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The Associated Press April 15, 2010, 5:40PM ET

NJ budget cuts health care for immigrants, poor

About 12,000 resident immigrants would be kicked out of a low-cost health insurance program funded by New Jersey and 39,000 parents would be denied eligibility to sign up in the coming year due to state budget cuts.

That's prompting concerns that Gov. Chris Christie's budget will increase emergency room visits and decrease preventative care for the working poor.

Christie's $29.3 billion budget proposes saving $29 million by eliminating resident immigrants from Family Care, the state's low-cost health insurance program. It saves an additional $24.6 million by closing off the program to the tens of thousands of working poor parents who were projected to sign up.

"I think we're saving pennies to spend dollars," said Sen. Brian Stack, who represents Union City -- an area which has a large immigrant population.

Human Services Commissioner Jen Velez told the Senate Budget Committee on Thursday that limiting access to Family Care is one of many painful proposals in the budget for the fiscal year that begins July 1. Velez said the debt-ridden state doesn't have the money to fully fund worthwhile programs including Family Care, which she helped develop and said was her proudest achievement in government.

The program would remain intact for 200,000 adults and 148,000 children already enrolled.

Velez said the proposed budget cuts totaling about $182 million were made to minimize the impact on services. But Velez acknowledged New Jersey's safety net is "being stretched considerably" by fiscal constraints.

The Senate panel reviewed the proposed budget for the state's largest agency Thursday morning, then examined the plan for Labor and Work Force Development in the afternoon. At $11 billion, the Human Services budget funds five psychiatric hospitals, seven developmental centers and many other programs and services for vulnerable residents.

Another cut that received scrutiny from the Democratic-controlled panel is a 50 percent reduction in the amount a family member can receive for necessities after taking in a child who would otherwise be sent to foster care. The budget proposes cutting the subsidy to $500 annually, from $1,000. The money can be requested for necessities like cribs or laptops.

Velez said the state would lose about $108 million in federal matching funds if cuts to 15 programs stand.

Acting Labor Commissioner Hal Wirths warned lawmakers that businesses would be paying $400 more a year per employee in unemployment insurance premiums as of July 1 unless lawmakers step in.

The $1 billion tax increase would be triggered because the Unemployment Insurance Fund has a negative balance. The state has already borrowed $1.6 billion from the federal government, and is continuing to borrow to meet its unemployment claims.

The once-healthy fund is in the red in large part because lawmakers have raided it of about $4.6 billion.

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