The Town Crier - Legislative Backgrounder

The Town Crier - Legislative Backgrounder

Mar 11

[ARCHIVED] American Rescue Plan Signed Into Law

The original item was published from March 11, 2021 11:06 AM to March 11, 2021 6:40 PM

The House of Representatives passed the American Rescue Plan on Wednesday and President Joe Biden is scheduled to sign it today. This $1.9 trillion package includes $350 billion funding for state and local governments as well was direct payments to working families; extensive expansion of child tax credits; aggressive action to speed up COVID-19 vaccinations and contain the virus; provides the resources needed to allow schools to safely re-open; immediate economic relief for Americans hit hardest; and support for struggling communities.

New Jersey is expected to receive $9.4 billion, $6.4 billion for the state and $2.9 billion for counties and all municipalities. The funding for local governments will be distributed in two tranches, 50% now and 50% in 12 months. For municipalities with population of 50,000 or greater the aid will be sent directly to the municipalities. For municipalities with a population less than 50,000 the aid will be sent to the State, who has 30 days to distribute the funds to the municipalities. States do have the ability to request an extension of the 30 days, however, if the funds are not transmitted to the municipalities the State’s Coronavirus Relief funds will be penalized.

Guardrails were put in place to specify how the federal money can be spent – response to the COVID-19 pandemic and to replace lost revenue, infrastructure such as transportation, sewer and broadband.

States are not allowed to directly or indirectly utilize these funds to offset a reduction in net tax revenue and penalty for doing so will require repayment to the treasury. No funds can be deposited in pension funds.

State and local governments are allowed to transfer funds to a private nonprofit organization, a public benefit corporation involved in transportation of passengers or cargo, or a special-purpose unit of State or local government.

There will be “periodic reporting” outlining the use of funds and repayment to the US Treasury for non-compliance. Deadline to spend funds is December 31, 2024.

The League has the estimated amount by municipality. Please reach out to find out the amount your municipality is scheduled to receive.

The law also includes a $10 billion Coronavirus Capital Projects Fund. Each state would receive a minimum of $100 million. The remaining funds would receive an additional allocation based on population, number of individual living in rural areas, and state as a percentage of US rural population and proportion of the state population living below the poverty line and funding is available until expended. 

Other items of interest to municipal officials include $25 billion to ensure restaurants stay open, $7.25 billion for Paycheck Protection Program$21.5 billion for rental assistance, $30.5 billion for transit systems, and small business assistance.

Contact: Paul Penna, Legislative Analyst,, 609-695-3481 ext. 110