January 9, 2012

SENATE BILL NO. 3046

To the Senate: Pursuant to Article V, Section I, Paragraph 14 of the New Jersey Constitution, I am returning Senate Bill No. 3046 with my recommendations for reconsideration. This bill would require the State to provide recipients of unemployment insurance (UI) benefits, State tax refunds and State employee compensation with an option to receive payments in the form of a paper check. Specifically, the bill mandates

that the Department of Labor and Workforce Development provide UI claimants with written notice of benefit payment options which shall include prepaid debit card, direct deposit and

paper check. paper

In addition, the bill requires the State to issue to State employees, including employees of

paychecks

State authorities and institutions of higher education, when so requested by the employee. Finally, the bill provides that the

Director of the Division of Taxation shall provide a taxpayer due a refund of any State tax payment the option of receiving the refund in the form of a paper check. While I recognize that the sponsors would like to provide recipients choice of of State of benefits, payment, I refunds am and payments by the with a

form that

troubled with my

bill’s

provisions

directly

conflict

Administration’s

efforts to streamline State government operations and save the taxpayers money. From the outset, my Administration has

diligently worked to reduce costs to the taxpayer created by vestigial and bureaucratic impediments to programmatic

efficiencies.

For instance, in March of 2010 I created the

“New Jersey Privatization Task Force” to evaluate the delivery of government services at the State level and to recommend

     

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reform measures to rein in spending on State programs.

In its

May 31, 2010 report, the Task Force noted that the State could realize significant cost savings by eliminating or reducing the practice of physically producing and distributing paper checks for payroll and other payments, including UI payments. Notably, in 2010 the Department of Labor and Workforce Development implemented a debit card program for UI benefits that has completely eliminated paper check payments and has already saved the taxpayers millions debit of dollars. program has More been

importantly,

the

Department’s

card

lauded by experts as extremely consumer friendly.

In fact, the

National Consumer Law Center concluded in a recent report that “New Jersey has one of the best UC prepaid cards, with multiple free ways to access cash, including some out-of-network ATM withdrawals, free account information, and no penalty fees.” By requiring a paper check option for UI benefits payments, this legislation would undermine the Department’s efforts to maximize cost savings and beneficiary convenience through its successful debit card program. In addition of to having and an adverse impact upon debit the card

Department

Labor

Workforce

Development’s

program, if approved in its current form this legislation will likely impede future efforts to pursue cost savings to payroll and tax refund operations. discourage the State Specifically, the legislation might exploring the feasibility of

from

eliminating paper checks for these payments in the future and might hinder future efforts to achieve less costly, but equally effective alternatives. In recognition of the foregoing, I recommend that the bill be revised to codify the Department of Labor and Workforce

     

3
 

Development’s continue efficient taxpayer. that to

successful serve our

debit UI

card

program in

so

that

we

can and the

claimants the

an

effective savings to

manner

and

maximize

program’s

In addition, I recommend that the bill’s provisions paper check options for State employee

mandate

compensation and State tax refunds be eliminated so that we can preserve our flexibility to explore future cost saving measures for these payments. Accordingly, I herewith return Senate Bill No. 3046 and recommend that it be amended as follows: Page 2, Title, Line 2: Page 2, Title, Line 3: Page 2, Section 1, Lines 8-17: Page 2, Section 2, Line 19: Page 2, Section 2, Line 22: Delete “Title 52 Revised Statutes,” of the

Delete “and Title 54 of the Revised Statutes” Delete in their entirety Delete “2.” and insert “1.” After “benefits,” delete “written notice of benefit payment options, which shall” and insert “payment either in the form of deposit into a benefit debit card account as prescribed or approved by the division or payment by direct deposit into the claimant’s personal account in a financial institution. Unless the claimant affirmatively indicates to the division a choice of payment by direct deposit into the claimant’s personal account in a financial institution, the division shall make payment of benefits to the claimant by deposit into a benefit debit card account prescribed or approved by the division. In no case shall payment be made by way of a paper check or other negotiable instrument other than as permitted by this section.” Delete in their entirety After “option” delete “at any time. The written

Page 2, Section 2, Lines 23-26: Page 2, Section 2, Line 28:

     

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notice,” and insert “at a time and in a manner prescribed by the division through regulation.” Page 2, Section 2, Lines 29-39: Page 2, Section 3, Lines 41-44: Page 2, Section 4, Line 46: Delete in their entirety Delete in their entirety Delete “4.” and insert “2.”

Respectfully, /s/ Chris Christie Governor [seal]

Attest: /s/ Kevin M. O’Dowd Deputy Chief Counsel to the Governor