County and municipal leaders in New Jersey have joined forces with public sector unions in a single, last-ditch appeal to the state for financial help as they face health care premium increases that take effect in less than a month.
The looming cost increases — in many cases more than 20% over last year — threaten to both raise local property taxes across New Jersey and cut take-home pay for state employees whose service has been highly valued. during the COVID-19 pandemic, government and union officials said during a joint press conference on Monday.
Officials also called their unity on the issue “unprecedented,” given that the two sides are usually on opposite ends of the negotiating table when it comes to labor deals and other related issues.
‘At the moment it is a crisis.’ — Janice Mironawa, President, New Jersey Conference of Mayors
But in this case, the two are jointly seeking $350 million in cash relief from the state to offset the rapidly increasing health care costs both are facing. At the same time, they also promise to work together to find ways to overhaul health plans to save millions of dollars in the years to come.
“We were all trying to reach common ground,” said Janice Mironawa, president of the New Jersey Conference of Mayors.
“We are very pleased to be able to come together,” said Fran Errett, director of the American Labor Relations Division of New Jersey.
The deadline is approaching
Still, with the Jan. 1 deadline looming, it remains to be seen how much attention the show of government-labor unity will garner in Trenton, where any emergency appropriation of state dollars requires approval from Gov. Phil Murphy and his fellow Democrats, who controlled by both houses of the legislature.
Earlier this year, county and municipal governments that participate in the State Health Care Program learned that the cost of financing their employees’ health insurance premiums is increasing by nearly 23% over last year.
This is due to many factors beyond their immediate control, including rising health care costs, the impact of the COVID-19 pandemic and general inflation, the state consultant’s report said.
For public employers, spending to fund employee health care costs is generally exempt from New Jersey’s 2% annual property tax increase limit. That means the employer’s share of higher health care premiums could be passed on in full to property owners, county and municipal government officials warned. Other alternatives, they said, include laying off government workers or cutting services.
“It’s a crisis at this point,” Mironov said during a news conference Monday that also included representatives from the New Jersey League of Municipalities and the New Jersey Association of Counties, among other groups.
In Paterson, Mayor Andre Sayegh said his community faces cuts that could affect youth recreation programs, libraries and even emergency services if the state doesn’t step in.
“Here we are, unfortunately, while we’re trying to turn the page on this pandemic, we still have costs that we have to bear, and we can’t bear those costs,” Sayegh said.
For their part, state employee union leaders said their members would likely be hit twice as most of them are in-state residents who would face higher property tax bills and, at the same time, increased contributions to employee health insurance.
Msome expressed concern that providing state-funded aid would do little to address the larger problems that the latest proposal would only partially address.
And while county and municipal governments may have some time before they have to come up with their next budgets, premium increases for workers will begin Jan. 1.
Errett, a CWA union leader, said the increase in health premiums would have a “tremendous impact [on] dedicated community workers who worked throughout the century [COVID-19] pandemic and were our first line of response.”
“We can’t forget that a steep rate increase has a big impact on public employees because they are also taxpayers,” said Kevin Lyons of the New Jersey State Police Benevolent Association.
Not a new release
Of course, the total cost of funding public employee health care in New Jersey has been long–is an ongoing problem, and many have expressed concern that providing government-funded relief will do little to address the larger problems that the latest proposal will only partially address.
Still, the concerted plea for state bailouts is also playing out on the airwaves among government and union officials at a time when a sustained surge in state tax revenue has left New Jersey on solid fiscal footing; the current state budget is supported by an unprecedented budget surplus of nearly $7 billion.
What’s more, the state has yet to disburse more than $1 billion of the total $6 billion in COVID-19 relief that was provided last year under the federal America’s Rescue Plan Act. The state is also set to receive a $600 million payout from Horizon Blue Cross Blue Shield of New Jersey later this fiscal year after a restructuring of New Jersey’s largest health insurer recently won state approval.
‘Any solution must achieve sustainable long-term savings and ensure that there are no unduly unexpected rate increases in the future.’ — Assembly Speaker Craig Coughlin and Senate President Nicholas Scutari
Concerns about the state’s record high property tax bill were high even before rising health insurance premiums threatened to increase again, while Murphy and lawmakers hammered out a new tax program that is expected to take some of the sting out of property tax bills, which averaged nearly $9,300 in New Jersey last year.
After Monday’s press conference, Murphy’s office noted that the administration is currently reviewing the proposal.
“Our office continues to review the recommendations offered by a coalition of local government organizations and labor unions,” said Murphy spokeswoman Christy Peace. “The administration remains committed to our ongoing goal of working with our partners in government and the workforce to find possible solutions that will help us provide quality health care at a more affordable cost.”
For their part, Assembly Speaker Craig Coughlin (D-Middlesex) and Senate President Nicholas Scutari (D-Union) issued a joint statement that emphasized the goal of finding long-term savings and suggested that it is the responsibility of state health plan committees to come up with “quality, affordable health plans for government workers.”
“Any decision must achieve sustainable long-term savings and ensure that future rate hikes are not excessively unexpected,” the two leaders said.