Unlike the national experience, the acquired immunodeficiency syndrome (AIDS) epidemic in New Jersey in primarily among intravenous drug users, their sexual partners and their children. Since the cost of caring for people with AIDS, especially these people, is high, the steadily rising number of new cases, coupled with their lack of any health insurance, will soon place a tremendous strain on State resources. New Jersey may be the first State to face an AIDS-related fiscal crisis. After estimating the costs of caring for intravenous drug-related AIDS cases in New Jersey, this paper examines the policies which have, thus far, helped New Jersey avoid such a crisis. The paper examines how escalating costs threaten these existing arrangements. It concludes with several policy recommendations. 28 references. (Author abstract)