N.J. set to get at least $2.2 billion in Medicaid aid

TRENTON - New Jersey stands to receive an additional $2.2 billion for its Medicaid program under the stimulus package emerging from Congress, providing a financial boost to a safety-net program that officials say will face more demands as the recession continues.

Other funding from the program is estimated to create or save about 100,000 jobs in New Jersey during the next two years, and may help renovate 205 schools in the state, according to White House figures distributed by New Jersey senators.

Still unclear yesterday was how much aid New Jersey would receive for education and other budget items under the $789 billion package. Based on the overall compromise figures, the amount is likely to be smaller than what was in the original House bill, since the final package includes significantly less money for state programs and school construction.

"It's not perfect. Some of us might argue it should be bigger," Gov. Corzine said on CNBC, but he added that the package would provide "real help" for the country and economy.

"This is not bailing out the states, I promise you," Corzine said. "This is going to make the pain just a little bit less terrible with regard to how we're going to have to cut budgets."

Corzine, who in January outlined $800 million in additional budget cuts, said revenues were continuing to fall so fast that in the coming weeks he would probably have to go back for another round of reductions.

With the economy battering state revenues, Health Commissioner Heather Howard welcomed support for Medicaid.

"It's critical aid coming in right now from the federal government because our health-care system is under stress like never before," Howard said.

The office of Sen. Robert Menendez (D., N.J.) said the state could expect the extra $2.2 billion in federal Medicaid support under the House-Senate compromise. The money, which would be added to the Medicaid support already allocated to New Jersey, would come over two years.

New Jersey already spends roughly $5 billion, about $1 of every $6 in its budget, on Medicaid, Howard said. The program covers about 1.1 million people, according to the Department of Human Services.

The number is likely to grow. For every 1 percent increase in unemployment, 1.1 million people lose health insurance and one million qualify for Medicaid, Howard said. New Jersey's unemployment rate hit a 15-year high at the end of December, but the state has less money to cope with the growing demands, she said.

Federal support will soften potential budget cuts, Howard said.

Menendez yesterday touted the plan's tax benefits.

His office said 1.7 million New Jerseyans would be spared from the Alternative Minimum Tax, 3.15 million workers and families would see tax cuts of up to $800, and 77,000 families would be eligible for a new college tax credit.

"First and foremost, this package is going to help start creating and saving jobs in our state," Menendez said in a statement. "We will also help bring economic change that affects the lives of New Jerseyans through relief on their taxes, education for their children, and assistance to sustain those who have been laid off."

Many of those tax cuts were added in the Senate in place of aid to states. New Jersey officials did not know yesterday how much money could be expected for school construction or "stabilization" aid for the state budget and schools, two areas that would have provided more than $2 billion to New Jersey in the House version.

But the overall amounts for each category included in Senate summaries of the final bill were much closer to the Senate's plan, which would have sent New Jersey $870 million in "stabilization" aid for education, as compared with the $1.76 billion for similar amounts in the House version. The Senate plan gave out no money for school construction, while the House version would have sent about $400 million to New Jersey. Much less appears to be available under the compromise.

Groups hoping to see an infusion for infrastructure projects were also grasping for details.

Philip Beachem, president of the New Jersey Alliance for Action, which represents labor unions, contractors and corporations interested in building, said he had spoken to leaders of dozens of organizations, but none had the details on what to expect.

"Nobody has a real firm handle on exactly what the conferees agreed to," Beachem said.