Fears of Federal Cuts a Feature at First NJ State Budget Hearing
President Donald Trump’s federal budget blueprint is due to be unveiled Thursday morning, but its anticipated cuts were already one of the recurring themes at Wednesday’s public hearing on the proposed New Jersey budget.
Technically, the federal funds spent by the state aren’t part the state budget. But the money, around $14 billion this year, goes a long way toward supporting state operations – and if they’re cut, could mean layoffs of state workers or shift the financial burden back to state taxpayers.
“President Trump’s EPA budget will have a disastrous effect on the state of New Jersey,” said Jeff Tittel, director of the New Jersey chapter of the Sierra Club.
“We are very concerned about the future of Medicaid and what’s happening in Washington,” said Kevin Casey, executive director of the New Jersey Council on Developmental Disabilities.
For now, Gov. Chris Christie’s proposed 2018 budget says the $35.5 billion in state spending will be supplemented by $14.1 billion in federal funds – which would be an increase of around 1 percent in money from Washington.
Few expect that to be the case once details of federal cuts in spending on domestic programs are determined.
“That’s something that has to be on our radar screen,” said Assemblyman Declan O’Scanlon, R-Monmouth. “We don’t know what that’s going to look like yet, and we’re so far from the end of that road we can’t really prepare for it at this point. We know it’s coming, but we don’t know what it’s going to look like.”
“There seem to be any number of initiatives which are coming from President Trump. Certainly the one which looms the largest from the state’s consideration would be health care,” said Assemblyman Gary Schaer, D-Passaic, who said health-care changes would have a bigger effect on budgets beyond 2018.
Schaer said the prospect of cuts in federal funds combined with the state’s perpetually precarious position make significant changes to Christie’s spending plan “extraordinarily difficult,” but that didn’t stop a long line of advocates from making their cases for funds for nursing homes, schools, home health care workers and much more.
Schaer said there will be some room for some tweaks in the $35.5 billion spending plan.
“Some funds could be found here to cut, some funds could be found here to expand,” Schaer said.
O’Scanlon said there won’t be much room and that increases will require corresponding cuts.
“No matter how good the idea is, everything in our budget for the next, oh, five or six years will be crowded out by the growth in our pension and health benefit obligations,” O’Scanlon said.
“Even when we do those reforms we’re still going to be tight, but until we do those reforms, there’s no money for anything,” O’Scanlon said. “I don’t care how good the idea sounds. I don’t care how good the initiative sounds. Everybody’s got to get real here.”
New Jersey Policy Perspective senior policy analyst Sheila Reynertson told the Assembly Budget Committee the financial challenges were made worse by tax cuts adopted in tandem with last year’s hike of the gas tax.
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