Federal Aid


Federal aid rose steadily from $5.6 billion in FY2000 to $8.5 billion in FY2008, with the biggest increase coming in Medicaid, the ever-growing 50-50 state-federal program that pays for nursing homes and institutional care for the elderly, mentally ill, developmentally disabled and other needy populations. When President Obama took office in January 2009, his first initiative was to work with his Democratic Congress to pass a $787 billion federal stimulus package to try to pull the nation out of its deep recession. That legislation, coupled with earlier initiatives, jumped federal aid to New Jersey from $8.5 billion the previous year to $11.3 billion in FY2009 and $13.5 billion in FY2010. The stimulus was intended as a short-term solution to get the economy through the worst of the recession, and federal aid for the fiscal year that begins July 1 is scheduled to decline to $12.4 billion, with most of the cut coming from money that went to school aid this year. Federal aid is expected to drop at least $600 million more in FY2012, which Christie will have to calculate into that year’s budget.