NJ leaders propose $350 million in subsidies to avoid mass health insurance increases

NEW JERSEY — Leading New Jersey local governments, including members of the NJ League of Municipalities, NJ Association of Counties, NJ Urban Mayors Association and NJ Conference of Mayors, came together Monday to challenge the state to come up with a solution to massive increases to ask for government health premiums from January 1st.

Bonuses for municipal employees are set to rise by 20%, plus an 18% increase in pensions, local leaders said in a statement on Monday. Local government and union officials are now warning that both changes could lead to layoffs and spikes in property taxes.

“Much of the positive work that lawmakers have done in recent years to stabilize property taxes will be sidelined if nothing is done to address this massive spike in community health insurance costs,” said Charles Wowkanech, NJ State AFL – CIO President. “It is clear to all concerned that if nothing is done, not only will our members and taxpayers be left in dire financial straits, but taxpayers, cities and counties will continue to be plagued as they take to the streets to control healthcare costs every year to come .”

As a possible solution, local government leaders and union officials unveiled a proposed law Monday aimed at offsetting increases in the state’s health plan with a one-time allocation of $350 million to the Division of Local Government Services from the General Fund, which guarantees annually would save at least $100 million by 2024, local leaders said.

If the $100 million doesn’t materialize, local leaders are proposing that the New Jersey state treasurer unilaterally make savings. The funds would then be used to set up a premium hike mitigation program and provide grants that would be prorated to local government employers.

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The proposal also recommends that employee contributions to health care costs should increase by the same percentage as the employer increases health care costs after grant funds have been allocated.

“Today we have an unprecedented coalition representing both workers and management, speaking with one voice and offering a solution to an unprecedented and devastating increase in health contributions for local government, local workers and property taxpayers,” said Raymond Heck, Mayor of Millstone Borough. President of the NJ League of Municipalities. “We call on the administration and lawmakers to work with this group of partners to consider and advance this solution for the benefit of our officials and our property taxpayers.”

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