New Jersey’s insurance and banking regulators on Tuesday defended their push for a roughly 18% hike in their budget for the next fiscal year, a request that comes even as Gov. Mikie Sherrill has said she is seeking to close a budget gap.
The state Department of Banking and Insurance wants $80.8 million in the coming budget year, much of which would go to overcome what it called a 25% staff deficit. Officials with the department said they need to hire at least 94 additional employees, upgrade technology, and shift more work to outside consultants to effectively regulate banking and insurance products used by millions of state residents.
Acting commissioner Susan Ochs told members of the Senate budget committee Tuesday that the agency’s budget has been “essentially flat” for the last decade.
“We are really, significantly understaffed, especially as the department has taken on new responsibilities. It’s really left us shortchanged,” she said.
Ochs said the extra work involves regulating new insurance products for e-bikes, pets, and travel and administering new federal regulations around pharmacy benefit managers.
“The understaffing has resulted in backlogs and extended wait times for both New Jersey consumers and for those we regulate,” Ochs said in her opening remarks, adding that “delays will continue without additional support.”
The department oversees state-chartered banks, credit unions, and real estate and insurance companies, and also oversees Get Covered NJ, the state’s Affordable Care Act marketplace.
Lawmakers are in the process of reviewing Sherrill’s $60.7 billion spending proposal, which they must finalize and adopt by the start of the new fiscal year on July 1.
The Department of Banking and Insurance’s budget is almost entirely driven by fees imposed on the industries it regulates, according to budget documents. It also manages several massive accounts, totaling more than $1 billion, tied to Get Covered NJ.
Its budget proposal includes money for 568 staff members, up from the current 431, the budget documents show.
Salaries and wages comprise the biggest part of the budget, at $51.4 million in Sherrill’s proposal, an increase of 12% over this year, according to the budget, and $2.7 million is allotted for information technology, building changes, and additional vehicles.
Spending on contracted services — like attorneys and consultants — would rise more than 50% to $10.7 million next year, the documents show. Ochs said this increase would be temporary and necessary “while we hire up, until we can reduce the consultant spend.”
Ochs said the short staffing has caused her department to heavily rely on external experts to provide basic but essential functions, costing the state more on several levels.
“On average, the cost of having an actuarial consultant handle this work is three times higher than paying for full-time staff. This reliance on consultants is not only more expensive, it also means we are not building important institutional knowledge, and, at times, we lose continuity in programs, making our work less efficient,” she said.
Republished from the New Jersey Monitor. New Jersey Monitor is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.
Photo: The state department that regulates the insurance and banking industries is seeking a budget increase to hire more staff. (Photo by Hal Brown for New Jersey Monitor)
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