Money shift from children's relief fund stirs concern

Gov. Corzine, appearing at a luncheon for the Catastrophic Illness in Children Relief Fund one day last week, praised the program and touted his support for it.

He didn't mention that his administration was taking $5 million of the fund's $6 million surplus to balance other parts of the state budget.

The shift pulled out more than a year's worth of revenue generated by a recent business-fee increase that was supposed to bolster the program. Corzine approved the hike 18 months ago.

Asked about it by reporters, Corzine said the fund was still giving out more awards than before and would have enough money to meet its demands. The program's top officials, however, raised some concerns.

The fund helps parents, most of them insured, who still face thousands of dollars of medical expenses when their coverage runs out or won't pay for certain needs.

At the lunch event Wednesday, parents and fund leaders told how the program helped pay for care for a boy with a neuromuscular disease, and surgery and hospital bills for premature triplets, among others. A Blackwood mother received $6,000 after racking up bills for emergency-room visits and follow-up care for her son's seizure disorder and cerebral palsy.

"I'm pleased to be a part of it. I'm pleased to have an administration that is committed to it," Corzine told parents at the event. "When we said we want to protect the vulnerable, we want to protect the vulnerable with every ounce of resources."

In January 2008, he signed a bill increasing support for the fund by raising a business fee from $1 per employee to $1.50. Last year, the increase generated around $3.3 million in new revenue for the program. A similar amount is expected in 2009 collections.

Corzine's administration rerouted $5 million.

The shift is part of more than $300 million in "diversions" Corzine is using to balance the budget ending this month and the one beginning July 1. In this instance, and others, fee hikes once approved for popular causes have been tapped to patch other parts of the budget. Administration officials said the shifts helped avert even deeper cuts to other areas.

Corzine said the fund would still be able to help parents, even with a smaller surplus.

"It will have no impact on our services, none whatsoever," Corzine said. He noted the grant total grew $1.3 million last year - before the fund shift - and said he expected more spending on the program in the coming year.

The program now receives more than $9.5 million in support a year, compared with $6.5 million before.

But Ralph Condo, the program's executive director, said that not having as much in reserve could create cash-flow issues. He already has 200 applications for aid in the new fiscal year and less money immediately available to help.

The program's expenses - $8.4 million in awards last year and $1.6 million in operating costs - pretty much match its revenue. So if applications grow, in a "worst-case scenario," the fund might have to turn away parents because it won't have the needed reserves, Condo said.

For example, he said, the fund board met Wednesday, with days left in the fiscal year, to approve $1.2 million in grants.

"I may not be able to have that meeting at the end of next year," Condo said.

He added, though, that he had assurances from Corzine that the administration would back the program.

"I feel that the Legislature, the Governor's Office, will not let us down," Condo said.

Margaret Caporusso, the program's assistant director, said she was less confident when parents wondered if the fund was secure.

"When a family calls us and asks us, 'Is our budget stable?,' in the past we were always able to say, 'Absolutely, yes,' " Caporusso said. "Now it's a little different story."