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Murphy’s benefits deal with NJEA and Other Public Unions – A snow job in September

by Organization For Economic Growth

Trenton NJ, Gov. Phil Murphy would have us believe he struck a tremendous blow for taxpayers with this new “deal” he negotiated behind closed doors with the NJEA and other public sector union heads
The deal is no bargain for taxpayers. Although there is more evaluation that needs to be done, it is clear from what we know that the alleged savings of $500 million over two years represents a tiny drop in the bucket of the $3.4 billion that state taxpayers spend for employee health care in a year.

The reported savings by the administration and the NJEA by moving retirees from traditional Medicare supplements to Medicare advantage, is supposed to save school districts $162 million next year and $110 million in 2020. That’s virtually nothing.

When you divide that “savings” by 670 school districts the actual savings per district is about $242,000 and 164,000 respectively. That minimal reduction will have no real impact on property tax bills and will likely be offset by rising salaries. Chalk up another win for the ravenous and selfish NJEA against the taxpayers.
What is so terribly disappointing is that Murphy and the legislature have had before them a blueprint for real meaningful reform produced by the New Jersey Pension and Health Benefits Commission in 2014 and 2015. They just refuse to follow it – showing a predictable lack of courage and a belief that financial wizardry will pull the state out of its growing financial morass that is killing business investment and burying property taxpayers.

The commission’s report points out the economic crisis that will ensue if real reform is not made and it offers, real, substantial steps the government can take to rein in the overly generous health and retirement benefits that public unions have squeezed from pliable public officials at the expense of hard-working families. More importantly the commission gave concrete proposals for change that will save billions not millions.

For example, the Commission noted that if the state were to refashion health insurance plans and co-pays that reflect private sector plans – with an employer (taxpayer) contribution of 75 percent – the state would save $1.9 BILLION THE FIRST YEAR. That savings would be achieved by treating employees fairly – and taxpayers too. The employees would get a health care plan equivalent to Obamacare Gold, not the platinum plan they have now – and pay a matching fee comparable to what private sector employees pay. The commission also noted that early retirees are a tremendous drain on the employee support system. These retires get full health coverage, and Medicare supplement reimbursement while contributing nothing to their benefits, which cost taxpayers $26,000 a year per family.
The current benefits system for New Jersey public employees is financially indefensible. It’s also unsustainable.

Whatever Gov. Murphy thinks he achieved with this “deal” is mere window dressing. He failed to give beleaguered and forgotten taxpayers the real reform they need and which Trenton has promised for so many years.

Rather than celebrate this “milestone” let’s call it what it is – a September snow job that should alarm taxpayers and awaken them to the fact that the state will not get any closer to affordability until every state official is held accountable for the financial catastrophe that has been visited on taxpayers. Accountability in this case starts with real pension and benefits reform for public employees.

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