In NJ, 'Christmas stockings' are never left empty

Despite talk of a fiscal crisis and this week's state budget wrangling by legislative leaders, lawmakers found room for a record $370 million for pet projects in their home districts.

The $27.9 billion state budget includes a long list of "legislative additions" that suggest it's Christmas in July at the Statehouse. The projects are therefore known as "Christmas tree" items, and they are spread all over the state.

The Newark School of Business at Rutgers University and St. Joseph's Hospital in Paterson each get an extra $18 million. Lawmakers scrounged up another $1.5 million for Battleship New Jersey in Camden. Jersey City Armory benefits from a $200,000 appropriation.

There's $7,000 for the Chatsworth Fire Company, $2 million to help Camden demolish houses & $65 million for additional hospital assistance grants.

And there's $40 million for a general grant fund known as the "MAC Machine" because it is doled out to municipalities by Treasurer John McCormac.

In a Statehouse controlled by Democrats, the lion's share of the additions went to Democratic districts. But lawmakers also found room for $100,000 for Ginnie's House in Newton, a shelter for domestically abused children founded by Virginia Littell, a former Republican state chairwoman and wife of Sen. Robert Littell (R- Sussex).

In his March 1 budget address, acting Gov. Richard Codey said the state was nearly broke. But this year's budget has boosted "legislative additions" by $100 million from last year.

"One of these days it's going to catch up to us," said Assemblyman Joseph Malone (R-Burlington). "They can't have it all. ... They couldn't help themselves." But Democratic lawmakers who served on the state's budget committees, which divvied up the money, said they have no trouble defending the projects.

N.J. spreads the wealth in $27.9B budget

Yes, the property tax rebates will get mailed out.

But the $27.9 billion state budget that lawmakers finally approved and acting Governor Codey signed into law early Saturday distributes a lot more money than a bundle of checks.

This relatively pain-free spending plan - there are no steep cuts in services, programs or jobs - sprinkles taxpayer funds in modest amounts to seniors, hospitals, community groups and, of course, homeowners.

"This budget shows what is possible when we commit to being realistic and living within our means," Codey said after signing the bill into law. "We can invest in the future, with increased aid to school districts and hospitals, cancer research and FamilyCare. We can do all that and still provide substantial property tax relief."

Parents and students shouldering college tuition will get a modicum of relief: The budget doles out aid to state colleges and universities on the condition that annual tuition increases do not exceed 8 percent.

That's a slight improvement from previous years, when the cap was 10 percent.

Low-income families needing health insurance also will benefit. The spending plan provides more than $113 million for FamilyCare, the state-subsidized health-insurance program for the poor that covers 106,000 children and 97,000 adults. The spending represents an additional $6 million over the original proposal and will fund the first stage of a multi-year expansion and overhaul of the program.

That is a marked change from three years ago, when the state stopped enrolling adults and disqualified others by lowering the income eligibility standards. Within three years, the changes should add 100,000 children and 80,000 parents to the program, said the FamilyCare bill sponsor, Sen. Joseph Vitale, D-Middlesex.

"It makes New Jersey the only industrialized state to have free or low-cost health care for all children," Vitale added.

Good news for seniors

Senior citizens are big winners in the budget. Not only does the plan include generous property tax rebates - as much as $1,200 a year - it preserves the program that covers seniors' annual increase in property taxes. The budget also maintains state-subsidized pharmaceutical benefits for seniors with moderate incomes.

Consumers in general avert a pinch to the pocketbook. The budget ditched a plan to extend the 6 percent sales tax to hundreds of items and services that have been exempted from the tax, such as tanning salons, limousine services, plastic utensils and foam plates, and software and services downloaded from the Internet.

Codey, who proposed the sales tax increase, said it was a matter of fairness, but nervous Democrats in the Assembly successfully lobbied to scrap the plan, fearing they could be accused of raising taxes in an election year. Also discarded was a proposed tax on cable television companies.

It's unclear, however, whether a new $30 million tax on Horizon Blue Cross/Blue Shield will result in higher premiums for customers. The budget includes language that would prevent the company from passing on the higher tax to consumers, but experts say that is hard to enforce. The insurer is likely to sue to stop the tax.

Health-care efforts gain

Patients enrolled in HMOs face similar uncertainty. The Legislature made what was supposed to be a temporary assessment on HMO premiums into a permanent tax, which will yield $54 million.

Workers in New Jersey, however, might pay more in unemployment taxes, thanks to a plan that takes $350 million from the insurance fund that covers benefits to those who lose their jobs. That money goes to pay for the increase in aid to hospitals that care for uninsured patients. If the economy sours and workers lose their jobs, unemployment benefits will be paid for 39 weeks, up from 26 weeks.

Cancer research in the state got $41 million more in aid. Overall grants to health-care efforts - everything from medical day-care services to autism research - jumped by $52 million. Health-care workers in many of those state programs will get a cost-of-living raise.

Codey made mental health programs a major tenet of his administration, and they will get $40 million more from the state. That includes a program to repay student loans for social workers in mental health fields.

Several community groups will see a windfall. The Boys and Girls Clubs of New Jersey will get a state grant of $1.5 million. Another $750,000 goes to Big Brothers/Big Sisters. The Lake Hopatcong Commission gets $500,000; Waterloo Village in Stanhope gets $250,000.

Museums and cultural attractions also were provided for. The Newark Museum gets an extra $2.5 million and the Battleship New Jersey Museum in Camden will have $1.5 million more. Lawmakers made contributions to the Thomas Alva Edison Memorial Tower and Menlo Park Museum in Edison, $500,000, and the Rutgers Performing Arts Center in Camden, $450,000, after none was made the year before.

GOP anger on school aid

Legislators added nearly $60 million in direct payments to school districts. Just over half of the money goes to towns where the schools are growing too fast for taxpayers to keep up and areas where neighboring school districts get extraordinary levels of state aid.

Republican lawmakers fumed because the schools are in key Democratic towns. They said the state should do more to help all schools.

"It appears the Democrats thumbed their noses at my kids. For the last four years, schools in my district have barely received any additional aid from the state, yet Democrats continually manage to bring home additional school aid for their school districts," said Assemblyman Joseph Pennacchio, R-Montville.

The state did spend money on public safety measures.

The New Jersey State Police will see an extra $2.2 million, which will be used to buy a pair of emergency transport helicopters. Another $1.7 million is for community grants.

Overall, about two-thirds of all state spending is sent back to schools and municipalities, as well as the rebate programs.

The rebates, about $1.1 billion, are paid to approximately 1 million people, all that received checks last year. Codey, who had worried about a shaky economy, initially said rebates should be scaled back for seniors and cut for everyone else.

But an additional $1.5 billion in forecasted revenues allowed him to spend more on health care, education and rebates. Democrats in the Assembly, whose members are up for reelection this year, insisted the rebate program be fully restored to $1,200 for seniors and a maximum of $800 for middle-class property owners.

After weeks of intense negotiations, Codey agreed to a budget that gives $1,200 to seniors and a maximum of $350 for others.

The budget does slash government spending by about $300 million, mostly through administrative cuts. Approximately 500 state jobs will not be filled.

Codey was able to spend more on health care and education, but the overall budget is less than what was approved last year.

But with all that spending, some said the state ignored key issues. Sen. Leonard Lance, R-Hunterdon, warned that the state continues to avoid making payments to its pension fund and debt. Eventually, that will cause an economic crisis, he said.

"We cannot, as a state, afford to place these massive burdens upon our residents and the next generation," Lance said. "If we continue to tax, borrow and spend in the manner proposed, New Jersey will cease to be a place where working families can live and raise their children."

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