Testimony before the Senate Budget and Appropriations Committee
New Jersey Department of Human Services
Commissioner Dr. Stephen Cha

Chair Sarlo, Vice Chair Greenstein, and members of the Committee, thank you for the opportunity to appear before you today to discuss the proposed Fiscal Year 2027 budget for the New Jersey Department of Human Services.

I am Dr. Stephen Cha, Commissioner of Human Services.

I am here today with members of the Human Services team...

Deputy Commissioner for Aging and Disability Services Kaylee McGuire.

Deputy Commissioner for Health Services Valerie Mielke.

Deputy Commissioner for Social Services Michael J. Wilson.

Division of Family Development Assistant Commissioner Natasha Johnson.

Division of Medical Assistance and Health Services Assistant Commissioner Greg Woods, who oversees NJ FamilyCare.

And Chief Financial Officer David Drescher.

I appreciate the Committee’s continued partnership and your shared commitment to the people of New Jersey.

I’ve been Commissioner now for a bit more than three months, and I stepped into this role with years of experience in public service, including work within large and complex health and human services systems.

I also offer the perspective of a primary care physician who spent years serving patients in a homeless shelter.

For 13 years, every Tuesday evening, I witnessed firsthand how vital Medicaid and related programs are to people’s lives.

And that’s what I’ve seen so far at Human Services.

We’re the largest department in the State, and we support 2.1 million people.

That's one out of every five New Jerseyans. 

One in three kids.

We are a department that serves real people through policies and programs that make a meaningful difference in their lives.

Our work provides true lifelines, whether through 9-8-8, 844-ReachNJ, StopOverdoses.nj.gov, or other behavioral health efforts.

We help families access food through SNAP, promote independence through programs for older adults and people with disabilities, and connect individuals to health care through NJ FamilyCare.

But what I love about this department is more than the programs. 

More than the policies we write. 

Every day the people in this department impact real human lives. 

This is, at its core, Human Services.    

I wish everyone could see what I’ve seen over the past few months as I have traveled this state. 

I see the heart of the people in this department. 

And I’m honored to be working with people who do so much for the people of this state, and want to acknowledge former Commissioner Sarah Adelman, who built most of the team that sits with me today.

As a physician, I sought to lead this department because I have seen how, across all of these programs, the work quite literally saves lives.

That is, and will always be, our keystone.

To that end, the Governor’s budget reflects a clear and consistent set of priorities: lowering costs for families, investing in children, strengthening accountability in government, and protecting essential services.

For Human Services, those priorities directly shape our core mission.

But this year’s budget comes at a moment of significant uncertainty due to last year’s legislation known as HR1 and its sweeping federal changes affecting Medicaid and the Supplemental Nutrition Assistance Program, or SNAP.

These changes are not theoretical.

Federal agencies have set deadlines, rolled out requirements, and will impose real consequences on families.

Federal policy changes will reduce funding, narrow eligibility, and dramatically increase administrative responsibilities for the State, counties, providers, and our partners.

These changes will affect tens of thousands of families, creating new barriers to health care, nutrition assistance, and critical services.

In your folders, you have a new fact sheet on some of the key direct impacts of H.R. 1 on New Jersey.

For Medicaid, these latest estimates based on the Urban Institute project are that more than 300,000 New Jerseyans could lose NJ FamilyCare due to the new federal burdens. 

If State and county systems work perfectly, models estimate the cut could be 165,000 or lower.

Along with these losses, the State could lose billions more in federal funding for hospitals, providers, and the broader health system. 

These provider cuts start in SFY28 and ramp up to as much as $2.6 billion a year in later years.

New Jersey gets hit hard. 

We have expanded Medicaid, and we also rely on these federal provider revenues that are getting cut. 

Not all states do both, and so we are in the top tier of states impacted.

These cuts alone mean we could lose $6 billion in lost federal revenue to New Jerseyans’ health care every year, once fully implemented. 

And there’s more.

Tens of thousands of SNAP participants are facing new hurdles just to maintain assistance.

Many residents who remain eligible for assistance could still lose coverage or food support because complex paperwork or missed deadlines prevent them from completing required steps.

A missed notice or misunderstood requirement could interrupt access to care or food, potentially as often as every six months under new eligibility red tape.

I want to be clear about the timing of these federal changes and how they will work.

On October 1, eligibility ends for certain documented immigrant populations under NJ FamilyCare.

The bigger eligibility hit starts on January 1.

About 30 percent of Medicaid beneficiaries --- adults ages 19 through 64 who gained coverage through the Affordable Care Act --- face new work or activity requirements, along with more frequent eligibility checks.

Taken together these changes will create more paperwork, more deadlines, and more opportunities for eligible residents to lose access.

Our responsibility for this year therefore remains clear and urgent: no eligible resident should lose coverage or access to food because of administrative hurdles.

We are, in many ways, sailing full speed toward a hurricane…and we need to turn.

Congress could choose to repeal these cuts.

And I’d join anyone to advocate for such a repeal. 

But we can’t count on Congress to save us.

If we wait too long or do not move boldly, our only choices will be to cut benefits, cut people, and cut reimbursements.

The Governor’s budget reflects that responsibility through a series of strategic investments.

First, the budget absorbs significant federal cost shifts required to maintain current services.

It includes $34.6 million to offset a reduction in federal Medicaid funding for emergency services.

Emergency rooms will continue to provide care as State and federal law requires, but New Jersey taxpayers must now cover a larger share of those costs.

Second, the budget invests in systems and partnerships to prevent unnecessary coverage losses.

It dedicates more than $10 million to strengthen coordination among State agencies, counties, and vendors, and to modernize eligibility and enrollment systems in preparation for new work requirements and more frequent eligibility checks.

Again our goal is clear – to make it as easy as possible for residents to enroll and re-enroll in NJ FamilyCare.

Third, the budget addresses major changes to SNAP administration.

More than 800,000 New Jersey residents rely on SNAP to access food.

 

As a result of H.R. 1, New Jersey is expected to see reductions in SNAP benefits and federal funds to operate the program in the coming years. 

 

Between 2025 and 2034, estimates suggest these provisions could reduce SNAP participation in New Jersey by as many as 47,000 people in any given month.

 

In addition, many SNAP households will see a reduction in the amount of assistance they receive.  

This could amount to $150 million this State fiscal year, with an economic impact of $240 million to New Jersey’s economy.

Meanwhile, the federal government and counties currently split administrative costs evenly.

Beginning in 2027, the federal government will reduce its share to 25 percent, which will leave counties responsible for 75 percent.

This shift would place significant financial pressure on counties and could drive property taxes or reduce service capacity.

To address this risk, Governor Sherrill’s budget includes $71 million to support county social service agencies, maintain operations, and ensure staff process applications efficiently, preventing delays in access for families.

I met with county leaders the morning after the budget address to underscore this initial investment in our partnership and emphasize how essential it will be to work closely together.

They were my first outreach.

That is how importantly I view that partnership.

And just a note about SNAP – last week Governor Sherrill and I called on Congress and the Trump Administration to either eliminate or delay harmful SNAP cost shift provisions tied to the USDA’s fundamentally flawed Payment Error Rate.

If these changes are not at least delayed until the 2030 federal fiscal year, the cost burden could jeopardize the state’s progress in combating food insecurity and create unnecessary barriers for residents accessing food assistance.

While we urge the elimination of cost shift provisions entirely, we recommend at minimum postponing the implementation of the SNAP cost shift to allow sufficient time to address the many concerns and inconsistencies in its implementation.

A copy of that letter is also in the folders before you today.

So to be clear - the budget investments I just mentioned do not expand programs.

They protect them, safeguarding health coverage, food assistance, and essential services while preventing families from losing benefits due to administrative complexity.

Amid these changes, I also want to emphasize the importance of program integrity as we move forward.

With significant cuts on the horizon, we cannot afford to lose a single dollar to misuse or inefficiency.

Program integrity does not mean denying coverage to those who are eligible.

Rather, it means strengthening our efforts to safeguard resources by modernizing data systems, enhancing transparency, and deepening collaboration with our partners.

The vast majority of providers are good actors.

Fraud is always about a small number of bad actors, but that means we must find them.

And we should lift up the facilities willing to abide by higher standards.

We need to continue expanding transparency, strengthening auditing, and improving oversight across our system.

Even in this challenging environment, the budget continues to invest in key priorities.

We recently reopened applications for the Child Care Assistance Program for all eligible families.

The Governor’s budget includes an additional $18 million for the program, which will support approximately 77,500 children and allow the program to stay open under current enrollment trends.

The budget maintains support for the direct care workforce, including wage increases for workers in nursing homes, the Personal Preference Program, and the Personal Assistance Service Program.

The Division of Developmental Disabilities, which supports more than 30,000 adults in the community, will receive $154 million in new funding to meet growing demand and move more individuals off the Community Care Program waiting list.

Since becoming commissioner, I have had the honor of meeting with self-advocates, the New Jersey Council on Developmental Disabilities, and providers.

I’ve had the opportunity to hear directly from individuals and families about their lived experiences, the challenges they face, and the vision they hold for an inclusive and supportive system.

Engaging with self-advocates in particular has reinforced the importance of ensuring that the voices of those who we serve are centered in the decisions we make.

Their insight, resilience, and determination are helping shape my understanding.

They guide our priorities, inform our policies, and remind us that our work must always be grounded in respect, dignity, and opportunity for all individuals with developmental disabilities.

And to make clear: the Department remains unwavering in its commitment to the safety, dignity, and rights of individuals with intellectual and developmental disabilities.

We take every report of abuse or neglect seriously, enforce zero tolerance, and conduct thorough investigations.

As part of that effort, we just announced the formation of the Disability Mortality and Abuse Prevention Advisory Committee that will conduct in-depth reviews of selected cases involving abuse, neglect, exploitation, or mortality of adults with intellectual and developmental disabilities.

This advisory committee will analyze trends, evaluate systemic responses to allegations, and recommend improvements to prevention strategies, reporting processes, and accountability measures.

It includes individuals with lived experiences, family members, medical professionals, advocates, and State agency representatives.

We are also preparing to impose civil penalties and fines on providers for serious violations, including failure to meet health and safety requirements, inadequate internal investigations, and operating without proper licensure.

And I thank the Legislature for your support in passing these reforms

By strengthening oversight, enforcing accountability, and formalizing opportunities to learn, we are fostering a culture where continuous improvement is embedded in service delivery, driving better protections, higher standards of support, and system-wide learning that prioritizes safety, dignity, and long-term quality outcomes.

We’re also investing in a more accessible New Jersey.

The early years from birth through five years represent a critical window for brain development and language acquisition.

The Division of Deaf and Hard of Hearing will receive an additional $132,000 to expand family support services and increase enrollment in the Language Instruction Program.

This program connects families of deaf, hard-of-hearing, and deafblind children with Deaf Language Associates who provide American Sign Language instruction in homes, childcare centers, preschools, summer camps, and community settings.

The program currently serves about 50 families, and projections show that at least 20 additional children will need services next year.

Meeting that demand will require hiring additional professionals fluent in sign language and trained in early language development.

The budget also includes $108,000 to pilot an on-demand sign language interpretation and visual reader service.

Today, deaf employees across State government must schedule interpreters weeks in advance even for routine interactions, and blind or visually impaired employees often encounter documents or systems that do not work with screen-reader technology.

This pilot program will provide technology that connects users instantly to trained interpreters or visual readers, ensuring timely access and greater workplace inclusion.

The budget also supports residents across the lifespan, including:

·      $30.2 million to maintain a minimum monthly SNAP benefit of $95 for 40,000 households;

·      $397 million in growth for long-term care services under NJ FamilyCare;

·      $22.4 million for pharmaceutical assistance programs serving nearly 150,000 seniors and individuals with disabilities; and

·      $28.8 million for the 9-8-8 behavioral health crisis response continuum.

We also continue to implement the recommendations of the Opioid Recovery and Remediation Advisory Council, which has already advanced nearly $312 million in settlement-funded projects to save lives in the opioid crisis.

And Governor Sherrill is committed to upholding the Constitution.

In February, the Governor signed Executive Order No. 12 to prevent ICE from staging operations on State property and published a “Know Your Rights” website in coordination with the Office of New Americans.

The budget also supports accessibility for New Americans through continued investment in translation and interpretation services.

Along with the federal policy challenges I’ve noted, we are managing incoming federal investigations that are consuming significant portions of our staff’s time and capacity.

And, in other states, we are seeing troubling efforts to target home- and community-based services using inaccurate or incomplete information.

We did not choose these challenges.

We must choose how we respond.

We must protect the people we serve, and we must transform our system to ensure long-term affordability, optimize coverage, and continue to improve health and wellbeing outcomes.

The work ahead is not abstract.

It means improving our fundamentals, especially our data systems.

If we cannot strengthen these systems, we risk making blunt, reactive decisions rather than thoughtful, targeted ones.

I am not here today with all the answers—and no matter how successful we are, the people we serve will face real challenges.

But we must open up a more direct conversation about how we achieve health care affordability.

This will not be easy.

And every decision we make will come with tradeoffs and criticism.

The paradox is that if we become paralyzed by the downsides of any one choice, we will continue sailing straight toward that hurricane.

And the longer we wait, the harder the choices become.

We cannot wish away these federal changes.  But we can mitigate the damage.

The stakes remain high, deadlines continue to approach, and impacts will affect real people.

With clear focus, smart investments, and strong partnership, New Jersey can meet this moment without leaving families behind.

I look forward to working with the Legislature in the weeks—and years--ahead as you review the Governor’s proposal.

Thank you.

I would be happy to answer your questions.