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Posted on: April 24, 2020

Local Governments Seek Support, Flexibility in Next Federal COVID-19 Bill

When Congress passed the Coronavirus Aid, Relief, and Economic Security Act - $2.2 Trillion CARES Act - it included a $150 Billion State and Local Stabilization Fund. Minus funding for U.S. Territories, and autonomous Tribal Governments, about $139 Billion is being distributed to the States, for their own use (55%) and for redistribution to ‘qualifying’ local governments (45%). 

The State of New Jersey is slated to receive $3.444 Billion. Of that total, a minimum of $1.894 Billion is earmarked for State use. The balance - $1.550 Billion - COULD be distributed to ‘qualifying’ local government. 

On Wednesday, the U.S. Treasury released official guidance. These funds can only be used to fund extraordinary costs, caused by COVID-19. These must be costs not anticipated in each entity’s current operating budget. They cannot be used to cover revenues not collected, as a result of the financial impact of the Coronavirus on taxpayers. And, they cannot be used to supplement other federal funding to be delivered to states and localities, through FEMA, pursuant to declared states of emergency. 

Yesterday, noting these limitations, Governor Murphy lamented the minimal value of the stabilization aid.

Our federal partners at the National League of Cities (NLC) have been hard at work to secure support for funding for all of America’s municipalities, and for greater flexibility in the use of that aid. We detail the problems and the prospects for solutions in this Town Crier blog post.

Contact: Jon Moran, Senior Legislative Analyst, jmoran@njlm.org, 609-695-3481 x121.


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