BUDGET "ONE-SHOTS"

Every legislator is concerned about the State’s $26Billion budget. The public is concerned about the affects of cut backs in State programs and services. It is estimated by Governor McGreevey that the potential shortfall for the next budget will be $4 billion dollars. While that number can be debated, particularly in partisan circles, it is fair to say that like the vast majority of the 50 states, state governments are dealing with reduced tax revenues since the economy faltered in 2000. Governor Schwartzenegger in California has a deficit the size of New Jersey’s entire $24Billion budget.

Often when Governors find the State in tough budget straits they look for “one-shot” plugs for holes in the budget rather than cut spending. This past week, the Senate President, Richard Codey (D-27th District) began the first of what is bound to be a series of talks with Horizon Blue Cross/Blue Shield concerning a possible conversion of the health insurer into a for-profit company. This deal could provide a big windfall for the state budget. A previous attempt by Horizon was shelved in August 2003 due to regulatory hurdles.

Because of its status as a non-profit company, Horizon has not paid any corporate business taxes to New Jersey. Should it convert to for-profit, some officials believe that the state could reap more than a $1 billion over a two or three year period as “back taxes.” This would certainly aid in the belt tightening that has been required over the last two years.

Previously, the Governor has taken money out of certain programs to shore up expenditures in other programs. For example, millions of dollars from the Federal tobacco lawsuit settlement monies intended for anti-smoking programs, and teen smoking prevention have been shifted to other unrelated programs funding gaps. Considering that lung cancer is the leading cause of cancer deaths, and that smoking contributes to heart disease, the leading cause of death, it is imperative that we leave this money in the tobacco settlement fund to do what it is supposed to do.

Horizons contemplated change would not be the first in the nation. Several Blue Cross/Blue shield programs in the country have become for-profit entities because it enables them to be more flexible and be able to compete for more technological advances in today’s market driven health care field.

If the conversion takes place, Horizon must set up a public health foundation, which could take over some of the public health burdens covered by the state. One of the biggest concerns with this conversion is how much of the money would go to the tens of thousands of low income residents who are covered by Horizon, and how much would go to the budget. Once in the budget, the Governor can do whatever he wants with the money.

Healthcare coverage is a huge problem in New Jersey, both for the unemployed and the working poor. This money should absolutely be used for public health programs, and charity care to insure that New Jerseyans receive that best possible care that the state can afford.