Murphy decries ‘race to the bottom’ on public worker health plans

Gov. Phil Murphy swiped at cuts legislative leadership has been eyeing for public worker health plans, decrying what he said are “race to the bottom” health care options.

His comments, made during a Thursday afternoon luncheon at the New Jersey League of Municipalities conference in Atlantic City, come less than a day after Senate President Stephen Sweeney, D-3rd District, vowed to force the governor’s hand on health care cuts via a ballot question should negotiations on legislation falter.

“We must prove that we can provide them the high-quality care they deserve – and which they’ve earned – at a better price. We can save them, and other taxpayers, money. And, we are,” Murphy said in his prepared remarks.

Sweeney put forward a plan over a year ago that he and advocates argue would save the state tens of billions of dollars by making deep cuts to public worker pension and health care benefits. One proposal would cut public worker health plans from the equivalent of a platinum level of coverage under the Affordable Care Act to a gold level of coverage, while the second creates a hybrid retirement system, wherein the first $40,000 of income is subject to pension, and the rest to a 401k-style plan.

Murphy is staunchly opposed to both measures, arguing that health care savings can be made by negotiating public worker health care agreements. For example, a March deal between his administration and the state’s largest public worker’s union – the Communications Workers of America – will save the state $70 million a year during the five-year contract.

“We worked alongside our partners in organized labor to put real health care savings into the state budget, and, as a result, premium rates for local government and school employees are going down in the vast majority of your communities,” Murphy said in his prepared marks.

“But, at the same time, we protected the quality of their health care. This is an important point. We can’t be part of a race to the bottom,” the governor added.

Still, Sweeney denied that there was any coldness to the governor’s comments.

“It’s not even close to a ‘race to the bottom’,” Sweeney told reporters right after the governor’s remarks. “The problem we have in New Jersey is we have the most expensive health care system in the nation and we can’t afford it. I don’t want substandard health care at all.”

New Jersey’s health and pension woes have been decades in the making.

The state currently owes roughly $151 billion of pension and retiree health benefits, a debt-fueled by decades and prior gubernatorial administrations that sweetened benefits for workers without increasing contributions, and deferred annual payments.

“The problem is, we’re out of time,” Sweeney told attendees at a Wednesday panel. “Unfortunately, we’re the ones that are here to deal with it.”

Both the Murphy administration and legislative leadership have found more common ground on efforts to combine local government services, including municipalities and schools—which they argue could lead to cuts in property taxes. The current budget includes $10 million of grants for local governments to study and rule out potentially shared service agreements. Meanwhile, a host of similarly-goaled bills for combining local services – such as regional school districts for smaller or lower-populated towns – are moving through the state Legislature.

“We know good things can happen for property taxpayers when communities come together,” Murphy said in his remarks.