Morris mayors: Health care premium hikes a 'gut punch' to municipal budgets

MORRIS TOWNSHIP − As the long-term economic impacts of the COVID-19 pandemic continue to wreak havoc on municipal budgets, a bipartisan coalition of Morris County mayors assembled at Town Hall Tuesday to call on Trenton lawmakers to soften their latest fiscal crisis: an expected 21% increase in the cost of health care coverage for government employees and 15% for school employees.

"The proposed premium increases for the state health-benefit program are a gut punch not only to our towns, but to our employees and our taxpayers," Morris Township Mayor Mark Gyorfy said.

The assembly included mayors Bob Conley of Madison, Thad Kobylarz of Chatham borough, Ashley Felice of Chatham Township, Tim Dougherty of Morristown, Jason Karr of Morris Plains and Carolyn Blackman of Dover. All but Felice are Democrats.

Morris Township Mayor Mark Gyorfy, center, speaks at a press conference at Morris Township Town Hall with several other Morris County mayors and elected officials to express concern about an approximate 20% increase in health insurance premiums for public employees
Morris Township Mayor Mark Gyorfy, center, speaks at a press conference at Morris Township Town Hall with several other Morris County mayors and elected officials to express concern about an approximate 20% increase in health insurance premiums for public employees

They also released a joint statement asking lawmakers in Trenton "to provide stability and relief by reducing the proposed premium increases to our public health benefits, suggesting lawmakers tap into "a record $6.8 billion surplus in this year’s state budget."

New Jersey public employees — members of the State Health Benefits Program and School Employees’ Health Benefits Program — are the largest insurance group in the state, with 816,000 active and retired members and their dependents.

Five unions of state government employees made deals with Gov. Phil Murphy’s administration in September that require them to pay only 3% more — with taxpayers covering the remaining 18%. But it’s unclear yet how local and county governments and school districts that participate in the state plan will split the rate hike between taxpayers and their employees.

Felice estimated that municipal employees and retirees in Chatham Township will see their premium contributions increase by 19.7%.

"I feel for our employees, who are impacted the most," Felice said. "Increases of this size are not something people typically anticipate or plan for. And when you couple this with the already out of control inflationary environment impacting them at the grocery store, gas station, etc. it has a snowball effect."

Several mayors said that due to the union contracts, the taxpayers will bear the brunt of the hike. The taxpayer tab in Morris Township will be $794,000 in 2023, Gyorfy estimated. "Couple that with over $215,000 in increases for our employees."

"If we were to raise property taxes next year to the 2% tax cap imposed by the state, it would net us a little over $450,000," he said. "That's less than half of our shortfall. Towns like Morris Township aren't going to have many options and they'll be forced to consider hiring freezes, pauses on public investments, layoffs and tax increases."

"It really resonated to me that I'm going to give my employees a raise, but they're going to take home less money," Dougherty of Morristown said.

Morris County Republicans issued a statement prior to the press conference, referring to it as "Democrat-party pageantry that comes in the midst of the holiday season and after months of debate and efforts by local and state Republican officials, unions, the league of municipalities, and the association of counties to change the outcome of the decision by the Murphy Administration and State Health Benefits Commission to hike health benefit costs for public employees and burden New Jersey’s property taxpayers."

Morris County NJJosel Mateo hopes 'to create a place I never had' through United Soccer Coaches' mentorship

Morris Republican Committee Chair Laura Ali said GOP-majority leaders in two Morris County municipalities - Mendham Township and Chatham Township - passed resolutions opposing the rate hikes back in the summer.

“This press conference is a little too late. It is a completely political attempt by these Democrat mayors to save face with their local employees and taxpayers as they plan to hike taxes in the coming next year," Ali said.

Gyorfy said the timing of the press conference reflects the time of year, when municipalities are beginning the process of crafting budgets for 2023. "We need clarity and whole numbers," he said.

"We can talk about who's to blame but as municipalities, we have to deal with what's handed to us," Gyorfy said. "Our job is to put together the budgets and if we can get some support in Trenton to give us some leeway to reduce the increases a bit, that will go a long way for our employees and our taxpayers.

Kobylarz said Chatham borough has already taken proactive steps to reduce costs, including a novel program that offers a cash incentive to employees who switch to lower-cost health plans. "This would not eliminate the overall cost increase, but would at least mitigate the heavy impact to Chatham Borough, he said.

The mostly part-time mayors said they normally rely on the New Jersey League of Municipalities and the New Jersey Conference of Mayors to engage directly with lawmakers and the Murphy administration. Conley, a member of the conference executive board, said it's "a No. 1 priority" for the organization "every day in Trenton."

"When they worked out a deal with the state employees, we were hoping to hear shortly after 'here's what we can do for the municipalities,' " Conley said. "That's what we're looking for now."

"This is not just a local program," Gyorfy said. "It's a statewide problem."

This article originally appeared on Morristown Daily Record: Morris County NJ mayors ask for help with health care costs