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Posted on: February 16, 2021

House Oversight and Reform Committee Holds Reconciliation Hearing Aid on State and Local Government

The House Oversight and Reform Committee met Feb. 12 to consider details on the state and local government aid section under the Covid-19 emergency aid reconciliation package. While this is a fluid situation and provisions can change, this information is current as of this writing.  We will keep you updated as developments warrant.

Included in the package is $350 billion in total for all municipalities, counties, states, tribes, and territories. Of that amount, $130 billion is set-aside for local governments, equally divided between municipalities and counties. The $65 billion for municipalities will be allocated to 19,000 cities, towns, and villages according to a modified Community Development Block Grant (CDBG) formula. Under that formula, $45.5 billion will be split among all municipalities that are designated CDBG entitlement cities (generally, cities with populations above 50,000) and $19.5 billion will be split among cities not designated CDBG entitlement cities (generally, cities with populations below 50,000 residents).

According to these formulas, New Jersey will receive $6.483 billion and New Jersey localities will receive $2.950 billion for a total of $9.43 billion.

There is no deadline for spending down funds, eligible expenditures will include replacement of lost revenue and the U.S. Treasury Department will allocate funds in a similar fashion to CDBG.

Assuming it is favorably reported out of committee, the section will be delivered to the House Budget Committee to be assembled into the broader emergency aid package.

The National League of Cities has created a form to register support for this legislation that will be forwarded to your Members of Congress. We urge you to take a moment and fill it out.

Contact: Paul Penna, Legislative Analyst, ppenna@njlm.org or 609-695-3481, ext. 110.

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