WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.) today hailed inclusion in the final Senate COVID relief package of $350 billion in direct federal assistance to state and local governments to help them keep essential workers on the job, help struggling families and small businesses, and make critical investments in infrastructure. New Jersey stands to receive an estimated $9.3 billion—split, approximately $6.4 billion to the state and $2.9 billion combined to each county and municipality—which is significantly more than it would have received under a formula that only considers population.
The state and local funding piece in the $1.9 trillion American Rescue Plan is modeled off of Sen. Menendez’s bipartisan SMART Actand provides direct, flexible assistance to every state, county and municipality based upon a formula that targets funding to the areas with the greatest need. U.S. Senator Cory Booker (D-N.J.) cosponsored the SMART Act.
“Our state and local governments have been on the frontlines of the fight against COVID-19. They have been bleeding resources for over a year while costs have soared and revenues have plummeted. As a result, they have borne the brunt of the economic pain and desperately need help,” Sen. Menendez said. “This badly needed federal funding will not just keep the lights on at City Hall, it will also help our communities get more vaccines in people’s arms, keep our first responders, teachers and other essential workers on the job, maintain our infrastructure and critical services, help our small businesses stay afloat, and put us on a smoother path towards economic recovery after the pandemic. This was a long and hard-fought battle, but I am pleased to be able to deliver in this COVID relief package billions in direct, flexible federal assistance to each and every corner of New Jersey.”
“In the midst of the greatest public health and economic crises of our lifetimes, it is unacceptable New Jersey schools, hospitals, small businesses, and workers faced the additional threat of budgetary shortfalls,” said Sen. Booker. “With state and local governments across our country facing the painful decisions of potentially laying off thousands of police officers, firefighters, teachers, and other essential workers, and cutting essential services, the full support of our federal government has never been more important to fight this pandemic. The federal funding in this COVID relief package will help provide the relief that New Jerseyans desperately need, and I was proud to work with Senator Menendez in getting it across the finish line.”
The direct, flexible funding can be used by state and local governments to pay COVID-related expenses; cover lost revenues due to the pandemic to maintain critical services and avoid layoffs of essential workers; provide additional assistance to residents and small businesses; and invest in water, sewer and broadband infrastructure.
While the SMART Act initially called for $500 billion in targeted state and local funding to the areas with the greatest need, Sen. Menendez was instrumental in fighting efforts to further lower that topline number or change the formula to hurt New Jersey, which has been disproportionately impacted economically by the pandemic.
As a result of the final formula, New Jersey will receive the eighth largest pot of federal money compared to other states, about $1 billion more than it would receive had the formula been based entirely on population. The formula allocates virtually all of the funding dedicated to state governments based on the number of unemployed persons in each state compared to the overall U.S. population to determine need.