Home>Health>New Jersey facing steep tax increases unless health care costs are reduced, officials, unions warn

Paterson Mayor André Sayegh. (Photo: André Sayegh for Mayor).

New Jersey facing steep tax increases unless health care costs are reduced, officials, unions warn

By David Wildstein, December 12 2022 8:25 pm

With a 22.8% increase in the cost of health care for a huge number of state, county and municipal employees across the state is set to take effect on January 1, a bipartisan group of elected officials and public sector union leaders says a crisis is looming that could come with some “political consequence,” including major tax increases in 2023.

“Towns would pay a steep price,” said East Windsor Mayor Janice Mironov, who heads the New Jersey Conference of Mayors.  “Workers will be harmed and taxes will go up at all local levels.”

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

“The state has a surplus of about $6 billion and about a billion and a half in between COVID money and money that they’re getting from Blue Cross Blue Shield after their recent transition,” she said.
“This is this is an appropriate use of COVID funds.”

According to Fran Ehret, the state director of the Communications Workers of America, New Jersey is the only state in the U.S. facing a 20% increase.  Other states are around six to nine percent, Ehret said.

“It’s going to be a tremendous impact to dedicated public workers who have worked all through the COVID pandemic and were our first line responders and by and large we were subjected to being sick and having to take care of their families and having to face a pay cut in the midst of a recession is going to be extremely difficult for them,” said Ehret.  “Frankly, public workers would be hit twice because they’re taxpayers too.”

Paterson Mayor Andre Sayegh said that his “financially distressed city” depends on transitional state and said that the increased health care costs could potentially necessitate the closing of a fire station or a library.

“I also have to protect the taxpayers,” he said.  “They’ve seen increases every year and quite frankly, cannot absorb yet another increase.”

But none of the elected officials or labor leaders were prepared to elaborate on the details of political consequences that could come next year when local taxpayers begin to feel the effect of the increased costs.

“What I would say is simply that we’re trying to express the urgency of the situation at hand. This isn’t a question, at least from our perspective, from the AFL-CIO’s perspective of politics,” said Eric Richard, the legislative director of the New Jersey AFL-CIO.  “This is about local government tax increases in a very difficult economy that we’re about to enter next year, so I’m not really comfortable with speaking with the politics of this other than to say that we want to work with both parties.”

The spike in heath insurance premiums comes at the same time the state is about to increase pension costs by 18%.

Correction: in an earlier version of this story, a quote from Eric Richard of the AFL-CIO was attributed to Michael Cerra of the New Jersey League of Municipalities. 

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