Friday, June 25, 2010

Washington Republicans Blast A Hole In New Jersey's Budget

There’s a gaping hole in New Jersey’s proposed budget.

Last night, Republicans in Washington refused to allow HR 4213 to come to the Senate floor for a vote – they filibustered it. HR 4213 is primarily thought of as a bill to extend jobless benefits for the long-term unemployed. However, the bill also included a 6 month extension of enhanced Federal Medical Assistance Percentages, i.e., more money for the states.

The budget currently under consideration in the New Jersey legislature relies on that extended FMAP money. In fact, it may be these very funds Governor Christie relied on when he restored a prescription drug benefit for seniors. And he restored that program to blunt the Democratic push to extend the Millionaires Tax.

There is no fallback plan in place to restore those lost FMAP dollars, which may actually exceed $570 million. A few weeks ago, David Rosen, legislative budget and finance officer for the Office of Legislative Services, observed that if the enhanced FMAP money evaporated New Jersey would have a serious issue.

Since the Governor is already facing some rebellions from Republican legislators who object to the tax increases already in the budget, the Governor is going to have a tough time replacing those lost FMAP dollars.

UPDATE: Treasury spokesman William Quinn has been quoted as saying that the Governor will move forward on the assumption that the $570 million in FMAP money is still on the way. But since the surplus is only $300 million, that's one risky assumption. Apparently, no one has the political will to actually get the budget right this late in the game.

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