Category Archives: NJ FamilyCare

As A Matter Of Fact…1 in 6 New Jerseyans hit By Governor’s vetoes


From July 11th, 2011 | Published in NJPP Blog: As a Matter of Fact …

By Raymond J. Castro, Senior Policy Analyst

One in six New Jerseyans will be adversely affected by line-item vetoes of two critical programs in the budget Governor Christie signed last week.

Today, the state Senate is expected to vote on restoring funding for those programs – the state Earned Income Tax Credit and NJ Family Care. Doing so, however, will require bipartisan support in order to achieve two-thirds majority.

The governor’s vetoes represented unprecedented cutbacks in state services and will affect more than 1.5 million residents, mostly low-income working families with children. Without these supports many parents will be unable to continue to work in low and moderate wage jobs that support their children in a state with one of the highest costs of living in the nation.

Last week the Legislature passed a state budget that fully funded these program. However the governor in New Jersey has considerably more power than governors in many states and has the discretion to delete any funds proposed for specific programs – or any “line item” in the budget. The only way that those funds can be restored is for the Legislature to vote to overturn each veto with a two-thirds vote.

When voting on each line-item, it will be important that legislators know what the impact is on people in their districts. New Jersey Policy Perspective has created an analysis to show the number of people, county by county, who will be affected by these two line item vetos, which were among dozens of vetoes by the governor.

Budgets reflect a state’s priorities. The public does not always know where individual legislators stand on those priorities because the budget is usually voted on in its entirety. That will all change today, and we hope that each lawmaker, regardless of party, recognizes just how devastating these cuts can be to wide numbers of New Jerseyans.

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Filed under As a Matter of Fact, budget cuts, children, Earned Income Tax Credit, Gov. Chris Christie, line item veto, low income families, New Jersey Policy Perspective, NJ FamilyCare, working poor

>As A Matter Of Fact…Proposed changes to NJ Medicaid program would wreak havoc on NJ FamilyCare

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June 9th, 2011 | Published in NJPP Blog: As a Matter of Fact …

Proposed changes to the state’s Medicaid program through a “waiver” of federal rules governing the program would wreak havoc on NJ FamilyCare, bringing the total number of uninsured parents in working poor families denied health coverage to 93,000 and touching every county in the state when prior cutbacks are also taken into account, according to an analysis by New Jersey Policy Perspective.

Essex and Hudson Counties have the highest number of uninsured adults losing coverage, but there are also substantial numbers of adults losing coverage in non-urban Ocean County and wealthier counties such as Morris and Somerset. The loss of an insurance option for those adults is likely to place greater pressure on other medical providers, such as hospital emergency rooms.

The data further showed that the exclusion of parents last year resulted in about 18,000 children not enrolling in FamilyCare, and the number would only increase as a result of new proposed new cutbacks in parent eligibility in the waiver.

Finally, while the stated purpose of the waiver is to maximize federal funding, the waiver would have the opposite effect for NJ FamilyCare. While closing enrollment would reduce state expenses by $9 million, it would cause the state to lose as much as $17 million in federal matching funds.

Continue reading…..Here

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Filed under As a Matter of Fact, federal funds, Gov. Chris Christie, Medicaid, New Jersey Policy Perspective, NJ FamilyCare

>As A Matter Of Fact…A fair exchange: Consumer driven health insurance

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May 9th, 2011 | Published in NJPP Blog: As a Matter of Fact …

One of the most important provisions of the Patient Protection and Affordable Care Act (ACA) is the establishment in every state of a health insurance market place, called an “exchange.”

These exchanges will allow individuals and small businesses to easily find and compare options for high quality, comprehensive health insurance. If done properly, the exchanges will increase competition in the insurance market and, in turn, lower the cost of insurance for nearly 800,000 uninsured New Jerseyans who must find coverage under the terms of the Affordable Care Act. The exchanges will also make available information about services and subsidies available to low and moderate income families.

While the federal government has set certain standards for exchanges, the Affordable Care Act offers each state broad flexibility to design its own exchange. The federal government will provide funding to operate exchanges until January 2015, when all of the exchanges must become self-sustaining. If the state has not established an exchange by then, the federal government will establish one for the state.

That process of creating an exchange has already begun in New Jersey.

The state, through its Working Group on the Patient Protection & Affordable Care Act and under a federal grant, has contracted with the Rutgers University Center for State Health Policy to seek input on priorities the state should consider for the implementation of key provisions of the ACA. As part of its information gathering effort, CSHP is asking interested parties to participate in a web-based survey on the design of an exchange for New Jersey by May 11. The CHSP’s report is expected to be made public later this year.

The Legislature has also set to work. The state Senate held an informational hearing last month and three bills have been introduced to establish the basic structure of an exchange (S2553, S1288 and S2597). Much of the public discussion of the details of the final legislation will take place in the Legislature’s health and insurance committees.

One of the key issues up for discussion is the extent to which the exchanges represent the interests of consumers.

For example, the exchange can be a wide-open marketplace where all insurers may participate, regardless of how much they charge or whether they meet minimal standards to protect consumers. Because the Affordable Care Act requires everyone who is uninsured to purchase insurance, that unregulated approach might leave consumers vulnerable. Alternately, the exchange could operate as an “active purchaser.” In that role, the exchange would only allow insurers to participate if they could demonstrate that their rates are reasonable and they meet other standards aimed at protecting consumers. A similar issue involves the requirements for members of the board that will ultimately oversee the exchange. Most boards are expected to be small, so decision-making will be more manageable. That makes the composition of the board a key point. Some states are establishing very strong requirements to prohibit conflicts of interest for members of the board while others go further and ban insurers, brokers and other representatives of the health care industry. Because of the importance of the exchange to consumers, the NJ for Health Care Coalition developed a set of principles recently that should be used as a guide in finalizing any legislation on exchanges. The coalition represents a broad alliance of 68 health care, consumer and social justice organizations (including NJPP) with more than two million members. It believes the public should understand the choices being made and should actively support the principles as established by the coalition to ensure that the health care exchange in New Jersey represents consumers over special interests.

Following are the principles as adopted by the coalition:

Public Interest Mission – The New Jersey Exchange should be established in the public interest, for the benefit of the people and businesses who obtain health insurance coverage for themselves, their families and their employees. It should empower consumers by giving them the information and tools they need to make sound insurance choices. The Exchange should work to reduce the number of uninsured, improve health care quality, eliminate health disparities, control costs, and ensure access to affordable, quality, accountable care across the state.

Independent Public Exchange – The Exchange should be a distinct legal public entity that is independent of other units of state government. It should be able to perform inherently governmental functions like determining income eligibility, coordinating with other state agencies and programs, and adopt rules and policies governing health insurance plan participation. The Exchange must be transparent and subject to open meetings and public disclosure laws.

Qualified, Pro-Consumer Governing Board – Consumer representatives should comprise a majority of the board. All board members must have expertise in one or more of the following areas: consumer advocacy, individual health care coverage, small employer health care coverage, health benefits plan administration and health care finance. The governing board may not include members who are affiliated with the health care industry.

Negotiate on Behalf of Consumers – The exchange must be given the authority to act as an “active purchaser.” This means the Exchange should use its large pool of consumers to negotiate, as large groups do, for the best premiums and plans. The Exchange must use this leverage to demand quality, responsiveness to consumer concerns, reasonable rates, efficient plan designs, robust provider networks and comprehensive benefits.

Full Integration with Medicaid and NJ FamilyCare – To promote seamlessness in the application process and continuity in coverage, the Exchange plans must be fully coordinated and integrated with Medicaid and NJ FamilyCare. Plans that are available in Medicaid and NJ FamilyCare must also be available in the Exchange.

Consumer Friendly – The Exchange must be easily accessible to all consumers and small businesses, use plain, easy-to-understand language and meet established standards for language, literacy and cultural competency. The Exchange must adopt a “no wrong door” approach, meaning people can access insurance through the exchange no matter how they come to seek assistance. It must reduce paperwork for individuals and small businesses, and provide in-person, telephone and online assistance and access.

Effective Outreach and Assistance – The Exchange should contract with independent organizations that will help consumers and small groups “navigate” the various health insurance plans and services offered through the Exchange. Contractors providing these navigator programs should be free of insurer conflicts of interest and have a history of working with diverse communities. The exchange must also provide customer service that understands diverse populations, such as people with disabilities, mental health needs or low-income.

One Insurance Pool – Health insurance markets work best when risk is shared across large numbers of people. The Exchange should explore how best to transition toward a unified insurance pool that combines both the individual and small employer markets. Other opportunities to expand the pool of insured people should be explored.

Improve Health Care Quality & Promote Prevention – The Exchange should only offer plans that provide a comprehensive and high-quality package of health care services. Every plan should prioritize prevention and work to reduce health disparities. Dental and mental health benefits should be included. Health care delivery networks should include essential community providers. Patients should have access to providers who speak their native language.

Community Health – The Exchange itself should promote community health by fostering collaborations between the Exchange insurers and community organizations, such as local public health departments, mental health associations, maternal and child health consortia and disease-specific nonprofits. This will ensure the efficient delivery of health information, health promotion and disease prevention and screening services.

Ensuring Exchange Stability– The State must guard against the segregation of people by their health status. Premiums in the exchange could become very expensive if insurers and brokers have the power to steer less-healthy patients into the Exchange, keeping for themselves only healthier, more profitable enrollees. The same rules must apply to plans both inside and outside of the Exchange. The Exchange must set market protections to prevent insurers and brokers from cherry-picking healthy enrollees or steering them into or out the exchange.

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Filed under As a Matter of Fact, Consumer Driven Health Insurance(CDHI), health insurance, Insurance exchange, New Jersey Policy Perspective, NJ FamilyCare, Rutgers University, The Affordable Care Act

NJPP Monday Minute 8/2/10: Rutgers Report Compares NJ Public and Private Employee Compensation


NJPP’s July 19 Monday Minute asked and answered the question: are public employees overpaid? National studies suggest that, on average, public sector employees are paid less than private sector employees – particularly in professional positions – but that public employee benefits (health insurance and pensions) tend to be better than private sector benefits.

Now that question can be asked and answered about New Jersey thanks to a new report by Rutgers School of Management and Labor Relations professor Jeffrey Keefe. His report has just been published by the DC-based Economic Policy Institute.

This is an important question in light of the governor’s interest in privatizing an increasing number of public services. The most significant savings in most privatization proposals come from salary savings – from reduced salaries and the constriction or elimination of benefits.

Professor Keefe’s data analysis controlled for education, experience, hours of work, organizational size, gender, race, ethnicity and disability and found that no significant difference exists between private and public sector compensation cost on a per hour basis.

But he finds that the public and private sector use substantially different approaches to staffing and compensation.

Salaries:

  • New Jersey public sector workers, on average, are more highly educated than private sector workers: 57 percent of full time New Jersey public sector workers hold at least a four-year college degree compared to 40 percent of full time private sector workers.
  • New Jersey state and local governments pay college educated workers, on average, 10 percent less than private employers. As noted in the July 19 Monday Minute, the earnings differential is greatest for professional employees, lawyers and doctors.
  • But the public sector sets a floor on compensation. Compensation of workers without a high school education is higher for public employees than for private employees.
  • State and local government employees receive a higher portion of their compensation in the form of employer-provided benefits and the mix of benefits is different from the private sector.

Benefits:

  • Public employers contribute, on average, 34 percent of employee compensation to benefits compared to 31 percent in the private sector.
  • Health insurance accounts for 11 percent of public sector compensation, but only seven percent of private sector employees’ compensation.
  • Retirement benefits are eight percent of public employees’ compensation compared to four percent in the public sector. And most public employees participate in defined benefit pension plans, while more private sector employers have switched to defined contribution plans such as 401(k) plans. A significant difference between these two plans is risk. Defined contribution plans shift much of the risk from the employer to the employee.

Using a standard earnings equation, Dr. Keefe estimates that fulltime state and local employees are under-compensated by about four percent. When the number of hours worked is included in the calculation, there is no significant difference in total compensation between fulltime state and local employees and private sector employees.

It is alleged that public employee unions and collective bargaining have produced an over-compensated workforce. Eligible public employees are almost completely unionized in New Jersey. It is well known that taxpayers do not want to pay higher taxes and so exert considerable pressure on elected officials to resist increases in compensation, creating an incentive to hold government below market compensation.

This report only considers fulltime public employees in New Jersey. It makes a strong case that fulltime public sector workers are not the cause and cannot be the solution to the state’s financial problems.

Lessons for privatization
It is likely that schemes to privatize state services will fail to result in savings if those services require more than a high school education – since the compensation differential between private sector and public sector salaries tends to be greatest as education levels increase.

Even in situations where a high school education is sufficient, savings may be questionable when health insurance and pensions are considered. When the Whitman administration privatized janitorial services in state buildings, state employees lost their jobs and benefits. The average state salary for a custodian at that time was just under $20,000 with benefits. When state office buildings were raided after the private contractor was hired, it was discovered that a number of the new cleaning staff were undocumented workers working off the books at below minimum wage with no benefits. The only person who benefits from this situation is the private contractor as long as he doesn’t get caught.

The actual cost to the public of low wage private sector workers is greater than people think. People with no health insurance, no vacation or sick days and no retirement are cheaper for their private sector employers to hire, but ultimately are supported by public services.

The children of the person who drives the privately owned school bus, often qualify for New Jersey’s FamilyCare program because they have no other health insurance. That driver personally may use emergency rooms in the hospital more because he or she can’t afford to go to the doctor. If that person’s child is very sick, New Jersey generally allows her to take paid family leave so she can take care of her child. If that person has no employer-sponsored retirement plan, she will need greater public support in his or her old age.

What everyone seems to forget is that when the private sector fails to provide for its workers, it is the public and the taxpayer who picks up the slack. What may seem like a good deal often doesn’t include the hidden costs.

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Filed under compensation, Monday Minute, New Jersey Policy Perspective, NJ FamilyCare, private employees, Professor Jeffrey Keefe, public employees, Rutgers University

NJPP Monday Minute 6/28/10: WHY THE BUDGET FALLS SHORT FOR VULNERABLE FAMILIES

There has been much fanfare regarding the restoration of a few programs that serve vulnerable people in the FY 2011 budget. But make no mistake; the budget expected to pass the Legislature today requires the greatest sacrifice from vulnerable working families hit hardest by the recession.

Let’s put the restorations in perspective. They amount to about $68 million, not including PAAD which was restored in an earlier separate agreement, in a budget which would spend just over $28 billion. As the governor’s chief of staff pointed out, these restorations amount to only about two-tenths of a percent (.02%) of the total state budget. He thought that was a good thing.

The Anti-Poverty Network indentified 26 programs (see list below) that were cut in the Christie budget that primarily affect the most vulnerable: low and moderate income families; the elderly; and people with disabilities. The list is conservative in that it does not include program cuts to items such as transportation and education, which serve mostly middle class and higher income groups as well as large numbers of low income people. The budget restorations only fund seven of those programs, leaving $262 million in program cuts to the most vulnerable.

The largest restoration was in General Assistance, which provides temporary financial assistance to unemployed adults without children. The Christie budget would have eliminated the entire $140 a month stipend, which is often the only source of income they have. The Legislature and the governor are to be commended for at least partially restoring this vital safety net program.

However, the administration did not restore cuts to the two largest programs that help vulnerable families remain independent. State and federal funding for New Jersey FamilyCare, which provides affordable health insurance for children and certain low income parents or guardians, was reduced by about $100 million. Enrollment has already been closed for parents with incomes between 133 percent and 200 percent of the federal poverty level ($24,352 to $36,620 for a parent with two children). This cut will be continued in FY 2011 resulting in 39,000 uninsured parents being denied health insurance at the same time many employers are dropping health coverage. Also, about 11,700 legal immigrant parents who have been in this country less than five years and currently receive health insurance through FamilyCare will lose their coverage altogether.

The state Earned Income Tax Credit was cut by $45 million, which will in effect increase taxes for 485,000 lower income households. At the same time, the governor refused to continue higher tax rates on those in the uppermost brackets, households with more than $400,000 in annual income. About 77 percent of the households that received the state EITC are working families with children. A parent earning the minimum wage in a full time job ($15,000) with two children will see his or her taxes increase by $300 as a result of this action. Taxes for wealthy households, on the other hand, will be cut by thousands of dollars.

It is also disturbing that the governor has opposed legislation which would restore the funds for the state EITC, if federal funds become available specifically for this purpose. Congress appears likely to act on legislation that would make $120 million in emergency contingency funds available to New Jersey without costing the state a dime. But the administration has rejected a budget resolution from Sen. Shirley Turner which would require that if such funds become available in FY 2011 they would be used to restore the state EITC cutback.

While the budget treats each of these programs separately, the cutbacks will have a cumulative impact on vulnerable families. Virtually all of the families that will lose or be denied health coverage in FamilyCare will also have the state EITC reduced. Many of these same families will also be denied vital supports like family planning, school breakfast, legal services, and affordable housing. None of the cuts in these programs have been restored in this budget. The combined effect on some families will be devastating and have long term consequences for them and the state’s economy.

Attempts are being made to restore some of these funds to vulnerable families in separate legislation. Senator Loretta Weinberg has introduced a bill to restore funding for family planning and Senator Joseph Vitale and Assemblyman Lou Greenwald have bills to restore funding for FamilyCare. If these bills pass the legislature, however, the governor is likely to veto these bills, as he did when the legislature passed a millionaires’ tax increase a month ago.

What some see as fiscal conservatism might be seen by others as plain mean-spiritedness.

It would appear that the deal on the FY 2011 budget is final but the fight to protect and support struggling working families in this high cost state must continue.


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Filed under budget cuts, budget deficit, Gov. Chris Christie, Loretta Weinberg, Monday Minute, New Jersey Policy Perspective, NJ FamilyCare, poverty, tax credits

NJPP Monday Minute 5/10/10: Christie Budget Diverts Federal Funds Away from Human Needs

Even though New Jersey receives only 57 cents back for every dollar in taxes sent to Washington, federal funds still provide important support to services in the state. Many believe the federal government determines how federal funds are used. The reality is that the state often has considerable discretion in the amount of federal funds the state gets and how those funds are used.

In addition to the $28.3 billion in state funds Gov. Christie proposes to spend in Fiscal Year 2011, another $12.5 billion in federal funds likely will be available for state programs. Approximately $7.7 billion of these funds (62 percent) would be spent in FY 2011 through the Department of Human Services, another $1.2 billion through the Transportation Trust Fund and just under $1 billion through the Department of Education. Within the Department of Human Services, the largest federal program by far is Medicaid ($4.6 billion).

It is important to understand how federal funds interact with state funds in order to maximize their effectiveness because state funds often generate federal funds. The state budget is ineffective in the way it explains federal funds, so it is not apparent what the total impact is on the budget, economy or the people receiving services. Those federal funds are often bundled in larger budget categories, but in some cases they are not accounted for at all.

For example, the state FY 2011 budget shows state “savings” of $43 million from three programs in the Department of Human Services: $14 million by reducing payments to workers providing personal assistance to people with developmental disabilities; $25 million by denying health coverage to 39,000 low-income parents in FamilyCare; and $4 million by eliminating orthodontic services to the poorest children in the state. What the budget does not show is that those cuts in state funds will result in an additional loss of $74 million in federal funds in those programs: $22 million, $48 million, and $4 million respectively. That is because each state appropriation to those programs is matched to some degree by federal dollars. To make matter worse, this results in an actual loss of $117 million in benefits to the vulnerable people served by those programs.

Because the state budget is not much help when it comes to understanding the impact of federal funds on the state, it’s important to understand how federal funds work to figure this out. There are basically two types of federal grants: categorical and entitlements. Categorical grants are the most common source of federal aid to state and local governments and can only be used for narrowly defined purposes like the Mental Health Block Grant. Categorical grants are subject to the annual federal appropriations process which takes place after New Jersey passes its own state budget by June 30th of each year. Because of this timing issue, states do not know for certain how much federal money they will receive until the federal appropriations process is complete at the end of September.

Entitlement grants are generally larger than categorical grants, are not subject to the appropriations process and sometimes require state matching funds. Unless Congress changes the law authorizing the entitlement, the federal government must make the funds available to those “entitled” to receive the assistance.

There are two types of entitlement grants: open-ended entitlements to the individual or entitlements to the state. Medicaid is an entitlement to the individual. Anyone who meets the state’s eligibility criteria is eligible for assistance. No matter what the cost, the federal government will reimburse the state 50 percent of total expenditures to eligible individuals. Similarly, the state must make the state funds available to serve all eligible residents who apply.

The Temporary Assistance to Needy Families (TANF) grant (which New Jersey calls WorkFirst New Jersey) is an entitlement to the state. The state is guaranteed to receive $404 million every year, but can close enrollment to families applying for cash assistance if funds run out.

States have discretion in entitlement program benefits and eligibility levels. This has consequences for the state budget when significant amounts of new federal funds become available. For example, the additional federal funds provided in the American Recovery and Reinvestment Act helped states avoid cutbacks in essential services. Big increases in federal matching funds can free up state matching funds that can then be used for any purpose.

Often a state must adhere to a “maintenance of effort” requirement as a condition for receiving additional federal funds. Generally this means a state must maintain its state funding for the program and use the additional federal funds to avoid cutbacks in services. Funding for Medicaid, for example, was increased by about $2 billion in the last two years. Most of these freed-up funds were used to reduce New Jersey’s budget shortfall because the state maintained its state funding from the previous year, but a small portion of them was also used to eliminate premiums for low-income children in FamilyCare.

New Jersey expects to receive another major increase in federal funds in FY 2011 as a result of the new health reform law and a partial extension of economic stimulus funds. Gov. Christie plans to use the $1 billion the state expects to receive in Medicaid stimulus money to balance the state budget. At the same time he plans to reduce coverage in Medicaid and deny health coverage to about 50,000 parents in FamilyCare.

Similarly, the FY 2011 budget estimates the receipt of about $90 million in new federal funds to reduce the state cost for medical assistance to individuals receiving General Assistance. Although these new federal funds are available, the governor proposes to save a net of $27 million by eliminating the monthly cash assistance of $140 to about 35,000 unemployed individuals. Rather than support the state’s most needy, the governor will use the funds to balance the budget.

New Jersey also expects to receive a windfall in federal funds next year for the Pharmaceutical Assistance for the Aged and Disabled (PAAD) program as a result of national health reform. These funds were not obligated in the governor’s budget because they were not anticipated when it was prepared. The Legislature therefore could use those funds to eliminate the $310 annual deductible to PAAD recipients and the co-pay increases proposed in the Governor’s budget.

Just as with state funds, how federal funds are used is a matter of choices and priorities.

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Filed under budget deficit, federal funds, Gov. Chris Christie, Medicaid, Monday Minute, New Jersey Policy Perspective, NJ FamilyCare, tax dollars, Temporary Assistance to Needy Families (TANF) grant

NJPP Monday Minute 4/26/10:Healthcare, transit and EITC cuts hurt working families

Gov. Christie’s FY 2011 budget proposes $400 million in cuts to programs that provide critical support to low and moderate income families. When unemployment is close to 10 percent and nearly 450,000 people are without jobs, pulling the rug out from under working families is the last thing one would expect.

New Jersey has long recognized that struggling working families need support if they are to work in a state with one of the highest costs of living in the nation. In the long run, affordable health coverage, mass transit and the benefits of the Earned Income Tax Credit avoid more costly alternatives like welfare, homelessness and charity care at hospitals. These alternatives are bad for families, bad for business and ultimately bad for the economy.

Here are three examples of these bad choices.

FamilyCare – $100 million cut

New Jersey’s FamilyCare program provides affordable health coverage for kids and certain low income parents or guardians. It is for families who do not have employer insurance and cannot afford to pay the high cost of private health insurance which costs between $6,000 and $12,000 per parent. To save money, the state has made the following program changes:

  • FamilyCare coverage is no longer available to parents whose income is greater than $23,352 for a family of three. In FY 2011, approximately 39,000 parents will be denied coverage, regardless of their medical needs. NJPP’s research shows that when enrollment is closed to parents, fewer children are enrolled. Closing the door to so many parents makes no fiscal sense. In FY 2011, the state would save $24.6 million but lose about $46 million in federal matching funds.
  • Enrolled parents who lose coverage because they can’t pay the premiums (which will be raised) or who do not renew their coverage will no longer be able to reenroll in the program if their income exceeds $23,352.
  • About 11,700 legal immigrant parents in this country for less than five years lost their FamilyCare coverage based on an Executive Order issued by the governor that bypassed the Legislature. Under threat of a lawsuit, the Christie administration extended coverage for three months, after which parents will permanently lose their coverage, saving $30 million in the FY 2011 budget.

New Jersey Transit – $300 million cut

Getting to work is an essential part of having a job and in New Jersey about 10 percent of all workers use mass transit. At a time now when families can least afford to pay higher transit fares, the funding cuts have forced NJ Transit to increase fares by an average of 22 percent, affecting almost a million New Jerseyans who commute to work on buses and trains. This is the second highest NJ Transit fare increase in history (averaging a $1,000 annually for a train pass).

But according to Gov. Christie these fare increases are preferable to raising the cost for people who drive. For example, the daily round trip fare between New Brunswick and Trenton will increase to $17.00 per day from its current fare of $11.75. Driving will become a cheaper option than using mass transit – IF they can afford it. Either way this will be a huge hit for working people.

NJ Transit estimates it likely will lose another five percent of its riders on top of the four percent it lost last year. All of these decisions, of course, contribute to the downward spiral in transit revenue and add 4,800 pounds of pollution to the air for every commuter who decides to take a car to work.

The fare increase hurts everyone, but it will be hardest on lower income families, the elderly, people with disabilities and college students. Using mass transit will be a greater burden for them because many have no alternative to public transportation-another barrier to work and education, another barrier to independent living.

At the same time the governor slashes transit funding, he has steadfastly refused to consider a gas tax increase, saying it will harm the economy. But gas prices in New Jersey are low relative to most places in the country, largely because New Jersey has the nation’s third lowest gas tax which has not been increased since 1988. This is yet another example of the administration’s unbalanced approach to the budget. Cuts in transit service and fare increases amount to taxes on those who use those services. User fees are acceptable as long as people have alternatives and that’s exactly the problem-many people have no alternative but to use public transportation.

State EITC – $45 million cut

The Earned Income Tax Credit (EITC) is a federal and state credit for people who work but have low wages. Recognizing that New Jersey is an expensive place to live, the New Jersey credit is calculated at 25 percent of the federal EITC. About 485,000 households received this state credit last year. The governor’s budget would reduce that to 20 percent of the federal EITC. This would mean that a family of four with one parent working full time at the minimum wage ($15,000 a year) would lose $251 next year.

The state and federal EITCs are one of the most effective ways to encourage work, prevent families from becoming dependent on welfare and reduce the number of children in poverty. In fact, some of the welfare savings are still being used to fund the state EITC.

New Jersey’s economy is dependent on a diverse workforce, and it is in the state’s best interest to help make it easier for families to continue to work and contribute to an economic revival. Placing more burdens on low and moderate income workers during a recession is not the way to do it, but that is precisely what Gov. Christie’s budget will do.

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Filed under budget cuts, Gov. Chris Christie, Monday Minute, New Jersey Policy Perspective, NJ FamilyCare, NJ Transit