Quick Highlights of the Budget Deal

June 20th, 2013  |  by  |  Published in Budget and Tax Policy, NJPP Blog: As a Matter of Fact ...

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We’ll have a more in-depth look at the negotiated FY 2014 budget in the next few days. In the meantime, here are the major items of note.

The total budget is $32.977 billion, $55 million above the amount proposed by the governor in February. The increase is reportedly due to the administration’s shifting of spending from FY 2013 to FY 2014 to insure a balanced budget this year and approximately $97 million in legislative spending changes offset by reductions. The total additions and reductions of $194 million represent only 0.6 percent of the total budget proposed by the governor.

The revenue is based on the administration’s estimates, even though the Office of Legislative Services (OLS) estimates that there could be $700 million less in revenue over the two year period.

The speculative $180 million revenue projection for internet gaming was reduced slightly to $160 million. OLS projects only $30 million of revenue for internet gaming. The $20 million reduction in the budget was offset by a similar-sized increase in miscellaneous revenues.

The budget maintains the status quo on income taxes: The restoration of the 25 percent cut made to the Earned Income Tax Credit in 2010 remains unrestored, and the tax cut the governor has been pushing for is not included.

Additional spending added by the legislature:

• $35 million for added costs associated with the UMDNJ reorganization: $18 million will go to Rowan University and $17 million to University Hospital

• $20 million for cancer research: $10 million to the Cancer Institute of New Jersey in New Brunswick and $10 million to the South Jersey Cancer Center

• $13.2 million for a small cost of living adjustment (of a half a percent) to community service providers – outside companies that provide services for the state in areas like health, human services and juvenile justice – beginning in January

• $10 million for nursing homes, and $325,000 for a small cost of living adjustment (of 1 percent) to Specialty Care Nursing Facilities

• $7.4 million in additional school aid to ensure that no districts receives less than it did last year – offsetting a re-payment fee charged to some districts that had received construction “grants.”

• $6 million in special aid to municipalities involved in the Meadowlands Tax Sharing agreement

• $3 million in additional operating aid for county colleges

• $1 million for the Newark Museum, which is on top of the $1 million from the Arts Council

• $1 million for the Anti-Bullying Grant program for schools as required by the Council on Local Mandates under the “state-mandate, state pay” constitutional amendment

• $200,000 for the Holocaust Survivor Assistance program

• $45,000 for Project S.A.R.A.H in the Division of Women

Spending reductions by the legislature:

• $63.7 million reduction in Medicaid based on recent spending trends

• $26.5 million reduction in state employee and retiree health benefits based on recent spending trends

• $2 million elimination of the pilot school vouchers program

• $5 million elimination of the Innovation Fund in the Department of Education that would have provided competitive grants for programs to improve student outcomes

Significant language changes by the legislature:

• Language providing an allocation to Rutgers-Newark ($347.060 million) and Rutgers-Camden ($180.875 million) as required under the reorganization approved last year; language provides that if the Rutgers administration does not comply and either campus remains underfunded, then the state will transfer funds directly to either or both campuses.

• Language prohibiting the use of state funds for payments as settlement, buyout, separation payment, severance pay or any other form of monetary payment in connection with termination of, separation from, the employment prior to the end of an existing contract of any officer or employee of higher education institution that has annual compensation in excess of $250,000.

• Eliminated language that would have conflicted with the 2008 School Funding Reform Act, even though the administration used its revised criteria to distribute the aid last year and for this year.


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