ASSEMBLY APPROPRIATIONS COMMITTEE

STATEMENT TO

ASSEMBLY, No. 34

STATE OF NEW JERSEY

DATED: JUNE 20, 1996

      The Assembly Appropriations Committee reports favorably Assembly Bill No. 34.

      Assembly Bill No. 34 makes supplemental appropriations for fiscal year 1996 of $40.4 million for the Department of Corrections, $15.95 million for State Employees' Health Benefits in the Inter-Departmental Accounts and $58 million for the Department of Health.

        The Department of Corrections appropriations consist of $24.4 million in Direct State Services funding and approximately $16 million in Grants-In-Aid funding. The Department of Corrections' Direct State Services appropriation will primarily cover additional custody overtime costs due to higher than anticipated institutional inmate population growth, increased overtime associated with the severe winter weather, and reduction initiatives that have produced less savings in fiscal year 1996 than had been projected.

      The Department of Corrections' Grants-In-Aid appropriation is required due to inmate population increases that have been substantially higher than those budgeted for, causing an increase in the number of State-sentenced inmates housed by counties and awaiting placement in State facilities. The fiscal year 1996 appropriations act assumed a net monthly increase of 125 inmates for fiscal year 1996 but the actual net monthly average increase for the first nine months has been 264.

      When the budget recommendations for fiscal year 1997 were prepared the fiscal year 1996 appropriation for State Employees' Health Benefits was adjusted to reflect a $24.7 million supplemental appropriation need because the State health benefits legislation, P.L.1996, c.8, was not enacted in time to affect the fiscal year 1996 State budget. P.L.1996, c.8, enacted on March 21, 1996, is not effective until fiscal year 1997. Other cost savings have reduced the supplemental appropriation need for State Employees' Health Benefits to the current $15,950,000.

      The supplemental appropriations of $58,000,000 for the Department of Health consist of: (1) an appropriation of $22,500,000 for the Health Access New Jersey program that will provide $10,000,000 for calendar year 1996 funding and $12,500,000 for one-half of the $25,000,000 calendar year 1997 funding required pursuant to P.L.1996, c.29, and (2) an appropriation of $35,500,000 for Charity Care Hospital payments that will provide $15,000,000 from the General Fund in calendar year 1996, and $20,500,000 for one-half of the $41,000,000 from the General Fund in calendar year 1997 required pursuant to P.L.1996, c.28. The Department of Health appropriations will ensure timely payments to hospitals under this program. The unexpended balances will be reappropriated into fiscal year 1997. When added to employer and employee payroll contributions, this supplemental appropriation will fully fund Health Access New Jersey, charity care and the Hospital Relief Fund through June 30, 1997.

FISCAL IMPACT:

      This bill makes a supplemental appropriation for fiscal year 1996 of $40.4 million for the Department of Corrections, $15.95 million for State Employees' Health Benefits in the Inter-Departmental Accounts and $58 million for the Department of Health.