Murphy, Delegation Seeking Federal Bailout for New Jersey
Posted March 18, 2020 by politico.com
Gov. Phil Murphy is working with New Jersey’s congressional delegation to seek a multibillion-dollar bailout from Washington as the economic damage from the coronavirus pandemic begins to inflict severe damage on state finances.
Murphy said Wednesday he wanted federal block grants for New Jersey and other states, a form of aid he said was needed to give the state flexibility to deploy money where and when it’s needed. Sen. Bob Menendez (D-N.J.) said the state needs billions of dollars in grants.
Across the country, Murphy said, the need for a stimulus and economic support for local governments may require a $3 trillion to $4 trillion package from Congress.
“History will be very unkind to our country and our state if we undershoot,” Murphy, a former top executive at Goldman Sachs, said during a press briefing in Trenton. “There’s no amount of money in any state — New Jersey, New York, California, you name it — there’s no amount of money that can deal with the challenges, the economic challenges, that can come from this.”
The financial strain on the state government is likely far spread and certain to grow worse. The economic collapse, which on Wednesday dragged the U.S. stock market back to where it was when President Donald Trump took office in 2017, has surely erased the state’s projected $1.5 billion surplus.
NJ Transit, which collects some $80 million a month in fare revenue, has seen its ridership vanish. Agencies that rely on user-revenue are now cash-starved.
The already struggling public employee pension system has lost billions of dollars in recent weeks because of the selloff on Wall Street. While such damage can be smoothed out over the long-term, the plummet in value could set back the state’s efforts to stabilize the retirement funds.
New Jersey’s Medicaid system and its public employee health care plans could face enormous costs as the virus spreads.
And the unemployment insurance fund could struggle to keep up with the need; at least 15,000 people applied for benefits on Monday, crashing the system, after Murphy ordered the closure of all bars, restaurants, casinos, movie theaters and gyms. He added malls to that list on Tuesday.
“You can’t do what we’ve done and not have a dramatic impact on not just people’s lives but also on the health of the state’s budget and on the state’s revenues,” Murphy said at Wednesday’s press conference.
The governor said he had a “constructive” call with the state’s congressional delegation about getting flexible block grants “as soon as possible,” as well as grants and forgivable loans, and operating subsidy funds for bus and rail transit. But the block grants are at the top of his list, Murphy said.
“That is the singular fastest and best way to shore up our finances,” he said.
Helping residents is also key, and Murphy said he is asking the federal government to lower the eligibility threshold for programs like SNAP and to allow for more flexibility for when people can use their food stamps.
“We need real relief on the individual level, particularly for those who are struggling and need help the most,” he said.
In a conference call with reporters Wednesday afternoon after the Senate passed a multibillion-dollar emergency package, Menendez and Sen. Cory Booker (D-N.J.) said the aid will help workers and the economy, but more needs to be done. Menendez said the expansion of unemployment insurance included in the package will go a long way toward helping New Jersey workers as the state experiences a spike in the number of applications for benefits.
Menendez also agreed that New Jersey needs more federal assistance — in the form of block grants and other reimbursements.
“My priority, as always, will be meeting the needs of New Jersey first,” he said. “New Jersey is already spending billions on this crisis and we need to expedite federal reimbursements for the sake of the state’s budget and needs.”
Meanwhile, with many businesses shut down, the state Turnpike Authority held two public hearings Wednesday on a plan to raise tolls and create a $24 billion, eight-year capital plan. Top officials there presented the proposal as a “stimulus” for New Jersey, saying such “public works projects” would assist with the “economic recovery efforts.”
The plan requires the authority to raise tolls on the New Jersey Turnpike and the Garden State Parkway, adding about $525 million in revenue next year. The agency could continue to raise tolls annually by up to 3 percent.
“The capital program we’re proposing will keep tens of thousands of women and men at work, will help drive New Jersey’s economy and will bolster mobility and improve safety on two of New Jersey’s most important highways for generations to come,” state Transportation Commissioner Diane Gutierrez-Scaccetti, chairwoman of the Turnpike board, said at the hearing.
This article was originally published on politico.com here.