New Jersey Lawmakers Reach Budget Deal


 

 

On Tuesday, three days after the state government shutdown, Governor Chris Christie signed a budget deal for the state of New Jersey. Governor Christie shut down beaches and other state services last Friday, after Christie and Democratic Assembly speaker, Vincent Prieto, hit a budget standoff centered around just how to restructure insurer Horizon Blue Cross Blue Shield (BCBS) of New Jersey. Horizon BCBS covers 3.8 million people in the state.

Governor Christie signed a state of emergency so that during the three day shutdown services such as state police, correctional facilities, welfare services, state hospitals, and treatment facilities remained operational. Also shielded from the shutdown were New Jersey Transit, the state lottery, casinos, and racetracks.

Assembly Speaker Vincent Prieto said the agreement to end the shutdown was reached after long talks in “crisis” mode with Horizon and state legislators.

Governor Christie originally demanded the governor’s office be given more control over the state’s largest health insurer, Horizon BCBS; hoping to get the insurer to turn over $300 million, from its $2.4 billion in capital reserves, to fund opioid addiction therapy, an issue Christie has focused on during his final months in office. Last week, New Jersey’s State Senate, led by Stephen M. Sweeney, passed a bill giving the governors office the desired control, however the bill fell short in the House.

The budget deal, which seeks to address the issues with Horizon and satisfy Democrats and the Republican governor, signed by Gov. Christie is a $34.7 billion budget that includes more than $300 million in Democratic spending priorities. The legislation calls for annual audits of Horizons BCBS reserve level, sets a range for their reserves, and requires excess money go back to its policyholders; instead of to the state as Governor Christie wanted. If Horizon’s reserves get too high, the company will have to submit a plan to the state Department of Banking and Insurance to return the excess money to its policyholders.

Also important is the lack of language in the bill requiring the company to have a “charitable” mission, or to be the state’s “insurer of last resort”, two provisions adamantly opposed by Horizon in earlier budget proposals.

Even though Christie did not get everything he had wanted out of the deal, the governor said the Horizon bill amounted to “a long overdue, significant reform”. Democratic and Republican lawmakers were pleased to have reached an agreement so that state parks and beaches were open for the 4th of July.

Governor Christie became the subject for criticism and mockery after a New Jersey newspaper published photos of the Republican governor and his family on a beach that had been closed to the public over the holiday weekend due to the budget standoff. The ‘story’ threw a spotlight on the stalled budget negotiations that caused a partial government shutdown, leading to the suspension of many non-essential services and putting more than 30,000 state workers on furlough.

While Horizon and Christie’s beach day dominated the budget news, also significant to the budget is the $125 million package of funding to struggling school districts intended to correct inequities in the state’s funding formula. The additional funding is a small fraction of the estimated $2 billion gap between what school districts receive and what is called for by the law. The move is the first in nearly a decade to follow the state’s school funding law.

On Monday night in Trenton, Governor Christie states that he belies the budget deal and the benefits it would provide will be remembered far longer than the shutdown.

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