With a 22.8% health care cost increase for a large number of state, county and municipal employees statewide set to take effect Jan. 1, a bipartisan group of elected officials and public sector union leaders says a crisis is looming that could have some “political implications,” including a significant tax increase in 2023.

“Cities are going to pay a big price,” said East Windsor Mayor Janice Mironova, who heads the New Jersey Conference of Mayors. “Workers will suffer and taxes will rise at all local levels.”

Mironov said talks with Gov. Phil Murphy and legislative leaders include a request for a one-time appropriation of $350 million “to offset the huge increase.”

“The state has a surplus of about $6 billion and about a billion and a half between the money from COVID and the money they get from Blue Cross Blue Shield after the recent transition,” she said.
“This is an appropriate use of COVID funds.”

According to Fran Errett, state director of the Communications Workers of America, New Jersey is the only state in the U.S. to face a 20% increase. Other states have about six to nine percent, Errett said.

“This will have a huge impact on the dedicated public workers who have been working throughout the COVID pandemic and have been our first line of response, and as a whole we have been sick and having to take care of our families and getting a pay cut in the midst of a recession will be very difficult for them,” Ereth said. “Frankly, public servants would be hit twice because they are also taxpayers.”

Paterson Mayor Andre Saye said his “financially challenged city” is in transition and said rising health care costs could potentially necessitate closing a fire station or library.

“I also have to protect the taxpayers,” he said. “They’ve seen increases every year and frankly can’t take another increase.”

But none of the elected officials or labor leaders were ready to elaborate on the political fallout that could come next year when local taxpayers begin to feel the effects of the increased costs.

“What I would say is simply that we are trying to express the urgency of the situation. It’s not an issue, at least from our perspective, from the AFL-CIO’s policy perspective,” said Michael Serra, executive director of the New Jersey League of Municipalities. he’s talking about raising local government taxes in a very difficult economy that we’re going to be entering next year, so I’m not really comfortable talking about the politics of that other than we want to work with both parties.”

The surge in health insurance premiums comes at the same time that the state is set to increase pension costs by 18%.

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