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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. In addition, the bill requires the State to issue

paper paychecks to State employees, including employees of

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 of State benefits, refunds and payments with a

choice of form of payment, I am troubled by the bill’s

provisions that directly conflict with my 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 of dollars. More

importantly, the Department’s debit card program has been

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 to having an adverse impact upon the

Department of Labor and Workforce Development’s debit card

program, if approved in its current form this legislation will

likely impede future efforts to pursue cost savings to payroll

and tax refund operations. Specifically, the legislation might

discourage the State from exploring the feasibility of

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

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Development’s successful debit card program so that we can

continue to serve our UI claimants in an effective and

efficient manner and maximize the program’s savings to the

taxpayer. In addition, I recommend that the bill’s provisions

that mandate paper check options for State employee

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: Delete “Title 52 of theRevised Statutes,”

Page 2, Title, Line 3: Delete “and Title 54 of theRevised Statutes”

Page 2, Section 1, Lines 8-17: Delete in their entirety

Page 2, Section 2, Line 19: Delete “2.” and insert “1.”

Page 2, Section 2, Line 22: After “benefits,” delete“written notice of benefitpayment options, whichshall” and insert “paymenteither in the form ofdeposit into a benefitdebit card account asprescribed or approved by

the division or payment bydirect deposit into theclaimant’s personal accountin a financial institution.Unless the claimantaffirmatively indicates tothe division a choice ofpayment by direct depositinto the claimant’spersonal account in afinancial institution, thedivision shall make paymentof benefits to the claimantby deposit into a benefitdebit card accountprescribed or approved bythe division. In no caseshall payment be made byway of a paper check orother negotiable instrumentother than as permitted bythis section.”


Page 2, Section 2, Line 28: After “option” delete “atany time. The written

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notice,” and insert “at atime and in a mannerprescribed by the divisionthrough regulation.”



Page 2, Section 4, Line 46: Delete “4.” and insert “2.”

Respectfully,

/s/ Chris Christie

Governor

[seal]

Attest:

/s/ Kevin M. O’Dowd

Deputy Chief Counsel to the Governor

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