Volume 7/Issue 3

  • Gov. Christie Delivers His Last State Budget Address
  • The Democratic Response

Gov. Christie Delivers His Last State Budget Address

On Tuesday, Governor Christie delivered the FY 2018 Budget Address, the last budget plan he will introduce as New Jersey’s chief executive.

The FY 2018 budget calls for $35.5 billion in State appropriations, a 2.6% increase over the fiscal 2017 adjusted appropriation.  He highlighted his Administration’s cuts in discretionary spending, the increase in private sector job growth during his tenure and the tax cuts and tax relief reforms he has implemented.

Highlights of his FY 2018 budget include:

Education

The Governor proposed the highest amount of school aid in New Jersey history, at $13.8 billion. Of that, approximately $9.2 billion represents direct aid to schools. The Governor stated that this represents 39 percent of the entire state budget. 

Governor Christie pledged to work with the Legislature to come up with a new school funding formula, without any preconditions, but set a deadline of 100-days starting next week to come up with the new plan.  The Governor was blunt in his delivery of his remarks, stating that he didn’t want any task forces or blue ribbon commissions. He stressed his desire to work together with the legislature to come up with a new formula, but vowed that he would act alone, if forced, before he leaves Trenton.

Regarding charter schools, the FY 2018 budget proposal seeks to ensure that the funding provided to charter schools in fiscal 2018 is not less than the 2017 funding, on either a base per-pupil funding or total revenue basis.

Hospitals

The Governor noted that his budget increases funding to NJ FamilyCare, the State’s Medicaid program. He pointed out that the infusion of federal dollars associated with the expansion has generated meaningful savings to the State budget and allowed for an additional 487,000 uninsured residents to gain coverage.  These factors set the basis for a $25 million reduction in State funding for Charity Care in the FY 2018 budget.  

Transportation

Governor Christie highlighted that the recent Transportation Trust Fund reauthorization will ensure a 25% increase in funding for the maintenance and improvement of the State's transportation network, providing $32 billion to maintain and upgrade our roadways over the next 8 years. He proposed a $400 million supplemental appropriation in this fiscal year to address bridge deficiencies and the state of good repair for roads in all 21 counties and called for spending these funds in the next 100 days.

Using Lottery Revenues for Pension Systems

The governor unveiled a new proposal to direct revenues from the State Lottery to eligible public pension plans. This could potentially reduce the unfunded liability of the pension system by approximately $13 billion and significantly decrease the amount the State must annually pay into the pension system out of the general fund.

Combatting the Drug Epidemic

Pointing out that Horizon Blue Cross Blue Shield has a $2.9 billion surplus, he called on the State’s largest health insurer to work with his administration to establish a permanent fund in which they would make annual contributions from their surplus to support access to in-patient and out-patient drug rehabilitation treatments.

The Democratic Response

Democratic leaders in the Senate and Assembly criticized the budget for being $8B larger than when Governor Christie first took office and for flat funding school and municipal aid.

Senate President and Speaker Prieto expressed a willingness to work on the school funding formula but indicated that incremental changes, not wholesale reform was the immediate objective. Other legislative leaders questioned the budget impact of the lottery proposal and whether the horizon initiative would withstand a legal challenge if one were to brought by the insurer.

Senate Majority Leader Loretta Weinberg stated that the Governor’s plan portrays an alternate reality when it comes to school funding, women’s access to health care or addressing property taxes.