Gov. Jon S. Corzine's proposed New Jersey state budget for fiscal year 2010 includes significant cuts to compensate for projected reductions in state revenue, including a 2.5 percent reduction in funding to health care practices. Significantly, the Governor avoided cutting charity care funding, which will remain at FY2009's level of $605 million. The Hospital Asset Transformation Program, which provides financial assistance to nonprofit hospitals in the process of closing, was one of the few programs that received an increase in funding (by $4 million).

Funding for graduate medical education, however, is slated to be reduced by $8 million to $60 million. The Health Care Stabilization Fund, which provides grants to ensure continuity of access and availability of services to communities in which hospitals are closing or reducing services, would be cut $4 million to $40 million if the proposal were enacted. The Hospital Relief Subsidy Fund, which supports hospitals with high caseloads of HIV, mental health, tuberculosis, substance abuse and addiction patients, would be reduced by more than $6 million, to $166.6 million. The Mental Health Subsidy Fund of $20 million is slated to remain the same.

The Assembly and Senate will hold hearings in the next couple of months as they debate the proposed budget. The budget must be passed by the legislature and signed by the Governor by June 30, 2009. The budget will be effective July 1, 2009.