Hospitals predict Corzine budget means closings

February 28, 2008 7:07:41 PM PST
New Jersey hospitals said Thursday that Gov. Jon. Corzine's cost-cutting budget proposal would hit them hard and force some to close. Meanwhile, a top Democratic senator said the state must review a special program that sends millions of dollars in state aid to cities.

Corzine's plan would cut state aid for hospitals by 14 percent and comes after four hospitals closed in the last 18 months, four others announced plans to close and five filed for bankruptcy, with about half the others losing money. The state has 78 hospitals.

"If the governor's proposal is enacted, we'll see a rash of additional unplanned hospital closures," said Rich Miller, president and CEO of Virtua Health and chairman of the New Jersey Hospital Association. "Our greatest fear may be at hand - the wrong hospitals, closing for the wrong reasons, creating an access-to-care crisis not only for charity care patients but also for all Garden State residents."

Tom Slater, a spokesman for the state Department of Health and Human Services, said his office was "well aware that there are essential hospitals" in the state.

"We will continue to work with them to help stabilize hospitals in New Jersey," Slater said. "Access to care and services is a priority for the department, and one of our main concerns is that there are still services in the community."

Corzine's budget proposes $902 million in state aid for hospitals, a cut of about $143 million. Most of the cut would come from money provided by the state to hospitals to help treat uninsured patients, or so-called charity care.

Corzine has also proposed giving the special municipal aid program $145.4 million, a 5 percent cut, but Senate Budget Chairwoman Barbara Buono questioned whether that was still too much money.

The law creating the program stated it was meant to provide "short-term" financial assistance to cities facing severe fiscal problems, but Camden has been in the program for 10 years, Paterson for nine and Union City and Harrison for six. Bridgeton has been in it for three years, Ewing two and Asbury Park one.

It started with three municipalities in 1998 at $32 million, but now has seven getting $175 million.

Buono questioned the special funding since Corzine has proposed cutting state aid for municipalities that have less than 10,000 residents to try to force them to share services or consolidate, a move she described as "legalized blackmail."

"I think it's enormously unfair," said Buono, D-Middlesex.

Buono said the special aid program lacks specific criteria and questioned whether the program has received proper state oversight.

"It's gone haywire, and now that we're in such dire straits overall I don't think you can justify maintaining it at the current level given the other cuts that the governor is proposing for other, smaller municipalities," Buono said. "This is something we really need to examine."

The budget plan was introduced by Corzine on Tuesday as a painful but necessary to fix state fiscal woes. It's for the fiscal year that starts July 1.

On Thursday, he briefed the New Jersey Chamber of Commerce in Newark on his $33 billion budget plan that seeks $2.7 billion in cuts. Corzine's proposal also calls for cuts in property tax rebates and state aid for municipalities, health services for the poor, the arts and nonprofits and state worker layoffs and early retirements.

"Spending cuts alone will not solve our fiscal problems, but they will give us breathing room at this turning point while continuing to work toward a solution to reduce our debt," Corzine said.

Corzine also wants to increase highway tolls to pay off about half of $32 billion in state debt.

"The problem is clear," Corzine said. "Until we fix our debt, it will continue to consume our budget and wreak havoc on the bottom line for our taxpayers."