Stimulus plan aims to pour big money into New Jersey

STAR LEDGER - February 01, 2009 07:29AM,  by Steve Chambers

Michael Rothkopf, a West Orange doctor, has been lobbying state and federal officials for years to put more health records online.

So he looks at the economic stimulus package passed by the House and about to be debated in the Senate not as some amorphous blob of money but as a sign that change is coming. Real change.

The bill the House approved Wednesday includes $20 billion to modernize health records nationwide, which would save money through reduced paperwork, and make it much easier for patients to obtain their records, through secure websites. It also would pour money into companies that provide the computers, software and training. In New Jersey, it could mean millions of dollars in grants of anywhere from $40,000 to $60,000 to doctors who want to digitize patient data.

"This bill is the tipping point for electronic health records," said Rothkopf, who belongs to the 1,500-member nonprofit group NJ Physicians and heads its commit tee on the subject. "Most doctors have been on the fence ... due to high costs and an absence of uniform standards for exchanging information. Now we're on the verge of getting significant incentives and a fast-tracked process for national standards."

The electronic health grants are one tiny piece of the esti mated $4.3 billion that could flow into New Jersey under the stimulus plan. With the measure nearly halfway to the finish line, New Jersey officials are celebrating their good fortune and lobbying hard to maintain their share in the Senate's version. (Once the Senate passes its bill, the differences between the two measures will be reconciled in conference.)

An analysis of New Jersey's share indicates the bill is so sweeping that it could touch the lives of virtually every citizen of the state.

THE ENTITLEMENT DEBATE

It also shows much of the money will be used to boost government programs long favored by Democrats.

One of the flash points of the debate over the stimulus -- and the thing that prevented House Republicans from casting even one vote for it last week -- has been the vast amount of funding that goes to social programs and entitle ments. Republicans question whether the bill has morphed from job creation to social give-away.

Take food stamps, for example. The House version of the stimulus package would pour $290million more into the program in New Jersey through 2013, helping feed an additional 450,000 people. Social Security disability would add a further 156,000 recipients through the same period at a cost of $89million.

"It's a classic Keynesian approach to put more money in people's hands and hope they spend it," Robert Rector of the conservative Heritage Foundation said, referring to the famous economics theorist. "I don't think it contributes to economic strength, and I don't think that people understand that the welfare system of over 50 programs for people of low income has been growing like gangbusters and now adds up to $711 billion nationwide."

Supporters argue that even entitlement spending can be a big help. Almost every dime of food stamp money, for example, gets spent in local grocery stores, and other assistance programs can take the load off state government.

"It helps the state meet its obli gations," said Rep. Bill Pascrell (D- 8th Dist.). "All in all, it's a balanced approach. It's not perfect, but it's heading in the right direction. These are dramatically terrible times for the average family, and we need to get things into the pipeline as quickly as possible."

Even seemingly innocuous programs like the Edward Byrne Memorial Justice Assistance Grant Program have been highly politicized.

The program, which offers funding to law enforcement programs like gang prevention and drug courts, had been steadily cut by the Bush administration. Over the last three years, New Jersey's share of the funds fell from $7.6 million to $5.1 million to $2.7 million, and At torney General Anne Milgram had lobbied hard for an increase. Under the House version of the stimulus, New Jersey would receive $52 million in JAG grants.

AILING INFRASTRUCTURE

It's much easier to understand the logic of the hundreds of millions of dollars New Jersey is in line to receive under the broad heading of infrastructure improvements that would create major construction projects designed to put people to work.

New Jersey would capture $777 million in highway and bridge funding, $500 million in mass transit and, possibly, $600 million to jump-start the construction of a second rail tunnel under the Hud son River. (The tunnel money isn't guaranteed, because the state needs to compete nationally for funds established for new mass transit projects. However, since New Jersey has won all the necessary federal approvals, experts said it is well-positioned to receive the aid.)

There also is nearly $420 million to modernize and repair public schools and college buildings.

Advocates were quick to add, however, that the state's vast needs outstrip the amount of money.

"It will make a difference. It will help," said Kate Slevin, executive director of the Tri-State Transportation Campaign, which advocates mass transit funding in the region. "But the needs are so overwhelming that most transportation agencies would tell you additional money beyond the stimulus will be needed."

So, too, with funding for local school districts and towns, which now face a mad scramble for a piece of the pie.

Because the Senate version isn't yet struck, it's unclear whether the locals will be making their case directly to the federal government or go to the state.

"Our concern is the process not get ahead of us," said Frank Bellus cio of the New Jersey School Boards Association. "The money will be available. We don't know the exact amount, but particularly with facilities, it can be a big help with emergency repairs."

School officials said hundreds of millions of dollars in direct grants to districts and assistance for special-education and other disadvan taged populations could go a long way toward righting a historic imbalance: The federal government has long mandated programs for special education and pledged to provide 40 percent of the funding, yet most years it has funded about 18 percent.

STRUGGLING OVER FORMULAS

The way the stimulus package works is this: Lawmakers in Washington hash out huge pots of money in key categories. Then they establish formulas to determine what percentage of each pot states get based on things like the number of students, poor people or population density.

Supporters argue this dispassionate system is fair for all. They note no specific projects are listed in the bill, eliminating the long- time practice of powerful lawmak ers padding appropriations with pork for their districts.

Still, insiders said there is fierce jockeying over how the formulas are drawn.

The historically poor states complained bitterly last week, for example, when the Medicaid for mula was adjusted to benefit states where unemployment has spiked in the recent recession.

In an interview, Gov. Jon Cor zine said the large number of former legislative aides on his staff has enabled New Jersey to keep pace with the changes and lobby hard for things that help bring more money home.

Noting the upcoming Senate debate, the governor said, "We're trying to shape the language in the educational allocation," so the funding can be used for preschool. Corzine has pushed for universal preschool for all low-income children in the state, but a lack of cash has put the plan on hold.

"Those are the kinds of things that are really important for New Jersey," he said.

As for how the state is doing so far, Corzine said he was pleased.

"If we had the House bill, it would be good for New Jersey. It would be great for New Jersey," Corzine said.

Staff writers Claire Heininger and Josh Margolin contributed to this report.