TRENTON — A coalition of more than a dozen public sector unions representing over 140,000 New Jersey workers is pushing back against Governor Phil Murphy’s proposed 37% increase in healthcare costs for state and local government employees, urging the legislature to reconvene immediately to address the issue.
Some pundits have suspected those cuts are to pay for the larger 2026 budget which also includes more services for illegal migrants living in the Garden State.
The healthcare premium increases, announced as part of the FY2026 state budget, include a 37% hike for local government workers and a 19.7% hike for state employees under the State Health Benefits Plan (SHBP). The unions say the cuts and premium hikes will amount to a $100 million shift in costs to workers and retirees, who already face rising living expenses.
“This dramatic increase is a betrayal of the public workers who keep our state running,” the unions stated in a joint release Thursday. “Governor Murphy’s decision to impose these staggering health insurance hikes… directly undermines the financial security of New Jersey’s public sector employees.”
The unions argue the move bypasses collective bargaining procedures and threatens to undo cost-saving negotiations previously reached with the Murphy administration.
The FY2026 budget, they say, undercuts those agreements by introducing significant out-of-pocket increases without going through the contractual reopener process.
In a letter to legislative leadership, the coalition called on lawmakers to return to Trenton and pass a supplemental bill that would restore the $100 million cut. They cited New Jersey’s recent revenue surplus projections as a reason why the healthcare program should not be underfunded.
“We urge the legislature to pass a supplemental budget bill to eliminate the $100 million healthcare cut,” the coalition wrote. “This action would not only repair the damage caused by the FY2026 budget but also send a powerful message that New Jersey stands with its workers.”
The growing coalition includes unions from across sectors such as communication, education, law enforcement, and healthcare — including CWA, AFSCME NJ, AFT New Jersey, HPAE, PBA, and FOP-NJ, among others.
The healthcare fight may also have political implications. With labor dissatisfaction mounting, it could pose challenges for Democrats in upcoming elections and provide new momentum for Republican contenders like Jack Ciattarelli, who lost narrowly to Murphy in 2021.