After lobbying Gov. Phil Murphy’s office for months, local government leaders and labor unions in New Jersey are now turning to the state Legislature for help with double-digit rate hikes on state health benefit plans.
The premiums for local government workers will go up by 20% on January 1. This was decided by a state health board in September. Local governments and union leaders have been warning for months that the rate hikes could lead to layoffs and higher property taxes.
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NJ State AFL-CIO President Charles Wowkanech said in a statement that a lot of the good work the legislature has done over the last few years to keep property taxes stable will be undone if nothing is done to stop the huge rise in the cost of local government health care insurance.
“It’s not often that unions and local government management agree on something, but we all agree on this.
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On Monday, a group of labor leaders and local government leaders unveiled a policy proposal that includes ways to save money and a one-time allocation of $350 million to help local governments and their employees deal with the cost increases.
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On Monday, the mayor of Millstone Borough, Raymond Heck, asked the Murphy administration and state lawmakers to “think about and move forward with this solution” because it would help public workers and property taxpayers.
“Today, for the first time ever, both labor and management are united in a coalition that speaks with one voice and offers a solution to an unprecedented and devastating rise in health care costs for local governments, local workers, and property taxpayers.”
Heck, who is also the president of the New Jersey League of Municipalities, said.
The $350 million would come from the state’s general fund and be given to the Division of Local Government Services. Leaders said the plan would save at least $100 million a year starting in the plan year 2024.
According to the proposal, these savings would be made by taking steps to lower the costs of the local government part of the state health benefits plan, which covers prescription drugs, without putting the costs on employees or employers.
The plan would give the New Jersey State Treasurer the power to save money without going through the state’s normal plan-making process.
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Steve Tully, executive director of the American Federation of State, County, and Municipal Employees Council 63, said, “This unprecedented coalition between management and labor is offering common-sense solutions to avoid hugely bad outcomes for taxpayers and public workers.”
“These recommendations give local governments enough money to make up for the huge premium increases for public employees, and they also deal with the things that keep pushing up health care costs,” Tully said. “This is a fair solution for taxpayers, local governments, and public workers.”
