At the beginning of 2021, the law commonly referred to as Chapter 44 went into effect. This law, passed by the Legislature last June and signed by Gov. Murphy, made significant changes to the health benefit plans that school districts must offer to their employees, while simultaneously altering how much those employees contribute to the cost of their insurance coverage.
As the bill made its way through the legislative process, NJSBA voiced its support for the intent of the proposal. However, the Association also expressed concern that the measure might not achieve its stated purpose of saving money for all of New Jersey’s districts.
In the months following the bills enactment, NJSBA has heard directly from member districts about the negative impact the law is having on their budgets. NJSBA staff has engaged key legislative staff, as well as members of the Murphy administration and the N.J. Department of Education, alerting them to the adverse consequences districts were experiencing.
New Jersey’s legislative leadership has indicated its willingness to revisit the law once there has been an opportunity to examine whether it is working as intended.
Working with the New Jersey Association of School Business Officials (NJASBO), the New Jersey School Boards Association has developed a sample resolution boards of education may want to consider adopting.
In part, the resolution reads:
WHEREAS, Chapter 44 was a well-intentioned proposal that aimed to generate hundreds of millions of dollars in savings for school districts, school employees and taxpayers; and
WHEREAS, While some school districts may indeed be realizing savings due to the provisions of Chapter 44, many are experiencing the opposite effect and witnessing an increase in their health care costs, which may result in cuts to critical programs, services and staff in order to balance their budgets; and
WHEREAS, Since Chapter 44 essentially froze the level of health benefits and employee contributions for the seven-year period following the law’s effective date, districts are unable to control cost increases through the traditional collective bargaining process; and
WHEREAS, It is incumbent upon the Legislature and Governor to address and correct the unintended financial consequences districts are experiencing due to Chapter 44 and ensure that all districts share in the anticipated savings.
NOW, THEREFORE, BE IT RESOLVED that the _____________________ Board of Education requests that the state Legislature and Governor provide relief from the increased health care costs experienced by school districts due to the implementation of Chapter 44; and be it further
RESOLVED, that relief from Chapter 44 should include direct, short-term assistance from the state to ensure that all school districts are held financially harmless in both the current and subsequent fiscal years; and be it further
RESOLVED, that the Legislature and Governor should expeditiously begin to explore long-term structural reforms that reverse the unintended consequences of Chapter 44 and generate lasting savings for school districts, employees and taxpayers.
A copy of the sample resolution can be downloaded here.