News Flash

Federal Government

Posted on: May 18, 2020

Senator Menedez to Introduce Municipal Aid Bill

Sometime this week, New Jersey’s senior Senator Bob Menendez and Louisiana Senator Bill Cassidy, M.D., will formally introduce legislation that could help all New Jersey local governments. It would create a $500 billion fund to help states and all local governments respond to the current public health and economic crisis while maintaining essential services.  

When first discussed a few weeks ago, the bipartisan State and Municipal Aid for Recovery and Transition (SMART) Fund would have expanded eligibility for funding to include counties and towns with populations of 50,000 or greater. When this bill is introduced, however, the population threshold will be eliminated. All New Jersey municipalities and counties would now be provided with badly needed financial support if the SMART bill is enacted.

We thank Senator Menendez for agreeing to expand eligibility to all League member municipalities. And we thank him, Senator Cassidy, and their bipartisan cosponsors, Senators Hyde-Smith, Collins, Manchin, and especially, Senator Booker for their advocacy and coalition building efforts.

The bill would set aside $20 billion for hard-hit tribal governments, leaving $480 billion to be divided among the States through three revenue streams. States would be required to reserve one-third of the funding from each stream for local governments. Half of that one-third ($80 billion), ‘the State shall pay’ to municipal governments, and the other half would go to counties.

The bill would also increase flexibility for states and local governments to use the funds to address the budgetary impacts of the COVID-19 outbreak. Specifically, in addition to covering unanticipated pandemic response costs, the funding could be used to provide the local match for FEMA ‘Stafford Act’ relief, or:

‘… for expenditures in calendar year 2020, 2021, or 2022 that the State, Tribal government, or unit of local government would otherwise be unable to make because of decreased or delayed revenues.’

The first criteria for funding (totaling $160 billion) would be each state’s, and local unit’s, relative population, based on the most recent Census Bureau estimates. (The Bureau is scheduled to release those estimates within the next two weeks.)

The second tranche of funding (again, $160 billion) would be divided among the states, based on the percentage of COVID-19 cases, as of June 1, 2020. The local redistribution would be based on population.

The final $160 billion would be distributed at the beginning of next year, based on relative revenue losses, experienced during 2020.

Again, our thanks to Senators Menendez and Booker, for working to address the needs of all New Jersey municipalities. And our thanks to those of you who reached out to our U.S. Senators and your Members of the House, urging them to appreciate all you are doing and the impact of the virus on your budgets.

Don’t stop now!

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


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