N.J.’s federal stimulus funds will have few strings attached, Biden administration says

Published: Jan. 09, 2022

There will be few strings attached to the $10.2 billion in federal funding New Jersey and its localities are getting under President Joe Biden’s $1.9 trillion coronavirus spending bill.

That’s a marked difference to the $1.8 billion the state received in 2020 when the coronavirus pandemic began ravaging the U.S. economy. The rules issued then, which severely limited limited how that money could be spent, led Gov. Phil Murphy to threaten to “fight this to the death.”

This time around, the final rule issued by the U.S. Treasury Department under Biden allows states and localities to use the federal dollars for programs and services designed to respond to the pandemic, replace tax revenues lost when officials shut down businesses to avoid spreading COVID-19, provide premium pay to essential workers or replace salaries lost to pay cuts or furloughs, expand high-speed internet, invest in water and sewer projects, and expand housing, child care, schools and hospitals.

The rules ban the money from being used to cut taxes, pay off debts, or shore up pension funds.

“As the delta and omicron variants have illustrated, pandemic response needs will continue to evolve,” Deputy Treasury Secretary Wally Adeyemo said. “These funds ensure that governments across the country have the flexibility they need to vaccinate their communities, keep schools open, support small businesses, prevent layoffs, and ensure a long-term recovery.”

Much of the $350 billion in state and local aid included in Biden’s stimulus bill already has been disbursed under interim rules governing how it can be spent. New Jersey received $6.2 billion through Nov. 15, of which $2.6 billion, or 41%, has been allocated, according to the Center on Budget and Policy Priorities, a progressive research group.

The stimulus bill “has been of enormous benefit to our state,” Murphy spokesman Michael Zhadanovsky said.

The governor wasn’t as kind in April 2020, when he blasted the guidance issued under President Donald Trump on how the state could the money it received under the CARES Act.

That limited the aid to covering extra expenses incurred due to the coronavirus and not to help offset the drop in tax collections hindering the abilities of state and local governments fund their operations and pay their employees.

Trump’s Treasury Department quickly backtracked, giving states and localities more flexibility, though not as much as they wanted. But the changes were enough to allow New Jersey spend its entire allocation rather than have to return some money to the federal government.

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published this page in News and Politics 2022-01-10 03:19:40 -0800