Over the past week, both houses of the Legislature moved forward with a proposal that would permit the enactment of laws that would impose unfunded mandates on boards of education and other local governing bodies. The New Jersey School Boards Association strongly opposes the legislation and has been encouraging board members to contact their representatives in the Legislature and urge them to oppose it as well.
The bill, S-4248/A-6217, was approved by the Assembly Appropriations Committee on Monday Dec. 13, and then by the Senate Budget and Appropriations Committee on Dec. 16. It was scheduled for an Assembly floor vote on Monday, Dec. 20, but was pulled from the board list. It is possible that the bill could resurface sometime before the current session ends, but the Assembly’s failure to take a vote Monday was a positive development.
“The Association thanks the board members who joined our advocacy efforts and expressed their opposition to the bill to their Senate and Assembly representatives,” said Dr. Lawrence S. Feinsod, NJSBA executive director. “We also thank the leaders of the Legislature for responding to our concerns about this legislation.”
The bill provides that any new law, rule, or regulation concerning any health care benefits plan or program and coverage under such plan or program provided by local public employers to their public employees and beneficiaries is not an unfunded mandate. The bill is a direct response to a pending complaint before the Council on Local Mandates brought by three school districts challenging that P.L.2020, c.44 (commonly referred to as “Chapter 44”), the health benefits reform law enacted last year, is an unfunded mandate. While some districts have achieved savings due to Chapter 44, others have unfortunately seen their health care costs rise, in some cases significantly.
Under the State Constitution, any law that is determined to be an unfunded mandate upon boards of education, counties, or municipalities because it does not authorize resources other than the property tax to offset the additional direct expenditures required for its implementation ceases to be mandatory and expires. The Council on Local Mandates is charged with resolving any disputes regarding whether a law, rule, or regulation constitutes an unfunded mandate. Under the State Constitution, specific categories of laws, rules, and regulations are not considered unfunded mandates. This is a legislative attempt to add an additional exception to what would otherwise be considered an unfunded mandate.
In testimony submitted to the committee, the NJSBA cited both cost and constitutional concerns with the legislation. The NJSBA argued that, should this legislation be approved, it has the potential to significantly increase costs for New Jersey’s local boards of education and taxpayers. It would effectively grant the Legislature unfettered authority to enact laws that alter the health care plans public employers offer to their employees without any consideration of the cost impact resulting from such changes. It also would restrict the ability of local governing bodies, including boards of education, to challenge those laws as unfunded mandates before the Council on Local Mandates. That body is charged with enforcing provisions of the New Jersey Constitution that prohibit the state from enacting any laws that cannot be paid for through means besides property taxes. It is a critical tool available to local governing bodies that is essential to protecting New Jersey residents from tax increases that may result from actions taken by lawmakers.
In addition, the “state mandate, state pay” provision of the State Constitution places a strong and important limitation on the Legislature’s ability to enact laws that impose unfunded mandates on local governments. In summary, it prohibits the imposition of any law that is determined to be an unfunded mandate upon boards of education, counties, or municipalities if it does not authorize resources, other than the property tax, to offset the costs associated with implementation of the law. This provision of the State Constitution also contains a limited number of exceptions to the prohibition on the imposition of unfunded mandates. However, the changes in statute contemplated by A-6217/S-4248 are not consistent with the State Constitution. Therefore, aside from the cost and procedural implications, the bill raises significant constitutional concerns. The NJSBA argued that any additional exceptions to the prohibition on unfunded mandates should be determined by the voters of the state through an amendment to the State Constitution. Moreover, the NJSBA notes that decisions on whether any law is, in fact, an unfunded mandate should remain under the jurisdiction of the Council on Local Mandates.
The NJSBA was joined by the New Jersey State League of Municipalities, New Jersey Association of Counties, New Jersey Association of School Business Officials and the New Jersey Business and Industry Association in opposition to the bill.
