N.J.'s Murphy Now Knows Taxpayer Bill for Workers' Pay Raise

(Bloomberg) -- New Jersey taxpayers will foot a projected $149 million bill for a four-year contract negotiated with Governor Phil Murphy’s administration that gives raises to 35,000 state workers.

The information was released by Murphy’s office a day after the governor, four months on the job, told reporters that he didn’t know the cost of the contract for the Communications Workers of America, which endorsed the Democrat and contributed to his 2016 campaign.

Murphy, 60, a former Goldman Sachs Group Inc. senior director, supports the agreement, which gives workers 2 percent raises for 2017 and 2018. Some will get onetime $650 payouts and retroactive clothing allowances and eye-care reimbursement.

Retirees won’t receive the retroactive payments, according to the governor’s office. The agreement included the withdrawal of litigation tied to the freeze of increment payments during Governor Chris Christie’s administration and a resolution to 1,300 grievances, some dating to 2011.

“The resolution of these matters allows the state to refocus its resources on labor-management relations rather than litigation preparation,” according to a statement from Murphy’s office.

The agreement includes a $48.8 million payout in fiscal 2019, which starts July 1. Pay retroactive to 2016, though, amounts to $100.1 million. The 2016 and 2017 payouts “are assumed in the fiscal year 2018 adjusted appropriation,” according to Murphy’s office.

The total projected cost is roughly equal to the amount Murphy left out of the state’s Homestead property tax-credit program in his proposed 2019 budget. The program provides relief for elderly and disabled homeowners in the state with the highest property taxes.

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