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In a formalized show of mutuality following one of the coldest of all statehouse chills and the hottest legislative war in U.S. history, the New Jersey Education Association (NJEA) and Senate President Steve Sweeney (D-3) this morning announced a deal they estimate will cut $1 billion in a state of bloated proportions and even more epic dysfunctions.
Reporters were in the room at the statehouse for a press conference to gather details about the agreement.
The agreement would provide NJEA members with relief from Ch. 78 while also lowering costs for local education employers and the state. Ch. 78, a pension and health insurance law passed in 2011, imposed unsustainable and ever-growing health care costs on educators. NJEA members have been working on a sustained campaign to win Ch. 78 relief for nearly two years, pushing the issue to the forefront of the agenda in Trenton. As part of that campaign, NJEA members also advocated for two job justice bills that provide expanded due process and contract protection rights to New Jersey’s educational support professionals (ESP).
“Under the proposal,” according to NJ.com, “the state would eliminate some existing health care plans currently available to teachers and introduce two lower-cost alternatives, called the New Jersey Educators Health Plan and the Garden State Health Plan.”
NJ.com had the initial story here, and offered the following early:
“This agreement is a win-win,” Sweeney, D-Gloucester, said about the deal, which was first reported by NJ Advance Media.
“This is a pretty huge announcement today that we’re coming up with over a billion dollars in savings,” he said. “This has been a long, long journey.”
The announcement marks a surprise twist in the long-running feud and a major leap forward in the state’s efforts to rein in employee benefit costs. With both Sweeney and the NJEA on board, the deal represents perhaps the clearest path yet to achieving a goal that’s vexed state leaders.
The Senate hopes to put the reform legislation on the governor’s desk by the end of the month, according to Senate officials.
Marie Blistan, president of the NJEA – the same organization that tried to blow Sweeney out of office in
2017, sparking the most expense legislative contest in the nation’s history, on Monday appeared alongside the senate president.
“This has been the culmination with a very long process,” said Blistan, according to NJ.com. “It wasn’t easy, but the work we’ve done has been a major victory.”
The deal did not come as a major surprise, following a long period of footsy engaged by the teacher’s union and Sweeney.
This last month from InsiderNJ columnist Carl Golden following Governor Phil Murphy’s budget address, wherein he again asked the legislature for a millionaire’s tax, which lawmakers had twice killed in their fellow Democrat’s first two years in office:
When Senate President Steve Sweeney (D-Gloucester) indicated his willingness to support a millionaire’s tax in return for an additional $1 billion contribution to the public employee pension system, the political/media chattering class immediately and confidently interpreted his remarks as evidence of a thaw in the relationship between the Senator and the Administration, an initial step toward a compromise that will lead to the fulfillment of Gov. Phil Murphy’s three-year quest to raise taxes on the wealthy.
The celebration may be a bit premature, however, a mix of wishful thinking and excessive optimism — a belief that, at last, hope will triumph over experience.
That wasn’t an olive branch Sweeney handed the governor; it was a ransom note: “Put one billion dollars in unmarked bills in a briefcase, deposit it in the pension fund and the millionaire’s tax will be released unharmed.”
It was a straightforward, blunt example of the transactional politics which control the state budget process. For fans of government transparency, it doesn’t get much clearer than this — a deal made on the front page.
Then there’s this nugget from Golden:
While Sweeney’s professed openness to increasing the tax on incomes above $1 million a year does represent a slight shift from his hard-line opposition, it was tempered by his negative reaction to the rest of the governor’s $1 billion tax and fee increase agenda.
One billion, in fact, is the amount agreed to by Blistan and Sweeney.
The press conference occurred a day after Amy Kennedy, herself a former public school teacher with the backing of members of the NJEA who are also delegates of the Atlantic County Democratic Committee, dealt a concussive blow to Sweeney’s candidate in a fiercely competitive primary contest for the CD2 seat now occupied by U.S. Rep. Jeff Van Drew (R-2). The convention represented the lone contested event in the district’s pre-primary season. Those other county organizations connected to Sweeney had already declared their support – under Sweeney’s auspices – for Kennedy’s rival.
Sweeney had long blamed Murphy for that period of greatest intensity in his political war with the NJEA.
The cross-the-aisle ally of Republican Governor Chris Christie had championed pension and benefits overhauls while Christie was in office, infuriating the teacher’s union and spurring them to spend millions to try to force the senate president out of office as Christie departed and Murphy entered in 2017.
Sweeney felt Murphy could have picked up the phone and called off the NJEA, but the then-presumptive next governor did not, forcing Sweeney into the position of having to spend millions to protect himself.
The senate president resumed office embittered toward the governor-elect, whom he saw as an NJEA-enabler and toothless toady of northern interests antithetical to South Jersey and that wing of the Democratic Party establishment that had stood with Christie to curb public sector labor unions. The NJEA is the biggest among them.
Two years of pushing and shoving ensued, with Murphy and the NJEA on one side, and Sweeney, the bulk of his caucus and Building Trades on the other, with Murphy’s millionaire’s tax the hostage Sweeney exacted for the governor’s campaign trail transgressions.
After a year of public labor unions deriding the senate president’s Path to Progress, with the Communications Workers of America taking the position of lead activists, but often joined by similarly irritated NJEA members, the dimensions of peace began to take shape in time to protect the powerful principals.
Murphy late last month showed up at a rally attended by Sweeney’s old ally, U.S. Rep. Donald Norcross (D-1), and paid animated tribute to the brother of the boss his administration’s AG is investigating, in connection with an act the younger Norcross wrote, Sweeney facilitated, and Christie signed into law.
Today, the CWA formally announced its support for Norcross’ reelection in a release that landed around the time of the Sweeney press conference with Blistan.
All was not merely political sweetness and light, however, as even amid the trappings of peace, statehouse theater carried a slight warlike – or at least lead role-insistent overtone, as Sweeney and Blistan announced the deal without the presence of the governor, pointedly denying Murphy a Jimmy Carter-Begin-Sadat moment.
Today’s announcement carried the cheeky, poor man’s Jersey swamp-optics version of Begin and Sadat striking a deal unassisted by Carter.
Murphy is convalescing following surgery last week to remove a tumor from his kidney.
“I’m glad that legislative leaders and the NJEA are finally working together to negotiate cost-saving reforms that are acceptable to both parties,” said Assemblyman Tony Bucco (R-25). “The announcement is a reflection that everyone agrees the cost of healthcare is too high and more must be done to lower costs for both teachers and taxpayers.”
This is a breaking news story. Please stay tuned for all the details from InsiderNJ’s own Fred Snowflack, who is harvesting information at the statehouse.
UPDATE: Please read Mr. Snowflack’s column here.
Here’s the official release from Sweeney’s Office:
Sweeney Joins with NJEA in Landmark Agreement to Realize Health Care Savings
Plan Will Produce More Than $1 Billion in Annual Savings for Property Taxpayers & Educators
Trenton –Senate President Steve Sweeney and Marie Blistan, the President of the New Jersey Education Association, joined together to announce a landmark agreement that will produce more than $1 billion in annual savings for taxpayers and educators by providing a new health benefits plan with reduced contributions by NJEA members and major cost savings for local property taxpayers.
“I am pleased to announce a landmark agreement on healthcare benefits with NJEA President Marie Blistan,” said Senator Sweeney. “Marie has been a tough negotiator and coming to an agreement that benefits educators and taxpayers is what we always wanted. The agreement is the result of several months of intense negotiations and represents a culmination of several years of efforts to identify opportunities to address the quality of healthcare while dealing with the reality of its skyrocketing costs. This agreement is a win-win for New Jersey taxpayers and educators that will deliver estimated savings totaling more than $1 billion annually.”
“This is the culmination of a very long process. It was not easy, but the work we have done together is a major victory for both our members and all the other taxpayers of New Jersey,” said Ms. Blistan. “It is no secret that our members have suffered a great deal under Ch. 78, which imposed unsustainable and ever-growing health care costs on them. With this creative, collaborative approach, that burden is greatly reduced, and our members no longer need to fear that their take-home pay will decrease year after year as a result of those imposed contributions. It is another example of the kind of win-win solutions we can achieve when we come together determined to make progress.”
The seven-year plan will address the issues of cost, quality and health wellness simultaneously. The annual savings are expected to be $670 million for local school districts and $403 million for NJEA members.
The savings will be driven largely by the creation of the new New Jersey Educators Health Plan. This plan will replace most other plans currently being offered to teachers and provide comprehensive coverage for medical and pharmacy benefits with reasonable member copayments for physician care and 100 percent coverage for the use of in-network providers.
New members coming into service and those electing to switch to this new plan will see their payroll deductions tied to a new contribution schedule, based on a percentage of salary as opposed to a percentage of premiums, as opposed to the currently required percentage of premium. Those electing to stay in the SEHBP’s more traditional plans will be required to pay more for their healthcare based on a percentage of their premium as determined under Chapter 78 requirements.
The agreement also calls for the creation in 2021 of the new Garden State Health Plan, which will offer NJEA members the voluntary option of a plan that produces even more savings with a network of New Jersey-only healthcare providers. It will provide provisions for out-of-state care not available in the state.
“In addition to this new plan, the NJEA and I have agreed to work on another plan design that we call the Garden State Health Plan,” said Senator Sweeney. “This plan will offer NJEA members the voluntary option of a separate plan that produces even more savings with a network of New Jersey-only healthcare providers. The level of benefits will match that of the NJEHP and will be tied to New Jersey providers who deliver care at quality standards at or superior to what is available outside the area.”
Estimates suggest care delivered outside of New Jersey is 50 percent to 100 percent more than the same services offered by New Jersey providers for the same or better quality.
The agreement would also require the SEHBP to continue to promote and look to further expand the use and availability of patient centered medical homes inside the SEHBP.
Senator Sweeney praised Assembly Speaker Craig Coughlin for his efforts in getting the NJEA to the table.
“This agreement would not have happened without Speaker Coughlin asking me to sit down with the NJEA to work out an agreement,” said Senator Sweeney.
Senate President Sweeney also agreed to support two Educational Support Professional (ESP) bills and help move them through the Legislature (S1928 – on Subcontracting and S993 on Due Process).