A20

A Supplement to "An Act making appropriations for the support of the State Government and the several public purposes for the fiscal year ending June 30, 2011 and regulating the disbursement thereof.

Be It Enacted by the Senate and the General Assembly of the State of New Jersey:

1. In addition to the amounts appropriated under P.L.2010, c. , the annual appropriations act for State fiscal year 2011, there is appropriated out of the funds as specified the following sums for the purposes specified:

46 DEPARTMENT OF HEALTH AND SENIOR SERVICES *20 Physical and Mental Health* *26 Senior Services* GRANTS-IN-AID
24-4275 Pharmaceutical Assistance to the Aged and Disabled ……		$55,540,000
(From General Fund ............................. $55,540,000)
Total Grants-in-Aid Appropriation,
Senior Services ..........................................................		$55,540,000
(From General Fund ............................. $55,540,000)
*Grants-in-Aid*:
24 Pharmaceutical Assistance to the Aged and Disabled – Claims ................	($48,537,000)
24 Senior Gold Prescription Discount Program ………………………………..	(7,003,000)

Notwithstanding the provisions of P.L.2010, c. , the annual appropriations act for fiscal year 2011, section 3 of P.L.1975, c.194 (C.30:4D-22), and any other law or regulation to the contrary, of the amount appropriated for fiscal year 2011 in the Pharmaceutical Assistance to the Aged and Disabled - Claims program shall be conditioned upon the following provision: the copayment in the Pharmaceutical Assistance to the Aged and Disabled program shall be $5.00 for generic drugs and $7.00 for brand name drugs.

Notwithstanding the provisions of P.L.2010, c. , the annual appropriations act for fiscal year 2011, and any other law or regulation to the contrary, the amounts appropriated for the Pharmaceutical Assistance to the Aged and Disabled program and the Senior Gold Prescription Discount Program shall be conditioned upon the following provision: there shall be no annual deductible imposed on recipients during this fiscal year.

82 DEPARTMENT OF THE TREASURY

70 Government Direction, Management, and Control

75 State Subsidies and Financial Aid

GRANTS-IN-AID

33-2078 Homestead Exemptions

33 Homestead Property Tax Credits (PTRF)

Notwithstanding the provisions of P.L.2010, c. , the annual appropriations act for fiscal year 2011, and any other law or regulation to the contrary, the amount hereinabove appropriated for Homestead Property Tax Credits is appropriated to reimburse municipalities for the quarterly Homestead Property Tax Credits that shall be provided to the following eligible homeowners beginning with property tax bills issued in May of 2011, subject to the enactment of legislation and subject to the following conditions: Residents who are not 65 years of age or older at the close of the 2009 tax year, or residents who are not allowed to claim a personal deduction as a blind or disabled taxpayer pursuant to subsection b. of N.J.S.54A:3-1, with gross income in excess of $50,000 but not in excess of $75,000 for tax year 2009 are eligible for quarterly credits in the amount of one-quarter of 13.34% of the first $10,000 of property taxes paid, and such residents with gross income not in excess of $50,000 for tax year 2009 are eligible for quarterly credits in the amount of one-quarter of 20% of the first $10,000 of property taxes paid. Such residents with gross income in excess of $75,000 are excluded from the program. The credits will be calculated based on the 2006 property tax amounts assessed or as would have been assessed on the October 1, 2009 principal residence of eligible applicants. The annualized sum of the quarterly credits provided to an eligible applicant in a given State fiscal year shall not exceed the Homestead Rebate amount paid for tax year 2006, absent a change in an applicant’s filing characteristics. If the amount hereinabove appropriated for Homestead Property Tax Credits is not sufficient, there is appropriated from the Property Tax Relief Fund such additional sums as may be required for State reimbursement to municipalities for such Homestead Property Tax Credits, subject to the approval of the Director of the Division of Budget and Accounting.

33-2078 Homestead Exemptions …………………………….……		$563,200,000
(From Property Tax Relief Fund ……….. $563,200,000 )
Total Grants-in-Aid Appropriation,
State Subsidies and Financial Aid ………………………		$563,200,000
*Grants-in-Aid*:
33 Homestead Property Tax Rebates for Homeowners (PTRF) ……………….	($492,000,000)
33 Homestead Property Tax Rebates for Tenants (PTRF) …………………….	(71,200,000)

The amount hereinabove appropriated for the Homestead Property Tax Rebates for Homeowners program, shall be used to pay homestead rebates directly to residents, and not as credits against local property tax accounts, pursuant to the provisions of section 3 of P.L.1990, c.61 (C.54:4-8.59) as amended by P.L.2004, c.40, and by P.L.2007, c.62, except that, notwithstanding the provisions of that law to the contrary, homestead rebates shall only be paid to residents who are 65 years of age or older at the close of the 2009 tax year, or residents who are allowed to claim for the 2009 tax year a personal deduction as a blind or disabled taxpayer pursuant to subsection b. of N.J.S.54A:3-1, provided that such residents with gross income in excess of $150,000 for tax year 2009 are excluded from the program, and provided that such residents with gross income in excess of $100,000 but not in excess of $150,000 for tax year 2009 are eligible for rebates in the amount of 10% of the first $10,000 of property taxes paid. In calculating the rebates, the Division of Taxation will utilize 2006 property tax amounts assessed or as would have been assessed on the October 1, 2009 principal residence of eligible applicants. A rebate paid to an eligible applicant may not exceed the amount paid for tax year 2006, absent a change in an applicant’s filing characteristics. If the amount hereinabove appropriated for the Homestead Property Tax Rebates for Homeowners program is not sufficient, there is appropriated from the Property Tax Relief Fund such additional sums as may be required for payment of such rebates, subject to the approval of the Director of the Division of Budget and Accounting.

The amount hereinabove appropriated for the Homestead Property Tax Rebates for Tenants program shall be used to pay homestead rebates pursuant to the provisions of section 4 of P.L.1990, c.61 (C.54:4-8.60), except that, notwithstanding the provisions of that law to the contrary, residents who are not 65 years of age or older at the close of the 2009 tax year, or residents who are not allowed to claim a personal deduction as a blind or disabled taxpayer pursuant to subsection b. of N.J.S.54A:3-1, are excluded from the program; residents who are 65 years of age or older at the close of the tax year, or residents who are allowed to claim a personal deduction as a blind or disabled taxpayer pursuant to subsection b. of N.J.S.54A:3-1, with gross income of $70,000 or less are eligible for minimum rebates of $160 and maximum rebates of $860 for tax year 2009, and residents who are 65 years of age or older at the close of the tax year, or residents who are allowed to claim a personal deduction as a blind or disabled taxpayer pursuant to subsection b. of N.J.S.54A:3-1 with gross income in excess of $70,000 but not in excess of $100,000 are eligible for rebates of $160 for tax year 2009. If the amount hereinabove appropriated for the Homestead Property Tax Rebates for Tenants program is not sufficient, there is appropriated from the Property Tax Relief Fund such additional sums as may be required for payment of such rebates, subject to the approval of the Director of the Division of Budget and Accounting.

From the amount hereinabove appropriated for Homestead Property Tax Credits, Homestead Property Tax Rebates for Homeowners program and the Homestead Property Tax Rebates for Tenants program, there are appropriated such sums as may be necessary for the administration of the program, subject to the approval of the Director of the Division of Budget and Accounting.

The Department of the Treasury may transfer funds as necessary between the Homestead Property Tax Credits account, the Homestead Property Tax Rebates for Homeowners account, and the Homestead Property Tax Rebates for Tenants account, subject to the approval of the Director of the Division of Budget and Accounting and the Joint Budget Oversight Committee.

In addition to the amount hereinabove appropriated for Homestead Property Tax Credits, Homestead Property Tax Rebates for Homeowners program and the Homestead Property Tax Rebates for Tenants program, there are appropriated from the Property Tax Relief Fund such additional sums as may be required for payments of property tax credits to homeowners and tenants pursuant to the “Property Tax Deduction Act,” P.L.1996, c.60 (C.54A:3A-15 et seq.).

Total Appropriation, General Fund ………………..……	$55,540,000
Total Appropriation, Property Tax Relief Fund ………..	$563,200,000
Total Appropriation, All State Funds ...................................	$618,740,000

2. This act shall take effect July 1, 2010, but shall remain inoperative until the date of enactment of P.L.2010, c. (pending before the Legislature as Assembly Bill No. 10 or Senate Bill No. 10 of 2010).

STATEMENT

This bill makes supplemental appropriations of $618.74 million for increased State support during State Fiscal Year 2011 for the Pharmaceutical Assistance to the Aged and Disabled Program, the Senior Gold Prescription Discount Program and the Homestead Property Tax Rebate/Credit program.

Governor Christie’s proposed Fiscal Year 2011 budget, while purporting to be based on the principle of “shared responsibility,” places much too high a burden on the State’s senior citizens and residents with disabilities.

This legislation, along with its companion measure (Assembly Bill No. 10 of 2010), would ease this burden on senior citizens and residents with disabilities by asking the State’s 16,000 highest earners to temporarily pay a higher income tax on income over $1 million. This one year increased rate would equate to just 1.7 cents for each dollar of income over $1 million.

The Governor’s proposed budget would eliminate vital homestead property tax rebates for over 500,000 senior citizens and disabled homeowners and over 100,000 senior citizen and disabled tenants during calendar year 2010 and provide just 25% of rebates for the remainder of Fiscal Year 2011.

With New Jersey’s dubious distinction of having the highest property taxes in the nation - a situation that will be exacerbated by substantial reductions in school aid and municipal aid in the proposed budget - these rebates are the financial bridge that senior citizens need to remain in their lifelong homes.

This legislation, together with the funding provided in the proposed budget, would give senior citizens and residents with disabilities the full homestead property tax rebate to which they are entitled in statute.

For nearly 400,000 senior citizens and disabled homeowners with incomes below $50,000, an average rebate of nearly $1,300 would be received; for over 50,000 with income between $50,000 and $75,000, an average rebate of over $1,300 would be received; for nearly 23,000 with income between $75,000 and $100,000, an average rebate of nearly $1,300 would be received; and for over 35,000 with incomes between $100,000 and $150,000, an average rebate of $750 would be received.

For over 100,000 senior citizen and disabled tenants with incomes below $50,000, an average rebate of over $700 would be received. Those with incomes between $50,000 and $100,000 would receive an average rebate of $150-$200.

Additionally, this legislation will reverse the devastating changes to the Pharmaceutical Assistance to the Aged and Disabled (PAAD) and Senior Gold Prescription Discount programs proposed by Governor Christie for Fiscal Year 2011. The Governor’s budget would increase the health care cost burden on the State’s least financially well-off senior citizens and residents with disabilities by requiring them to pay a deductible before being eligible for low-cost medications. The proposed budget also would increase the co-payment these residents must pay for brand name drugs from $7 per prescription to $15 per prescription.

Approximately 100,000 senior citizens and residents with disabilities that qualify for PAAD with incomes below $24,432 (single) and $29,956 (married) would be subject to a $310 deductible. An additional 5,000 residents would pay a $63 deductible. The 23,000 residents qualifying for the Senior Gold Prescription Discount program with incomes between $24,432 and $34,432 (single) and between $29,956 and $39,956 (married) also would pay the $310 deductible ($620 for a married couple).

Under the Governor’s proposal, beginning January 1, 2011 PAAD and Senior Gold participants will not be able to receive their medications until they meet the full cost of the new deductible. The average cost for one prescription for these residents is $119 - the amount most will have to have in hand in order to get their first prescription in January. For those with multiple prescriptions, the full $310 will have to be paid on their first trip to the pharmacy in January. This not only presents a severe hardship for the patients, but will be problematic for pharmacies which would have to withhold medications from those who cannot pay or pay for the drugs themselves.

In addition, the over 100,000 senior citizens and residents with disabilities who would pay the newly imposed deductible would also pay a 114.3% increase in the co-payment for brand name drugs.

According to the Division of Senior Benefits and Utilization Management in the New Jersey Department of Health and Senior Services, nearly 40% of all PAAD prescriptions are for brand name drugs. There are many drugs for which there are no generic equivalents and many patients for whom the brand name drug is medically necessary even when a generic equivalent exists. For patients requiring brand name drugs there is no alternative but to pay the increased cost or forego the medications.

There is great concern that the added burden of these costs will lead to senior citizens and residents with disabilities rationing drugs or not taking them at all. This eventuality would lead to even higher health care costs across the health care system, including Medicaid and Medicare. Since the vast majority of senior citizens and residents with disabilities receive health care services through government programs, the “savings” from these PAAD and Senior Gold changes will likely result in much higher costs for other taxpayer-funded health care programs.

This legislation will eliminate the Governor’s proposed co-pay increase to PAAD recipients as well as the proposed imposition of a new deductible on PAAD and Senior Gold recipients. It is the sponsor’s belief that eliminating the proposed deductible and keeping the brand name drug co-payment at the current level is not only the fair and humane way to treat this State’s senior citizens and residents with disabilities, but that, in the long-run, it will save the State even more by avoiding more costly health care issues.