On Thursday, the Senate Labor Committee favorably reported S-4059. This legislation increases workers' compensation contingency fees from 20% to 25%, and is companion to A-5659, which we reported on two weeks ago when it was favorably reported out of the Assembly Labor Committee.
The League opposed this legislation, noting that it would lead to premium increases. Also, because workers’ compensation insurance falls under the 2% levy cap, it could force municipalities to cut core services and make other difficult budgeting decisions.
Senator Lagana, the Senate sponsor, stated publicly during the hearing that he expects to amend this legislation based on the testimony offered. We will continue to advocate against this legislation until there is some relief from the additional cost burdens on municipalities.
The Assembly companion, A-5659 was favorably reported out of the Assembly Labor Committee on November 30 and scheduled for a full Assembly vote last Thursday. As we reported last week, it was removed from the board list at the last minute.
The League is a member of a broad coalition opposing this proposal, including the African American Chamber of Commerce of New Jersey, American Property Casualty Insurance Association, Associated Builders and Contractors – New Jersey Chapter, Chamber of Commerce of Southern New Jersey, Chemistry Council of New Jersey, Commerce and Industry Association of New Jersey, Fuel Merchants Association of New Jersey, Garden State Municipal Joint Insurance Fund, Government Finance Officers Association of New Jersey, Homecare and Hospice Association of New Jersey, Insurance Council of New Jersey, Municipal Excess Liability Joint Insurance Fund, National Association of Mutual Insurance Companies, National Federation of Independent Business, New Jersey Apartment Association, New Jersey Association of Counties, New Jersey Builders Association, New Jersey Business and Industry Association, New Jersey Cable Television Association, New Jersey Civil Justice Institute, New Jersey Dental Association, New Jersey Food Council, New Jersey Independent Electrical Contractors Association, New Jersey Motor Truck Association, New Jersey Propane Gas Association, New Jersey Retail Merchants Association, New Jersey Self Insurers’ Association, New Jersey State Chamber of Commerce, New Jersey State Funeral Directors Association, Public Entity Joint Insurance Fund, and Shipping Association of New York and New Jersey.
The League is grateful that the Division of Local Government Services approved a levy cap exemption in CY 2023/SFY 2024 for appropriation increases in excess of 3.5% for the following budget appropriations: garbage and trash removal and disposal; recycling; PERS and PFRS employer contributions; gasoline and diesel fuel; and workers’ compensation insurance (See Local Finance Notice 2023-04 ). The League has been advocating for these items to be outside the levy cap on a permanent basis.
At the 2023 New Jersey State League of Municipalities Annual Conference, Resolution 2023-14 Urging Action to Provide Relief from Increased Insurance Costs noted that New Jersey has the highest workers’ compensation premiums in the nation and urged that no further legislation be considered until an analysis of why this is, and a plan is enacted to reduce these premium costs to municipal taxpayers.
Consistent with the League Conference Resolution 2023-14, the League opposes this legislation because the increased costs further hamstring municipalities that must comply annually with a 2% levy cap.
This legislation is likely to be considered during the remaining days of this legislative session. We encourage you to reach out to your Assemblymembers and Senators and share your thoughts on S-4059 and A-5659.
Contact: Paul Penna, Senior Legislative Analyst, email@example.com, 609-695-3481, x110.