federal dollars include:

· $296.5 million in Supplemental Nutrition Assistance Program (SNAP) benefits (formerly food stamp program);

· $208.1 million in new Unemployment Insurance funding;

· $74.8 million from State Energy Program funding energy efficiency projects for cities, towns and counties;

· $26.5 million in Dislocated Workers State Grants, particularly training and grants aimed at addressing shortages of skilled workers;

· $21 million for Department of Labor Youth State Grants;

· $12.8 million for Head Start expansion of programs;

· $10.8 million in State Employment Service Grants to match unemployed individuals to jobs;

· $9.5 million for Department of Labor’s Adult State Grants program;

· $9.5 million for vocational rehabilitation to help individuals with disabilities to prepare for and sustain employment;

· $2.8 million for Emergency Food and Shelter Program, providing grants to local nonprofit groups providing emergency food and shelter for the homeless;

· $2.2 million for senior meals programs;

· $2.2 million for the Emergency Food Assistance Program;

· $2 million for National School Lunch Program Equipment Assistance.

Other New Jersey programs receiving funding from the Federal Stimulus package include monies for state fiscal stabilization, highways and bridges, special education, poor school districts, clean water, housing and homeless programs, law enforcement efforts and child care block grants. The money allocated specifically for New Jersey does not include other funding in the form of grants or loans available from the federal government as part of the overall nearly $800 Billion Federal stimulus package, which could drive New Jersey’s proportionate total even higher.

Also included in the economic stimulus package are significant modifications to the COBRA continuation coverage rules, which will be generally effective March 1, 2009. Overall, under the package, individuals who become eligible for COBRA by reason of an involuntary termination of employment during the September 1, 2008 and December 31, 2009 period are only required to pay 35% of the COBRA premium. The remainder of the premium is generally subsidized by the employer, which is reimbursed through a payroll tax credit. With respect to any individual, this subsidy can last up to nine months. High-income individuals generally must repay the subsidy through a recapture tax.

CORZINE ANNOUNCES CUTS

Governor Jon S. Corzine announced yesterday a total of $3.6 billion in budget cuts and other actions to keep the state budget balanced in the wake of further declining revenues resulting from the economic crisis. State revenue collections for January fell $526 million - nearly 18 percent below projections. Through January, total revenues are now $1.33 billion under projections for fiscal 2009, which translates to a $2.8 billion shortfall by the end of the fiscal year. Fiscal 2009 spending levels are now expected to come in at $31.6 billion, more than $4 billion less than projections when the budget process began last year.

Now, Governor Corzine said, the combination of a $2.8 billion shortfall and an additional $800 million in needed spending requires a total of $3.6 billion in cuts. Among additional spending needs is a replenishment of the Unemployment Insurance Trust Fund to prevent a statutory tax increase on employers of nearly 25 percent - a trigger that the Governor says would further threaten the state's economy.

The budget cuts and other actions Governor Corzine announced include:

· A requirement that all state employees take two unpaid furlough days in May and June, saving $35 million;

· Redirecting $160 million in balances from dedicated funds to support programs currently supported by general taxpayer funds. About half of these funds will be used to help avoid the Unemployment Insurance tax increase;

· Requesting the Legislature to enact a Tax Amnesty Program, which is expected to generate $100 million;

· Utilizing $500 million that was previously set aside for debt relief and $200 million available from the Fiscal Year 2008 budget surplus;

· Accessing $450 million from the Rainy Day Fund.

In addition, the state is expected to receive about $850 million from the federal stimulus package that can be used for the fiscal 2009 budget. Governor Corzine said these cuts, cost reductions and other actions are expected to total $3.6 billion, which will allow the state budget to remain balanced with a $150 million surplus.

If any member needs more details on the federal Stimulus Package and the Governor’s Budget cuts, please contact NJFC at (609) 392-8899.