‘They did us dirty’

Compiling a year’s operating budget is seldom an easy task for a municipal governing body. This year, it’s come with an extra dose of difficulty and a degree of resentment levied by Middlesex Borough officials.

The source of both is an issue that local officials throughout the Garden State are struggling with in 2026: How to provide health insurance coverage for municipal employees and still be able to afford everything else?

Various factors are driving up health insurance costs through the state plan for participating municipalities, Middlesex officials said on Tuesday, March 10. The Middlesex Borough increase has been calculated in excess of 50%.

Middlesex and other towns in the 21st Legislative District have two new representatives in the State Assembly – Democrats Vincent Kearney and Andrew McCurdy. The two Dems took their Assembly seats in January after toppling two Republican incumbents in last November’s general election.

Mayor Jack Mikołajczyk said the new reps have not been spared from hearing the displeasure of Middlesex officials and will continue to get an earful. “It’s bad and they know they did us dirty,” Mikolajczyk said.

Internet sources cite a variety of reasons for the skyrocketing costs. They include high claims utilization, inflation, and soaring prescription drug costs. The state-run plan faces what has been characterized as a “death spiral” as local governments leave due to high premiums, increasing risk for those remaining.

The number of participating local governments in the state plan has dropped from 768 to 689. The local portion of the state plan had a $57 million deficit. The plan is self-insured, making it susceptible to increased claims and requiring massive, often double-digit rate hikes to remain solvent. 

Middlesex officials are taking steps to mitigate the fallout from the health plan increase and budget work is continuing. The 2026 spending plan will be introduced later this spring with property owners getting their final number in August when new tax bills arrive in the mail.

The borough attempted to be proactive on the insurance issue, asking for and obtaining state approval to seek a cheaper option. Middlesex municipal employees will have a health plan that reduces costs by utilizing higher deductibles. But it won’t completely shut off the financial pain.

Mikołajczyk said the cheaper, increased deductible plan won’t go into effect until June 1. That means borough taxpayers will pay the costs of the more expensive state plan for the first five months of this year.

This year’s budget work is “a tough go,” the mayor said, adding that officials have already “cut a lot.” 

“We’ve got a significant amount of money to go, until it’s palatable even to us,” he added.

Councilman Joseph DeScenza, a member of the finance committee, said that group expects to review a revised budget late this week. “Hopefully, it will be a lot better than the first go-round,” he said.

The initial budget version carried a 10% municipal property tax increase, which officials are working to whittle. It’s been common, officials said, for municipal governing bodies elsewhere to compile initial 2026 spending plans that would impose similar hikes. The statewide increases, they added, are being driven by the health insurance issue.

The mayor and council are hoping the borough’s three Payment in Lieu of Taxes (PILOT) agreements help reduce the effect on other property owners. The amount that each of those PILOTs produce is based on a percentage of the revenue generated by the related project. So far, officials have been working with projections. They will have concrete numbers in the coming weeks.

Reminder

Subscribe to Inside – Middlesex. Enter your email address to subscribe to this blog and receive notifications of new posts by email. It is absolutely free.