Testimony presented to the

Senate Budget and Appropriations Committee

by

Acting Commissioner Jennifer Velez

New Jersey Department of Human Services

April 25, 2007

Good morning, Chairman Kenny, and members of the committee.

Thank you for the opportunity to be here today to talk about the Governor's Proposed Budget for the Department of Human Services for State Fiscal Year 2008.

The past year at the Department has been momentous, and there have been many changes – the most significant of which has, of course, been the carve out of the divisions that now comprise the Department of Children and Families.

In the three months since the Governor nominated me to be Commissioner, I believe both management and staff have grown increasingly confident in the Department's direction and stability. I am very optimistic about the management team I have in place, many of whom are with me here today, and I have confidence in the Department's ability to deal with the challenges ahead.

One of those challenges came to light just last week in a report by the N.J. State Commission of Investigation on the state's Charity Care program. As the SCI report notes, the statute that governs this critical program does not clearly delineate responsibility for investigating fraud, waste or abuse. I agree with Dr. Jacobs' comments this past Monday that we look forward to working with you, together with the Department of Health and Senior Services, to clarify this responsibility and ensure that fraudulent practices are eliminated.

Turning back to our budget, we are looking at another tough budget year and one that required many difficult decisions and choices. Governor Corzine has proposed a $4.9 billion budget for the Department of Human Services that shows his understanding of our role as New Jersey 's social service agency and his commitment to the almost 1.5 million people we serve every day.

Although our budget shows only modest growth over last year's total appropriation, specific funding allocations reflect careful decision making and an appreciation for some of our most critical needs.

This budget, for example, allocates $20 million in new funding to our Division of Mental Health Services, which as you know, is deeply engrossed in overseeing historic changes in the way we manage and deliver services to people with mental illness. We have been guided in this effort by the wisdom and strategic plan offered by Governor Codey's Mental Health Task Force and the leadership of Assistant Commissioner Kevin Martone . This new funding will allow us to continue to build the infrastructure of supports and services we need to meet our twin goals of strengthening New Jersey 's community mental health system and stabilizing our state psychiatric hospitals.

In a similar vein, the Governor's budget includes $10.1 million in new funding for the Division of Developmental Disabilities, which is now under the direction of our new Assistant Commissioner Ken Ritchey, who joins us from Ohio with over 30 years of experience in the field of developmental disabilities.

This funding will allow us to begin to move new people off our waiting list over the next four years, increase the number of people in the community who will be able to benefit from Real Life Choices, allow others to receive family support services and help us continue day programs for young people aging out of the educational system.

Our responsibilities to individuals served by both of these divisions are underscored by the mandates of the U. S. Supreme Court's Olmstead decision, which affirmed an individual's right to live outside an institution when he or she is deemed able and is willing to do so – as well as the current litigation by New Jersey Protection and Advocacy . I can report that we are on target to meet the May 2 nd statutory deadline for reporting back to the Legislature and the Governor on our plan for responding to Olmstead, as it pertains to the Division of Developmental Disabilities. We look forward to engaging in a continuing dialogue about this important plan with you – and with our advocates - as the discussions and the plan continue to evolve.

The Governor's budget also includes $5 million to provide more services and support programs for people with autism. This funding truly reflects Governor Corzine's commitment to people with developmental disabilities, and we appreciate the leadership role he has taken.

Other new funding in the budget includes $3.5 million for the Personal Assistance Services Program, known as PASP, which is administered by the Division of Disability Services. This is the first new appropriation for this program in six years, and it will allow us to completely eliminate its waiting list of people with disabilities who want assistance with the tasks of daily living that literally determine their ability to leave the house to go to work, attend school or get involved in the community.

The proposed budget also provides a long overdue increase of $5 million in the Medicaid rates paid to pediatric providers. Because of the 50 percent match we receive from the federal government, and the effective date of January 1, 2008, this will annualize to $20 million.

This good news is tempered by our concern over the ongoing debate in Washington over the future of SCHIP funding, which helps to support our children's health insurance program. Although it has not been resolved, the issue continues to move forward and I want to assure you that we are involved in the debate because we want to be sure New Jersey receives the federal funding we need in order to continue our program without interruption. Governor Corzine has played a pivotal role in helping to shape the SCHIP conversation in Congress, and Deputy Commissioner Ann Kohler is recognized nationally for her knowledge and expertise in this area.

Although somewhat different – another concern right now is the federal legislation that reauthorizes the Temporary Assistance to Needy Families (TANF) program, which is administered by the Division of Family Development. This reauthorization includes new requirements that could prove very costly to New Jersey . We look forward to working with you to help address this challenge and forestall the potential loss of significant federal funding.

The federal reauthorization of TANF requires us to have a significantly higher percentage of TANF families participating in work activities by October 2007 or risk losing up to five percent of our TANF block grant funding, which for New Jersey totals approximately $20 million.

To help us reach that goal, we are looking to the legislature for help with two urgently-needed legislative reforms in our WorkFirst New Jersey program. One of these would increase the earned income disregard. This would benefit the program by providing TANF recipients with a smoother and more successful transition from welfare to work. The other reform would streamline the sanctions process. Both would increase the work participation rates. These changes require legislative action by the end of the fiscal year, and we look forward to working with you so New Jersey can meet its federal mandate. I want to add that we are continuing to work closely with the Department of Labor and Workforce Development on this issue and many initiatives are well underway.

Before I leave the Division of Family Development, which administers programs for people facing economic difficulties, it seems appropriate to note that the Governor's proposed budget illustrates his commitment to fighting poverty, which we welcome because the challenges of poverty are a daily reality for so many of our clients.

In line with this commitment, the Division of Family Development's budget includes an important child care reform. It is a first step toward creating a more equitable child care system throughout the state because it will reduce the financial burden that the cost of child care imposes on New Jersey 's lowest income families. This reform is compatible with the Governor's decisions to increase the Earned Income Tax Credit and increase funding for Hunger Relief, and it is good news for all of New Jersey 's lowest-income and most vulnerable families with children, regardless of where they live.

I would like to turn next to the Division of Addiction Services, which has weathered a very difficult year that recently culminated in the release of two reports from the Office of the Inspector General. While the reports' conclusions were very critical, they have produced many positive results. Most particularly, we have gained the progressive leadership of Raquel Jeffers , the Division's new director, who is passionately dedicated to reform and to the concepts of transparency, accountability and quality in all that DAS does.

As the state's sole federally-designated authority on substance abuse, DAS also is sensitive to new scientific discoveries and public health trends around the issue of addiction. As such, DAS is refocusing its efforts to make sure this understanding is incorporated into all of its prevention, treatment and recovery efforts, and that the system is oriented toward helping individuals recover from their addictions.

I'd be remiss if I didn't briefly mention the Division of the Deaf and Hard of Hearing, which provides vital information and referral services and is an important resource for the almost 800,000 people in New Jersey who are deaf or hard of hearing. I also want to mention the Commission for the Blind and Visually Impaired (CBVI), which serves more than 10,000 New Jersey residents who are blind or visually impaired. Although these two divisions are small, they provide valuable services to important segments of the disability community and encounter many of the same issues as our larger divisions.

Today, as the new Department of Human Services, we are better able to marshal our energies and resources to focus on the programs that serve all these individuals and that have experienced some underinvestment in past years.

In closing, I would like to once again thank you for your support of the people we serve and assure you that I look forward to working with you, as well as our stakeholders, to ensure that state government is making a positive difference in the lives of those we all serve. I would now be happy to answer your questions.