TRENTON, N.J. – Local government leaders will be forced to raise property taxes or cut services after promised relief for escalating health care costs was unexpectedly dropped from Gov. Phil Murphy’s $54.3 billion FY24 budget.
Assemblyman Ned Thomson criticized Democrat leaders for adding $1.2 billion in pork spending to the governor’s already record-breaking proposed budget while leaving counties and municipalities to scramble to cover the 23% health care rate hike. In February during his “Building the Next New Jersey: Affordability, Opportunity, Responsibility” budget address, Murphy promised $200 million in federal Covid relief to offset that premium increase in the State Health Benefits plan, which covers more than 800,000 state, county and local government employees.
“There is nothing affordable or responsible in this budget. Democrats managed to find money for their pet projects but leave local towns scrambling to meet statutory obligations,” Thomson (R-Monmouth) said. “Ultimately, it’s the New Jersey taxpayers who must shoulder the cost of these premium increases. The majority party never misses an opportunity to pass the costs along our constituents.”
Instead, the budget includes $150 million from energy tax receipts and $50 million in federal pandemic money that creates an urban investment fund, neither of which is dedicated to offsetting rising health care costs and lowering property taxes. The state for years has used the taxes collected from utility companies to balance the state budget, for years shortchanging local municipalities billions in property tax relief. Last fiscal year, municipalities were entitled to $350 million, but only received $75 million.
Thomson said aid delivered to municipalities from the energy tax receipts should equal what would offset increases in employee health care and prescription benefits expenditures. A bill (A4789) he introduced would require that, but has yet to receive a committee hearing.
“This money belongs to the towns, so they should be able to use it to offset any and all healthcare increases in order to keep taxpayers from footing the bill,” Thomson added. “For all his pomp and circumstance, Murphy’s so-called solutions to our very real property tax crisis never go far enough.”