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Christie sends $54M to towns after vote on public worker health care cuts

Tuesday, August 30, 2016   (0 Comments)
Share | 08/30/16

New Jersey's distressed cities will have $54 million coming their way following Gov. Chris Christie's announcement Monday that he will release the aid he'd frozen because he wanted to force public worker health care cuts. Christie had sequestered more than $100 million in transitional aid to municipalities and funding for social programs until the joint-employer-employee benefits committees agreed to benefits changes saving the state $250 million this fiscal year. The committee for state and local workers approved the cuts 7-3 with one abstention Monday afternoon.

The freeze affected half of the total appropriation for transitional aid, which typically goes to such low-income cities as Atlantic City, Camden, Paterson, Asbury Park, Harrison and Trenton. The governor will still hold in reserve the $55 million for such social programs. Only one of the two committees overseeing public worker benefits has adopted the proposals. Union representatives on a commission for school employees' benefits have boycotted the meetings to block the administration from pushing through its recommendations. 

The governor first raised the challenge to cut $250 million in health benefits costs in his February budget address. His proposed budget assumed those savings but left it to the committees to find the money. The administration later asked the Legislature to add language to the proposed budget giving the plan design committees a deadline to approve $250 million in health benefits savings or state officials would find those cuts for them. But Democrats who control the Legislature didn't comply with Christie's request. Christie responded with an executive order placing the funds in reserve, which he said was necessary to ensure the budget stays in balance and is able to respond to emergencies.

He said in his message that the "permissive nature of the Legislature's budget language" and the "historical reluctance of some members of the plan design committees to embrace even the most modest of common-sense reforms, calls into question whether the Fiscal Year 2017 health benefits savings embedded in the Legislature's budget is realistically likely to be achieved." The State Health Benefits Plan Design Committee on Monday approved seven proposals that would move retirees onto Medicare Advantage, reduce out-of-network reimbursement rates for physical therapy, extend the state contract with its pharmacy benefits manager, offer financial incentives for employees to migrate to lower-cost, tiered plans, and prioritize less expensive and generic drugs, among other changes.

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