Legislation creating a new state health benefits plan for teachers that will provide approximately $700 million a year in property tax relief is now law. Gov. Phil Murphy on Wednesday signed S-2273 (Sweeney, D-3)/A-20 (Coughlin, D-19) following final legislative passage by the Assembly on Monday.
The measure is part of Senate President Stephen Sweeney’s Path to Progress reforms to reduce government spending in New Jersey. NJBIA supports the initiative and called for its passage in a recent editorial advocating for real spending cuts as part of the solution to the COVID-19 fiscal crisis.
“This reform will produce lasting financial savings for local taxpayers and educators at the same time it maintains quality healthcare for public workers,” Sweeney said. “Both of these achievements are even more important at this time. Local government is experiencing severe fiscal problems because of the shutdown, and the need for medical care is vital because of the pandemic.”
Sweeney negotiated an agreement with the NJEA for the new plan, which will be called the School Employees’ Health Benefits Program (SEHBP).
When he unveiled the plan in early March, the Senate President said it would save $670 million in property taxes for lower costs to local governments and another $400 million in premium contributions by plan beneficiaries. The savings were calculated by actuaries employed by the state Division of Pension and Benefits and the Senate Majority Office.
Assembly Speaker Craig Coughlin also worked with the NJEA to push this reform, and this bill reflects the work of both legislative leaders.
Additionally and positively, the bill requires local school boards to use any savings from the health benefits change to reduce the property tax levy on local taxpayers, provided the school district is already spending what it is required to by state law.
NJBIA looks forward to working with Legislative Leadership and Governor Murphy on further structural reforms like this to make New Jersey more affordable.