$6B+ in latest federal relief lands in NJ. Treasurer says no spending plan yet

Some lawmakers displeased to have found out about aid only after pressing for details during committee hearing
Credit: (NJ Legislature)
Sen. Declan O’Scanlon (R-Monmouth) and NJ Treasurer Elizabeth Maher Muoio

New Jersey has received the more than $6 billion allocated to it under the latest federal COVID-19 relief package, the state treasurer confirmed during a budget hearing on Thursday.

But how exactly Gov. Phil Murphy’s administration wants to use those dollars remains an open — and somewhat contentious — question.

“There’s no plan in place at this point,” Treasurer Elizabeth Maher Muoio told members of the Senate Budget and Appropriations Committee after several asked about the status of the federal dollars, which come from the overall $1.9 trillion relief package that President Joe Biden enacted in March.

“The administration is working, I think, with the Legislature to look at what the various needs are, what type of short-term spending needs there are (and) long-term spending needs,” Muoio said.

That wasn’t enough to satisfy some lawmakers, including Republicans on the committee who offered a quick rebuke.

“It’s clear that neither Gov. Murphy nor Treasurer Muoio are willing to articulate a plan to spend this money effectively,” said Sen. Declan O’Scanlon (R-Monmouth) and the committee’s other GOP members in a joint statement.

Meanwhile, some Democrats on the committee also aired concerns about the federal funding, including chair Paul Sarlo (D-Bergen), who stressed the need for “input from the Legislature.”

Not widely known

It was not widely known before Thursday’s budget hearing that the state had received the federal dollars in one big deposit the day before the hearing, and some lawmakers weren’t happy to have found out about the deposit only after they pressed the treasurer on the issue during the hearing.

How the state spends $6.24 billion in federal American Rescue Plan Act money has emerged as a key issue to be resolved in the run-up to the state’s next fiscal year, which starts July 1.

The new tranche of aid — while more substantial than previous rounds of federal pandemic relief — can only be used for specific purposes, such as funding ongoing public health and economic recovery needs, according to interim federal guidelines released earlier this month. Preliminary estimates had indicated the state would receive as much as $6.4 billion, but Treasury officials confirmed the slightly smaller final amount.

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Murphy’s administration has managed New Jersey’s share of the earlier rounds of federal COVID-19 funding largely without legislative input.

Lawmakers want bigger say in the spending

But lawmakers from both parties have indicated they want a bigger say in determining how the state will spend the funding just received. They’ve also suggested separate legislation should be passed or language written into the next state budget to direct the spending of the more than $6 billion, which doesn’t have to be used in full until Dec. 31, 2024.

Some lawmakers have already identified areas where they think the funding should go immediately, including to prop up the state’s Unemployment Insurance fund. The fund has been leaned on heavily over the last year after benefits claims surged because of the health crisis and the economic restrictions put in place to slow the rate of infections.

“That is one of the uses that seemed to be allowed by the guidance, the interim guidance that’s out now,” Muoio told O’Scanlon after he asked about the unemployment fund during Thursday’s hearing.

“I think that is one of many uses that the administration in collaboration with the legislative leadership is looking at as a potential use for the funds,” she said.

Sen. Nilsa Cruz-Perez (D-Camden) also made a pitch for using a share of the federal money to help New Jersey businesses that she said “are going belly up” during the pandemic.

“That is clearly an area that the money can be utilized for,” responded Muoio.

Republican criticism

Some lawmakers weren’t happy to have found out about the deposit of the federal dollars only after O’Scanlon pressed the treasurer for a direct answer on the status of the funding during the hearing.

Those frustrations also coincided with Republican criticism of the majority Democrats over a COVID-19 emergency bill drafted earlier this week that calls for the ending of the public health emergency that Murphy, also a Democrat, has held in place for more than 14 months.

While allowing the public health emergency to end, that legislation would also leave in place for the rest of the year more than a dozen other executive orders that the governor has enacted since the health crisis began last year. The bill was originally supposed to be up for a vote in the full Assembly on Thursday, but it was pulled from the agenda at the last minute by Speaker Craig Coughlin (D-Middlesex), who cited a need to “refine” the legislation.

O’Scanlon and fellow Republican Sens. Steve Oroho (Sussex), Michael Testa (Cumberland) and Sam Thompson (Middlesex) faulted the administration’s handling of the pandemic response. In a joint statement issued after the budget hearing ended, they said it “has failed to be transparent about New Jersey’s finances and kept important information from the public and legislators.”

“This outrage should be all the proof our Democratic colleagues need to join us in advancing legislation to strip Gov. Murphy of the power to spend these funds without any legislative oversight or public input whatsoever,” the GOP lawmakers said.

Also after the hearing, Treasury spokeswoman Jennifer Sciortino reiterated in a statement that the federal guidance for the American Rescue Plan Act funding has been issued on an interim basis and is “not yet final.”

“We will continue to evaluate the allowable uses of ARP funds while working in conjunction with our partners in the Legislature to make sure we meet the state’s many pressing needs and ensure our continued recovery from the pandemic,” she said.

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