Aiming to save the state money while providing New Jersey communities with important public health care services, Assemblyman Bill Moen has sponsored a bill to establish a five-year social innovation loan pilot program. The legislation was advanced by the Assembly Science, Innovation and Technology Committee Monday.
The “New Jersey Social Innovation Act” (A-2349) would create this pilot program within the Economic Development Authority (EDA). Under the program, the EDA would guarantee loans on behalf of eligible organizations that plan to use the borrowed money to provide healthcare-related social programs in New Jersey.
The EDA would only repay the loans in an amount equal to the money the government saves by having these private organizations supply public health services. As such, the government would only be responsible for repaying funding for demonstrably successful services that meet agreed upon objectives.
The legislation would also establish a commission to assist the EDA in implementing the program and assess both the impact of the pilot program and the feasibility of eventually expanding it statewide.
Upon the bill being advanced, Assemblyman Moen (D-Camden, Gloucester) issued the following statement:
“With the COVID-19 pandemic wreaking havoc on our state’s revenue and the health of New Jersey residents, now is the time to establish a program like this.
“These public-private partnerships would allow social service organizations to access the upfront financing necessary to expand services that are proven to benefit the public health. That means the government would only be responsible for repaying the loan these organizations received if their services are actually successful in generating positive social outcomes and cost savings.
“As such, New Jersey wouldn’t have to find the funds to provide and broaden important public health-related services at a time when we need to promote healthcare access more than ever. By partnering with organizations through social impact bonds, we would be able to benefit from their expertise and only pay for what successfully helps residents.
“This pilot program is our opportunity to help residents right now while seeing how beneficial a statewide program could be going forward, even once the pandemic has ended.”