Christie's $32.9B NJ budget expands Medicaid

TRENTON, N.J. (AP) -- New Jersey Gov. Chris Christie proposed a $32.9 billion budget Tuesday that allows more poor residents to enroll in Medicaid and increases public school aid but defers property tax rebates for three months to cover a projected budget shortfall.

Christie, a possible Republican presidential contender in 2016 who is seeking a second term as governor in November, touted the budget as a blueprint that seeks fiscal stability without forgetting about the state's most vulnerable residents. The Democratic-led Legislature must approve the plan.

"We are meeting the needs of our people in this budget, we are doing it by spending less than the state spent in fiscal year 2008," he said in an afternoon budget address at the Statehouse.

The governor claimed victory for revamping rules that strip teachers of lifetime tenure and for keeping property tax increases to 1.4 percent this year, but he presented no big initiative or surprises in his election-year budget.

Afterward, Democrats said they liked some — but not all — of what they heard from the governor.

"It was nice that we all gathered in the chamber," Assembly Speaker Sheila Oliver said, "but I want (to hear) some meat."

Christie's budget proposal comes as the state rebounds from Superstorm Sandy, the worst natural disaster in state history. It counts on nearly 5 percent revenue growth, down from more than 7 percent in the current budget, which Treasurer Andrew Eristoff acknowledged Tuesday that the state is unlikely to meet.

The governor is banking on federal Sandy relief funding to stimulate the state's still-sluggish economy and help coastal communities rebuild. Twenty-five municipalities lost at least 5 percent of their tax base after Sandy because of destroyed homes and closed businesses.

The first $1.8 billion in relief money is due in April but New Jersey could see $100 million less than expected unless there's a deal in Washington to eliminate federal cuts set to take effect Friday.

Christie proposed adding $40 million to the current-year budget to cover Sandy-related expenses not reimbursed by the federal government.

"This will ensure that we can move ahead with maximum speed, and that those things that fall through the cracks will not bankrupt families, businesses and local governments," Christie said.

Christie's budget abandons the 10 percent tax break he proposed last year that the Democratic-led Legislature refused to go along with. Christie and all 120 members of the Legislature face re-election in November.

His likely challenger, Sen. Barbara Buono, said afterward that Christie's priorities "are wrong for New Jersey." She said the budget does not address the state's persistently high unemployment rate, which was 9.6 percent in December, more than a full percentage point above the federal rate.

The proposed budget adds nearly $100 million to public education and allocates $2 million for a project to allow 200 low-income students in failing public schools scholarships to attend school elsewhere. A similar proposal has stalled in the Legislature, in part because it permits the taxpayer-funded scholarships to be applied to private and parochial school tuition.

The budget also expands the Medicaid rolls by 104,000 by allowing the federal government to take over costs, Christie said.

While making it clear he's no fan of the Affordable Care Act, Christie said he decided to accept federal funding.

"Refusing these federal dollars does not mean that they won't be spent. It just means that they will be used to expand health care access in New York, Connecticut, Ohio or somewhere else," Christie said.

Including New Jersey, 22 states and the District of Columbia have signed on to the expansion and 13 states have rejected it so far.

One casualty of the budget proposal is homeowner tax rebates. Senior, disabled and low-income homeowners expecting rebate credits in May would instead see them in August. The deferral would allow the state to cover a projected $407 million shortfall in the budget that expires in June. New Jersey's constitution doesn't allow deficit spending.

State residents already pay the highest property taxes in the country, averaging $7,870 per household.

The budget also makes a $1.6 billion payment to the public employee pension system, a commitment the administration made when landmark pension and health benefits changes were enacted two years ago.

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Associated Press reporters Geoff Mulvihill and Rema Rahman contributed to this report.