Local/State

Christie's $32.9B NJ budget expands Medicaid

Tuesday, February 26, 2013

New Jersey Gov. Chris Christie is proposing a $32.9 billion budget that allows more poor people to enroll in Medicaid and increases public school aid but defers property tax rebates for three months.

Christie's budget for the fiscal year that starts July 1 contains no surprises.

The proposal comes as the state rebounds from Superstorm Sandy, the worst natural disaster in state history. Christie's budget counts on federal funding to stimulate the state's still-sluggish economy and help coastal communities rebuild.

Christie says his plan also adds nearly $100 million to public education and expands the Medicaid rolls by 104,000 by allowing the federal government to take over costs.

However, many homeowners expecting property tax rebates in May will have to wait. Seniors, the disabled and low-income homeowners will see them in August.

In a video clip released ahead of his 3 p.m. speech to the Legislature, Christie appeared to offer up a theme but no budget details.

In the clip, titled "Saving Lives Lasts Forever," the governor says it's probably wrong to focus on one's legacy as a governor but that doesn't mean "you shouldn't be conscious of it." As governor, he says, he hopes some of the things he does will be permanent.

"Budgets come and go. Taxes go up and down. But saving lives ... that lasts forever," says the governor, who is seeking re-election this year.

The governor is counting on billions of dollars in federal Sandy relief funding to boost construction jobs and help communities that lost part of their tax when homes were destroyed and businesses closed.

Christie's proposed budget could be thrown into turmoil by the end of the week - to the peril of the state's property holders - if President Barack Obama and Congress fail to strike a deal on looming federal budget cuts.

The first $1.8 billion in Sandy aid is due in April. But New Jersey could see $100 million less than expected unless there's a deal in Washington to eliminate federal cuts set to take effect Friday. Preschool classes and regional airports could also be shuttered.

Christie's budget counts on Sandy funding to stimulate the state's still-sluggish economy and help municipalities along the coast whose revenue base was upended by the late October storm. The Division of Local Government Services estimates that 25 municipalities lost at least 5 percent of their tax base to Sandy.

The Republican governor has told residents of hard-hit towns whose homes survived the storm to expect to pay higher property taxes. But that could be a bitter pill for New Jerseyans recovering from Sandy. State residents already pay the highest property taxes in the country, averaging $7,870 per household.

Budget Officer Declan O'Scanlon, who represents some of the shore towns, said a portion of the Sandy aid was earmarked for property tax relief to cushion the blow.

"Regarding Sandy and property taxes, the way we're going to hopefully resolve that is with federal money," O'Scanlon said. "That's been done before in other jurisdictions where they've had massive storms like this."

"There are billions of dollars coming from the federal government," he added. "The administration has as a top priority dealing with the gaps, the gaps in insurance coverage, the gaps in people's ability to elevate their houses and what they can afford they're getting from insurance, another key gap is property tax gaps."

Assemblyman Vincent Prieto, a Democrat who heads the Assembly Budget Committee, said he wants to hear Christie address the revenue shortfall, which stands at $350 million seven months into the current fiscal year. Revenue collections have gained steam in the past two months, after significantly underperforming projections in the first quarter.

If tax collections don't improve, year-end budget cuts will be required because the state constitution does not allow deficit spending.

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