On Tuesday, March 25, 2025, League Executive Director Michael F. Cerra testified on the FY26 State Budget and offered concerns about Energy Tax Receipts, Affordable Housing, and cost increases for municipalities in the State Health Benefits Program.
The State’s taking of Energy Tax Receipts and CMPTRA funds are meant to be distributed to municipalities for property tax relief. This year again, respectfully, we ask the members of this committee to, at least, begin to restore the over $330 million that was diverted from these property tax relief programs going back over a decade. While the inclusion of the Municipal Relief Fund, which was funded at $75 million in FY23 and $150 million in FY24, was a positive development to making municipalities whole to the $330 million they are cumulatively owed, its exclusion in FY25 and in the proposed FY26 budget is disappointing.
The continuing rate increases that are borne by local government employers and employees in the State Health Benefits Program is unsustainable. The increases over the past three plan years have been 16%, 7% and 22%. As we approach Plan Year 2026, local government employers and their employees can now expect for the 3rd time in 4 years a double-digit increase in premiums, based on recent reports and data. Many employers have already left the systems and, in many cases, those who have not are unable to do so because they don’t have the number of employees to field a competitive bid on the marketplace. This is not sustainable, and the State budget should look to provide relief for what could be yet another staggering premium increase.
Lastly, over 430 municipalities met the January 31 deadline to submit a resolution of participation in the housing program established by the new law signed just about a year ago. Previous budgets saw the end of the diversion of funds from the State Affordable Housing Trust Fund, but the current proposal diverts funding to the other programs and objectives. As hundreds of municipalities are planning on how to meet the State-imposed housing obligations, a diversion of the housing trust funds should not be supported.
The League will offer testimony before the Senate Budget and Appropriations Committee next week and will keep you appraised of FY26 budget developments as they occur.
Contact: Paul Penna, Director of Government Affairs, ppenna@njlm.org, 609-695-3481, x110.