Category: Report

In Brief: Preparing New Jersey for the Next Economic Downturn

Posted on by Vineeta Kapahi

To read a PDF version of the full report, click here.

As the Great Recession gripped the country over a decade ago, states like New Jersey had to make tough choices to balance their budgets. They relied on a mix of tax increases, budget cuts, and tapping into savings to close budget gaps and ride out significant reductions in tax revenue collections. Nationally, state tax revenue has recovered overall, but each state’s recovery varies widely and many states still lag behind. 

Nearly one-fifth of states still collect less revenue than before the economic downturn, more than one-third have smaller rainy day funds, and almost half spend less from their general fund budgets than a decade earlier. Unfortunately, New Jersey checks all of these boxes, putting the state’s precarious financial health at greater risk should another recession hit. To put it another way, the Garden State has yet to fully recover, making New Jersey one of the least prepared states to weather a future economic downturn.

To better understand why New Jersey continues to struggle while states with similar economic profiles have fully recovered and then some, New Jersey Policy Perspective (NJPP) commissioned graduate students at the Edward J. Bloustein School of Planning and Public Policy to examine the matter. This report assesses the policy choices made before and in response to the Great Recession by New Jersey and five comparable states: Connecticut, Illinois, Maryland, Massachusetts, and North Carolina.

Using a set of performance indicators, the practicum group tracked how each state prepared for, and recovered from, the Great Recession using information collected through document and database analysis and interviews with state and national budget and policy experts. Because each state had its own unique experience in the past decade, no one policy decision could be identified as making or breaking a state’s recovery. Nonetheless, the report finds a number of important trends, such as:

  • States with policies in place to rationalize debt usage before and during the recession were less likely to borrow for operational expenses and pension funding 
  • Reliance on non-recurring revenues and borrowing during and before the recession often exacerbated budgeting challenges in future years 
  • States with a well-funded Rainy Day Fund were able to get through the recession with less borrowing, fund transfers, and spending cuts 
  • States with already low bond ratings were more likely to use debt financing during the Great Recession 
  • Pension/OPEB liabilities and structural deficits greatly limited states’ flexibility and posed challenges to maintaining services and investments 
  • States that raised taxes during the recession and sunsetted them before their economies fully recovered generally had to deal with budgetary shortfalls in future years.

This report was prepared for New Jersey Policy Perspective (NJPP) by a practicum of graduate students from the Rutgers University Edward J. Bloustein School of Planning and Public Policy under the advisement of Dr. Cliff Zukin: Alex Barree, Vineeta Kapahi, Rafay Kazmi, Benjamin Levy, Jeehye Min, and Emilia Piziak.

More Hispanic and Asian Children Uninsured Likely Due to Chilling Effect

Posted on by Raymond Castro

To read a PDF version of the full report, click here.

The well-being of New Jersey families relies on their access to high-quality, affordable health coverage, which should be easy to obtain without fear. This is a challenge, however, for legal immigrants and citizens who live in mixed-status households (where at least one family member is undocumented) due to federal policies that penalize immigrants who enroll in NJ FamilyCare (NJFC). Last year, the Trump administration proposed an expansion to the “public charge” rule that would deny green cards and various visas to certain immigrants if they are enrolled or were deemed likely to enroll in a safety net program, including Medicaid. Despite the overwhelming public comments opposing the change, it was scheduled to take effect on October 15, 2019 until it was enjoined by multiple federal courts.

While the rule change has yet to be implemented, it has already had a chilling effect on legal immigrants and citizens in mixed-status households who are now dropping out of or not applying for public health coverage for fear of retribution. Last year, one in seven adults in immigrant families nationally reported that they or a family member did not enroll in a public benefit program because of the proposed public charge rule.[i] The new 2018 census data shows a steep increase in the number of uninsured Hispanic and Asian children in New Jersey, further demonstrating the enormous harm of anti-immigrant policies here in the Garden State.  

More Uninsured Asian and Hispanic Children

Immigrant and citizen children in mixed-status households may have been harmed the most by the Trump administration’s anti-immigrant policies, especially as it concerns health coverage. Over the last year, there is a stark difference in the change in coverage for kids who are White or Black and kids who are Asian or Hispanic (Asian and Hispanic residents in New Jersey represent 85 percent of all immigrants).

While the total number of uninsured children remained about the same in New Jersey, it decreased by 3,591 for White and Black kids and increased by 2,621 for Asian and Hispanic kids. This is consistent with national trends as well. For example, the national uninsurance rate for Hispanic children increased significantly to 8.7 percent in 2018 from 7.7 percent in 2017.[ii]

Many children are harmed by the public charge rule even if it does not apply to them, as their parents do not always know this. The rule is complicated and strikes fear,[iii] which understandably has a chilling effect on many immigrant and mixed-status families. The chilling effect extends to children who are citizens as they can be living in households where another family member is an immigrant. The loss in health coverage for Hispanic and Asian kids is alarming because they already represent 54 percent of all uninsured children.

Historic Drop in Enrollment for Children in NJ FamilyCare

The increase in the number of uninsured Hispanic and Asian kids mirrors national trends and helps explain the major decrease in child enrollment in NJFC in 2018.[iv] Enrollment for children decreased by a startling 30,000 in 2018 from the peak of May to December. While the low unemployment rate during that time is a factor, researchers have concluded that the drop is too large to be explained by falling unemployment alone.[v] The new census data show that another cause is likely that parents are not enrolling their kids in or are dropping out of NJFC because of federal anti-immigrant policies that incite fear and mistrust among Hispanic and Asian families.[vi]

Drops in Enrollment Result in Lost Federal Funds and Higher Charity Care Costs

As result of this decrease in enrollment for kids, New Jersey is losing about $5 million in federal matching funds every month compared to the peak in May 2018.[vii] This will also have an economic impact because lost federal funds will result in lost jobs. Furthermore, hospitals are incurring $8.5 million in charity care costs to treat uninsured kids.[viii] This causes higher costs for taxpayers because part of charity care costs are reimbursed with federal and state funds. It also harms hospitals because the reimbursement they receive only defrays about half their full costs.[ix] 

If Trends Continue, the Uninsurance Rate for Children Will Increase in 2019

Even more alarming, the decrease in enrollment for children is likely to be even greater in 2019 based on current NJFC enrollment trends. As of August 2019, enrollment decreased to 780,000, the lowest level in approximately five years. Thus, this problem will likely only get worse and could result in the total uninsurance rate for kids rising significantly in 2019 for the first time since the Affordable Care Act was implemented, just as it already did at the national level in 2018.

Public Health Coverage for Immigrants Decreased Sharply in 2018

The census also provides data on enrollment in all public health coverage programs based on citizenship for all New Jerseyans regardless of age.

Most likely this decrease is in NJFC because the only other large public health program is Medicare which has very stable enrollment. The percent of New Jerseyans with public health coverage remained about the same for native born and naturalized citizens but decreased by a startling 14 percent for immigrants. That meant there were 23,000 fewer immigrants enrolled in public health coverage in 2018 compared to 2017. 

This decrease is particularly disturbing because immigrants already have the highest uninsurance rate compared to citizens in 2018 (31 percent vs 4 percent).

New Jersey has the third highest share of immigrants in the nation, and immigrants represent 41 percent of the state’s uninsured. This is the main reason why New Jersey scores near the national average in the uninsurance rate, in sharp contrast to other positive measures that New Jersey ranks very high in like median income and a low poverty rate. New Jersey can’t hope to become a top state in health coverage, much less achieve universal health coverage, without covering more immigrants.

Urgent Action Needed

Immigration policy may be set at the national level, but there are proactive steps the state can take to mitigate the harm caused by the Trump administration. Some of these actions have already been taken, such as the state opposing and suing the federal government on the proposed public charge rule. In addition, the state is expanding outreach for the marketplace starting November 1, 2019, which should help in enrolling more immigrants. Starting in 2021, the state will also take over all the operations of the marketplace, which has been run by the federal government.

It will be critical that the state develop targeted strategies to reach Asian and Hispanic immigrants. The state needs to improve outreach to make sure immigrants are fully aware of the proposed public charge rule, which is currently stuck in the courts. The rule will only directly affect a relatively small number of immigrants, but each immigrant will need to weigh the risks and benefits to themselves and their family in deciding whether they want to apply for NJFC and other safety-net programs. 

To address this problem, the state should enact legislation that makes all children eligible for NJFC regardless of immigrant status and allocates outreach funding to organizations that have the trust of immigrants to reach and enroll more children in NJFC. Administrative barriers to enrollment in the Child Health Insurance Program (CHIP) portion of NJFC should be eliminated, like premiums which are the second highest in the country.  In addition, the state requires that children must be uninsured for 90 days before they can be eligible for CHIP, a needless restriction that should also be dropped.

Taking proactive steps to insure all kids—regardless of where they were born—will make New Jersey’s children healthier and save the state money on charity care costs. New Jersey cannot afford not to enact these reforms.

End Notes

[i] Hamutal Berstein, et al, Avoiding Routine Activities Because Of Immigration Concerns, Urban Institute, July 24, 2019, https://www.urban.org/research/publication/adults-immigrant-families-report-avoiding-routine-activities-because-immigration-concerns

[ii] Joan Alker, Why Are There More Uninsured Children and What Can We Do About It? Georgetown University, September 12, 2019, https://ccf.georgetown.edu/2019/09/12/why-are-there-more-uninsured-kids-and-what-can-we-do-about-it/

[iii] Ibid 1, Berstein, et al

[iv] Georgetown University , Child Enrollment in Medicaid and CHIP, May 2019, https://ccf.georgetown.edu/wp-content/uploads/2019/09/Child-Medicaid-CHIP-Enrollment-Dec-2017-May-2019.pdf

[v] Matt Broaddus, Research Note: Medicaid Enrollment Decline Among Adults And Children Too Large To Be Explained By Falling Unemployment, Center On Budget and Policy Priorities, July 17, 2019, https://www.cbpp.org/research/health/research-note-medicaid-enrollment-decline-among-adults-and-children-too-large-to-be

[vi] Samantha Artiga, Estimated Impact Of Final Public Charge Inadmissibility Rule on Immigrants and Medicaid Coverage, September 18, 2019, https://www.kff.org/disparities-policy/issue-brief/estimated-impacts-of-final-public-charge-inadmissibility-rule-on-immigrants-and-medicaid-coverage/

[vii] Calculated based on estimates in Governor Murphy’s FY 2019 State Budget.

[viii] New Jersey Department of Health estimates per OPRA request, 2019.

[ix] New Jersey Hospital Association, 2018 Economic Activity Report,  http://www.njha.com/media/541893/2018-Economic-Impact-Report.pdf

Valuing Our Time: Strengthening New Jersey’s Overtime Law

Posted on by Nicole Rodriguez

To read a PDF version of the full report, click here.

A prosperous New Jersey depends on the livelihood of all our workers. In fact, the state economy benefits most when workers are able to earn fair pay for all the hours they work while balancing employment responsibilities with family obligations. However, millions of people across the nation, including hundreds of thousands in New Jersey, are not covered by overtime protections and risk being exploited for their time.[i] This is a direct result of federal overtime laws that have eroded over time—and the lack of a strong state overtime law—where far too many workers are exempt from the right to earn time-and-a-half when they work over 40 hours a week.

Currently, some salaried white-collar workers who earn more than $23,660 a year can be legally denied overtime pay. These exempted workers (1) are considered “highly compensated,” earning at least $455 per week ($23,660 per year), (2) have primary office or non-manual duties, and (3) pass the “duties test,” a complicated test of employees’ tasks and responsibilities that establish them as a bona fide executive, manager, or highly trained professional.[ii] The federal overtime salary threshold for these exempted workers will increase to $35,568 in 2020, but this still falls significantly short of historical standards.

When overtime protections were created in 1938, Congress authorized coverage for most workers. Still, specific groups of white-collar workers were exempted (as outlined above) under the presumption that “bona fide” executives, administrators, and skilled professionals possessed high enough salaries and enough individual bargaining power that they were not at significant risk of exploitation.[iii]

However, the federal salary threshold has severely eroded over the years from not being updated or indexed to inflation or wage growth. Over the past four decades, the percentage of full-time salaried white-collar workers who are guaranteed overtime pay has fallen significantly from 63 in 1975 to less than 7 in 2016.[iv]

The last time the federal salary threshold was meaningfully updated was in 1975, when it was 3 times the federal minimum wage.[v] From the 1940s through the late 1970s, the threshold remained above 2.5 times the minimum wage in all but two years (for those two years, the threshold only fell to 2.3 times the minimum wage).[vi] If this minimum threshold of 2.5 times the minimum wage held constant for New Jersey, it would be $52,000 per year for salaried white-collar workers at the current $10 minimum wage in 2019 and $78,600 in 2024 when the upcoming $15 minimum wage rate takes effect in New Jersey.

In 2016, the U.S. Department of Labor (DOL), under the Obama Administration, attempted to increase the overtime threshold to $47,476 per year for full-time, white-collar salaried workers and tie future automatic increases to the cost of living.[vii] However, a federal judge in Texas blocked the Labor Department from enforcing the higher threshold after it was challenged in court by a coalition of Republican-controlled states and business groups. In response, the U.S. DOL, under the Trump Administration, watered down the 2016 proposal to a $35,568 threshold starting in January 2020. The Trump Administration’s rule only covers one third of the workers that Obama Administration’s DOL rule would have covered, leaving behind 8.2 million workers across the country, including 280,000 in New Jersey.[viii] It also does not include automatic indexing which means the threshold will soon erode and cover far fewer workers.

If New Jersey adopts its own overtime threshold at 2.5 times the minimum wage—$78,000 by 2024—it would restore the standard from the 1940s through the late 1970s. By 2024, when the state minimum wage reaches $15 an hour, 842,000 salaried white-collar workers would gain coverage, representing 38 percent of total salaried workers. Specifically, 315,000 would gain overtime protections for the first time and 528,000 would have strengthened protections, as they would be less likely misclassified as exempt, white-collar workers. Under this threshold, 287,000 more workers would gain new overtime protections than under the Trump administration’s new overtime threshold.

Of these covered 842,000 salaried workers, more than half are women and nearly one third are parents. In addition, nearly half of the workers are Black, Latinx, and Asian and 69 percent are prime working age adults (25–54 years old).

Under the 2.5 times the minimum wage salary threshold, New Jersey workers, their families, and the broader state economy would benefit. For workers, this means that those who were previously required to work extra hours without extra pay would receive the wages they earned, boosting their take home pay. If they choose not to work overtime, workers would have more invaluable time to spend with their families.

For the economy, raising the overtime threshold can stimulate job growth. An employer may find it advantageous to hire more workers instead of paying overtime premiums for extra hours by existing staff.[ix] Also, expanding overtime protections will benefit the state economy as it will increase worker productivity and improve profitability for businesses. Research indicates that being overworked is associated with lower rates of output, and reductions in working hours within some industries has increased productivity.[x] Further, raising the overtime threshold will likely increase pay and therefore strengthen consumer power, which is a proven way to grow an economy from the bottom up. When people have more money in their pockets, they are likely to spend a portion of those increases locally, thereby supporting local businesses and boosting their local economy.

New Jerseyans who work extra hours deserve the right to overtime pay. Regrettably, federal policymakers have not prioritized these workers as overtime protections have drastically eroded. It’s up to state lawmakers to step in to protect New Jersey’s working families from unfair and exploitive labor practices.

End Notes

[i] Economic Policy Institute. Overtime research overview.

[ii] Lexis Nexis. 2011. New Jersey Adopts The Federal Regulations Concerning Exemptions From Overtime Pay Laws; Economic Policy Institute. 2019. Modernizing Massachusetts overtime law is critical to strengthening pay and protecting work-life balance for hundreds of thousands of Massachusetts workers.

[iii] Economic Policy Institute. 2019. EPI comments on proposed changes to Washington state’s overtime rules.

[iv] Economic Policy Institute. 2017. What’s at stake in the states if the 2016 federal raise to the overtime pay threshold is not preserved—and what states can do about it.

[v] Economic Policy Institute. 2019. EPI comments on proposed changes to Washington state’s overtime rules.

[vi] Economic Policy Institute. 2019. EPI comments on proposed changes to Washington state’s overtime rules.

[vii] Economic Policy Institute. 2019. More than eight million workers will be left behind by the Trump overtime proposal.

[viii] Economic Policy Institute analysis of pooled Current Survey Outgoing Rotation microdata, 2024

[ix] Economic Policy Institute. 2019. EPI comments on proposed changes to Washington state’s overtime rules.

[x] Washington Center for Equitable Growth. 2019. Overworked America: The economic causes and consequences of long work hours. Page 22.

Reining in Corporate Tax Subsidies: A Better Economic Development Playbook for New Jersey

Posted on by Sheila Reynertson

To read a PDF version of the full report, click here.

When the Economic Opportunity Act was signed into law in 2013, New Jersey signaled to corporations that it was “open for business.” The idea was, by offering overly generous corporate tax subsidies, more companies would choose to expand in or relocate to the Garden State. This, in turn, would create more jobs for New Jersey residents, providing a much-needed boost to the economy.

Instead, by removing oversight safeguards and caps on awards, the economic development legislation enabled an unprecedented spike in corporate tax breaks with questionable benefits, depressing future tax revenue for years to come. Today, New Jersey is a national outlier in both the size of its corporate subsidy awards and how little the state receives as a return on its investments.

For years, New Jersey lawmakers fixated on big-ticket corporate tax incentives as a key driver of economic development without credible evidence that more is better — and little attention to the collateral consequences or opportunity costs.

But times have changed. High-profile debacles like FoxConn in Wisconsin and Amazon’s infamous HQ2 search have undermined the public’s perception of this costly strategy, both across the nation and here in the Garden State. Now is the opportune time for reform.

The next iteration of New Jersey’s economic development strategy must embrace two strategies. First, pivot away from overly generous tax breaks — with little oversight — to large corporations, and instead tailor the programs toward new companies within promising sectors in locations that have a greater need for job opportunities. Second, and more importantly, redirect the bulk of economic development dollars back into the public assets that benefit all employers and have a proven track record of making New Jersey an attractive place to grow a business: customized job training, safe roads and bridges, affordable homes, child care, and high-quality public schools from pre-Kindergarten through college.

To rein in New Jersey’s corporate subsidies, lawmakers should implement the following reforms:

  1. Goals driven by national best practices
  2. Hard caps on annual and per-job awards
  3. Shorter award timeframes
  4. Local hiring agreements
  5. Strict reporting and evaluation criteria
  6. Stronger net benefits test
  7. Restrict sale of tax credits
  8. Mandatory labor protections
  9. Community benefit agreements
  10. Prohibit awards to documented “bad actors”

By reining in New Jersey’s corporate subsidies and implementing best practices from across the nation, lawmakers can spend less and get more. They can grow an economy that truly generates prosperity for workers, their families, and their communities.

New Jersey’s Corporate Subsidies: Big Cost, Small Return on Investment

On the heels of the Great Recession and under a new administration, New Jersey lawmakers put all their eggs in one basket — corporate tax subsidies — to help jump-start the state economy. In 2010, Governor Chris Christie’s first year in office, New Jersey approved $353 million in corporate tax subsidies, a whopping 163 percent increase from the year prior. The price tag of corporate tax breaks surpassed $1 billion for the first time in state history in 2013. At the end of that year, the Economic Opportunity Act of 2013 (EOA) removed all meaningful caps and safeguards from the state’s corporate subsidy programs, opening the door for enormous tax breaks for the next several years. Meanwhile, as the state committed billions in lost tax revenue to already profitable corporations, the state simultaneously cut funding for public schools, NJ Transit, property tax relief, colleges and universities, and affordable housing — all proven drivers of widespread economic growth.

Awards and subsidies of this size are woefully out of sync with economic development strategies in other states. Whereas the average per job cost of corporate tax incentives hovers around $33,000 nationwide, New Jersey’s unrestricted spending spree on subsidies led to a record breaking $105,192 per job price tag in 2015.[i] Today, the cost still exceeds $80,000 per job.[ii] In Camden, where special provisions in the EOA allowed for bonus awards, the average spending on tax subsidies totals a whopping $215,000 per job.[iii] In some deals, New Jersey agreed to tax breaks worth more than half a million dollars per job. 

This overreliance on corporate tax subsidies flies in the face of economic development best practices and ignores New Jersey’s precarious fiscal condition. In testimony delivered to a senate committee on economic growth strategies, national experts agreed that corporate subsidies like New Jersey’s have questionable benefits for the public good.

According to Dr. Timothy Bartik, Senior Economist at the W.E. Upjohn Institute for Employment Research, at least 75 percent of incentives have no effect on job creation.[iv] Worse, corporate subsidies rarely, if ever, pay for themselves because nearly all revenue gained from job creation is offset by necessary public costs used to mitigate its impact. Jackson Brainerd, a policy specialist from the National Conference of State Legislatures, reiterated this position, stating “there is no evidence that the number of tax incentives offered bears any relation to the broader performance of the state’s economy, and there’s quite a bit of evidence that tax incentives often fail to achieve their stated goals and have a negative impact on state fiscal health.”[v]

Of the $11 billion in tax subsidies approved since New Jersey began offering them, an outstanding majority have yet to be redeemed. The state’s biggest subsidy programs — Grow New Jersey Assistance (Grow NJ), Economic Redevelopment & Growth (ERG), and Urban Transit Hub Tax Credit (HUB) — awarded approximately $8 billion in subsidies. Yet fewer than 9 percent of those tax credits have been distributed to corporations that met their qualifying goals, according to the state Comptroller.[vi]

That means the drag on New Jersey’s finances has yet to be fully realized. Starting in fiscal year 2020, already-approved tax breaks are estimated to cost New Jersey over $1 billion annually in foregone tax revenue.[vii] That figure is likely to grow in future years as more subsidies granted under the EOA are redeemed.

A New Approach to Economic Development: 10 Key Reforms

To improve the quality of New Jersey’s corporate incentive programs, it is vital for lawmakers to pursue a more fiscally responsible approach to economic development that reins in the volume and scope of subsidies. This is especially important considering the state’s ongoing struggles meeting its past and current budgetary obligations.

New Jersey should also consider implementing a regional corporate subsidy ceasefire agreement with neighboring states that share a labor market. Modeled after the Kansas City pact, this innovative interstate agreement sets a powerful precedent for the tri-state area, where corporations often threaten to cross state lines in exchange for millions in tax credits.[viii] When tax credits are given to companies that ultimately move within the same metro region, no new jobs are actually created, as they’ve merely shifted to a different address. A ceasefire agreement would end this costly race to the bottom and demonetarize the blackmail tactics made by corporations in exchange for tax subsidies. A resolution introduced by Senator Joe Cryan could be the vehicle for a more regional approach to economic development.[ix]

1. Goals Driven by National Best Practices

Before addressing the design, implementation, and oversight of its tax subsidy programs, policymakers should first take a step back and take a long view of the state’s role in large-scale economic growth. Is the goal of the state’s economic development strategy to encourage new job creation? How important is it to play the defensive strategy of keeping jobs from leaving the state? Should the main focus be on boosting economic activity in distressed areas, increasing the state’s supply of affordable housing, or investing in young, fast-growing companies? Should subsidies be earmarked for sectors that show the greatest potential for growth in the Garden State?

Once the goals are clarified, policymakers would better serve the public good by abiding by the so-called “rule of 98 and 2.”[x] Businesses typically spend less than 2 percent of their total costs on state and local taxes. The other 98 percent consists of variables such as labor, occupancy, raw materials (or other inputs), IT, marketing, administration fees, and logistics. New Jersey should treat their economic development dollars in the same manner: de-emphasize large awards for a tiny percentage of corporations and, instead, invest heavily in the basics that benefit businesses across the state like development of an educated workforce with quality K-12 and higher education, reliable infrastructure, affordable homes, and specialized job training programs.

2. Hard Caps on Annual and Per Job Subsidy Awards

New Jersey has offered corporate tax subsidies as an economic strategy since the 1990s, and though each iteration was slightly different, they always included annual limitations on cost — until the Economic Opportunity Act of 2013. Under the EOA, the job creation program had a spending cap, though it was repeatedly lifted by the legislature. Bypassing such an important cost-control mechanism opened up a Pandora’s Box of already wealthy corporations taking advantage of generous tax breaks with lax oversight. If the Grow NJ program included a hard $200 million spending cap per year, New Jersey would have awarded $4 billion less in tax breaks over a seven-year period — a whopping 74 percent savings.

Research by the Pew Charitable Trusts highlights that well-designed tax subsidy programs utilize annual cost limits to address long-term affordability upfront and keep annual costs more predictable.[xi] Governor Murphy’s proposed subsidy programs feature annual spending caps, though the larger programs allow for some flexibility that could prove costly.[xii] The Murphy administration’s jobs-based program, NJ Forward, has an annual soft cap of $200 million with the option to lift the cap by as much as $100 million. The real estate subsidy program, NJ Aspire, has a spending cap of $100 million allocated through biannual applications, with some large-scale projects excluded from the cap. Three other proposed programs have annual caps of $60 million or less.

To both increase the legislature’s role in oversight and restore the public’s trust in how government invests tax dollars, spending caps should be on the smaller side without exception. Allowing flexibility as proposed in NJ Forward is excessively subjective and vulnerable to the political pressures of a proposed megadeal. Similarly, a proposal introduced by Senator Singleton would give the legislature the authority to enact spending caps on a year-to-year basis for tax credits that foster job creation or retention based on EDA projections.[xiii]

If these programs were instead funded by appropriations, like most government programs, it would give the governor and lawmakers more control of their costs. It would also create another opportunity for lawmakers to understand the size and scope of the state’s corporate tax subsidy programs and hopefully encourage a healthy debate about the right level of funding and how to improve their effectiveness. Although an appropriations process is far more common for cash incentives than it is for tax incentives, it can work for tax incentives, too, according to the Pew Charitable Trusts. For example, in Florida’s budget each year, lawmakers set how much money will be available for several of the state’s programs, including cash and tax incentives. This isn’t a new strategy for New Jersey; the former Business Employment Incentive Program (BEIP) was subject to annual appropriations in the state’s budget.

The removal of spending caps in the EOA also led to skyrocketing per-job costs. New Jersey’s average award per job since the end of 2013 is $81,300. In Camden, the average is $200,570 per job. Taxpayers subsidized 250 new jobs linked to the Philadelphia 76ers new practice facility for an astonishing $328,000 per job, while 395 new and retained jobs at Holtec cost $658,228 each. At such a price, taxpayers can never break even. That is, workers at such firms are never going to pay $300,000 or $600,000 more in state and local taxes than public services they and their families consume. Considering these egregious costs, New Jersey’s outsized subsidy levels should be cut in half, at least, as measured by dollars-per-job. The Murphy administration’s proposal includes a sensible dollars-per-job cap ranging from $2,400 to $6,400 per year, which is more in line with at least 16 other subsidy programs across the country that impose caps of less than $10,000 per job.[xiv] This best practice helps to avoid giving mega-tax breaks to just a few companies without adequate evidence that the economic benefit will eventually pay for them.

3. Shorter Award Timeframes

New Jersey currently allows projects to qualify for corporate tax subsidies that are paid out over the course of 10 to 20 years, which is much longer than necessary and out of sync with best practices. Research shows that corporations are far less persuaded by money that they are promised a decade from now.[xv] Offering shorter timeframes means a state can spend less on subsides and more easily predict when business will earn or use the awarded credits while receiving the same benefits. The NJ Forward program, the Murphy administration’s job creation proposal, includes this best practice by imposing a timeframe of three years with a built-in two-year extension, if necessary.[xvi] The proposal also requires businesses to document performance indicators while committing to maintain their operations in the state for twice as long as their award timeframe. Further, the Murphy administration’s proposed historical preservation and environmental cleanup programs have one-year timeframes. With shorter timeframes, New Jersey can be better assured it is “moving the needle” on corporate decisions while avoiding long-term budget problems.

4. Local Hiring Agreements

Under the EOA, the EDA awarded large-scale tax subsidies to “distressed municipalities” to encourage investment, business development, and employment in those areas. New Jersey’s designated Growth Zones include Atlantic City, Camden, Passaic, Paterson, and Trenton. However, the overwhelming majority of these awards — over 85 percent — went to Camden without specifically tailored requirements to ensure local hiring.

Thirty-six projects were approved since 2013 without any meaningful guarantee to Camden residents that local hiring would be a priority. Instead, the subsidized jobs were typically filled by workers who commute across city limits, while the vast majority of construction jobs associated with 25 subsidized projects were taken by workers from outside the city.[xvii]

This further debunks the trickle-down philosophy underpinning the state’s economic development strategy. Simply targeting subsidies in a “distressed municipality” does not guarantee jobs, let alone good paying ones, for local residents.

Tax subsidies for distressed local labor markets must be tied to first source hiring agreements and customized job training to encourage prioritized hiring of unemployed and underemployed local residents.

Research demonstrates that this targeted strategy has social benefits that endure even if the initial job is short-lived.[xviii] In other words, efficiently run job training programs may give New Jersey a better return on investment than reducing the tax burden of corporations. The Murphy administration’s proposal offers bonuses in its job creation program to encourage local hiring.[xix] But local hiring should instead be a requirement.

5. Strict Reporting and Evaluation Criteria

Based on the selected findings of the state Comptroller’s audit and the EDA Task Force, major flaws persist in the state’s monitoring of tax subsidy recipients and evaluation of the EDA’s overall effectiveness. In 2007, the state mandated a report — the Unified Economic Development Budget (UEDB) — to provide important and detailed information about larger tax subsidies and the types of jobs they created. That report has never been produced. While there have been annual reports on tax breaks produced since 2010, the UEDB would provide a more comprehensive look at the state’s subsidy programs. The EDA has taken steps to produce a similar annual report, but it is not enough given the mounting evidence of mismanagement, or worse, corruption.[xx] The Treasury Department must release the annual UEDB report going forward.

Policymakers must first assess why New Jersey has a track record of failing to monitor and enforce its performance standards before crafting effective and enforceable reform measures. The assessment criteria in the Murphy administration’s proposal includes annual reporting by award recipients on the number of new and retained jobs, along with their salaries.[xxi] Self-reporting like this should be paired with real-time data from the Departments of Labor and Treasury to ensure accuracy and oversight.

Lawmakers must also fully commit to establishing a regular, independent evaluation process in order to effectively analyze the design, administration, and effectiveness of the state’s subsidy programs. The recent studies from the Bloustein School at Rutgers University and the Comptroller are not enough. Pew’s research shows that states benefit significantly from recurring evaluations. This is evidenced by thirty states utilizing this sort of evaluation process, with many states acting on the findings to reform their tax subsidy programs.

The Murphy administration’s proposal includes a biennial, independently produced report with a detailed analysis of the tax subsidies’ effect on a business’ relocation decision, the return on investment for the award, the impact on the state’s economy, and other metrics based on national best practices.[xxii] However, rather than relying on a sub-contracted college or university for such a report, a biennial performance audit produced by the Comptroller would be much more effective as it is less likely to invoke any concerns over conflicts of interest.

Finally, lawmakers must get a better handle on the budgetary impact of already-approved subsidies, i.e., of cumulative tax credit liabilities. Without this data, policymakers are left in the dark when the costs of tax subsidies begin to rise, leaving them unprepared for increases or ill-equipped to change the design of the programs. Right now, at the request of the Office of Legislative Services (OLS), the EDA voluntarily provides 5-year fiscal impact estimates of already approved awards on the state’s budget.[xxiii] Should OLS cease to ask for this information, there is no guarantee that the EDA will continue to supply such data. This is especially concerning for New Jersey given the enormous long-term obligations the state has incurred since the EOA was enacted. Policymakers would benefit from an annual forecast of the cost of each program in addition to data on maximum liabilities. Not only should this forecast be required by law to ensure transparency, but it should more closely match the lifespan of the approved tax subsidies to generate a better estimate of long-term future revenue losses. A multi-year forecast requirement is not included in the Murphy administration’s proposal.

6. Stronger Net Benefits Test

Lawmakers need to build upon the EDA’s changes to the “net benefits test,” which is the statutory formula used to estimate the economic benefits of tax subsidies. As a basic taxpayer protection, a strong net benefits test restores a sense of fiscal responsibility and realism that has been sorely lacking since the passage of EOA. The EDA’s “net positive benefit” test has since been improved to cover the time period a business commits to maintaining the awarded project. However, there are loopholes that allow projects within a specific place, particularly Camden, to water down this provision.[xxiv]

The clawback formula in the net benefits test has also been improved administratively, but it does not apply to every project administered by the EDA. It is imperative that carve-outs for this provision be eliminated.

The legislation guiding the EDA can be significantly improved to deliver better outcomes for workers and communities with the following recommendations: codify stringent tax subsidy standards for retained jobs, close all job retention loopholes in EOA, and place a cap on the percentage of tax subsidy dollars awarded for job retention (e.g.,10 percent of gross tax credits).

7. Restrict Sale of Tax Credits

It sounds counterintuitive, but most New Jersey tax credits are not claimed by the companies to which they were awarded. Why? Because the “tax credits” are so large, they greatly exceed the companies’ tax liabilities. When this happens, a recipient firm is legally allowed to sell its award to other businesses for cash on a secondary marketIn fact, most recipients of tax subsidies in New Jersey do just that. The buyers are usually large corporations that have substantial tax liabilities and can use the credits, dollar for dollar, to reduce their tax bills. So these “tax credits” are not tax breaks for the recipient companies; they are actually cash gifts to them.  Since 2011, over three-quarters of the corporations that received tax credit awards sold their tax credits, and at a significant discount.[xxv] This practice then leaves the state Treasury to contend with front-loaded corporate tax revenue shortfalls; it does not learn of tax credit sales until the new owner files to cash them in.

The sale of tax credits would still be allowed under the Murphy administration’s proposal, but with a nod toward better transparency by making these transactions publicly available on the EDA website.[xxvi] If the ultimate beneficiary of a tax credit award is not disclosed, then the state’s largest tax expenditures for economic development are hidden. In some cases, a 10 percent sales tax would be applied, helping close revenue gaps caused by the companies cashing the credits in. These are important first steps, but more should be done to restrict a practice that benefits corporations more than New Jersey taxpayers. For starters, the 10 percent sales tax should be applied to the sale of all tax credit awards, and documented “bad actors” should be barred from purchasing tax credits on the secondary market (see below).

8. Mandatory Labor Protections

Under the EOA, applicants of Grow NJ were offered a bonus of up to $1,500 per job if the average salary was either more than the existing county average or more than the average salary in one of the Growth Zone cities (Atlantic City, Camden, Trenton, Passaic, and Paterson). Offering bonuses as a way to further an important policy objective, such as creating jobs that pay a living wage, is an insufficient approach. In fact, the EOA had originally mandated that building services workers (such as custodial and security staff) on any project or development that received tax credits could be paid no less than the prevailing wage for that industry or sector. It was the only part of the Economic Opportunity Act of 2013 conditionally vetoed by then-Governor Christie.

A bill introduced by Senator Singleton would reinstate this provision, while the Murphy administration’s proposal goes further, including not just building workers but also construction workers.[xxvii] Still, policymakers should be more proactive to ensure that all new subsidized jobs have salaries that are above existing market averages for the geographic area, industry, or occupation.

Policymakers should also mandate other labor protections that play a key role in fostering a strong and healthy state economy in New Jersey. For example, companies that receive tax subsidies should be required to implement fair work schedules and production quotas, provide affordable healthcare, and guarantee workplace safety standards. These priorities are critical because when workers have rights, wages go up, poverty rates go down, the use of government benefits programs decreases, workers’ safety improves, and economic stability and prosperity prevails.

9. Community Benefit Agreements

The Murphy administration’s reform proposal features bonus structures to encourage community benefit agreements to generate local employment, good paying jobs, innovative technology, incubator development, and more.[xxviii] However, offering bonuses does not go far enough in advancing critical policy priorities.

Lawmakers should eliminate bonus options as a tactic and instead require community benefit agreements for all projects to encourage strong environmental standards, job training, targeted labor protections, affordable housing set-asides, and market-based wage standards. This model allows community groups to have a voice in shaping a redevelopment or job creation project by pressing for community benefits that are tailored to their particular needs. The fulfillment of commitments made to the community by the award recipient would need to be submitted to the EDA in order to certify their compliance with the community benefits agreement.

10. Prohibit Awards to Documented “Bad Actors”

Currently, the EDA has rules in place which prohibit corporations from receiving tax subsidies if they have violated certain state and federal laws. However, the process of vetting applicants properly has proven to be faulty based on recent reports of awards going to corporations that should have been disqualified from the very beginning.[xxix] Again, staff at the EDA need better training to ensure tax dollars are not benefitting bad actors. Additionally, the scope of what constitutes disqualification should be expanded. Senators Cruz-Perez and Singleton have introduced a bill that would deny tax subsidies to businesses that are two years or more delinquent on a previously awarded loan.[xxx] Other types of bad corporate practices that should lead to disqualification include parking profits offshore to avoid federal and state taxes and any violation of federal law in the last five years.

Endnotes

[i] Prepared testimony of Dr. Timothy J. Bartik, Senior Economist, W.E. Upjohn Institute for Employment Research before New Jersey State Senate Select Committee on Economic Growth Strategies, September 2019. https://research.upjohn.org/presentations/60/; NJPP analysis of New Jersey Economic Development Authority public data, accessed via the EDA website. The data is up-to-date through the August 2019 EDA meeting.

[ii] NJPP analysis of New Jersey Economic Development Authority public data, accessed via the EDA website. The data is up-to-date through the August 2019 EDA meeting.

[iii] Ibid 2

[iv] Prepared testimony of Dr. Timothy J. Bartik, Senior Economist, W.E. Upjohn Institute for Employment Research before New Jersey State Senate Select Committee on Economic Growth Strategies, September 2019. https://research.upjohn.org/presentations/60/

[v] Testimony of Jackson Brainerd, Policy Specialist, National Conference of State Legislatures before New Jersey State Senate Select Committee on Economic Growth Strategies in Politico New Jersey, National Experts Recommend Overhauling New Jersey’s Tax Incentive Programs, September 2019. https://www.politico.com/states/new-jersey/story/2019/09/05/national-experts-recommend-overhauling-new-jerseys-tax-incentive-programs-1173192https://www.politico.com/states/new-jersey/story/2019/09/05/national-experts-recommend-overhauling-new-jerseys-tax-incentive-programs-1173192

[vi] State of New Jersey, Office of the State Comptroller, New Jersey Economic Development Authority: A Performance Audit of Selected State Tax Incentive Programs, January 2019. https://www.state.nj.us/comptroller/news/docs/eda_final_report.pdf

[vii] New Jersey Economic Development Authority, Response to Office of Legislative Services Questions in Fiscal Year 2020 Budget Hearings, May 2019. https://www.njleg.state.nj.us/legislativepub/budget_2020/EDA_response_2020.pdf

[viii] The Kansas City Star, “Sometimes common sense does prevail.” Kansas celebrate end of border war, August 2019. https://www.kansascity.com/news/business/article233725152.html

[ix] New Jersey Senate Resolution Number 158, Urges governors of New Jersey, Delaware, New York and Pennsylvania to collaborate on tax incentive agreement similar to Kansas and Missouri’s agreement. 

[x] Greg LeRoy, Executive Director, Good Jobs First, Testimony before Governor Murphy’s Task Force on New Jersey’s Economic Development Authority Tax Incentives, July 9, 2019. 

[xi] The Pew Center on the State, The Pew Charitable Trusts, Avoiding Blank Checks Creating Fiscally Sound State Tax Incentives, December 2012. https://www.pewtrusts.org/~/media/legacy/uploadedfiles/pcs_assets/2012/pewtaxincentivesreportpdf.pdf

[xii] Governor Murphy’s Conditional Veto of New Jersey Senate Bill Number 3901, August 2019. http://d31hzlhk6di2h5.cloudfront.net/20190823/54/bd/95/16/7c81846d765063ebeb8a61c1/S3901CV.pdf

[xiii] New Jersey Senate Bill Number 4063, Establishes award limitations for certain EDA tax incentives related to job creation and retention.

[xiv] Ibid 12; Good Jobs First, Smart Skills versus Mindless Megadeals, September 2016. http://www.goodjobsfirst.org/sites/default/files/docs/pdf/smartskillsversusmindlessmegadeals.pdf

[xv] Bartik, Timothy, J., Who Benefits From Economic Development Incentives? How Incentive Effects on Local Incomes and the Income Distribution Vary with Different Assumptions about Incentive Policy and the Local Economy, 2018. https://research.upjohn.org/cgi/viewcontent.cgi?article=1037&context=up_technicalreports

[xvi] Ibid 12

[xvii] Philadelphia Inquirer, NJ Tax-break Projects Hired Just 27 Camden City Residents for Construction Jobs, A State Analysis Found, September 2019. https://www.inquirer.com/business/nj-tax-breaks-camden-jobs-construction-economic-development-authority-20190912.html?__vfz=medium%3Dsharebar

[xviii] Bartik in Greg Schrock, Remains of the Progressive City? First Source Hiring in Portland and Chicago, Urban Affairs Review, 2015. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.832.6973&rep=rep1&type=pdf

[xix] Ibid 12

[xx] WNYC News, Norcross Companies in the Crosshairs, May 2019. https://www.wnyc.org/story/norcross-companies-crosshairs/

[xxi] Ibid 12

[xxii] Ibid 12

[xxiii] Ibid 7

[xxiv] P.L. 2013, c.131, New Jersey Economic Opportunity Act of 2013. https://www.njleg.state.nj.us/2012/Bills/PL13/161_.HTM

[xxv] The Wall Street Journal, For sale: New Jersey tax credits, July 2018.

https://www.wsj.com/articles/for-sale-new-jersey-tax-credits-1532511001

[xxvi] Ibid 12

[xxvii] New Jersey Senate Bill Number 60, Modifies certain provisions of EDA incentive programs; requires EDA to provide report with review and analysis of those programs, https://www.njleg.state.nj.us/2018/Bills/S0500/60_I1.PDF; Ibid 12

[xxviii] Ibid 12

[xxix] NJ Spotlight, Whistleblower Says Her Former Company Lied in EDA Tax-Incentive Application, March 2019. https://www.njspotlight.com/stories/19/03/28/whistleblower-says-her-former-company-lied-in-eda-tax-incentive-application/; WNYC, A False Answer, A Big Political Connection And $260 Million In Tax Breaks, May 2019. https://www.wnyc.org/story/false-answer-political-connections-millions-tax-breaks/

[xxx] New Jersey Senate Bill Number 1576, Prohibits awarding of economic development subsidy to business if payment of principal and interest on previously awarded loan or loan guarantee is greater than 24 months overdue, https://www.njleg.state.nj.us/2018/Bills/S2000/1576_I1.PDF

In Brief: New Jersey’s Teacher Workforce, 2019

Posted on by Mark Weber

To read a PDF version of the report summary, click here.

To read a PDF version of the full report, click here.

The Garden State has, on average, one of the best statewide systems of education in the nation, providing an important foundation for New Jersey’s communities to thrive. At the heart of this system is a workforce tasked with ensuring every student has access to a thorough education that can only be delivered by well-trained, highly qualified teachers.

Maintaining an educator workforce of the highest quality must be a top policy priority for New Jersey’s schools to excel. In addition, the state’s student body deserves a teacher corps that is as diverse as they are, especially given recent research that shows the positive impact of teacher diversity on student achievement. By this metric, New Jersey’s teacher workforce falls short of reflecting the diversity found in classrooms across the state, due in part to a legacy of racism and the challenges created by economic and racial inequities.

Given the crucial role teachers play in educating New Jersey’s children and leaders of tomorrow, it’s surprising that so little attention has been paid, until now, to the characteristics of New Jersey’s workforce. In this report, I take an in-depth look at New Jersey’s teachers: who they are, how they are paid, and how they vary across different types of school districts. My findings are:

  • Teachers in New Jersey make substantially less than similarly educated workers. Further, teacher benefits – pensions and health care – do not appear to make up for the gap in wages.
  • Much of the gap in teacher wages can be explained by the gender wage gap; however, college-educated women still see a decline in pay when they choose to teach.
  • Teacher salaries tend to be lower in less-affluent school districts.
  • New Jersey’s teachers don’t look much like the state’s student population: teachers are overwhelmingly white and female, and there is little indication the state’s teaching workforce is becoming more diverse.

 

Based on these findings, I recommend:

  • New Jersey must offer competitive wages and other compensation to attract qualified workers into teaching.
  • Given the wage gap for teachers, New Jersey should not degrade the value of teacher pensions and benefits, which help to close that gap.
  • The state needs to make teacher compensation competitive in all of its districts, not just the affluent ones.
  • New Jersey needs to take steps to make its teacher workforce more diverse.

 

Teachers Matter – Yet They Are Paid Less Than Similarly Educated Workers

While research shows that neither teachers nor schools can completely close the “opportunity gap” for disadvantaged students, the quality of teachers can and does affect student outcomes. Attracting well-qualified candidates into the teaching profession is critically important if New Jersey is to develop an educated workforce and overall thriving economy in the coming decades.

This report finds that teachers in New Jersey are paid significantly less than similarly educated workers. When controlling for hours and weeks worked, age, and geographic differences in the cost of labor costs, college graduates find they will earn much less if they choose to teach.

Previous research finds little reason to believe that teacher pensions and health care benefits make up for this gap. Any further of erosion of those benefits, however, is likely to make the total compensation gap for teachers even worse.

Part of the wage gap is explained by the gender pay gap; however, women who teach still suffer a significant wage penalty. The returns to earning a master’s degree are also much smaller for teachers than for other workers.

A Demographic Bubble in the Teaching Workforce

Teachers in New Jersey are younger than they were two decades ago: a demographic bubble has moved through the teaching workforce. But another bubble is coming; in two to three decades, many teachers will reach retirement age. This may be the best possible time for the state to strengthen and support its teacher pension system before another wave of teachers moves into retirement.

Teacher Pay Lags in Less-Affluent School Districts

All school districts should be able to compete for the best teacher candidates. Yet teacher pay varies significantly across different school districts. Experienced teachers will make more, on average, in the most affluent school districts. Charter school teachers make significantly less than public district teachers, even adjusting for experience.

Challenges Promoting Teacher Diversity

Recent evidence finds that students of color respond positively when more teachers of color are in front of their classrooms. Yet developing a diverse teaching workforce remains a challenge in New Jersey.

New Jersey’s teachers don’t look much like the state’s students: while 22 percent of students in 2016 were white females, white women made up 66 percent of the teacher workforce. The state should develop strategies – including offering competitive pay to highly-qualified teacher candidates – to bring more workers of color into teaching.

* * *

All of New Jersey’s students deserve a highly qualified and diverse teacher workforce. Yet teacher compensation lags behind other professions, making the recruitment of the best possible teacher candidates an ongoing challenge. The state should implement policies to strengthen teacher pay, protect benefits that help close the teacher wage gap, allow districts to compete fairly for prospective teachers, and promote a diverse teaching workforce.

It’s Time for All Kids Health Coverage

Posted on by Raymond Castro

To read a PDF version of this report, click here.

The best investment a state can make is in its children, yet New Jersey is falling short in one of its most effective childhood health programs, the Child Health Insurance Program (CHIP). With the help of the Affordable Care Act, New Jersey has reduced the uninsurance rate by about a third since 2013.[1] Currently, about 800,000 children receive comprehensive quality health coverage in NJFC (which consists of  both Medicaid and CHIP), which represents one in three children in the state.[2] The uninsurance rate is now so low that New Jersey is in a position where it can realistically achieve a goal that would have been unheard of only a few years ago: universal health coverage for kids. 

That means more healthy children and a lower cost for taxpayers by preventing costly health problems later in life. The research is clear that coverage causes a reduction in adverse health outcomes for children, such as poorer health; avoidable hospitalizations; delayed prescriptions; less access to care from a specialist; newborn complications; no regular physician; unmet prescription needs; fewer visits to the emergency room; and death.[3] The research also shows major social benefits, such as fewer school absences[4] and higher graduation rates;[5] better jobs when these kids become adults;[6] as well as less medical debt and bankruptcies for the family.[7]

Assuring affordable health coverage for all kids is a historic opportunity that must not be wasted, but to meet this laudable goal, the state needs to overcome the following challenges:

New Jersey Is Still Behind Many Other States in Insuring Children

The state’s uninsurance rate dropped quickly from 2013 to 2015 (5.6 percent to 3.7 percent), but has remained flat for three years. In total, 78,000 children remain uninsured in New Jerseyand as many as 40 percent are not eligible for current programs.[8] Nineteen other states are doing better at insuring children than in New Jersey, many of which are much less wealthy, like Louisiana, Alabama, and West Virginia.[9] New Jersey’s uninsurance rate is higher than all Northeast states except Pennsylvania and Maine. Clearly NJFC has not lived up to its potential. Massachusetts and Washington, DC have essentially achieved universal health coverage for their children, so it can be done. 

Federal Anti-Immigrant Policies Discourage Enrollment in NJFC

One of the main reasons that the uninsurance rate for children in New Jersey is higher than in many other states is that it has the sixth highest number of children in immigrant families in the nation and many immigrant parents are reluctant to enroll their children in any public program because of federal anti-immigrant policies. Like in many other states, for example, from May 2018 to January 2019, the enrollment of kids in NJFC declined by 33,000, resulting in the lowest enrollment in approximately four years.[10] While much of this decline may be due to the improved economy, it also probably means that fewer children are applying for assistance because of existing and proposed punitive immigration policies from the Trump administration.

Unfortunately, if enrollment trends in NJFC continue to be less than expected, the number of uninsured children will likely continue to remain flat — or actually go up. Of particular concern is the proposed “public charge” rule that could result in the denial of citizenship to legal immigrant parents if their child received Medicaid.[11] There are an estimated 150,000 citizen children in NJFC who have non-citizen parents who could be affected by the proposed public charge rule, which could result in between 22,500 to 52,500 children losing coverage.[12]

NJFC’s systemic outreach to schools is broad-based and not based on immigration status. New Jersey relies mainly on working with public schools to reach all uninsured kids, but other states have made extensive use of contracts with community-based organizations that have the trust of the Latino community to reach these families or have used evidence-based strategies, such as parent mentoring programs that employ the parent enrolled in Medicaid or CHIP to do the outreach.[13]

New Jersey Is Losing Up To $60 Million In Federal Funds for Uninsured Children Already Eligible for NJFC and the Marketplace

Over half (58 percent) of all uninsured children in New Jersey are eligible for, but not enrolled in NJFC — which has an income limit of 355 percent of the federal poverty level — and in the Marketplace, which has an income limit of 400 percent of the federal poverty level. That means most of them are eligible for coverage that is matched by the federal government at 50 percent in Medicaid and at least 65 percent in Child Health Insurance Program (CHIP). If New Jersey enrolled all these children, it would receive $60 million in federal matching funds.[14] Any new federal funds would increase economic activity in New Jersey because they have a multiplier effect since they come from outside the state and create new jobs.

Major Racial and Ethnic Health Disparities in Covering Children

Health equity means that every child should have an equal opportunity for good health regardless of the color of their skin. Unfortunately, that is not the case in New Jersey, as indicated by the uninsurance rates of children. The uninsurance rate for White kids is 2.2 percent. The rate for Hispanic children is three times higher, at 6.3 percent, while the rate for Black children is two and a half times higher, at 5.1 percent.

This data illustrates a disturbing reality in New Jersey — one of the most affluent states in the nation — as nearly three quarters (71 percent) of all children who are uninsured are children of color. In raw numbers, that means that 35,000 Hispanic children are uninsured, as are 15,000 Black children, and 5,000 Asian children, while only 21,000 white children are uninsured. We know that these inequities not only harm people of color when they are children, but when they grow up as well. For example, Black New Jerseyans die nearly five years earlier than white New Jerseyans. 

Children from Lower-Income Families Are Much More Likely to Be Uninsured Than Wealthier Kids

Wealthier children in New Jersey are more than five times more likely to be insured than poor kids. Whereas the uninsurance rate for kids above four times the poverty level is only 1.5 percent, the uninsurance rate for kids below the federal poverty level is a staggering 8.7 percent. These children meet the income level for Medicaid (138 percent of the federal poverty level) which provides comprehensive benefits and no cost sharing, although some of them may not be eligible. 

Health Coverage for Kids Often Depends on Where They Live 

A child’s health should not depend on where they live, but that is often the case in New Jersey. Cumberland County has the highest uninsurance rate at 6.3 percent, which is four times greater than wealthy Morris County, which has the lowest rate at only 1.5 percent. Unlike some other states, counties in New Jersey do not provide health coverage for uninsured kids, so the only way they can obtain public coverage is through the state’s program, NJFC. The uninsurance rate for kids in Morris County is already near universal health coverage, but that is not nearly the case in other parts of the state, especially in other much less affluent counties with higher unemployment rates.

CHIP Premiums are Among the Highest in the Nation

New Jersey’s maximum premium ($152 a month) in CHIP is the second highest premium in the nation for families above 300 percent of the federal poverty level, the second highest (tied with New York at $90) above 250 percent of the poverty level, and the fourth highest ($45 a month) above 200 percent of the poverty level.[19] These high costs are especially problematic in New Jersey because the state has one of the highest costs of living in the nation, especially for housing, so these families have little left in disposable income for premiums. This policy is completely inconsistent with Medicaid in New Jersey, which does not charge any premiums. Twenty-one states do not charge any premiums.

Further, these exceptionally high costs are even worse than they appear, as New Jersey does not vary premiums by family size. For example, the maximum premium in New York for families above 300 percent of the federal poverty level is $135 a month, but for one child it is only $45. Missouri, Vermont and Washington all vary their premiums by family size.

Waiting Periods in CHIP Cause 90-Day Gaps in Coverage 

Unlike 36 other states, New Jersey also requires that children must be uninsured for 90 days before they can enroll in CHIP if they leave employer-based coverage, which is the maximum allowed under federal law. The state does allow exceptions to the 90 days if they leave employer coverage through no fault of their own. Other than New Jersey, Maine is the only state in the Northeast that requires a waiting period. There is a growing recognition among states that this requirement simply creates another gap in health coverage. Within the last five years alone, at least 24 states have eliminated their waiting periods and two states moved all their children in CHIP into Medicaid, which does not require a waiting period.[20] States surrounding New Jersey that ended their waiting periods entirely are New York, Pennsylvania, Delaware, Connecticut, and Maryland. 

Many Middle-Income Children Are Denied Coverage in CHIP

Citizen children who exceed the income eligibility level for NJFC at 355 percent of the federal poverty level and for the Marketplace at 400 percent of the federal poverty level are also denied any subsidized health coverage. There are 14,600 such children in New Jersey, which represents 19 percent of all the uninsured children. Technically they should still be eligible for CHIP because state law requires the establishment of a buy-in program that allows consumers to purchase the full cost of insurance at reduced rates. Such a program was in operation until 2010, when the Christie administration decided that they would not make the changes that were needed to make the plans compliant with the essential benefits that were required in the Affordable Care Act. 

However, Congress has granted states new flexibility that will make it easier to administer a new program at lower rates. The savings to the consumer could be major with no cost to the state. The cost to insure a child in the private market is about twice the cost for coverage in CHIP.[21]

Unauthorized Immigrant Children are Ineligible for NJFC

There are about 17,000 undocumented, uninsured immigrant children in New Jersey who are also ineligible for NJFC under state law. These children represent 23 percent of all uninsured kids in the state. All six states and DC that have covered undocumented kids have lower uninsurance rates than in New Jersey. These states recognize that these children did not choose to live in this country — and they get sick just like any other kid. Ironically the state requires that they attend school and will pay for that education along with the local governments, but the state will not fund their health coverage. This investment in their education would be much more effective if these kids had health coverage as they would spend less time home sick or in school getting their classmates sick, too. 

Recommendations

While these challenges are significant, there are common sense solutions that will cost little to implement yet could be a game changer in making affordable health coverage available to every child in New Jersey. Given that so many children in New Jersey are currently still without any health coverage, the steps below should be taken as soon as possible. All costs are annualized; State FY 2020 costs would be about half these estimates assuming an implementation date of January 2020 (half the fiscal year).

Develop Better Strategies to Reach More Uninsured Children

  • Earmark funding for outreach on a permanent basis. This will allow the state to conduct the targeted and intensive outreach necessary to enroll the remaining uninsured. This funding would also be used to research where underserved children live. 
  • Focus outreach efforts on creating a permanent infrastructure of local organizations (including faith-based) that the community trusts which can effectively reach children with barriers to enrollment.
  • Authorize a parent mentoring program which has been shown to be more effective than traditional methods to insure Latino kids, improve health outcomes and increase employment for parents.
  • Authorize funding for community-based demonstration projects, in cooperation with public health agencies, schools and other local entities, to test various ways to provide health care for children of color and immigrant children who are unlikely to enroll in NJFC.

State Cost: $1 million for outreach, which could obtain up to another $1 million in federal matching funds and $1 million for demonstration projects, which may be eligible for federal funding depending on how they are structured.  

Remove Major Administrative Barriers to Health Coverage

  • Consistent with Medicaid and all other families below 200 percent of the federal poverty level in CHIP, eliminate all premiums to other families in CHIP. 
  • Like 36 other states, do not require that a child wholeaves employer-based healthcoveragemust be uninsured for 90 days before enrolling in CHIP.  

State Cost: Eliminating premiums would result in lost collections of up to $28 million annually in CHIP which would be offset set by $22 million in federal matching funds resulting in a state cost of $6 million  (this would rise to $10 million in the future as the federal CHIP matching rate gradually decreases to 65 percent). This does not take into account substantial administrative savings that would be achieved and that some of those collections would continue for co-payments which would not be eliminated. Ending the 90-day waiting period would increase enrollment by about 1,500 and cost about $900,000 in state funds which would be matched with $2.9 million in federal funds based on the experience of many states that have abandoned the waiting period.[22] This change would likely create administrative savings. 

Cover Those Children Who Are Currently Ineligible For NJFC

  • Reinstate and improve the buy-in program for families above 400% of the federal poverty level as long as they do not have coverage availabletothem for less than 9.5 percent of the family income similar to ACA policy,with the goal of making it as seamless and cost-effective as possible and open to more than one insurer. 
  • Authorize the state to require any or all the carriers to participate in the buy-in program as a condition for continuing to participate in NJFC.
  • Repeal any eligibility restrictions in NJFC based on immigration status.
  • Strengthen the rules for confidentiality to apply to all information relating to the administration of CHIP and Medicaid and allowing the state to withhold information from the federal government on children who receive health coverage at all state cost and where such sharing of information may not be in the best interest of the child. 

State Cost: There is no cost for the buy-in because the parents would pay the full cost in their premiums and any administrative costs or costs associated with any possible adverse selection. It would cost about $10 million to make uninsured unauthorized children eligible assuming a 25 percent participation rate which does not consider reduced costs from a decrease in the spread of infectious diseases in schools in addition to other health and social savings outline earlier. Further, the federal government would still be responsible for paying the full cost for hospitalization which could reduce the above estimate significantly.   

Improve Transparency and Accountability

  • Require that the work group, authorized under state law that advises the Department of Human Services on ways to improve outreach, meet at least annually.
  • Require the Department to submit an annual report to the legislature on actions it has taken and their results to provide affordable quality health coverage for all children in New Jersey and the extent to which coverage disparities have improved based on income, race/ethnicity, and geography.

State Cost: Insignificant administrative costs.

Possible Revenues

The $19 million total annual cost for all these recommendations ($9.5 million in SFY 2020 assuming a January 2020 start date) is statistically insignificant compared to a $15 billion budget for NJFC (the state cannot even project total NJFC cost from one year to the next within this level of accuracy). Thus, they should be funded with general revenues.

However, if additional revenues need to be identified for this expansion, it is likely that the savings which will occur as a result of the sharp drop in the child enrollment in NJFC due to existing and proposed federal anti-immigrant policies and a better economy could be more than sufficient to fund this proposal as would part of the revenues that would be generated by the  Corporate Responsibility Fee proposed by Governor Murphy, which is based on the number of employees (and their dependents) who are enrolled in Medicaid at all public cost, or other similar fee.[23]

End Notes

[1]American Community Survey, 2017

[2] Center on Budget and Policy Priorities, Medicaid Works: A State by State Look, no date, https://www.cbpp.org/medicaid-works-a-state-by-state-look#New_Jersey.

[3] Flores G. Lesley B, Children and US Federal Policy on Health and Health Care: Seen But Not Heard. JAMA 2005;168(12):1155-63. Pediatric.

[4] Howell Trenholm, et al, The Impact of New Health Insurance Coverage on Undocumented And Other Low-Income Children: Lesson From Three California Counties. Journal of Health Care for The Poor and Underserved, 2010.

[5] Cohodes, S, et al, The Effect of Child Health Insurance Access on Schooling: Evidence from Public Insurance Expansion. The National Bureau of Economic Research, 2014.

[6] D. Brown, et al, Medicaid As an Investment In Children: What Is The Long-Term Impact On Health Receipts? National Bureau of Economic Research, January 2015.

[7] M. H. Boudreaux, et al, The Long-Term Impact of Medicaid Exposure in Early Childhood: Evidence From The Program Origin, Journal of Health Economics, January 2016.

[8] American Community Survey, 2017.

[9]Joan Alker, Olivia Pham, Nation’s Progress on Children’s Health Coverage Reverses Course, November 21, 2018, https://ccf.georgetown.edu/2018/11/21/nations-progress-on-childrens-health-coverage-reverses-course/

[10] DHAHS, NJFC Enrollment Statistics, http://www.njfamilycare.org/default.aspx

[11]Georgetown University Health Policy Institute, How Proposed Changes to Public Charge What Impact Children In Immigrant Communities, no date,  https://ccf.georgetown.edu/wp-content/uploads/2018/11/Public-Charge-Fact-Sheet_Final_11918.pdf

[12] Samantha Artiga, Effects of Public Charge Changes on Health Coverage for Citizen Children, KFF, May 2018, http://files.kff.org/attachment/Issue-Brief-Potential-Effects-of-Public-Charge-Changes-on-Health-Coverage-for-Citizen-Children

[13] Glen Flores, et al, Parent Mentoring Program Increases Coverage Rates for Uninsured Latino Children, Health Equity, March 2018.

[14] The average total cost in CHIP and Medicaid for a child is $2,400 which was multiplied times the number of kids who are eligible for NJFC (minus unauthorized immigrant kids). Federal matching is based on 50 percent federal funds in Medicaid and 65 percent in CHIP which was prorated base on eligible kids for each of these programs.

[15] DHAHS, NJFC Enrollment Statistics, http://www.njfamilycare.org/default.aspx

[16] Georgetown University Health Policy Institute, How Proposed Changes to Public Charge What Impact Children In Immigrant Communities, no date, https://ccf.georgetown.edu/wp-content/uploads/2018/11/Public-Charge-Fact-Sheet_Final_11918.pdf

[17] Samantha Artiga, Effects of Public Charge Changes on Health Coverage for Citizen Children, KFF, May 2018, http://files.kff.org/attachment/Issue-Brief-Potential-Effects-of-Public-Charge-Changes-on-Health-Coverage-for-Citizen-Children

[18] Glen Flores, et al, Parent Mentoring Program Increases Coverage Rates for Uninsured Latino Children, Health Equity, March 2018.

[19] Trisha Brooks, Kaiser Family Foundation, Medicaid And CHIP Eligibility, Enrollment, Renewal, And Cost Sharing Policies As of January 2019: Findings from a 50-state Survey, March 2018 http://files.kff.org/attachment/Report-Medicaid-and-CHIP-Eligibility-Enrollment-Renewal-and-Cost-Sharing-Policies-as-of-January-2019

[20] Ibid.

[21] Healthcare.gov

[22] The enrollment changes for all states that ended their waiting period in 2014 was calculated for 2013 and 2015 and compared to all other states. The enrollment changes for states that dropped their waiting period was a .2 percent increase vs. a .5 percent decrease in all other states. That .7 percent difference was applied to the CHIP enrollment and costs in the governor’s 2020 budget. The sources for enrollment rates for all states are https://ccf.georgetown.edu/wp-content/uploads/2013/01/Getting-Into-Gear-for-2014.pdfand https://ccf.georgetown.edu/wp-content/uploads/2015/01/Modern-Era-Medicaid-January-2015.pdf

[23] FY2020 Budget in Brief, p. 6,https://www.nj.gov/treasury/omb/publications/20bib/BIB.pdf

Immigrant Small Business Ownership is a Cornerstone of New Jersey’s Economy

Posted on by Erika J Nava

To read a PDF version of this report, click here. 

On any given day and in every corner of the state, immigrants – both documented and undocumented – wake up and set out to work at small, local businesses that they themselves own and operate. This follows a nationwide trend, as immigrants are almost twice as likely to start new businesses than their native-born peers. And while immigrants are more likely to open any kind of business — including large corporations like Tesla, Google, and Pfizer — they are much more likely to own a “Main Street” business than native-born residents.[1] These small businesses, like grocery stores, hair salons and restaurants, generate approximately $1 billion in economic activity every year and are critical to downtowns and local economies across New Jersey with its 565 unique municipalities.

Immigrants own a higher share of Main Street businesses in New Jersey than in any other state not named California.[2] In fact, immigrants account for 47 percent of the Garden State’s Main Street business owners despite making up just 22 percent of the total population.[3] Given the state’s many small towns and its diversity of immigrants — New Jersey has the third highest share of immigrants and arguably the most ethnically diverse immigrant population and workforce in the nation — this is perhaps not surprising, but it is nonetheless important to the state’s economy.

Proactive immigration policies are inextricably linked to the success of immigrant-owned businesses, yet decisions on these issues are often made without input from immigrant business communities. For example, a proposal to expand access to driver’s licenses to all residents, regardless of immigration status, will allow customers of immigrant-owned businesses to have more purchasing power. This policy would also allow employees of immigrant-owned businesses to leave work on their own terms — not just when the last bus or train departs — and become more financially secure and independent.[4]

New Jersey’s Immigrant Entrepreneurs Are Diverse and Own a Variety of Businesses

New Jersey’s immigrant population has doubled since 1990, and the shares of immigrants in the labor force and immigrant business owners have grown along with it. In 2016, immigrants made up 31 percent of New Jersey’s business owners and 28 percent of the labor force, up from 18 percent and 15 percent, respectively, in 1990.

The immigrant share of Main Street business owners has also grown tremendously, doubling over the same time — to 47 percent in 2016 from 24 percent in 1990.

And while a majority (53 percent) of New Jersey’s Main Street businesses are owned by individuals born in the US, 8 out of 10 dry cleaners and 7 out of 10 grocery stores and bodegas are owned by immigrants. Further, immigrant entrepreneurs own 50 percent or more of the state’s household maintenance businesses, transportation services, nail salons, computer service centers, restaurants, and clothing stores.[5]

New Jersey’s immigrant entrepreneurs are diverse in the types of businesses they own and in regard to their race and ethnicity. A majority (54 percent) of Main Street immigrant business owners are Asian, while fifteen percent are Hispanic.[6] Asian and Hispanic immigrants are much more likely than their US-born peers to own Main Street businesses. However, Black immigrants only account for two percent of immigrant owned Main Street businesses.

What Makes Immigrants More Likely to be Business Owners

Mounting evidence suggests that immigrants are more likely to start and own small businesses because they face discrimination in the job market due to limited English proficiency and, sometimes, their citizenship status.[7] In addition, immigrants who earned advanced degrees in their home country have trouble continuing their careers in the US as foreign qualifications and academic achievements may not be recognized.

Ray Lamboy, Executive Director of the Latin American Economic Development Association (LAEDA), a nonprofit dedicated to helping immigrants and ethnic minorities start their own businesses, reinforces these findings:

“First generation immigrants do not typically have the access or the time to develop strong networks of support in the business community. This makes it difficult for immigrants to acquire full-time, professional positions in the workforce. Within immigrant communities, connections and networks are more easily established, making it easier for immigrants to find support in starting their own business.

“An example of a strong immigrant entrepreneur network can be found in South Jersey, where a large share of small businesses are owned by immigrants from the Puebla region of Mexico. These immigrants own a majority of the Latino owned businesses in Camden and the Vineland–Millville–Bridgeton metro-region. A majority of these businesses are supported with resources from other immigrant entrepreneurs from the same part of Mexico.”[8]

Immigrant-owned businesses are often a source of first jobs for other immigrants in the community for two reasons: the stepladder experience and block mobility.[9]

The stepladder experience is the idea that immigrant businesses function as a training platform for other immigrants to gain knowledge on how business is done in the United States, obtain work experience, and build social capital.[10] Some immigrants start their business in the informal market (businesses that are not incorporated or legally recognized) and then incorporate it once they gain experience, capital, and knowledge of the market and regulatory landscape. For instance, Felix Sanchez of Passaic, New Jersey started his businesses selling tortillas in the informal market, going door-to-door. As his community’s Latino population grew, so did his business, in spite of him not speaking English and dropping out of school after sixth grade. His company, Puebla Foods, is now a multi-million-dollar business.[11]

Block mobility explains that immigrants seek to be business owners resulting from the disadvantages and discriminations they often suffer in the labor market due to a lack of English proficiency and trouble transferring their foreign-earned degrees.

Economic Impact and Disparities in Earnings Between Native-Born and Immigrant Small Business Owners

Owning a Main Street business comes with increased social capital, as these establishments are an important part of the fabric of their respective local communities. However, owning a Main Street business does not guarantee a higher salary.

The average annual earnings for an immigrant Main Street business owner in New Jersey are $45,117. This is less than the average earnings for their US-born counterparts, who make $53,998 per year. When counting all businesses, the average annual earnings for an immigrant entrepreneur are $55,998. For US-born businesses owners, the average annual earnings are $75,062. For context, the average New Jersey immigrant earns $45,037 per year while US-born New Jerseyans earn an average salary of $58,000.[12]

Nevertheless, New Jersey’s immigrant business owners are a critical part of the state’s economy. In total, New Jersey’s immigrant-owned businesses earn $4.4 billion dollars per year, including $950 million per year from Main Street businesses.[13] These earnings inject money into local economies, employ thousands of New Jersey workers, and in some cases, act as a lifeline for neighborhoods that have experienced decades of disinvestment and population decline.

Education and Gender Disparities

Higher-education is strongly correlated with owning a business. This is true for both immigrants and US-born business owners. Half of immigrant business owners — 50 percent — have either completed college or have an advanced degree. US-born business owners mirror these levels of education, as 53 percent have completed college or have an advanced degree.

Education, however, is not as strong a predictor of immigrant business ownership as it is for US-born entrepreneurs. Almost a third of immigrant business owners — 32 percent — have a high school degree or less. This is eight percentage points higher than US-born business owners, as only 24 percent have a high degree or less. This exemplifies the impact of the stepladder effect, which explains how many immigrants gain the necessary experience within the immigrant business sector to open their own business.

In regard to the gender breakdown of business ownership, men own a greater share of businesses than women. Men own 74 percent of total businesses and 67 percent of Main Street businesses. Immigrant women are slightly more likely to own a business than US-born women.

Immigrant Owned Small Businesses Are a Critical Part of New Jersey’s Economy

Small businesses are the backbone of local economies and communities across the state.[14] Small businesses, specifically those on Main Street, help neighborhoods stay economically active and, in some cases, revitalize cities experiencing population decline. Small businesses also help increase the local tax base and stimulate consumer spending in local economies.[15]

New Jerseyans born outside of the US are an asset not only to the state’s culture but also to its broader economy. Policymakers and the public alike should recognize the contributions of immigrants and the vital role they play on Main Streets in every corner of the state. It is in everyone’s best interest to have proactive policies that allow immigrants to prosper and feel safe and secure here in the Garden State. When immigrants do better, we all do better.

 

Endnotes

[1] Dyssegaard K.David, Bringing Vitality to Main Street: How Immigrant Small Businesses Help Local Economies Grow. Fiscal Policy Institute. 2015.

[2] Main Street businesses are defined by this report as small businesses focused on neighborhood services, accommodation and food services, and retail. This definition is consistent with that used by David K. Dyssegaard, cited above.

[3] NJPP analysis of American Community Survey (ACS) 2016, Public Use Microdata Sample (PUMS), 5-Year. Data obtained from Fiscal Policy Institute.

[4] Amuedo-Dorantes, C., Arenas-Arroyo, E., & Sevilla, A. (2018). Labor Market Impacts of States Issuing of Driving Licenses to Undocumented Immigrants (No. 12049). Institute for the Study of Labor (IZA). http://ftp.iza.org/dp12049.pdf.

[5] Private Households subsector include private households that engage in employing workers on or about the premises in activities primarily concerned with the operation of the household. These private households may employ individuals, such as cooks, maids, butlers, and outside workers, such as gardeners, caretakers, and other maintenance workers. Source: https://www.bls.gov/iag/tgs/iag814.html

[6] Ibid 3.

[7] Zhou, M. (2004). Revisiting Ethnic Entrepreneurship: Convergences, Controversies, and Conceptual Advancements. The International Migration Review,38(3), 1040-1074. Retrieved from http://www.jstor.org/stable/27645425

[8] NJPP interview conducted with Ray Lamboy, Executive Director of Latin American Economic Development Association, January 2019. http://www.laeda.com/

[9] Ibid 1.

[10] Ibid 7.

[11] Semple, Kirk. Moving to U.S. and Amassing a Fortune, No English Needed. New York Times. 2011. https://www.nytimes.com/2011/11/09/nyregion/immigrant-entrepreneurs-succeed-without-english.html?smid=tw-share&_r=0

[12] Ibid 3.

[13] Ibid 3.

[14] Nava, Erika (2017). New Jersey Immigrants are a Huge Economic Driver. https://www.njpp.org/blog/new-jerseys-immigrants-are-a-huge-economic-driver

[15] Ibid 1.

In Brief: New Jersey’s School Funding Reform Act at 10 Years

Posted on by Mark Weber

In this report, Dr. Bruce D. Baker of Rutgers University analyzes the impact of New Jersey’s School Funding Reform Act (SFRA) over the last decade and recommends policies that would strengthen the law and improve the state’s school funding system.

To read a PDF version of the full report click here.

To read a PDF version of the report summary, click here.

New Jersey’s School Funding Reform Act (SFRA) of 2008 was never a perfect law; in many ways, however, it remains a model state school finance policy:

  • SFRA directs more funding toward the students who need it the most. Under SFRA, New Jersey distributes state aid more progressively across local public school districts with respect to students’ needs.
  • SFRA directs more funding toward the school districts that can’t raise enough revenue locally. Because of SFRA, New Jersey distributes state aid progressively with respect to local income and property wealth, which serve as measures of local capacity to adequately fund schools.

Unfortunately, SFRA has been undermined by several factors through the years during and following the economic recession of 2008, including:

  • Cuts and freezes to state aid. These cuts have led to larger and large shares of children attending districts falling well short of their adequacy budget targets.
  • Failure to enforce a minimum local fair share. The failure to make sure each district raises its “fair share” of school funding through local taxes leaves some districts with even larger gaps between current spending and adequacy targets.
  • Local property tax increase caps. These caps prohibit districts that are levying less than their required local effort – and spending less than adequacy targets – from raising their local property taxes so as to adequately fund their schools.

Figure 1: Total Student Enrollment by School District Adequacy (2008-2018)

Figure 1 shows the numbers of children attending districts that are below adequacy and more than $5,000 per pupil below adequacy.[1] About 800,000 children attend districts below adequacy and nearly 200,000 children attend districts with adequacy gaps greater than $5,000 per pupil. These gaps alone require a minimum of $1 billion to close.

Rise and Fall of Progressive School Funding in New Jersey

New Jersey reached its highest school funding effort level around 2009 with respect to GDP/State and 2006 with respect to personal income. Since that time, effort has declined, including a sharp decline from 2010 to 2012. Current effort levels are back to early 2000s levels, about halfway between their peak and pre-1998 levels. In 2015, New Jersey ranked 5th in the share of aggregate personal income spent on elementary and secondary education.

Figure 2: NJ School Funding Effort Levels (1996-2016)

How School Funding Affects Student Achievement

Figure 3: Average PARCC Scores by SFRA Adequacy Group (2015-2017)

Figure 3 summarizes average PARCC scores for the past three years, showing lower average scores in schools in districts with larger adequacy gaps. Admittedly, this relationship is, to an extent, circular: districts serving higher-need populations tend to have lower scores, and also tend to have larger adequacy gaps. But therein lies the point. The goal of a progressive school finance formula is to leverage additional resources in order to assist in closing the funding gaps – and therefore, the outcome gaps between high-need and low-need districts. National data shows SFRA has helped to shrink these gaps – but state data shows New Jersey’s school funding system is still falling short of what is needed to equalize educational opportunity.

School Funding: New Jersey vs. the Nation

The evidence is clear: school funding matters. The maps below show how spending and outcomes are related in the lowest-poverty and highest-poverty districts.

The map in Figure 4 is based on a statistical model, using national data, that calculates how much the lowest-poverty districts (bottom 20 percent in poverty) actually spend compared to how much they would need to spend to achieve average national test outcomes. Darker green indicates more spending. The map in Figure 5 shows test score outcomes; darker blue indicates higher outcomes.

New Jersey’s most affluent districts make large investments in their schools compared to similar districts in other states. As a consequence, New Jersey’s lowest-poverty districts have some of the highest test score outcomes in the nation. New Jersey’s wealthiest districts spend more on their schools and get exceptional outcomes in return.

Figure 4: Spending Gaps for Lowest Poverty School Districts

Figure 5: Test Score Outcomes for Lowest Poverty School Districts

What about the New Jersey districts with the highest levels of poverty (top 20 percent)? As the map in Figure 6 shows, these high-poverty districts still don’t spend enough to match the districts with the lowest levels of poverty (darker red indicates lessspending than what is needed to attain average test outcomes). Nonetheless, as the map in Figure 7 shows, these least affluent districts still come close to matching national average educational outcomes (as indicated by the tan color, which signifies average outcomes).

Figure 6: Spending Gaps for Highest Poverty School Districts

Figure 7: Test Score Outcomes for Highest Poverty School Districts

Overall, New Jersey is in a good position with respect to the rest of the nation: the state is able to shoot for much higher than prior year national average outcomes. But a sustained commitment to adequate and equitable funding is necessary for the state to provide allof its students with equal educational opportunity.

Solutions to Improve SFRA

Short Term:

  1. Fully funding the SFRA formula to meet its adequacy targets.
  2. Requiring districts to fully fund their local fair share if they fall below adequacy targets.
  3. Using a competitive wage growth index instead of a consumer price index. New Jersey can only maintain a high-quality teacher workforce if it offers competitive wages. Keeping those wages competitive requires tying them to the wage increases of other college-educated professionals.

Medium Term:

  1. Replacing the current Geographic Cost Adjustment (GCA) factor (which is applied at the county level) with a similarly determined adjustment (Taylor’s ECWI) applied at the labor market level, to remove distortions along county lines within the same labor market.
  2. Returning special education funding to a system based on tiers of student need, with appropriately differentiated funding based on actual distributions of children with disabilities. This change should be combined with providing 100% of special education funding through the equalization formula.

Long Term:

  1. Recalibrating funding targets and cost adjustments tied to current outcome goals. Using current data and applying more rigorous cost analysis methods, New Jersey should reexamine the levels of resources needed for schools and districts to efficiently achieve its current educational goals.
  2. Reconsidering the role of charter schools and how they affect public school funding. The state should direct funding to charter schools based on costs and needs while simultaneously assessing their fiscal impact on the efficiency of the entiresystem of public schools.
  3. Integrating pre-K funding into the SFRA model.
  4. Considering a statewide, SFRA-like formula for financing the state’s community college system. This would enable the provision of free, equitable and adequate two-year public college programs for all who wish to attend.

2019 is the year to act – to create better schools and better lives for the children of New Jersey. This report provides a starting point for the Murphy administration and the Legislature to enact legislation that will lead to a better statewide school funding system and a better education for all of New Jersey’s students.

 

Endnotes

[1]As calculated in this report.

Targeted Public Investments Can Improve Health Across New Jersey

Posted on by Brandon McKoy

To read a PDF version of this report, click here.

By Brandon McKoy, Sheila Reynertson, and Raymond Castro

All New Jerseyans should have the opportunity to lead a healthy life, no matter where they live or how much money they make. State policymakers can foster this opportunity for all Garden State residents by unleashing targeted public investments and making smart budget and tax policy decisions. Lawmakers — as well as health care leaders — need to look beyond traditional investments in health care services and access (think insurance, hospitals, and the like), and consider how the state’s investments in education, housing, and other socioeconomic and environmental factors can eliminate the barriers to a healthy life for New Jerseyans.

While access to health care does play an important role in influencing health outcomes, the conditions and circumstances in which people live, work, learn, and play are very influential in shaping how healthy they feel and how long they live. One widely recognized and validated model, from the University of Wisconsin Population Health Institute, suggests that 80 percent of health outcomes are determined by social and economic, environmental, and behavioral factors; just 20 percent are attributable to health care.[1] Social, economic, and environmental factors are largely shaped by state and federal policy and budget decisions.

Low-Income New Jerseyans Face Unique Barriers to Healthy Living

Healthy people and communities are the building blocks of a strong and thriving New Jersey. Since state policymakers expanded Medicaid in 2013, New Jersey’s uninsured rate rapidly dropped to 8 percent in 2017 from 13.2 percent in 2013. However, a number of barriers prevent many Garden State communities from experiencing good health, including economic instability and hardship; limited access to healthy, affordable food; lack of affordable housing; and exercise options in safe, walkable neighborhoods.

In short, opportunities for Americans to be healthy are not distributed equally. As documented by many studies, there is a direct relationship between income and health with low-income Americans having poorer self-reported health status across all racial and ethnic groups.[2]Meanwhile, a history of structural racism and inequality have helped create especially poor health outcomes for Americans of color, who are more likely to report their health as fair or poor than their White peers. And low-income people of color have the poorest self-reported health status of all, with more than 1 in 5 low-income Black and Latinx people reporting fair or poor health (among racial groups where data are available: Black, Latinx, and White).[3]

In New Jersey, these health inequities can be viewed geographically and demographically, though it’s worth noting that due to historically racist policies in housing and other areas, residential segregation has created a situation with many demographically homogenous geographies across the Garden State. This is not so evident at the county level, but much more so at the ZIP code level.

For example, the share of residents in poor or fair health is just 11 percent in New Jersey’s healthiest county (Morris) and 23 percent in the state’s least healthy county (Cumberland). The disparities across racial and ethnic lines are even more severe: just 11 percent of White and Asian New Jerseyans are in poor or fair health, compared to 20 percent and 32 percent of Black and Latinx New Jerseyans, respectively.[4]

Where one is born and resides in New Jersey can have a big impact on how long one lives. Take life expectancy in the Trenton area, for example. In the 08611 ZIP code, which includes the Chambersburg and Mill Hill neighborhoods, the average life expectancy is 73 years. As one moves north and east of Trenton, people live longer lives: In the 08619 ZIP code, that includes neighborhoods in both Trenton and Hamilton, the average life expectancy jumps 10 percent, to 80 years; and moving farther out to the 08550 ZIP code (the Princeton Junction section of West Windsor), the average life expectancy increases another 9 percent, to 87 years.[5]

This neighborhood-by-neighborhood disparity is not limited to Mercer County, of course. One finds similar results when comparing life expectancy in Camden and Cherry Hill, or in Newark and Montclair, for example.

Overall, New Jerseyans of color are less likely to achieve greater health than their White neighbors — no matter where they live. While close to 60 percent of White New Jerseyans have “good or excellent health,” according to the health equity metrics developed as part of the Health Opportunity and Equity (HOPE) Initiative, less than 45 percent of Black, and less than 35 percent of Latinx, New Jerseyans do.[6]Black New Jerseyans also have significantly lower average life expectancies, and higher rates of infant mortality, than their White or Latinx neighbors.[7]

Building Healthy Communities and Advancing Equity Through Public Policy

 New Jersey policymakers should focus on improving the health and well-being of all the state’s residents by implementing sound policies that lift people out of poverty and boost opportunity, and by leveraging the state budget to support programs beyond investments in health care. Many programs and policies that may not seem health-related on the surface can help build healthy communities and advance equity.

The good news is that New Jersey has already taken major steps in this direction; lawmakers ought to build on that foundation of progress in 2019 and beyond. Here’s how.

Make Health Care Affordable for All New Jerseyans

Polls in New Jersey have shown that health care costs were the number one issue in the midterm elections last year. This is understandable because New Jersey is often ranked among the top states in medical costs. To help address this issue, policymakers enacted a reinsurance program and reinstated the individual mandate that was repealed at the federal level, both of which have and will continue to reduce insurance costs.[8]Nevertheless, much more needs to be done. New Jersey lawmakers should:

  • Make all uninsured children eligible for NJ FamilyCare (includes Medicaid and CHIP) regardless of immigration status and income
  • Establish a commission to oversee and set caps on the excessive costs of prescription drugs
  • Raise Medicaid reimbursement rates for pediatric services that are not sufficiently accessible to low-income children

Boost the Income of Workers and Their Families

In a high-cost state like New Jersey, far too many workers and their families are not paid enough to make ends meet. This creates a wide range of barriers to better health for hundreds of thousands of New Jerseyans who are unable to afford a decent, safe place to live; or who struggle to regularly put nutritious meals on the table; or who must cope with the toxic stress and uncertainty that comes with being unable to secure basic economic security.

To allow all New Jerseyans the chance to live healthy, thriving lives, policymakers must boost the income of these workers and their families on both payday and at tax time.

Raise the minimum wage

New Jersey’s minimum wage in 2019 is $8.85, a woefully inadequate rate that does not help workers meet their basic needs. But thanks to the hard work of NJPP and our allies, the Governor signed into law an increase in the wage to $15 by 2024 for most workers, after which future increases will be tied to inflation. The wage will go up to $10 on July 1, 2019, and then increase to $11 on January 1, 2020. The wage will then increase $1 on January 1st each year until reaching $15 in 2024. This increase will benefit about 1 million of the state’s workers, helping them meet their daily needs and improving our economy.[9]

Some workers are on a separate, slower phase-in schedule. Those who are employed as seasonal workers or at businesses with fewer than 6 workers will get to $15 by 2026, after which there is a provision to bring them to parity with the general wage by 2028. For farmworkers, they will get to $12.50 by 2024, after which the Commissioner of Labor and Secretary of Agriculture will determine whether they should continue to $15. If they decide in the affirmative, farm workers will reach $15 by 2027, after which they will reach parity with the general wage by 2030.

New Jersey’s tipped wage will also get a small increase to $5.13 from the federal tipped minimum wage of $2.13. While this is important, the tipped differential between the tipped wage and the minimum wage will go from $6.72 in 2019 to $9.87 in 2024, a development that we have advised against. NJPP has reported on the unique challenges faced by workers who rely on tips for a majority of their pay, from increased instances of wage theft to a heightened risk of assault and sexual harassment. NJPP and labor advocates will continue to push for the complete phase out of the tipped wage.

Nevertheless, this is a hugely important change that will reverberate throughout New Jersey’s economy. As one of the slowest states to emerge from the Great Recession, and with a population where four out of ten households essentially live paycheck to paycheck and have trouble making ends meet, raising the minimum wage to $15 will be transformative for the state’s workers, families, and businesses.[10]Lawmakers should develop new legislation to phase-out the tipped wage altogether, a move that would significantly improve the economic security and work experience of tipped workers.[11]

Expand tax credits for working families

 Increasing take-home pay for low-paid workers is a critical step toward increasing economic security and the prospects for better health. It is equally critical for policymakers to ensure low-income and working-class families aren’t unduly punished by an upside-down tax code that asks them to pay greater shares of their income to state and local taxes.

The federal Earned Income Tax Credit (EITC) provides low-paid workers with a boost to their incomes in the form of a tax refund. This credit lifts more than 5 million Americans — including 3 million children — out of poverty each year, and reduces the severity of poverty for many millions more.[12]The EITC has been shown to have tremendous widespread benefits, including improved health for infantsand mothers.

New Jersey — like 28 other states and D.C. — has a state EITC that builds on the federal credit and helps even out the tax code and increase opportunity for working families and their children.[13]Children who get additional income through programs like the EITC tend to do better and go farther in school and tend to work and earn more as adults — all of which can have a strong, positive effect on their ability to live healthier lives.

The state EITC in New Jersey is strong, thanks to a longstanding tradition of bipartisan support in the legislature and governor’s office. Last year, policymakers came together and agreed to increase the state EITC from 35 percent of the federal credit to 40 percent over three years. This will put tens of millions of more dollars each year in the pockets of over half a million New Jersey families.

Lawmakers should build on the success of this vital credit by expanding it to an important group of low-paid workers that the EITC largely ignores: adults who aren’t raising children. California, Maryland, Minnesota, and the District of Columbia have already expanded their EITCs to include these workers; hundreds of thousands of low-paid New Jersey workers could receive a much-needed boost to help make ends meet if Garden State lawmakers follow suit.[14][15]

New Jersey policymakers took another big step last year to help the state’s lower-income working families at tax time when they created a new child and dependent care tax credit (CDCTC) for 74,000 families with annual incomes of less than $60,000. It is based on the federal credit, which allows parents and caregivers to deduct up to 35 percent of employment related care expenses from their federal taxes. However, New Jersey caps the CDCTC at a low 50% of the federal credit and is nonrefundable, meaning it will offset the tax due but cannot reduce the tax below $0. Making the CDCTC fully refundable and at a more generous percentage of the federal credit would help the families that need it the most. Half of the states and D.C. currently offer these credits. In twelve states the credits are fully refundable.

Ensure All Workers Have the Ability to Balance Work and Family Needs

Expand paid family leave

 In 2008, New Jersey became the second state to adopt a paid family leave policy. Nearly a decade into the Family Leave Insurance (FLI) program, it’s a clear success, having replaced hundreds of millions of dollars in lost wages for tens of thousands of New Jerseyans who needed to take time off to be with a new child or sick family member.

The existence of this program is a boon for health in New Jersey, particularly for the health of young children. A period of paid leave after the birth of a child contributes to the healthy development of infants and toddlers. There is evidence linking paid leave to better maternal and child health outcomes, like reduced infant and post-neonatal mortality rates; increased breastfeeding, well-child medical visits, and immunizations; and improved health outcomes for children in early elementary school, including reduced issues with maintaining a healthy weight, ADHD and hearing-related problems, particularly for less-advantaged children.[16]

And yet this trailblazing program is falling short of its potential, with serious repercussions for New Jersey families and for the state’s economy. The program is not widely advertised, particularly among low-paid workers. And the wage replacement level and cap on earnings are so low that many workers across the income scale simply cannot afford to take advantage of what should be an important benefit.

In January 2019, legislation to improve and expand the NJ Family Leave Insurance Program passed both houses. The reforms and additional changes in the bill will go a long way to make the program more accessible for working families, especially those struggling to balance work and family caregiving. With the bill on the Governor’s desk, New Jersey is poised to both remove the barriers that have stopped many people from taking paid family leave and increase public awareness of the program so that no one will have to choose work over the time to heal or care for a loved one in need. These improvements will be fully funded by a small increase to current worker contributions, with measurable benefits for families, employers and the state’s economy. Specifically, the new law will:

  • Allow workers to take up to 12 weeks of paid leave
  • Increase the current two-thirds wage replacement
  • Raise the very low cap on earnings while on leave
  • Expand job protections for 200,000 workers employed at companies with 30 to 50 workers
  • Expand the definition of family to include grandparents and grandkids, siblings, adult children, parents-in-law, and chosen family
  • Provide benefits for survivors of domestic violence or sexual assault and to those caring for survivors
  • Increase public awareness with designated funding for outreach

Ensure sound implementation of earned sick leave

Until last year,over 1 million New Jerseyans, mostly in low-paid jobs, couldn’t get paid if they needed to take time off because they were sick. And for many, taking an unpaid day off meant forfeiting their job. Last year state policymakers fixed that problem.

The New Jersey Earned Sick Leave Law — which went into effect on October 29, 2018 — allows employees to accrue 1 hour of earned sick leave for every 30 hours worked, for up to 40 hours each year. This new law is important for workers, particularly low-paid workers, and also for public health.

Earned sick leave has been linked to reducing preventable hospitalizations and emergency-room visits; stopping the spread of illness (particularly foodborne illness, since the restaurant industry is one where workers are least likely to have employer-sponsored access to earned sick days); and more.[17][18]People who come to work sick also get injured more often, particularly in high-risk occupations like manufacturing, construction, healthcare and agriculture.[19]

Being able to take earned sick days is also very important for working parents. When they aren’t allowed to take earned sick days, parents face the difficult decision of caring for themselves and their loved ones or showing up for work, a choice which could extend the duration and increase the severity of an illness.

We have seen evidence right here in New Jersey of how earned sick leave policies can improve health. In Jersey City, which was the first New Jersey municipality to pass an earned sick leave policy in 2014, fewer sick Jersey City employees are coming to work, reducing the risk of illness spreading around the city — an important finding that promotes both public health and a stronger economy.[20]

The New Jersey Department of Labor is now in the process of finalizing regulations which appear to be strong interpretations consistent with Earned Sick Leave Act. They establish clear guidelines for New Jersey employers about their new obligations and employees about their rights to access earned time off to recover from an illness or help a sick loved one. To ensure New Jersey workers and employers learn about the law, regulations will also provide for general outreach and education efforts in multiple languages.

Invest in the Building Blocks of Healthy, Strong Communities

Continue expanding access to high-quality preschool

Universal high-quality preschool prepares children for school and has been found to boost their test scores, high school graduation rates and employment opportunities, as well as their long-term health.

Children who participate in high-quality early childhood programs experience immediate and long-term health-related benefits.[21]They also tend to go farther in school; setting up another wave of positive outcomes, since people with more education live longer, are less likely to die from cancer or heart disease and have better access to health care and insurance.[22]

In 2008, the legislature recognized the value of expanding access to high-quality early education, passing the School Finance and Reform Act to bring preschool to more towns across the state. Still, many New Jersey’s children lack access to early education. That’s because many successive governors and legislatures have yet to deliver on the promise of the 2008 law. That has begun to change, and in last two state budgets lawmakers dedicated over $100 million in additional funding to expand state-funded, full-day preschool for 3- and 4-year-olds to more school districts.[23]As a result, the number of districts providing at least partial access to high-quality public preschool has more than tripled, from 35 just two years ago to over 100 today.[24]

New Jersey policymakers should continue to take steps to fully fund the 2008 law and expand preschool to more districts, but they also ought to think bigger and bolder and work towards implementing truly universal preschool across the entire state, in every district.

Make public transit more accessible, affordable, and reliable

Transportation is a monumental issue for New Jersey, and here more than anywhere else the conversation about transportation must be about public transit. But, despite the fact that nearly a million New Jerseyans use public transportation on a daily basis, the political and policy culture of the state remains dominated by car-centric thinking. This is an enormous problem for the most densely populated state in the nation.

As a result, public transit in New Jersey is in crisis. The infrastructure is decaying. The funding streams are dried up, and the funding structure is broken. As a result, the costs to commuters are rising. And still, the service is getting worse. Low-income residents and New Jerseyans of color are disproportionately harmed by this public transit crisis that is also making our communities less healthy.

This must change. After all, increased use of public transit has a positive effect on health. It improves local economies, helping boost working families and their long-term health. It makes the air cleaner and safer for New Jerseyans to breathe by getting more automobiles off the roads. And it leads to more physical activity too — public transit users, on average, walk more than drivers. And the connections between bicycle infrastructure and transit infrastructure show tremendous promise, helping to extend the reach of public transit and get more riders on buses and in trains, without further clogging local roads — and doing so in a way that is more affordable for less well-off residents.

But public transit’s social, economic and health benefits don’t exist if there are no riders, or not enough riders. And if the transit system is unaffordable, unreliable and unsafe due to years of disinvestment, the riders will — if they can — stay away.

New Jersey has shirked its responsibility to invest the dollars necessary to create a reliable, affordable, modern public transit system. In 2016, policymakers took a big step toward fixing this problem by raising fuel taxes to help pay for capital investments in transit modernization and for expansion across the state. That will help, but it will not fix New Jersey’s long-standing underfunding of NJ Transitoperatingcosts.

Lawmakers must find adequate, stable and dedicated funding for NJ Transit’s operations. From 2005 to 2017, the state slashed direct support of NJ Transit by 59 percent. This meant NJ Transit increasingly turned to riders to make up the difference. Major fare hikes raised rider contributions by 45 percent over the same time.[25]

Riders pick up far more of the tab for NJ Transit (52 percent) than they do for most peer transit agencies around the country. In Chicago, for example, riders pay for 38 percent of operations and in Los Angeles, just 22 percent. This is a direct result of how little of NJ Transit’s operating budget is covered by dedicated taxes — just 1.3 percent, compared to 51 percent in Chicago and 58 percent in Los Angeles.

Dedicated, stable annual revenues are necessary to support NJ Transit’s operating budget. Lawmakers should consider a variety of options, including congestion pricing, a surcharge on gas-guzzling automobile purchases and taxing businesses that disproportionately benefit from transit (as New York’s Metropolitan Transit Agency does). Ensuring stable and adequate support for operating expenses will prevent NJ Transit from imposing even more fare hikes or capital funding raids.

Reverse disinvestment in higher education

People who attend and graduate from college have a greater shot at economic success — and at living healthier lives. Now more than ever, Americans with less education are dying earlier than their peers; more likely to have major diseases, such as heart disease and diabetes; more likely to have risk factors that predict disease, such as smoking and obesity; and more likely to have diminished physical abilities for health reasons or to be disabled.[26]

New Jersey policymakers concerned with improving health outcomes for all residents shouldn’t overlook the role of affordable public higher education — and should work to reverse the recent trend of sustained disinvestment in New Jersey’s public colleges and universities.

At a time when more students than ever are seeking to secure their families’ future with a college education, New Jersey has slashed funding for its institutions of higher learning and shifted the cost burden onto the shoulders of striving students and their families. Between 2008 and 2018, New Jersey’s funding for public four-year colleges and universities dropped 24 percent, representing a $2,387 cut per-student. Over that same period, average tuition costs at public four-year colleges and universities increased 18 percent, or $2,075, from $11,973 in 2008 to $13,868 in 2018.

This results in an increasingly heavy burden for New Jersey families. In 2017, average tuition and fees at a public four-year institution accounted for 17 percent of a New Jersey family’s median income. For families of color — who often face additional barriers to employment and increased difficulty accessing jobs that pay better — the situation was far more severe, with those costs accounting for 27 percent of a Black New Jersey family’s median income and 25 percent of a Latinx family’s median income.[27]

To slow the increase in unaffordable college prices and rising student debt, New Jersey should at the very least return to pre-recession levels of funding for higher education.

Raise adequate revenues in an equitable way

Creating opportunities for all New Jerseyans to lead healthier lives requires investments beyond traditional health care spending. It is essential to apply a health lens to the way the state raises and spends money, because health starts with where we live, learn, work, and play. Great schools, safe and vibrant communities, quality jobs, and programs that lift and keep people out of poverty strengthen our economy while creating opportunities for healthier New Jerseyans in every corner of the state. To support these foundations of thriving communities, our state needs dependable revenues that are equitable, sustainable, and adequate.

The good news is that New Jersey’s fiscal year 2019 budget, the first of Governor Murphy’s administration, signaled a much-needed reversal after nearly a decade of austere fiscal policy.[28]After years of neglect, assets critical to New Jersey’s economic success, like K-12 schools, public transit, and county colleges all received modest increases in state funding. However, the most recent budget falls short in one key area that has plagued the state and its finances for three decades: there are simply not enough stable, long-term sources of new revenue to sustain these increased investments.

Policymakers should build on the steps taken in the FY 2019 budget by implementing adequate revenue streams. Doing so will help unleash important public investments that can boost opportunity and the long-term health of New Jersey’s current and future generations.

Policymakers should:

  • Continue to make the state income tax more based on the ability to pay, by levying higher marginal rates on income over $1 million
  • Restore adequate taxation of inherited wealth
  • Reform and minimize corporate tax breaks for economic development
  • Modernize the sales tax and return the base rate to 7 percent
  • Strengthen the state’s newly implemented combined reporting law
  • Make the corporate tax surcharge permanent

Author’s Note: Support for this report was provided by the Robert Wood Johnson Foundation. The views expressed here do not necessarily reflect the views of the Foundation.

 

Endnotes

[1]Patrick L Remington, Bridget B Catlin and Keith P Gennuso, “The County Health Rankings: rationale and methods,” Population Health Metrics, April 17, 2015, https://pophealthmetrics.biomedcentral.com/articles/10.1186/s12963-015-0044-2. Note that the County Health Rankings model does not account for genetics and biology, which are not measurable or modifiable.

[2]https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2837459/

[3]Ibid.

[4]http://www.countyhealthrankings.org/app/new-jersey/2018/overview

[5]https://societyhealth.vcu.edu/work/the-projects/mapstrenton.html

[6]http://www.nationalcollaborative.org/wp-content/uploads/2018/07/hope_chartbook_final-1.pdf

[7]Although life expectancy for Latinx people is higher than for whites and higher than the U.S. average, the data include individuals born in the United States as well as individuals born outside the United States. Individuals born in the United States tend to have lower life expectancy than those born outside the United States. A growing body of research explores other potential reasons for longer life expectancy among Latinx populations relative to what would be expected based on their income and education levels. See: Neil K. Mehta et al., “Life Expectancy Among U.S.-born and Foreign-born Older Adults in the United States: Estimates From Linked Social Security and Medicare Data,” Demography: August 2016, 53(4): 1109-1134, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5026916/; Paola Scommenga, “Exploring the Paradox of U.S. Hispanics’ Longer Life Expectancy,” Population Reference Bureau, July 12, 2013, https://www.prb.org/us-hispanics-life-expectancy/

[8]https://www.njpp.org/healthcare/new-jerseys-individual-market-premiums-to-be-among-the-lowest-in-the-nation

[9]https://www.njpp.org/reports/increasing-the-minimum-wage-to-15-would-boost-the-economy-and-help-over-1-million-workers-but-not-if-the-legislature-stalls

[10]United Way of Northern New Jersey, ALICE Report 2019: https://www.dropbox.com/s/h3huycfbak512t2/18_UW_ALICE_Report_NJ_Update_10.19.18_Lowres.pdf?dl=0

[11]http://rocunited.org/wp-content/uploads/2018/02/OneFairWage_W.pdf

[12]https://www.cbpp.org/research/federal-tax/policy-basics-the-earned-income-tax-credit

[13]https://www.cbpp.org/research/state-budget-and-tax/policy-basics-state-earned-income-tax-credits

[14]https://www.cbpp.org/blog/state-eitc-expansions-will-help-millions-of-workers-and-their-families

[15]https://www.njpp.org/budget/eitc-expansion-would-provide-a-crucial-boost-to-hundreds-of-thousands-of-new-jerseyans

[16]http://www.nationalpartnership.org/our-work/resources/workplace/paid-leave/the-child-development-case-for-a-national-paid-family-and-medical-leave-insurance-program.pdf

[17]https://smlr.rutgers.edu/sites/default/files/images/NJ_HIA_-_Full_ReportApril2011_0.pdf

[18]http://www.nationalpartnership.org/our-work/resources/workplace/paid-sick-days/paid-sick-days-lead-to-cost-savings-savings-for-all.pdf

[19]https://blogs.cdc.gov/niosh-science-blog/2012/07/30/sick-leave/

[20]https://smlr.rutgers.edu/sites/default/files/documents/Jersey_City_ESD_Issue_Brief.pdf

[21]https://developingchild.harvard.edu/resources/the-foundations-of-lifelong-health-are-built-in-early-childhood/

[22]https://www.rwjf.org/content/dam/farm/reports/issue_briefs/2014/rwjf414926

[23]https://prekourway.org/assets/Pre-K-Our-Way_ExpandNJsPreK_OCTOBER_2018.pdf

[24]https://prekourway.org/assets/Pre-K-Our-Way_WINTER-2018_Newsletter.pdf

[25]http://blog.tstc.org/2016/12/13/nj-transit-lacks-dedicated-funding-thats-not-normal/

[26]https://www.rwjf.org/en/library/research/2014/01/education–it-matters-more-to-health-than-ever-before.html

[27]https://www.cbpp.org/research/state-budget-and-tax/unkept-promises-state-cuts-to-higher-education-threaten-access-and

[28]https://www.njpp.org/budget/opportunity-lost-consequences-and-shortcomings-of-the-fiscal-year-2019-budget

Defending Reproductive Rights in New Jersey by Improving Access to Health Care for All

Posted on by Jazmyne McNeese

To read a PDF version of this report, click here.

Access to safe, accessible, and medically competent reproductive health care in the United States is under concentrated and powerful attack. A more radical Supreme Court now puts in jeopardy key reproductive health services like Title X federal funding for family planning and the constitutional right to abortion. The current political climate provides progressive-leaning states like New Jersey an urgently important opportunity to develop and enact forward-thinking reproductive health care policy.

This report highlights some of those opportunities by examining a wide cross section of gaps and disparities in New Jersey’s reproductive health care landscape. The selected issues include:

  • Expanding access to contraception and abortion
  • Addressing maternal and infant mortality disparities
  • Providing dignity for people who are incarcerated
  • Expanding health care for undocumented immigrants

This sampling was chosen due to its urgency, invisibility, and vulnerability to political attacks. By highlighting a cross-section of issues, the report aims to foster renewed interest among policymakers and advocacy organizations in pursuing state-level policy that guarantees every individual—regardless of circumstances or identity—equal access to reproductive health care services.

The reproductive health care gaps identified in this report are based on a series of one-on-one interviews conducted with community leaders and advocates from several organizations representing communities that chronically face barriers to reproductive health care (see the list at end of the report). Those facing these challenges due to their circumstance, income, or identity include, but are not limited to, women of color, people who are undocumented, LGBTQI communities, incarcerated people, people with disabilities, indigenous high-poverty communities, young people, and residents of rural areas. As experts of their own lives, community members and leaders from these groups are best equipped to inform policy changes that can improve those lives.

By focusing on those who have been historically underserved, this report follows the example of the groundbreaking work of Reproductive Justice, the movement created by women of color as an alternative to the mainstream reproductive rights framework. To be clear, this report was developed by individuals who are not associated with Reproductive Justice organizations. Rather, the intention is to inspire New Jersey stakeholders to invest in the principles developed by leaders of the Reproductive Justice movement and champion legislation that embodies the Reproductive Justice framework. For more information about the history of the Reproductive Justice movement and framework, see Appendix I.

Reproductive Health Care Policy in the Garden State

New Jersey has a strong record for advancing reproductive health care policy, but programs that serve low-income people, especially women of color, have chronically been vulnerable to funding cuts.[1] For example, $7.5 million in annual state grants for family planning services, prevention and treatment of sexually transmitted infections, and cancer screenings for low-income residents were cut from the state budget for eight consecutive years.[2] Those cuts forced six of the 58 family planning clinics in the Garden State to close. Of the 136,000 mostly low-income patients served by New Jersey’s family planning clinics each year, many were left to find care elsewhere or skip care altogether.[3]

With a new governor in office, New Jersey has taken steps to correct course. Through advocacy efforts led by Planned Parenthood Action Fund of New Jersey, that funding has finally been restored. In addition, more people now have access to reproductive health services through the state’s Medicaid program which covers comprehensive contraceptives, abortion care, and prenatal care. More recently a pilot home visitation program providing parenting support to at-risk families has been established and $4.3 million in grants has been committed to address New Jersey’s dismal black infant mortality and maternal health rates.[4][5]

Still, there are many outstanding issues that demand policymakers’ attention. These issues persist because the advancement of reproductive health policy in the Garden State has failed to actively dismantle the ongoing, systemic oppression of women of color and other historically marginalized groups. When marginalized communities are absent at the forefront of a movement, chronic health care gaps and disparities can persist and worsen, harming the very communities most vulnerable to institutional injustice. Though presumably unintentional, the effect is ubiquitous. To improve reproductive health care access for everyone in New Jersey, policymakers must work to eliminate unnecessary barriers and focus resources on communities that historically have been the most disadvantaged. See Appendix II for examples of recent and pending legislation that represent the kind of forward-thinking policy agenda being advocated for in this report.

Improving Access to Contraception and Abortion

 The scope of reproductive health care is not limited to contraception and abortion care, but these specific services have long been targeted for political reasons. Given the intensified political climate on the national level around reproductive health care access, it is vital that New Jersey defend these services from ideological attacks by expanding access through multiple avenues. In the following discussion of contraception and abortion, when we refer to people who can become pregnant, we emphasize the inclusion of women, transgender men, and gender non-conforming people.

Contraception

 A person’s ability to plan, prevent, and space pregnancy is directly linked to their ability to access contraception. New Jersey has a responsibility to ensure that all people who can become pregnant, regardless of their circumstance, have control over their reproductive health decisions—and by extension their economic status—by removing unnecessary or outdated barriers to contraceptive services. New Jersey could begin by removing payment and logistical barriers that most impact communities vulnerable to patterns of institutional bias and discrimination.[6] Improving the lives and well-being of all families through better access to family planning services helps New Jersey conserve health care resources by reducing the number of unintended pregnancies, which cost the state over $185 million in 2010 alone.[7]

One immediate opportunity to remove harmful barriers is to require health insurance companies to provide a 12-month supply of birth control instead of 6 months—a measure that has been shown to cut down on both costly doctors’ visits and unintended pregnancies. According to a University of California, San Francisco study, dispensing a one-year supply of birth control at a time is associated with a 30 percent reduction in the likelihood of unplanned pregnancy.[8] Twelve states have mandated that health insurers cover an “extended supply” of birth control; several other states have pending legislation.[9]

 Should federal efforts to defund Title X be successful, New Jersey must step in and ensure that low-income communities continue to receive family planning care in a seamless manner. The state Medicaid program should also address several lingering logistical barriers. For example, offering long-acting reversible contraceptives, like IUDs, to patients immediately after giving birth, would dramatically expand contraceptive options for low-income parents. But billing logistics have stymied widespread implementation. Just before the release of this report, a first step toward improving this important access gap has been addressed. Another technical fix to make the process seamless for both the health care provider and the patient is under review.[10] New Jersey should also allow Medicaid recipients access to emergency contraception (EC) without the unnecessary extra step of having to obtain a prescription first—a logistical barrier left over from the George W. Bush era.[11] Requiring all retail pharmacies in the state to stock and dispense EC would greatly improve people’s ability to obtain this time-sensitive medication as well as improve another avenue toward reducing the rate of unintended pregnancy.

Abortion Care 

New Jersey has upheld the right to abortion care since the procedure was legalized under Roe v. Wade. Just as importantly, the state has largely remained outside the national trend of state-level abortion restrictions like waiting periods and gestational limits. Across the country, over 1,000 anti-abortion laws have been enacted with a notable increase in the last several years.[12] In fact, the state Constitution has been interpreted to provide more expansive protections for the right to privacy and the right to end a pregnancy than the federal Constitution does, even with the protections of Roe v. Wade.[13] Yet, barriers to abortion care remain in the Garden State, primarily due to inadequate insurance coverage and efforts by anti-abortion organizations to diminish access through harassment, intimidation, and deception. For uninsured or under-insured individuals who wish to end a pregnancy, the cost of care can be out of reach. According to a 2014 Guttmacher Institute national survey, 75 percent of abortion patients are low income and a majority paid for their abortion care out of pocket, even though most had health insurance coverage. Due to the large number of patients paying out of pocket for services, abortion providers have strived to maintain affordable cash fees. Still, the financial expense of accessing abortion care extends beyond the medical cost with a substantial number of patients reporting additional expenses such as transportation, childcare, and lost wages.[14] When faced with these unexpected expenses, some patients may be forced to delay paying bills, borrow money, or seek assistance from a privately-run abortion fund like the New Jersey Abortion Access Fund—options that can create unnecessary delays.

Before Roe v. Wadelegalized abortion nationwide, the class divide in access to the procedure was clear cut. Those in need of abortion care but without financial resources had no access to safe medical services. Those with means travelled to states like New York where the procedure was legalized in 1970. In the first two years, 60 percent of abortion patients were from outside the state.[15] AfterRoe, the Hyde Amendment was swiftly enacted, blocking all federal funds from paying for abortion information, referrals, or care. Recognizing this clear violation of state control over reproduction and decision-making, New Jersey opted in to use state funds to support Medicaid access to abortion services thereby mitigating the impact of the Hyde Amendment. New Jersey remains one of only twelve states to do so.

Despite this decades-long commitment, many abortion providers in New Jersey struggle to cover costs due to low reimbursement rates from both Medicaid and the private insurance sector. Even when private insurers have appropriately negotiated reimbursement rates, many people are still unable to utilize their policies to access abortion care. For example, some private policies do not cover abortion services for policy holders or dependents, or policies may have increasingly high deductibles, which forces many patients to pay for services out-of-pocket.[16] The overall effect of underfunding leaves health centers trying to provide high-quality care to everyone regardless of ability to pay while keeping the doors open in a safe environment for patients and staff. Independent abortion providers, committed to maintaining meaningful access to abortion care throughout pregnancy while enduring the bulk of harassment by anti-abortion extremists, feel this financial strain most acutely. As reproductive rights continue to erode across the county, now is the time for New Jersey to invest in expanding and preserving abortion access.

 Increasing Medicaid Reimbursement Rates for Abortion Providers: A Case Study

 Cherry Hill Women’s Center (CHWC), a premier independent abortion provider in Camden County, New Jersey, is a prime example of this struggle. CHWC specializes in providing first and second trimester abortion care and other reproductive health services, inspired by their belief in the autonomy of the individual and their commitment to strengthening communities. Yet, because abortion care is a highly politicized and stigmatized health service, it carries its own set of unique challenges and obstacles that increase operating costs.

For decades, abortion providers have faced the risk of violence at the hands of anti-choice extremists, creating unusual security needs that other health care facilities do not have. This includes security guards, secure entry, 24-hour closed-circuit video cameras, bullet-proof glass, high-level security trainings, and coordination of clinic volunteers to escort patients through protestors. Screening of patients, staff, and vendors is needed to eliminate the opportunity for anti-abortion extremists to breach security, violate privacy, and/or commit violence. All these safety measures require resources that may need to be diverted from health care services and clinic sustainability. Given the alarming increase of anti-abortion rhetoric at the federal level, there has been a notable increase in violence meant to disrupt care and intimidate patients and staff members.[17]

The threat of violence also has a ripple effect on other aspects of operating an independent abortion clinic like CHWC. It makes it more difficult to contract necessary services, such as facility maintenance, medical waste disposal, and the purchasing of medical supplies. Targeting by anti-abortion extremists also makes it difficult to recruit and retain medical professionals to perform abortion procedures due to their own safety and privacy concerns. Abortion providers are already hard to recruit due to limited access to training, low-reimbursements, and increasingly high insurance costs.

Medicaid reimbursement rates fail to consider not only the true cost of health care, but the unique costs associated with providing abortion care in a safe and secure setting. Simply put, Medicaid reimbursement rates for abortion care have not kept pace with medical care costs and certainly do not account for the complex challenges faced by abortion providers.[18]

Taken as a whole, abortion providers remain at an economic disadvantage due to the burden of these unavoidable extra costs. As it stands, the United States has a limited number of facilities qualified to provide abortion throughout all stages of pregnancy, particularly the third trimester. Policymakers looking to improve and expand abortion access in New Jersey can start by increasing Medicaid reimbursement rates for a medical service that has been politicized and stigmatized for far too long.

Fake Women’s Health Centers

 Everyone deserves unbiased, evidence-based health information, regardless of their zip code or financial situation. In New Jersey, this value is exemplified by mandated comprehensive sex education curriculum. Thorough and accurate sexual health education provides young people with the tools they need to make decisions about their health and well-being. Unfortunately, there are organizations operating in New Jersey with the sole intention of derailing access to legitimate reproductive health care services.

Fake women’s health centers, or crisis pregnancy centers, have become a well-established tactic used by anti-abortion extremist organizations with the intention of misleading women seeking pregnancy options, counseling, or abortion care.[19] They use false and deceptive advertising to lure unsuspecting pregnant women to a facility staged to look like a legitimate health care clinic, where staff attempt to coerce them to continue their pregnancies using false medical information, shame, and religious rhetoric.[20] Some of these unlicensed, unregulated “clinics” even provide cursory health services like ultrasound imaging to manipulate women.[21]

Fake women’s health centers have also infiltrated the public school system, offering supplemental abstinence-only sex education based in misinformation and stigma.[22] This puts students at a dangerous disadvantage, making them vulnerable to deception when accessing reproductive health care in the future. This kind of lapse speaks to the need for a comprehensive inventory of New Jersey’s existing sex education curriculum and funding sources, which includes federal “abstinence-only” dollars.[23] Fortunately, a review of New Jersey’s existing sex education curriculum for grades one through 12 is scheduled for 2019. Plans to re-evaluate federal contracts, update the standards, develop sample lesson plans, provide more sex education training for teachers, and incorporate an evaluation tool to ensure accountability are important steps toward getting New Jersey back on track as a strong supporter for comprehensive sex education.

But more commonly, fake women’s health centers target vulnerable women by burgeoning in underserved communities and offering their services free of charge, potentially increasing systemic inequalities.[24][25] Similar to the sex education example above, the proliferation of these health centers in New Jersey is an indicator of ongoing gaps in health care access. Most New Jersey counties have only one family planning clinic, and nearly one in four women live in a county with no abortion provider at all.[26] These gaps put those with limited finances and access to transportation at risk of being duped by fake women’s health centers. Addressing these gaps by increasing the availability and access to qualified health care providers, as well as clearly indicating where people can access these services, will have the biggest impact on the lives of New Jersey women seeking legitimate reproductive health care.

Addressing Maternal and Infant Mortality Disparities

When maternal health care needs go unmet—whether incidentally or systematically—the health and well-being of parents and children are put at serious risk. For decades, New Jersey’s Black families have been at a greater risk than anyone else.

While the overall maternal death rate in New Jersey has improved over time and is below the national rate, enormous racial disparities have persisted. Black women in New Jersey are more than four times more likely to die from pregnancy-related complications as white women.[27] Similarly, the likelihood of a New Jersey infant dying before their first birthday has recently dropped and is slightly lower than the national rate. Yet, the disparity between white and Black infant mortality in New Jersey is the worst in the country. A Black infant born in the Garden State is three times more likely to die than a white infant, regardless of their mothers’ income level or educational attainment.[28]

Research suggests that Black women are susceptible to dangerous pregnancies and birth outcomes due to “weathering,” the cumulative effects of racism on one’s health and well-being.[29] The chronic stress of discrimination in all aspects of society—from housing to employment to picking up groceries—may negatively affect the body causing it to age prematurely. These effects may “weather” African American women more acutely than other women resulting in high-risk reproductive health issues.[30]

New Jersey’s dismal Black maternal mortality rate is not breaking news to the state’s Health Department. Since 1931, it has reviewed maternal health outcomes with detailed research about the root causes of its high maternal mortality rate and possible causes of the stark racial and ethnic disparities. But, like other states, New Jersey has failed to find long-lasting solutions to close the racial gap in maternal health. With a new governor in office, interest in the issue has been renewed. Another maternal mortality review commission has been established, a proposed infant mortality review board is moving through the legislature and grants have been awarded to community-based organizations in high-risk areas to help coordinate maternal care including doula pilot programs in Newark and Trenton.

These targeted efforts are based on similar work taking place North Carolina, one of the few states that have successfully closed the racial gap in maternal health.[31] Doctors there are incentivized through Medicaid reimbursements to screen pregnant women for issues that may trigger a high-risk pregnancy. Patients that have either physical or psychological risks are connected to a “pregnancy care manager” who helps expectant mothers follow their care plan by addressing a wide range of barriers. The North Carolina Pregnancy Medical Home program provides support for everything from access to insulin to housing issues to helping offset both the physical stress of pregnancy and the physical stress in one’s life that has real consequences on one’s health.

In addition to the state-supported medical home model, over 60 North Carolina birthing hospitals have conducted several statewide quality improvement efforts including cutting down on inducing birth before a baby’s due date and improving rapid response treatment of mothers with gestational hypertension and preeclampsia—two of the most severe and dangerous health issues among African American mothers.

Studies also show that in countries with a generous parental leave policy there are tremendous effects on morbidity and mortality rates of infants and young children.[32] New Jersey is one of only four states that have implemented a paid leave policy providing workers and their families the opportunity to take time off work to bond with a new baby or adopted child or care for an elderly or very sick family member. However, very few New Jersey workers utilize the program because they are either not aware of it, or they fear negative repercussions at work, including job loss. In addition, workers struggling to balance work and family caregiving simply can’t afford the low wage replacement rate that is offered by the program.

Meanwhile, there are stark disparities among New Jersey mothers who take paid leave. Between 2012 and 2015, white women in New Jersey were 3 times more likely to take leave than Black women.[33] National research has shown that workers of color are more likely to work for firms that don’t offer family leave insurance.[34] New Jersey is poised to make major improvements to its existing Family Leave Insurance program including promotional efforts so that more workers take advantage of the program. However, the current bill may leave 750,000 workers without job protection putting their household economic security at risk.

The next step for New Jersey is to strengthen its Family Leave law and move beyond demonstration projects and pilot programs. One key component to addressing racial disparities in maternal health care is found in making the leap toward sustainable funding for medical home models in at-risk communities, higher Medicaid reimbursement rates for obstetric services in the hospital setting, and Medicaid coverage for related services including doula care and home visitation.

In fact, state legislators have recently introduced a bill to provide state Medicaid coverage for doula services. Doula care, non-clinical emotional, physical, and informational support before, during and after birth, is associated with lower caesarian section rates, fewer obstetric interventions, fewer complications, shorter labor hours, and healthier newborns. These improvements are critical for Black mothers who are disproportionately at risk for pregnancy-related complications and are routinely subjected to the inherent biases of medical staff that can have life or death consequences.[35] Doula care has been proven to reduce health disparities, improve health outcomes, and improve quality of care, especially in low-income communities.[36] Studies have shown potential cost savings, even if doula care services are partially covered.[37]

Dignity for Those Incarcerated

 Regardless of circumstance, everyone deserves to be treated with dignity. In the prison setting that includes having the right to serve a sentence free of abuse, to access appropriate health care, and to maintain parenting obligations. Key criminal justice policy reform like the expansion of drug courts and the overhaul of the bail system has helped New Jersey reduce its prison population by almost a third (28 percent) since 2000.[38] That trend has fared better for New Jersey women as the men’s prison population has declined by a smaller proportion.

Still, stark disparities persist. According to a 2016 report, New Jersey has the nation’s highest rate of Black/white disparity with African Americans being incarcerated in state prisons 12 times the rate of imprisonment of whites.[39] As a comparison, the national disparity rate is five to one.

To the state’s credit, a newly mandated racial and ethnic impact statement provides an overdue opportunity for lawmakers to address this glaring disparity by reviewing a statistical analysis of the impact of proposed criminal justice policy changes. It is a vital first step toward making informed decisions about improving public safety without exasperating existing racial disparities. Now it is time for policymakers to do the same for gender disparities in the criminal justice system.

Multiple studies show that there is a direct link between women with a history of trauma, substance use disorders, poverty, and mental health problems and their eventual contact with the criminal justice system, where these problems are often exacerbated. New Jersey’s only women’s prison serves as a sobering example.

The Edna Mahan Correctional Facility for Women, which houses about 650 inmates, is currently the subject of at least 11 lawsuits related to sex abuse allegations including a class-action suit that details a history of abuse at the prison since the early 1990s.[40] An independent review has been commissioned by the State Attorney General’s Office and a federal civil rights investigation is underway. Four staff members have been convicted, and three other correctional officers face trial.

Despite laws and procedures in place to ensure the safety of inmates, the Department of Corrections has systematically failed to protect these women. Policymakers’ response to this horrific pattern of abuse and inaction has been to propose ways of improving existing procedures. This is a missed opportunity to look beyond the deficiencies of the correctional system and instead shine a spotlight on the unmet needs of Edna Mahan’s prison population.

According to the Vera Institute for Justice, many jailed women experience mental illness and extremely high rates of victimization—including childhood sexual abuse, sexual assault, and intimate partner violence.[41] New Jersey’s correctional system has not only failed to properly treat women inmates, it has re-traumatized women through unchecked abuse of power. Even standard practices such as strip searches have the potential to retraumatize victims of sexual assault. A former inmate involved with the class action lawsuit said she came forward to help women like herself who “had to live with monsters just to come to a different place and have to live with a new set of monsters.”[42]

To improve conditions at Edna Mahan, state legislators have introduced bills that are primarily focused on codifying existing policy, including the prohibition of shackling pregnant women, limitations on the use of strip searches, and the expansion of the correctional ombudsman’s role to include sexual assault.[43] While these responses are notable, more must be done.

New Jersey’s criminal justice system is one that is primarily designed for the incarceration of men. To improve conditions in a meaningful way, reform must begin with identifying the unique needs of a prison population comprised entirely of women. An inclusive overview of Edna Mahan’s population would provide an opportunity to improve and expand access to health care that meets the needs of its inmates, including reproductive health care for individuals across the gender spectrum. This path toward meaningful reform should begin with policymakers sitting down with formerly incarcerated women and advocates who represent the interests of incarcerated women.

Expanding Health Care for Undocumented Immigrants

 Health care access is a fundamental right for everyone regardless of where they come from or how they arrived in the country. Yet, this right is routinely denied to undocumented families living in New Jersey due to financial and travel barriers to health care services.

Federal restrictions to programs that provide health care coverage, job-training, nutrition, and cash assistance vary depending on the immigration status of noncitizens. The Personal Responsibility and Work Opportunity Act/Illegal Immigration Reform and Immigrant Responsibility Act of 1996 created two categories of immigrant community members: “qualified” or “not qualified.”[44] In addition, the federal law banned legal immigrants who are permanent residents or green card holders from accessing a variety of welfare services or health care programs for a period of 5 years beginning on the date of entry into the United States.[45]

However, states do have the power to implement their own health care policies. For example, state health plans in six states and Washington D.C. cover all children, regardless of immigration status and health plans in 17 states cover all pregnant women, regardless of immigration status. New Jersey is not among these states, but there is movement to change that.[46][47]

While the Garden State has made great strides in reducing the overall uninsurance rate for children to 3.5 percent, there are still 70,000 kids who remain uninsured. Half of these children are undocumented immigrants not eligible for coverage through NJ FamilyCare, the state Medicaid program. Making the well-being of all children a priority would provide long-range health and social savings to the state. Children who are covered by Medicaid are more likely to do better in school, finish high school, attend college and graduate from college, have fewer emergency-room visits and hospitalizations, and earn more as adults.[48]

New Jersey would also benefit in the long run if undocumented immigrant adults also became eligible for health care coverage, starting with those who can become pregnant. Currently, undocumented women—including DACA recipients and women who have held lawful permanent resident status for less than five years—have no access to health care coverage including coverage for preventative reproductive health services. New Jersey should extend health coverage for all undocumented women by offering a full range of reproductive health services. Modeled after Oregon’s Reproductive Health Equity Act, this comprehensive measure would provide undocumented individuals with health care coverage for contraceptives and related services including counseling, voluntary sterilization, screenings for pregnancy, pregnancy care, birth services, sexually-transmitted infections and cancers, and abortion care.[49]

In addition to expanding Medicaid coverage, policymakers should address additional barriers to health care that undocumented families face every day. For example, immigrant rights advocates are pushing to join the 12 states and DC that already allow all residents to obtain a driver’s license, regardless of immigration status.[50] Though seemingly unrelated, expanding eligibility to a driver’s license to all qualified individuals in the state would profoundly improve the ability to access to health care. Transportation barriers created by the inability to access a driver’s license and fear of being detained at a routine traffic stop equate to real obstacles for undocumented people, missed doctor’s appointments and delays in picking up prescriptions. The outcomes have negative health implication and are especially detrimental for time-sensitive, pregnancy related care.[51] Transportation barriers are particularly harmful for those with lower incomes or those who are underinsured or uninsured.

 Special Thanks To:

 Cherry Hill Women’s Center

Planned Parenthood Action Fund of New Jersey

New Jersey Institute for Social Justice

National Immigration Law Center

Garden State Equality

Rutgers Criminal and Youth Justice Clinic

Women Who Never Give Up

National Council of Jewish Women – Essex County

American Friends Service Committee Prison Watch

New Jersey Family Planning League

Family Planning Association of New Jersey

American Civil Liberties Union of New Jersey

New Jersey Abortion Access Fund

Unitarian Universalist Faith Action New Jersey

National Institute for Reproductive Health

State Innovation Exchange

Appendix I: Reproductive Justice Definition and Resources

Reproductive Justice is both a theoretical framework and a social movement created by women of color in the Southern United States as an alternative to the mainstream reproductive rights movement. Sister Song describes Reproductive Justice as the complete physical, mental, spiritual, political, social, and economic well-being of individuals, based on the full achievement and protection of human rights.[52] The issues central to Reproductive Justice impact one’s right “to not have children using safe birth control, abortion, or abstinence; the right to have children under the conditions we choose; and the right to parent the children we have in safe and healthy environments.”[53] By centering the unique, interconnected identities that shape the lives of women within the movement, organizations using the Reproductive Justice framework present a holistic vision with which to challenge policy decisions entrenched in reproductive oppression.

By placing bodily autonomy and the right to access abortion care within the larger human rights framework, Reproductive Justice illuminates the intersections of seemingly unrelated issues like police violence, inhumane immigration policies and environmental racism.

The concept, in part, grew out of the acknowledgment that communities of color and other marginalized groups were often left out of reproductive rights advocacy work, which traditionally centers on abortion rights. This limited scope fails to account for the historical reproductive oppression of people of color engrained in the United States, including forced sterilization, medical experimentation, and family separation. By framing reproductive rights around the issues of “choice” and “privacy,” the mainstream movement for reproductive freedoms have effectively silenced the voices, experiences, and circumstances of women who historically have had to contend with racial and economic injustice. For example, shortly after Roe v. Wadewas decided in 1973, Congress quickly passed the Hyde Amendment, banning federal dollars from being used to provide abortion care. The failure of reproductive rights advocates to immediately mobilize against this policy has had a devastating and long-lasting effect on access to abortion care for poor women. Despite a 1993 modification that extended coverage in cases of rape, incest, or danger to the mother’s life, the Hyde Amendment remains a major barrier to abortion care, especially for women of color and immigrants.

For more information, we encourage you to look to the Reproductive Justice organizations led by people of color advancing policy campaigns that reflect the unique needs of their communities and the historical work of Reproductive Justice leaders.

Appendix II: Recent and Pending Legislation in New Jersey That Reflect a Reproductive Justice Framework

Endnotes

[1] In this report, low-income generally refers to those with incomes at 200 percent or less of the federal poverty guidelines which in 2018 is just over $50,000 per year for a family of four.

[2] NJ.com, Eliminated by Christie 8 Years Ago, $7.5M for Women’s Clinics is Making a Comeback, January 2017. http://www.nj.com/politics/index.ssf/2018/01/eliminated_by_christie_8_years_ago_75m_for_womens.html

[3] Last year 94 percent of those seeking care at family planning clinics had incomes at 200% or less of the federal poverty guidelines (Interview with New Jersey Family Planning League).

[4] P.L.2017, Chapter 50, An Act Establishing a Home Visitation Pilot Program in Medicaid, Approved May 1, 2017. https://www.njleg.state.nj.us/2016/Bills/AL17/50_.PDF

[5] New Jersey Department of Health, DOH Announces $4.3 million to Reduce Disparities in Birth Outcomes and Black Infant Mortality, April 2018. https://nj.gov/governor/news/news/562018/approved/20180430a_birthoutcomes.shtml

[6] AMA Journal of Ethics, “Vulnerable” Populations: Medicine, Race, and Presumptions of Identity, July 2011. https://journalofethics.ama-assn.org/article/vulnerable-populations-medicine-race-and-presumptions-identity/2011-07

[7] Guttmacher Institute, State Facts About Unintended Pregnancy: New Jersey, August 2017. https://www.guttmacher.org/fact-sheet/state-facts-about-unintended-pregnancy-new-jersey

[8] Obstetrics & Gynecology, Number of Oral Contraceptive Pill Packages Dispensed and Subsequent Unintended Pregnancies, March 2011. https://journals.lww.com/greenjournal/Fulltext/2011/03000/Number_of_Oral_Contraceptive_Pill_Packages.8.aspx

[9] California, Hawaii, Illinois, Maryland, Massachusetts, Nevada, New York, and Vermont. Colorado, Maine, Oregon and Washington State laws go into effect January 2019. Guttmacher Institute, Insurance Coverage of Contraceptives, August 2018. https://www.guttmacher.org/state-policy/explore/insurance-coverage-contraceptives

[10] New Jersey Department of Human Services, Division of Medical Assistance & Health Services, NJ FamilyCare Coverage of Long-Acting Reversible Contraceptive Devices, Newsletter Volume 28 No. 18, October 2018. https://www.njmmis.com/documentDownload.aspx?fileType=RecentNewsLetters

[11] Emergency contraception is not a medical abortion. Emergency contraception works primarily by delaying or inhibiting ovulation. Emergency contraception will not work if a woman is already pregnant. For more information about the difference between these two medications, see this fact sheet from the American Society for Emergency Contraception http://www.cecinfo.org/custom-content/uploads/2013/03/MedAbort_FactSheet_2013_ASEC.pdf

[12] Guttmacher Institute, Last Five Years Account for More Than One-quarter of All Abortion Restrictions Enacted Since Roe, January 2016. https://www.guttmacher.org/article/2016/01/last-five-years-account-more-one-quarter-all-abortion-restrictions-enacted-roe

[13] See Planned Parenthood of Cent. New Jersey v. Farmer, 165 N.J. 609, 629, 762 A.2d 620, 631 (2000) (“The language of that paragraph is ‘more expansive … than that of the United States Constitution….,’ it incorporates within its terms the right of privacy and its concomitant rights, including a woman’s right to make certain fundamental choices. Thus, in New Jersey, we have a long-standing history that begins even prior to Roe v. Wade, demonstrating a commitment to the protection of individual rights under the State Constitution.”) (citations omitted); id. at 632-33 (“Our inquiry begins with an examination of the nature of the affected right. We have earlier discussed the importance of a woman’s right to control her body and her future, a right we as a society consider fundamental to individual liberty. Although we will not repeat that discussion here, we are keenly aware of the principle of individual autonomy that lies at the heart of a woman’s right to make reproductive decisions and of the strength of that principle as embodied in our own Constitution. We have not hesitated, in an appropriate case, to read the broad language of Article I, paragraph 1, to provide greater rights than its federal counterpart. Our precedents make clear that the classification created by the statute is deserving of the most exacting scrutiny.”) (citations omitted).

[14] Women’s Health Issues, At What Cost? Payment for Abortion Care by U.S. Women, May-June 2013. https://www.whijournal.com/article/S1049-3867(13)00022-4/fulltext

[15] New York Times, ’70 Abortion Law: New York Said Yes, Stunning the Nation,April 2000. https://www.nytimes.com/2000/04/09/nyregion/70-abortion-law-new-york-said-yes-stunning-the-nation.html

[16] Guttmacher Institute, Characteristics of U.S. Abortion Patients in 2014 and Changes Since 2008, 2016. https://www.guttmacher.org/report/characteristics-us-abortion-patients-2014

[17] National Abortion Federation, 2017 Violence and Disruption Statistics, 2017. https://5aa1b2xfmfh2e2mk03kk8rsx-wpengine.netdna-ssl.com/wp-content/uploads/2017-NAF-Violence-and-Disruption-Statistics.pdf

[18] Guttmacher Institute, Assessing the Gap Between the Cost of Care for Title X Family Planning Providers and Reimbursement from Medicaid and Private Insurance, January 2016. https://www.guttmacher.org/sites/default/files/pubs/Title-X-reimbursement-gaps.pdf

[19] NARAL Pro-Choice America, The Truth about Crisis Pregnancy Centers, January 2017. https://www.prochoiceamerica.org/wp-content/uploads/2016/12/6.-The-Truth-About-Crisis-Pregnancy-Centers.pdf

[20] Ibid 19

[21] Ibid 19

[22] Blue Jersey, Crisis Pregnancy Centers Are in Our Schools, Teaching Our Children, April 2018. http://www.bluejersey.com/2018/04/crisis-pregnancy-centers-are-in-our-schools-teaching-our-children/

[23] Sexuality Information and Education Council of the United States, State Profiles Fiscal Year 2017: New Jersey, July 2018. https://siecus.org/wp-content/uploads/2018/07/NEW-JERSEY-FY17-FINAL-New.pdf

[24] Although this paper seeks to include all those who can become pregnant, including women, transgender men, and gender non-conforming people, fake women’s health centers only target those they perceive to experience pregnancy, namely cisgender women.

[25] AMA Journal of Ethics, Why Crisis Pregnancy Centers Are Legal but Unethical, March 2018. https://journalofethics.ama-assn.org/article/why-crisis-pregnancy-centers-are-legal-unethical/2018-03

[26] Guttmacher Institute, State Facts About Abortion: New Jersey, May 2018. https://www.guttmacher.org/fact-sheet/state-facts-about-abortion-new-jersey#7

[27] NJ Spotlight, Black Mamas Highlight Racial Maternal Health Disparities, April 2018. http://www.njspotlight.com/stories/18/04/24/black-mamas-highlight-racial-maternal-health-disparities/

[28] NJ Spotlight, Racial Disparity in Infant Mortality Remains Persistent Public Health Challenge, June 2017. http://www.njspotlight.com/stories/17/06/05/racial-disparity-in-infant-mortality-remains-persistent-public-health-challenge/

[29] Human Nature, Do US Black Women Experience Stress-Related Accelerated Biological Aging? A Novel Theory and First Population-Based Test of Black-White Differences in Telomere Length, March 2010. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2861506/

[30] Journal of Women’s Health, The Impact of Racism on the Sexual and Reproductive Health of African American Women, July 2016. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4939479/

[31] Vox.com, Black Moms Die in Childbirth 3 Times as Often as White Moms. Except in North Carolina, July 2017. https://www.vox.com/health-care/2017/7/3/15886892/black-white-moms-die-childbirth-north-carolina-less

[32] Texas A&M University, Why American Infant Mortality Rates are So High, October 2016. https://www.sciencedaily.com/releases/2016/10/161013103132.htm

[33] NJ Department of Health and The Center for Disease Control and Prevention, Pregnancy Risk Assessment Monitoring System (NJ PRAMS), Employment, Workplace Leave and Return to Work Among New Jersey Mothers, March 2018. https://www.nj.gov/health/fhs/maternalchild/documents/workforce_mar2018.pdf

[34] Ibid 33

[35] Choices in Childbirth, Overdue: Medicaid and Private Insurance Coverage of Doula Care to Strengthen Maternal and Infant Health, January 2016.https://choicesinchildbirth.org/wp-content/uploads/2015/12/DoulaBrief_FINAL_1.4.16.pdf

[36] Ibid 35

[37] Ibid 35

[38] Bureau of Justice Statistics, 2000, 2015 in The Sentencing Project, Color of Justice: Racial and Ethnic Disparity in State Prisons, 2016. http://www.sentencingproject.org/publications/color-of-justice-racial-and-ethnic-disparity-in-state-prisons/

[39] The Sentencing Project, Color of Justice: Racial and Ethnic Disparity in State Prisons, 2016. http://www.sentencingproject.org/publications/color-of-justice-racial-and-ethnic-disparity-in-state-prisons/

[40] NJ.com, Sex Abuse Scandal at N.J. Women’s Prison Keeps Getting Worse, July 2018. https://www.nj.com/politics/index.ssf/2018/07/sex_abuse_scandal_at_nj_womens_has_sparked_at_leas.html

[40] Vera Institute of Justice, Overlooked: Women and Jails in an Era of Reform, August 2016. https://www.vera.org/publications/overlooked-women-and-jails-report

[41] NJ.com, Locked Up, Fighting Back: More Than a Dozen Female Inmates Accused an Officer of Abuse, January 2017. https://www.nj.com/news/index.ssf/page/locked_up.html

[42] NJ.com, New Crackdown on N.J.’s Women’s Prison Pushed Amid Sex Abuse Claims, May 2018. https://www.nj.com/politics/index.ssf/2018/05/lawmakers_push_crackdown_on_nj_womens_prison_amid.html

[43] National Immigration Law Center, Overview of Immigrant Eligibility for Federal Programs,December 2015. https://www.nilc.org/issues/economic-support/overview-immeligfedprograms/

[44] U.S. Department of Health & Human Services, Office of the Assistant Secretary for Planning and Evaluation, Summary of Immigrant Eligibility Restrictions Under Current Law, February 2009. https://aspe.hhs.gov/basic-report/summary-immigrant-eligibility-restrictions-under-current-law#sec

[45] States with health plan that cover all children include Washington, Oregon, California, Illinois, New York and Massachusetts.

[46] National Immigration Law Center, Health Coverage Maps, January 2018. https://www.nilc.org/issues/health-care/healthcoveragemaps/

[47] The Center on Budget and Policy Priorities, Medicaid Helps Schools Help Children, April 2017. https://www.cbpp.org/research/health/medicaid-helps-schools-help-children

[48] Reproductive Health Equity Act (OR HB 3391), 2017. https://olis.leg.state.or.us/liz/2017R1/Downloads/MeasureDocument/HB3391

[49] New Jersey Policy Perspective, Let’s Drive New Jersey: Expanding Access to Driver’s Licenses is a Common-Sense Step in the Right Direction, January 2018. https://www.njpp.org/reports/lets-drive-new-jersey-expanding-access-to-drivers-licenses-is-a-common-sense-step-in-the-right-direction

[50] The Journal of Rural Health, Access to Transportation and Health Care Utilization in a Rural Region, Winter 2005. https://www.ncbi.nlm.nih.gov/pubmed/15667007

[51] SisterSong Women of Color Reproductive Justice Collective and the Pro-Choice Public Education Project, Reproductive Justice Briefing Book: A Primer on Reproductive Justice & Social Change, 2007. https://www.law.berkeley.edu/php-programs/courses/fileDL.php?fID=4051

[52] Ross, Roberts, Derkas, Peoples, Bridgewater Toure, Radical Reproductive Justice: Foundations, Theory, Practice, Critique, November 2017.

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