With $6B on the way, lawmakers want a say on spending

Gov. Phil Murphy has made all the decisions on federal COVID-19 funding. Democrats, Republicans hint at ending that
Credit: (AP Photo/Noah K. Murray)
File photo: Aug. 25, 2020, Assembly Speaker Craig Couglin, left, and Senate President Steve Sweeney listen as Gov. Phil Murphy gives budget address.

A year after the onset of the coronavirus pandemic, state lawmakers from both parties are signaling they want to play a bigger role in determining how New Jersey distributes federal pandemic aid.

Gov. Phil Murphy’s administration has largely managed the initial rounds of federal COVID-19 funding, echoing the governor’s broader approach to the pandemic itself, which has been dominated by the executive branch and a series of ongoing executive orders.

But last week, lawmakers easily approved on a bipartisan basis a series of bills that call for using roughly $100 million in federal aid for specific purposes related to the state’s ongoing response to the health crisis.

They include earmarking more aid for businesses, including bars and restaurants that have been hit particularly hard in recent months, as well as for food banks and other nonprofit organizations.

It remains to be seen whether Murphy will agree with any of those spending proposals, but the bills themselves demonstrate the interest by lawmakers from both parties in getting off the sidelines when it comes to the distribution of federal aid.

And looking ahead, the stakes for both the governor and lawmakers are about to get much higher as New Jersey awaits its more than $6 billion share of the federal government’s recently enacted American Rescue Plan Act. That dwarfs the amount of money allocated to New Jersey under last year’s federal Coronavirus Aid, Relief, and Economic Security Act.

Bipartisan agreement

How exactly the new and bigger batch of federal dollars will be spent by the state is an issue that’s come up during recent public hearings on Murphy’s proposed state spending plan for the next fiscal year, which begins July 1. And again, lawmakers from both parties have suggested they want a bigger role going forward, especially as the state moves away from operating in solely a crisis mode.

“We believe the Legislature, and at least the budget committees, should play a role in that,” said Sen. Paul Sarlo (D-Bergen) during a recent interview with NJ Spotlight News. Sarlo is chair of the Senate Budget and Appropriations Committee.

READ: What NJ gets in federal stimulus funds: Billions for residents and for government to keep fighting the coronavirus

WATCH: Aiding small businesses and unemployed workers

A little over a year after the first case of COVID-19 was identified in New Jersey, the state has recorded nearly 880,000 cases. More than 24,000 fatalities have been linked to the disease, according to the latest data tracked by the Department of Health.

In addition to the health crisis itself, the pandemic triggered a record-setting economic downturn in New Jersey, and while there’s been some improvement in recent months, boosting the state economy has remained a key concern for the governor and lawmakers.

Boilerplate language in the state budget generally leaves it up to the executive branch to distribute emergency aid, such as in the wake of a major hurricane or other major natural disaster. So as New Jersey received more than $2.4 billion from the federal government under last year’s CARES Act, the Murphy administration has largely controlled distribution of that assistance.

But as Murphy continues to issue orders extending a state of emergency due to the health crisis, the governor and lawmakers have also been positioning the state for what is expected to be a long-term economic recovery.

Earlier this year, Murphy signed a $14 billion corporate-tax incentive law billed as an important initiative for rejuvenating the state economy in the wake of the pandemic. And in Murphy’s nearly $45 billion state budget plan for the 2022 fiscal year, a number of proposals seek to better position the state for recovery, including investments in public health, housing and higher education.

Waiting for federal guidance

Moreover, Murphy’s budget proposal isn’t balanced with any of the money the state will receive from the American Rescue Plan Act. Murphy’s administration has indicated it is still waiting for clear guidance from the U.S. Treasury before finalizing decisions about including the money in the state budget.

Lawmakers are planning to get an update on federal pandemic funding during hearings on the Murphy budget proposal scheduled to begin next month. During recent public budget hearings, a case has already been made for a more cooperative approach by the administration to the spending of federal dollars as the state transitions out of the immediate health crisis and into a recovery mode.

Lawmakers have suggested such an approach to spending federal dollars could come through either legislation or even a revision of the boilerplate budget language.

“Clearly, with the CARES money, it was a different time,” Sarlo said. “We’re in a much better place right now.”

It was Republicans on the Senate budget committee who last year first took issue with the administration’s largely unilateral approach to the spending of federal pandemic aid. They’ve also raised concerns about the continued extension of Murphy’s broader emergency executive orders.

When it comes to appropriating the federal aid dollars, Sen. Steve Oroho (R-Sussex) is among those saying it’s time to give lawmakers a bigger role.

“It’s basically been a year now,” said Oroho, who serves alongside Sarlo on the Budget and Appropriations Committee.

“The Legislature should be brought into this,” he went on to say during a recent interview.

Ideas for how the money should be used

In a Politico NJ story published earlier this month, longtime Assembly Appropriations Committee Chair John Burzichelli (D-Gloucester) suggested using some of the federal aid to help pay down New Jersey’s significant bonded debt. That’s a concern Sarlo said he’s also interested in addressing.

Kevin McArdle, a spokesman for Assembly Speaker Craig Coughlin (D-Middlesex), also noted the federal funds will be “non-recurring,” meaning the state can’t expect to receive such aid again in future years.

“We must wisely focus on uses such as one-time emergent expenses and long-term capital investments,” McArdle told NJ Spotlight News. “The Speaker looks forward to working with his Assembly colleagues, the Governor and the Senate President in determining how to best utilize the funds.”

For its part, the Murphy administration pointed to the need to wait for final guidance from the federal government before making any final decisions about the American Rescue Plan Act funding. The law itself spelled out broad parameters for using the money, but also didn’t require the immediate distribution of the federal aid.

“Any decision on how to spend American Rescue Plan funds will be contingent on guidance from the U.S. Treasury Department,” Murphy spokesman Darryl Isherwood said last week.

WATCH: Deep dive into Gov. Murphy’s budget proposal

READ: NJ Budget 2022: Murphy says NJ will spend big

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