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♪ David: The state budget is here.

Some will cheer, others will jeer, but the president could blow the whole thing up.

Hey, everybody, it's "Reporters Roundtable."

I'm David Cruz.

Our panel today includes Katherine Carrera, bureau chief for Chalkbeat-Newark, Brent Johnson, politics reporter for NJ Advance Media, and P. Kenneth Burns, New Jersey reporter for WHYY.

We will hear from the panel in just a few minutes, but let's begin with the topic we've been paying the most attention to this week -- the new state budget, introduced by Governor Phil Murphy on Tuesday.

All the experts have had a look, that includes Peter Chen, senior policy analyst for New Jersey Policy Perspective, who joins us now.

Peter, good to see you again.

Welcome back to "Roundtable."

Peter Chen: Thanks, David.

Great to see you as well.

David: So, let's do a kind of "before" picture of the budget as we see it today, and then we'll do an "after" of the budget with some of the worst-case scenarios, right?

From your perspective at NJPP, what's in here to like?

Guest: well, one thing that is great about this budget is that we are seeing a reduction in what is called the structural deficits.

For as long as I can remember, New Jersey has had structural deficits where the budget has more expenditures than it has revenue that we're bringing in.

This budget goes to close that gap by increasing revenues, including through a new assessment of property over $1 million in value when it is sold.

And that is going to help out with the state budget to help make sure that we have fiscal stability moving forward, especially when we face some of those headwinds that you're talking about from the federal level.

David: the structural deficit, some say it's a billion, some say it's up to $4 billion.

Do you have a gauge on what it is?

Guest: in the budget as it is written, it is $1.2 billion.

Now, there might be increases inspending that happen over the course of a year as necessary for emergencies, and there may also be lapses -- what are called lapses for their cuts that occur in the budget for positions that aren't hired.

So that may change somewhat.

And, of course, were big?

Is old as revenues.

This is a prospective budget, for the next year.

Revenues could come in below expectations about could always expand the deficit further.

Luckily, we have a surplus we can fall back on.

It's about 6.5 billion dollars.

But there are concerns about if we're not careful about ensuring that we have enough revenue, that surplus could shrink quickly as, especially if we have to fill in gaps left by the feds.

David: it's like you are reading my questions with their stock.

dipping into the state surplus is really kind of the reason for a state surplus, it's for a rainy day.

When you and I were talking earlier this week, you said we are dipping into the rainy day fund and it's not even raining yet.

David: Yeah, and we have unfortunately seen the surplus shrink a little bit this year, especially because the budget plans for spending on stay NJ, which is a homeowner subsidy for seniors, that disproportionately goes to wealthier households.

And that wasn't supposed to go through unless we had a 12% surplus.

Well, we have a less than 12% surplus, but the money is still in the budget.

So that with us on difficult fiscal switching, certainly for Fiscal Year '26, but especially moving forward as that program is likely to get expensive over time.

David: What happens if that's the case?

Right?

I mean, there was this task force that said you've got to meet these benchmarks, one of them being a 12% budget surplus.

What happens if that benchmark isn't met?

Does it automatically cancel or install the program?

Guest: the law says that the payments can't go out unless these benchmarks are met.

But as you know, they can always change the language in the budget itself, right?

They can modify or amend statutes as necessary through the budget bill.

And they might make changes later on.

All the WHEELING AND DEALING that happens in the back rooms -- they don't let me in on.

[LAUGHTER] David: It's all written and disappearing ink.

The governor painted a rosy picture in his speech, though, but there is a lot of uncertainty surrounding the budget because if you look at the budget plan the House just passed, there could be some pretty severe funding cuts coming.

Could you explain first what areas of the state budget could be affected, and why would happens at the federal level affects the state so much?

Guest: sure.

The biggest one is Medicaid.

Medicaid is health insurance for working class folks, little or no-cost -- low or no-cost.

And the key to the way Medicaid works is that it is a federal-state partnership.

The feds kick in money, and the state kicks in money as well.

There's what's called the federal match.

It is a combined program.

It brings in a huge amount of funding to the state to support folks who need health insurance to the tune of about 13 billion dollars.

For perspective here, the entire state budget is $58 billion.

No, no, no, even a -- So, even a small change in the Medicaid rate that the feds pay or changes in the program that reduce the amount that the state gets, would mean that potentially hundreds of thousands of people would get kicked off of health insurance, and the state would have to step in to either provide them with health care or face higher costs elsewhere as uninsured folks seek health care and raise costs in other areas.

So we have seen the improvements over the last couple of decades -- reductions in uninsured rates and improved health -- and that could all go out the window if there are cuts to Medicaid as the House budget resolution would seem to require.

David: Yeah,.

We had Speaker Coughlin on "Chat Box."

He seemed to not even want to talk about what the impact could be.

But his pet project, Stay NJ, is one of those things that could be at risk.

But it also could impact school funding and money for New Jersey transit.

No?

Guest: I think the governor has been fairly clear that school funding and funding for transit are some of his top priorities.

But I think the reality is if there are federal cuts that come down the line, we will have a hard time trying to fill those gaps and it would require painful cuts to other programs in order to make sure the people don't get kicked off of health insurance.

That we don't see a massive increase in people going hungry because their S.N.A.P.

benefits have been cut.

The hard part is we don't know what the worst case scenario is.

But it would be bad.

And it would require a lot of difficult decisions about what to do with the state budget.

And I think the governor talked about that, when talking about the uncertainty facing the budget moving forward.

David: Yeah, we always talk every year about this process.

We are at the very beginning of the process, it goes until June 30th.

There's all these hearings.

But it seems to me that every year that I discovered the budget, we go through this process, we have these hearings, and it's the same three guys at the end of the day saying "Well, this is what we're going to do."

Any chance that that's going to be any different this year?

And if you had one suggestion, what would that suggestion be to make this process more transparent?

Guest: Certainly, the biggest suggestion that I would have for a budget process that has already begun, is to put out a legislative budget proposal two weeks before the constitutional deadline.

Put it out in mid-June, allow the public to review it, to provide public comment, to have a hearing before it is voted on.

All the public comment refers to the governor's budget, but we don't have a chance to comment on the finished product before it is voted on.

And that is probably the biggest single change we like to see.

This is one area where there is certainly support across the ideological divide.

The business lobby and progressive groups and whoever the minority party is in the legislature are cut frequently talking about the need for more transparency and better practices.

They have talked about the need for better but the procedures to make sure we actually have a transparent budget and the responsible one moving forward.

But one of the reasons why we have had so many gimmicky budgets in the past is because of focus on single-year budgeting, rather than looking at multiple years, planning ahead, and having enough in reserve to make sure that we can eat difficult economic circumstances.

David: Alright, the process has just begun.

Peter Chen is with New Jersey Policy Perspective.

Good to see you again.

Guest: Great to see you too, David.

David: All right, panel -- Brent, Kenny, Katherine -- good to see you all.

Welcome.

Kenny, saw you at the budget speech.

If you listen to the governor, everything seems to be OK. 58 billion dollars is about what it costs to do all the things that people want the government to do, but people barely mentioned a reality you those Republican budget plans on the federal level which will have a major impact on New Jersey's spending plan.

Was the governor being a little bit too rosy?

Guest: [LAUGHTER] I tell you, David, two states, a lot of legislative sessions in between covering budgets, the governors have always spoke a rosier picture than reality.

Of course it's going to be a good looking budget and everything is going to be fine.

But I would think the GOP leaders would agree to this.

We don't know.

Because you have different headlines coming out of PC every day, Elon Musk once this cut.

Trump says he has.

Appeals court said yes.

Another judge -- it's on and on.

So, the big takeaway from Tuesday is, everything's fine, as long as the federal government is still standing.

David: Alright, Brent.

The speaker was bullish about Stay NJ, but could be one of those things that goes if the budget has to become -- pardon the expression -- austere, no?

Guest: It's a tough thing for anyone to say no to because its property tax relief for seniors in an election yet where the governor's is up in all 80 seats in the assembly, which is Speaker Coughlin's chamber.

It's tough for even Republicans to say no to that.

How do you say no to property tax relief?

But it is an expensive program.

Only half is being funded this year because it's only taken care of the second half of the fiscal year.

Next year is really going to be ground zero for this because it grows to be a billion-dollar program, more than a billion dollar.

The budget next year is going to need to be more austere when the new governor comes in today care of this.

David: And we should tell the this is a 10 people now running for governor, that they have got a big problem coming their way next year's budget.

Alright, making her roundtable debut, we welcome Catherine Carrera, Bureau Chief of Chalkbeat-Newark.

Welcome.

Guest: Gracias.

Thank you, David, for having me.

Where were you before chop beat?

-- Chalkbeat?

Guest: I was covering a range of things that "the record," for North Jersey.com.

I've been covering education here in Jersey for quite a while.

We definitely saw a big chunk of money going towards pre-K-12 education in the budget as well.

David: So what was the message on education from the governor this week?

Guest: Well, he is proposing 22 billion four pre-K-12 education.

And that includes $12.1 billion for state aid.

It also includes money for a cell phone initiative that he has been pushing, to continue the pre-k, free universal pre-k extension that has been the cornerstone of his education priorities since he took office.

David: Yeah, we were talking about that $3 billion for the cell phone ban in schools -- $3 million.

What does that pay for?

Do we know yet?

Guest: it's a modest $3 million.

What I do know is that one of the popular companies that provides the pouches that students or schools have been using to put the phones away, they can be quite expensive and run up to $30 per pouch.

I am not sure how far that $3 million will go.

But it is definitely something he wants in the budget to incentivize more districts to look into the mechanisms to implement a cell phone ban in classrooms.

David: So what could the potential changes and cuts to the federal Department of Education, what kind of impact could that have on Jersey schools?

Guest: Well, the individuals with disabilities education act would be, I assume, would be impacted.

And so that would be a significant loss for the school districts.

It is 22 billion dollars for K-12 education.

And a chunk of that, especially in the $12.1 billion going towards school aid, that includes funding for special education.

But I'm not really sure what, you know, David: It's too early to tell.

Guest: Yes, and the governor's office has literally shared what the Plan B is if that happens.

But I think we would see taxes or cuts in other areas.

David: Whatever it is, it's not good.

Guest: Yeah.

David: So the ballot design build past both sides of the house this week, in other news.

There is no more party line.

But Brent, that doesn't mean the organization candidates won't get a little bit of a leg up in the final design, right?

Guest: you already hear critics saying this is a lighter version of the line.

It allows parties to endorse the candidate.

In some respects is still singles out who the party wants.

But Murphy still has to sign it -- I know there is pressure on him to make some changes or maybe conditionality veto it.

It's a tough thing to explain to the viewers because it is such an esoteric idea.

But the the line is a big deal in New Jersey, and it has influenced elections for decades.

And this could be big change coming.

David: Kenny, as soon as the legislature was given a hand in this, we knew they were going to try and salvage some aspect of it -- not that they don't have all the things that county machines have had since forever: the bodies, the money, etc.

But one of the things that they'll be able to bracket their candidates together, right?

If Joe is running along with Jane, they can bracket together, right?

Guest: I didn't get a good look at this, but from what it sounds like, that slogan part could be really easily used to group everyone together.

So, whether Governor Murphy says get rid of that, or whether they allow everybody to use their slogan, that remains to be seen.

But they don't have a whole heck of a lot of time to do it, considering that the primary is in June.

David: Yeah,.

We learned last week that settlement talks in the school desegregation case have broken down, and the parties are -- Ward, back to the drawing board?

Guest: Yes.

They are back to putting together a plan to appeal the judge's order from 2023, which was mixed in that it acknowledged that there is -- that school segregation does exist in New Jersey, defective segregation.

But it didn't go as far as saying, as a greeting fully with the plaintiffs that it is a.

They provided evidence for some districts that this does exist -- for example, in Newark, where 90% of the student body is black or Latino.

so, the judge's order was mixed, and so the plaintiffs are going to go ahead and look to appeal that.

David: So, they were dealing with a mediator, right?

The judge told them, "Go meet with this mediator."

I mean, they met for several months, did they not?

Guest: Yeah, and it was a confidential mediation.

So they haven't really shared any details about how that went.

But they were providing status updates to the courts every few months.

And in January, we saw that mediator is a, a path towards a solution coming because they did indicate that mediation would wrap up in February.

But they didn't say either way if it would be a positive settlement that they came up with, or if it's going back to litigation.

The reason they wanted to go ahead and do the mediation, was to save taxpayers the expensive cost of years of litigation in the courts.

But it seems like that did not work out.

David: So there were some things like, you know, making more regional districts and stuff like that.

So what is there anything that they seemed to agree on?

Or was it that they didn't tell anybody anything?

Guest: I've tried getting this information.

I know that among the remedies they were looking at are, regional schools, County schools that already exist and may be expanding those programs in their district school program.

But neither the state nor the plaintiffs attorneys have shared where the breakdown was exactly.

David: Nobody is spilling the beans for us.

The other news this week, George Norcross, Cooper Hospital Board Chairman and South Jersey powerbroker, had corruption charges against him blocked.

Shocker or know of, Kenny?

Guest: Guest: To the activists, not so much.

They expected the indictment would be dropped someway, somehow.

Personally I was expecting some of the indictment to get got it based on the allegations.

Prosecutors normally threw everything they have to the wall .

Outright dismissal, I was not expecting.

It was 96 pages of essentially the judge backing up his arguments, that George Norcross is just a really powerful guy who has a lot of influence, who has people in the Camden City government call him back.

And by the way, the mayor can reject the vocals of whoever she pleases.

This is going to be appealed.

The notice of appeal went in the same day as the decision.

The Norcross camp, they were doing one hell of a victory lap.

Praising the decision, calling it bulletproof in the appellate division, while slamming Attorney General Matt Platkin and basically raking him over the coals, saying that his political ambitions have taken a break.

But even the Attorney General himself says, I don't know what's going to happen, I'm going to serve my term and then spend some time with my boys well I figure out what I am going to do next after my term is up.

David: Brent, the Republicans want to impeach the Attorney General.

Guest: They can work to do something.

That doesn't necessarily mean that is going to happen.

I would think it would be highly unlikely.

Some Democrats aren't fans of is, but I can't see where the Democratic assembly actually goes through impeachment proceedings.

But it is another crazy chapter in what has been a crazy two year period for New Jersey politics.

[LAUGHTER] David: God.

Guest: Really.

It's unprecedented what has happened the last two years.

David: Listen, I've been doing this for 30 years, and I couldn't get 4 former governors to show up for anything, even if I offered them cookies and doughnuts and coffee.

He's got governors jumping through hoops for him, as you saw in some of that video.

He really is an amazing character.

Guest: I was there in Camden.

It was part Norcross celebration and part cannot celebration and oh, by the way, we are expanding the hospital.

David: Right.

All right, governors race.

Newark Mayor Ras Baraka is out with new TV and web spots.

They're a far cry from the funky Newark tourism ads that had Baraka in poet mode.

Is the mayor trying to soften his image for a statewide audience, do you think?

Guest: Honestly, I don't know if Mayor Baraka has any type of statewide presence outside of North Jersey for obvious reasons.

Newark's in the New York market, and whenever something happens in Newark, he's on television.

even less out-earn end of Central Jersey, which my station signal covers, maybe maybe not.

But definitely South Jersey, I would be hard-pressed to find anybody that even knows who Mayor Baraka is.

I understand Mayor Carstarphen in Camden endorsed him.

But I don't know how far the endorsement will go.

David: Brent, I did want you to tell us about the new newsletter you're offering.

It's called "What Makes Jersey Run."

What's that about?

Guest: It's once a week.

Every Thursday.

It will talk about statewide politics, the governor's race, all the big things that happen in this state where politics are so important.

There will be breaking news, there'll be insider gossip, there'll be links to stories you should read.

The first one came out this past Thursday.

On NJ.com, you can sign up there.

So, check it out.

David: Alright,.

Well done.

That's "Roundtable" for this week.

great to see you all.

Thank you very much.

Thanks also to Peter Chen for joining us earlier.

You can find out what the rest of the NJ Spotlight News team is up to by subscribing to our YouTube channel.

I'm David Cruz, for all the crew here at Gateway Center in downtown Newark.

We thank you for watching, and we'll see you next week.

♪ ANNOUNCER: Major funding for "Reporters Roundtable with David Cruz" is provided by RWJ Barnabas Health, "Let's be healthy together."

Rowan University, Educating New Jersey leaders, partnering with New Jersey businesses, transforming New Jersey's future.

♪