TRENTON, N.J. (AP) - New Jersey Gov. Phil Murphy is taking his administration’s health benefits review on the road.
The freshman Democrat announced this week that the task force he put together this summer to review New Jersey’s multi-billion-dollar public worker health benefits will go on a three-stop listening tour.
The task force’s meetings, one each in the central, northern and southern parts of the state, will take place through November and come soon after a bipartisan legislative commission unveiled its own findings about how to address this perennial issue.
Murphy has not tipped his hand about what changes he would accept, but has allied himself closely with the state’s public-sector unions, which generally oppose benefits cuts and waged a war of words over givebacks under Republican Chris Christie.
That sets up some potential tension with the Democrat-led Legislature because the legislative blue ribbon panel recommended a cut in benefits for the state’s roughly 800,000 workers and retirees.
A closer look at the issues:
WHAT’S THE PROBLEM?
In a word: money. The state has a combined pension and health benefit liability of about $152 billion, according to the legislative panel that released its findings weeks ago. That’s roughly four times the size of the state budget and three times the size of the state’s bonded debt. Health benefits this fiscal year run $3.4 billion, or just less than 10 percent of the overall budget, and are expected to climb by $700 million over the next four years.
The Legislature’s report estimates that the rising costs are about $200 million more than state revenues are projected to grow over the same time period.
WHAT PROPOSALS ARE ON THE TABLE ALREADY?
Murphy has been mostly reticent about how he would proceed. He announced the task force, which includes members of labor and his administration, in May and said in a later executive order that he wanted it to look for “short-term improvements” and “long-term reforms.”
Lawmakers already put something on the table, though they have not yet advanced any legislation.
The legislative work group recommended reducing public worker benefits from platinum level to gold level. That change alone would save $587 million from state retiree benefits premiums in one fiscal year alone, according to the commission. Another big change would be requiring retirees to shoulder the same percentage of the cost of benefits as current workers, at 21 percent. New retirees in 2016 paid just $50 million out of $2 billion for health care, according to the legislative panel.
WHAT’S THE KEY CONTEXT?
Under Christie, public sector unions opposed cuts, and Murphy campaigned and won last year with their assistance. He’s made no public promises on health benefits, but he has taken some actions to show how close he is with labor: He declined to renew a 2 percent cap on the amount that could be awarded in arbitration cases between police and fire workers and towns. That was a win for labor unions. He also agreed to public worker contracts that resulted in across-the-board raises to the acclaim to unions. But Murphy also headed a 2005 health benefits review commission for then Acting Gov. Richard Codey. That report called for workers to shoulder a larger share of benefits costs.
WHAT’S NEXT?
The first task force listening session is Thursday evening in Hamilton. The second is Oct. 25 in Rutherford, and the final meeting is Nov. 14 in Mount Laurel. Residents can submit comments to the task force at StateHealthBenefitsTaskForce@NJ.Gov.
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