Testimony on Budget Proposal

Testimony of Jean Pierce, HPAE
Before the Assembly Budget Committee
Collingswood, NJ
March 24, 2010

My name is Jean Pierce, and I represent the Health Professionals and Allied Employees (HPAE), NJ’s largest union of 12,000 nurses and health care workers. I thank you Chairman Greenwald and Committee members for the opportunity to address you today on the 2011 budget and its impact on front-line nurses and health care workers, our patients, and the healthcare institutions we serve.

The budget proposed by Governor Christie for 2011 represents slash-and-burn service cuts, trickle-down economics, and the abandonment of regulations that safeguard the health and safety of our nurses, health care workers, our patients and consumers. The shared sacrifices called for are not reflected in the budget, which asks nothing of the very wealthy, but everything of working and middle income families.

The budget is riddled with cuts to municipal and school aid; increased fares for trains and buses with reduced schedules; reduced income tax credits for the working poor; short-sighted cuts to Family Care enrollments; elimination of the ‘NJ Stars’ program providing support for high achieving students to attend community colleges; minimal increases in charity care for our hospitals coupled with increased ‘bed’ taxes and reduced stabilization funds; cuts in unemployment benefits for people already hard-hit by the economy; privatizing of public services; and $60 million in cuts to UMDNJ programs.
This budget follows the cuts already announced in February by Governor Christie to education and health care, including Family Care and Charity Care programs.

No one except the very wealthy escapes the cuts – incomes taxes on the wealthy and the business tax surcharge have been allowed to expire, with no current plan to reinstate them, even in the face of drastic shortfalls in revenues.
Whether you are a nurse, a medical researcher, a lab tech or social worker, you know without the correct diagnosis, you can’t cure or solve the real problem.

Yet, misdiagnosing the cause of our state and national economy’s ills is precisely what we are doing. Here in NJ, in the midst of this terrible recession, our new Governor stands up and says that New Jersey doesn’t have a revenue problem – we have a spending problem. He is also misdiagnosing the problem. And the solutions he poses will cause harm to our members and the public we serve at hospitals, nursing homes and universities across NJ.

For example, this year, NJ’s income from sales tax fell by 5% - and income from business taxes fell by 8%. That’s a revenue problem. Allowing a millionaires’ tax that brought in nearly $1 billion a year to lapse is a revenue problem as is allowing a corporate tax surcharge of 4% to lapse. We should fix our revenue problems first – and it doesn’t mean adding taxes, it just means not allowing existing taxes on the wealthy and corporations to lapse.

Treating the symptom and not the underlying problem is a prescription for disaster. Cutting back the funding for vital programs like family care won’t solve a revenue problem: it will only leave more than 15,000 children and families without health care coverage, placing more pressure on our hospitals. We’ve already cut $12.5 million in charity care to our hospitals–money that is now matched by the federal government. In just one example, Christ Hospital in Hudson County, is being asked to repay $500,000 in charity care advances, and in response, have announced lay-offs. Reducing stabilization funds in the 2011 budget – from $40 million to $30 million may make the difference between survival and bankruptcy for some of our hospitals. Last year, the stabilization fund helped St. Mary’s Hospital in Passaic to emerge from bankruptcy and begin the process of financial recovery. While the Governor’s budget does lift a cap on hospital provider tax to put back into this fund – we are still unsure of the impact of this increased tax on our struggling hospitals.

This budget also includes a $61 million cut to UMDNJ, which provides critical medical research, medical education and patient care, community services and trauma care in Newark. We would encourage this Committee to lift the cap on Graduate Medical Education funding, which would allow UMDNJ to continue providing medical education to our state’s future physicians; and to restore funding through the Higher Education budget to FY2010 appropriation levels.

Now is not the time to cut health care programs, as the number of uninsured families continues to grow – and our nation marks a milestone in achieving national health care reform This is the time for the Legislature to examine our ability to support programs like Family Care because of the impact national health care reform will have on subsidizing families to purchase health coverage; providing tax breaks for small businesses to offer coverage; and improving access to care and coverage.

Over the past few years, the staffing and consequently the enforcement capabilities of the NJ Department of Health and Senior Services have been diminished. No longer does the NJDHSS inspect hospitals biennially, relying instead on the Joint Commission on the Accreditation of Healthcare Organizations (JCAHO). Regulations enforcing recently passed laws protecting the health and safety of caregivers and patients have been frozen in the broad-based approach to cutting regulations, including the Safe Patient Handling Act, and the Violence in HealthCare Prevention Act. Safer workplace, improve healthcare worker retention, reduce injuries and associated costs, and make things safer for our patients too. We urge this Committee to look carefully at the budget for the DHSS to ensure that we continue to protect patients and caregivers in our state’s hospitals and nursing homes, and to allow regulations safeguarding healthcare to be implemented.

We’ve learned in the past that tax breaks and tax cuts to the wealthy do not ‘trickle-down’ and fix our economy. In fact, they often starve our economy when we most need the revenues for investing in our economy. In closing, I urge this Committee to resist short-sighted budget cuts and make the investment in our communities, put people back to work and support those who are unemployed, focus on quality health care; and really make sure we are sharing any necessary sacrifices by extending the ‘millionaire’s tax and business surcharge.