Hearings on budget under way Health-care issues dominated the first session, before an Assembly panel. A Senate committee will open its hearings this afternoon.

Posted: June 19, 2008

The first day of public hearings on legislative leaders' version of the state budget was dominated yesterday by representatives of hospitals and other health-care providers.

Dozens of advocates appeared before the Assembly Budget Committee in a hearing that lasted nearly five hours.

Many thanked lawmakers for scaling back some of the budget cuts that had been proposed by Gov. Corzine, while pleading for yet more funding.

"People - workers and frail elderly residents alike - will suffer," said Paul Langevine Jr., president of the Health Care Association of New Jersey, speaking of the impact the budget cuts would have on Medicaid patients who live in nursing facilities. Langevine urged lawmakers to give nursing homes $9.5 million more to cover the cost of inflation.

In his February budget address, Corzine warned that the fiscal year that begins July 1 would be a difficult one. He also pledged the budget would help right the ship's fiscal course after years of misspending, budget gimmicks and irresponsible borrowing.

The governor's proposed budget of $32.97 billion represented the second-largest year-to-year spending dip in state history.

Legislative leaders trimmed the budget this week even further, to $32.9 billion, while restoring funding in areas including charity care for hospitals, the arts and municipal aid.

The Senate Budget and Appropriations Committee is scheduled to meet this afternoon on the budget. The full Legislature could vote on the budget bill as early as Monday, which would give the governor a week to review the budget before the July 1 deadline.

Among the issues that apparently have not been resolved is a group of pension-reform bills that would affect newly hired state employees.

Backed by both Democratic and Republican lawmakers, the bills would keep newly hired, part-time employees from entering the state health plan and shift them from a pension program to a 401(k)-style retirement program.

Corzine has not yet said whether he would support the bills and insists that they should be considered separately from the budget. Several legislators, however, said the budget should not be approved without the savings to be gained from the pension-reform package.

Yesterday, Assembly Budget Committee Chairman Louis D. Greenwald (D., Camden) wasted no time in reminding those who testified of the difficult fiscal climate the state is facing.

"Revenues are down and money is short," Greenwald said. Later, he added: "We need people to share the pain across the board."

Asked whether the day's testimony might have any impact on the final budget, Greenwald said: "It would be foolhardy to think a new tax revenue stream will pass."

Elizabeth Ryan, chief executive officer of the New Jersey Hospital Association, asked lawmakers to find more funding for charity care, which helps hospitals cover some of the costs of caring for the uninsured. Greenwald said that charity care was the most heavily debated topic in budget negotiations this year.

Corzine initially proposed cutting charity care by $143 million. Legislative leaders restored $32 million, but Ryan said that still amounted to a 15.5 percent reduction in funding for state-mandated care.

Ryan said New Jersey is one of only two states that requires hospitals to treat the uninsured, yet the state reimburses hospitals only a small fraction of the cost.

She noted that seven hospitals closed in New Jersey over the last 18 months and five filed for bankruptcy.

"I'm worried about the future of hospital care in our state," Ryan said. "Today, our hospital system is on the brink of crisis."

Several groups urged lawmakers to give cost-of-living increases to contractors who serve populations such as the disabled and the mentally ill to help them cope with rising costs of fuel, food, salaries and other expenses.

A modest investment today would save the state larger sums in the future, some advocates argued.

"Adults and children who cannot access service on a timely basis can deteriorate and end up in crisis, needing much more expensive treatment and services," said Megann Anderson, associate executive director of New Jersey Association of Mental Health Agencies, which represents 125 nonprofit community mental-health-care providers throughout the state.

"We would not think of making a heart patient wait until he experiences a massive heart attack before providing treatment. We must end this discrimination against those with a mental illness."

Contact staff writer Adrienne Lu at 609-989-8990 or alu@phillynews.com.

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