Home>Governor>Deal on health benefits leaves unions happy, local and county governments not so much

Union members protest a planned state health plan rate hike at the statehouse on September 13, 2022. (Photo: Joey Fox for the New Jersey Globe).

Deal on health benefits leaves unions happy, local and county governments not so much

By David Wildstein, September 14 2022 5:51 pm

A deal to reduce proposed increases in health care costs for public employees have left union leaders happy, but not municipal and county officials who claim the Murphy administration left local taxpayers to foot the bill.

The compromise with government workers reduced an initial proposal of increased employee health care contributions from 18% to 3% this year.

“Coupled with certain modest changes in the design of the state’s healthcare plans, resulting in a more affordable option,” said a group of six labor leaders, including CWA state director Fran Ehret, AFSCME Council 52 executive director Steve Tully, Council of New Jersey State Colleges/American Federation of Teachers president Tim Harsign.

The labor leaders said that Gov. Phil Murphy’s “engagement on this issue was vital to the successful conclusion of negotiations.”

“(We) have forged an agreement on healthcare that benefits union members and their families by avoiding unaffordable cost increases,” they said.

As a result of the deal, municipal and county leaders say their health care costs are expected to increase by about 20%, a burden that could lead to property tax increases.

East Windsor Mayor Janice Mironov, the president of the New Jersey Conference of Mayors, criticized the deal as “dramatically steep and burdensome” and said it was “yet another unfunded mandate on local governments that will be borne by property taxpayers at a time when affordability is a paramount concern for our residents.”

“This SHBC vote of approval is entirely unjust, in these late-breaking actions, to leave municipal governments and public workers holding the proverbial bag, due to state unwillingness to short-term and long-term plan and fiscally address these significant impacts,” said Mironov, who is also the Mercer County Democratic chair.  “We call upon Governor Murphy and State Legislators to intervene and to ensure a fair and equitable worked through resolution for taxpayers and public employees in all of our towns.”

The Conference of Mayors preferred that the vote by postponed so that alternative solutions could be discussed, and expressed disappointment that “municipal and county officials are provided no voice at the table of the Commission.”

“We’re disappointed that the State Health Benefits Commission voted to support unprecedented health benefit rate increases as a matter of routine business at its meeting by telephone conference earlier today without due consideration for local governments, property taxpayers, or public employees already struggling to make ends meet,” said John Donnadio, the New Jersey Association of Counties executive director.

Michael Cerra, the executive director of the New Jersey League of Municipalities, said that the rate increase “will have a staggering impact on municipalities, local government employees, and property taxpayers.”

“This was avoidable and there were options that could and should have been taken, including delaying the vote today and engage an open and transparent process,” Cerra said.  “Local governments will now do their due diligence and explore more cost effective alternatives.

Also walking away unhappy was Pat Colligan, the New Jersey State Policemen’s Benevolent Association president.  He said the State Health Benefits Plan Design Committee rejected five proposals that were “immediately rebuffed by Governor Murphy’s appointees on the board all ending in a 6-6 tie.”

In a joint statement, Senate President Nicholas Scutari and Assembly Speaker Craig Coughlin commended the accord with public employees to “offset the drastic cost increases in health benefits for this year in a fiscally responsible way.”

But the two legislative leaders said that were “extremely disappointed” that the Plan Design Committee and the Health Benefits Commission failed to “prevent what are unaffordable rate hikes for counties and municipalities.”

“Ignoring municipalities will inevitably result in higher costs for taxpayers and workers,” Scutari and Coughlin said.

“It is imperative that the Health Benefits Commissions and Plan Design Committees immediately start working on effective ways to stop this and future exorbitant increases,” stated the two legislative leaders. “They should examine all possible options and consider any responsible alternative.  Any solutions need to prevent the imminent rate hike and ensure that increases of this magnitude do not happen again.”

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