A proposed new tax in New Jersey Governor Mikie Sherrill’s Fiscal Year 2027 state budget could impose significant new costs on organizations and nonpublic schools across the state, including dozens of Mosdos in Lakewood, TLS has learned.

Under the plan, companies with 50 or more employees would pay a per-employee fee of $725 if workers are enrolled in Medicaid and the employer does not provide health insurance coverage. The Sherrill administration estimates the policy could raise about $145 million annually to help offset rising Medicaid costs.

The proposal is aimed largely at major national employers such as Amazon and Walmart – both of whom she mentioned by name during her budget address. But critics are pointing out the proposal will also negatively affect schools, nonprofits and other employers with large numbers of modest-income workers.

Such a move would potentially have an outsized impact on Lakewood, where dozens of schools combine for thousands of employees and their dependents, according to data from the state Department of Human Services.

For example, the Lakewood Cheder School, 293 employees are enrolled in NJ FamilyCare, New Jersey’s Medicaid program. Those workers represent an additional 2,236 spouses and dependents receiving coverage through the program.

Because many teachers and support staff work part-time or earn modest salaries, many qualify for NJ FamilyCare coverage. If such a tax is enacted, it could force institutions to absorb new costs or consider raising tuition and cutting expenses.

Supporters of the proposal say it ensures that large employers contribute toward the cost of health care when their workers rely on taxpayer-funded programs.

The plan is part of Sherrill’s broader effort to help stabilize Medicaid spending as the state faces rising health care costs and growing budget pressures. Lawmakers will review the record $60.7 billion proposal as part of negotiations over the final budget, which must be adopted by July 1.