A disagreement over the Horizon legislation has kept lawmakers from sending a budget to Christie, who said he would only agree to sign off on $325 million in Democratic spending proposals if lawmakers also passed the Horizon bill. | AP Photo
TRENTON — Gov. Chris Christie and lawmakers ended New Jersey’s first state government shutdown in more than a decade, settling a bitter feud over an unrelated bill that had left the Statehouse in disarray for two weeks.
In votes after midnight, both houses of the Legislature passed the state budget and the companion legislation, sending the measures to Christie, who was waiting with pen in hand. The governor announced at 2:39 a.m. that that he signed the budget into law, the last and most contentious spending plan of his two terms in office.
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An agreement was struck just before 10 p.m. after top lawmakers spent much of the day scurrying from one closed-door meeting to another, haggling over the details of a bill that would reshape the state’s largest health insurance company, Horizon Blue Cross Blue Shield of New Jersey.
The Republican governor had demanded such a bill in exchange for signing off on some $325 million in Democratic priorities included in the proposed $34.7 billion state budget.
Democratic leaders of the state Legislature said the governor had stayed in touch all day and agreed to the terms.
“It’s unfortunate that we had to get to this point,” Assembly Speaker Vincent Prieto, who refused to move an earlier bill targeting Horizon, said in a joint press conference with Senate President Stephen Sweeney. “I wish we would have been able to do this before, but sometimes, you know, it gets to a point that when you’re in a crisis, then people are more willing to be more reasonable.”
As the two spoke, the governor began announcing plans to lift his order shutting down all non-essential government services. The state Department of Environmental Protection quickly said all state parks and beaches would be open Tuesday morning for the Independence Day holiday.
The closure of the parks became a global point of interest after photos were published on Sunday showing Christie and his family basking in the summer sun on a deserted strip of sand in Island Beach State Park, where the state keeps a gubernatorial retreat.
In a press conference after 11 p.m. at his office in Trenton, a weary-looking Christie said he was ready to act immediately to end the shutdown, which began at midnight Friday.
“I’m saddened that it’s three days late, but I’ll sign the budget tonight,” Christie told reporters.
The state’s 120 lawmakers were recalled on Monday evening for a midnight voting session in which they would pass both the new Horizon legislation and the budget, which has been open for a vote on the Assembly floor since Friday evening but until now did not have enough support to pass.
The Assembly passed the Fiscal Year 2018 budget, 53-23, with one abstention. The Senate quickly did the same, voting 21-14 to send the proposal to Christie.
The deal on Horizon came after Sweeney summoned company executives to meet with him and Prieto on Monday afternoon. Their discussions consumed most of the day before a possible compromise was settled on around dinner time and word was put out to rank-and-file lawmakers to prepare to return on short notice.
Horizon CEO Bob Marino, joined by numerous lobbyists, was involved in negotiating the language of the final bill that broke the logjam. Sweeney said Sen. Joe Vitale, another Democrat, worked with the governor to drill down on the details of a bill that that everyone could live with.
After saying last week that the state would just repeal the legislation next year if Democratic gubernatorial nominee Phil Murphy wins the election in November, Sweeney began backing away from the claim on Monday.
“I wouldn’t. Not at this point,” Sweeney said. “We worked pretty hard. We worked well together. We think this piece of legislation is a solid piece of legislation.”
The bill in question will add two new members to Horizon’s board: One appointed by the Assembly speaker and one appointed by the Senate president, bringing the total number of board members to 17. Under current law, there are four members appointed by the governor and 11 elected by the board.
The bill will also put a maximum cap on Horizon’s reserves, which is linked to a measure known as the risk-based capital ratio. Insurers are required to maintain a certain level of reserves as a way to hedge against unexpected future claims, expenses and other market risks.
The bill establishes a range for the reserves of 550 percent to 725 percent, the lawmakers said. If Horizon has reserves above the maximum threshold, it would have to send any excess back to its 3.8 million policyholders. Last year, Horizon maintained a reserve ratio of 618 percent, meaning it would not have exceeded the limit.
Each year, an independent actuary retained by the state Department of Banking and Insurance will calculate the insurer’s risk-based capital ratio. The actuary will be paid for by Horizon.
The legislation also increases financial disclosure requirements. Horizon will be required to post executive compensation and other financial information on the state Department of Banking and Insurance website.
Prieto, who had been the one person standing in the way of moving earlier legislation to tackle Horizon, said he had stood up for what he believed in.
“It’s a shame that we couldn’t get done before, but sometimes it’s not about digging your heels in, it’s about having philosophical differences and then you’ve got to walk to the middle of the room,” he said.
Christie has been pursuing Horizon for months, first proposing in his February budget address that the company fork over hundreds of millions of dollars in reserve funds to support his anti-addiction campaign.
His fight with the insurer, which played out in deeply personal terms, eventually moved beyond the addiction issue to focus on reforming the company itself.
“This bill is a long overdue significant reform that will have a lasting impact on New Jersey residents,” Christie said. “I’m proud of the results. For the last two weeks, I was told that no bill on Horizon would be passed now. That I would have to wait. That was unacceptable to me.”
But, in the same breath, he expressed some disappointment that no money would go toward drug treatment.
“That’s what I wish would have happened, but I couldn’t get agreement on that. So I gave in on one point, yeah,” Christie said. “But I got a bill that reforms them significantly and caps the excess reserves.
“This is not a perfect bill. It was not everything that I wanted,” he said.
In taking the deal with the Democrats, Christie agreed to sign off on hundreds of millions of dollars in Democratic spending proposals. Christie usually vetoes such items, line by line. The spending plan provides $150 million in new appropriations, including $25 million for pre-K education, as well as $31 million in funds that are being diverted from other districts.
Beyond school funding additions, the budget includes about $13 million for women’s services, including sexual assault prevention, domestic violence prevention and family planning services, which the governor gutted years ago. Roughly $30 million was allocated for vulnerable populations, including spending on food stamps, prisoner re-entry, legal services, and sheltered services. Another $15 million was allocated for health care spending, including money for cancer research and nursing homes and $23 million was appropriated for higher education.
Sweeney said it was all those programs that drove him to fight for the Horizon legislation.
“We’re finally starting to fund education again,” he said. “That’s one of the big things for me. There’s some many programs that we fought for.”
Matt Friedman contributed to this report.
UPDATE: This story has been updated to reflect the fact that the Legislature passed the budget.