Nearly $1.5 billion in planned supplemental spending covering everything from additional gun-violence research to a voter-education initiative is set to occur before the end of June, according to state budget documents obtained through a public records request.
The full list of the dozens of supplemental spending items for the 2023 fiscal year includes a $600 million appropriation to a proposed “Health Care Affordability and Accessibility Fund.”
The source of funding for that appropriation comes from Horizon Blue Cross Blue Shield of New Jersey as a result of its recent reorganization into a mutual holding company, according to Department of Treasury officials and budget documents.
In all, the planned supplemental spending to be added to the original budget for the current fiscal year that was enacted by Gov. Phil Murphy and lawmakers late last June totals $1.456 billion.
Before the current fiscal year ends in June, Murphy is also planning to deposit more than $2 billion into an off-budget, debt-relief account that was established just a few years ago to advance efforts to ease the state’s massive debt burden.
How much supplemental spending is planned for the 2023 fiscal year was disclosed in the Budget in Brief released by the Murphy administration late last month at the same time he unveiled a proposed budget for the fiscal year that begins July 1.
However, the dozens of individual line items that make up the planned supplemental appropriations were not included in the Budget in Brief.
Instead, the full list of line items, grouped by departments of state government, was obtained by NJ Spotlight News by filing a public records request.
Pushing budget into unauthorized territory
If the supplemental spending occurs as planned, it would push total spending well above the $50.7 billion initially authorized by Murphy and lawmakers late last June.
Counting the deposit into the off-budget debt-relief fund, total supplemental spending would top $3.8 billion, according to the list provided by Treasury.
The planned supplemental spending and continued emphasis on debt reduction comes in the wake of a major upgrade to the administration’s revenue forecast for the 2023 fiscal year also detailed for the first time late last month in Murphy’s budget proposal.
It’s unclear exactly how the new Health Care Affordability and Accessibility Fund proposed by Murphy will operate. Treasury spokeswoman Melinda Caliendo said it would be the subject of a ‘conversation that the administration will have with the Legislature over the next few months.’
What’s more, budget documents also indicate additional resources are being freed up through routine “lapses,” a catchall term used by Treasury officials to describe routine fine-tuning of the annual budget to reflect adjustments made to planned appropriations.
In all, the revenue forecast for the current fiscal year has been increased to $54.05 billion, representing a nearly $3.7 billion upgrade compared to the administration’s original projections.
The adjusted tax-collection forecast for the current fiscal year is just the latest fiscal revision since the onset of the COVID-19 pandemic, which triggered an initial revenue loss for the state. In more recent years, New Jersey has enjoyed a big surge in collections, across a number of different tax sources.
Horizon contribution
This year, the revenue stream is also being supplemented by the Horizon funding in the wake of its 2022 reorganization as a not-for-profit mutual holding company after operating for years as a not-for-profit health-services organization.
While several advocacy groups have raised concerns about the overall impact of the reorganization, the funding from Horizon will help offset reduced taxes to the state under the corporate change, NJ Spotlight News reported last year. After the Horizon reorganization received regulatory approval late last year, Murphy administration officials said Horizon had until June 1 to submit payment to the state.
While it’s unclear exactly how the new Health Care Affordability and Accessibility Fund proposed by Murphy will operate, Treasury spokeswoman Melinda Caliendo said it would be the subject of a “conversation that the administration will have with the Legislature over the next few months.”
Proposed language included in budget documents released earlier this month also provides some initial clues.
According to a section of the detailed budget book released by the administration earlier this month, money deposited into the proposed fund could be used “solely for the purpose of enhancing the availability of affordable and accessible health insurance and the provision of health care to underserved individuals and communities statewide, as well as promoting the integration of the overall health care delivery system in the State to meet the needs of New Jersey residents.”
Moreover, the role of determining which specific “programs, projects, and uses” could be paid for using the fund would be determined by the “Director of the Division of Budget and Accounting, in consultation with appropriate State departments and agencies, including, but not limited to, the Department of Health, the Department of Human Services, and the Department of Banking and Insurance,” according to the proposed budget language.
The same language would also apply to an additional $100 million appropriation to the fund that is proposed for the 2024 fiscal year, according to the budget language, which also calls for giving lawmakers an oversight role via the bipartisan and bicameral Joint Budget Oversight Committee.
A similar oversight process has been established for spending down the state’s remaining federal COVID-19 pandemic aid and the funds set aside for debt.
Republicans who serve in the minority in both houses of the Legislature have suggested there should be even more oversight of these pots of money, citing the billions of dollars in federal aid and debt-relief funding that remains unallocated.
