Inflation Is Eating Up NJ's Unspent Pandemic Funds, GOP Lawmakers Say

NEW JERSEY — “Why are billions of dollars being allowed to be consumed by inflation?” This is just one of several hard questions that need to be asked about a windfall of unused federal coronavirus aid in New Jersey, a group of Republican state lawmakers say.

Gov. Phil Murphy signed the largest state budget in New Jersey history in June. Read More: Tax Rebate Official As NJ Budget Is Signed (Here Is What You'll Get)

But many Garden State residents continue to demand more insight into how the state plans to use its unspent pandemic aid from the U.S. federal government.

Last week, Republican members of the Senate Budget & Appropriations Committee called on their Democratic peers to hold required oversight hearings to review proposed uses of federal pandemic relief funds. The lawmakers are also calling for a review of a state fund intended to pay down and prevent new debt.

The request was made in a letter from Senate Republican Leader Steven Oroho (R-24), Republican Budget Office Declan O’Scanlon (R-13), Senator Sam Thompson (R-12) and Senator Michael Testa (R-1). It was sent to to Senate President Nicholas Scutari (D-22), Majority Leader Teresa Ruiz (D-29), and Budget Chair Paul Sarlo (D-36).

Read its full text here.

“We are extraordinarily concerned that there has been no public legislative oversight of the unparalleled budgetary power granted to Governor Murphy in this year’s state budget,” they wrote. “We respectfully request that public oversight begin as soon as possible – consistent with statutory requirements and past commitments.”

The lawmakers continued:

“As you are aware, the Appropriations Act requires the Joint Budget Oversight Committee (JBOC) to meet quarterly to provide oversight of how the Governor, in his sole discretion, is appropriating $300 million of federal block grants and how he will recommend appropriating approximately $700 million that requires JBOC approval. The JBOC has similar oversight responsibilities with respect to the ‘Debt Defeasance and Reduction Fund’ which allows the Governor to recommend appropriations – with JBOC approval – of more than $3 billion of uncommitted balances.”

The lawmakers said there are three big concerns they share:

INFLATION – “First, we are concerned that billions of dollars sit in idle State accounts while inflation devalues these funds at a rate approaching 10% annually. The nonpartisan Office of Legislative Services has indicated that the Governor and his Administration have failed to retire any debt with the $3 billion of ‘Debt Defeasance and Avoidance Fund’ set aside for that purpose or even encumber under contract any of the $3 billion set aside in that fund for capital projects. Similarly, they have failed to recommend a single use for federal funds that requires JBOC approval.”

$300 MILLION IN FUNDS – “Second, though the Governor has not yet advanced many uses of the $300 million of federal funds under his unilateral control, what he has advanced is disturbing. He has advanced a program that hands out $2,000-$4,000 checks to criminals departing prison and will purchase new SUVs for his use and that of the Lt. Governor.”

LACK OF INFORMATION – “Finally, while dozens of special grant programs under his control (an accounting of some are attached hereto) are being eaten up by inflation, there has been little information made available about how the grant programs will work and how applications can be submitted. Without legislative pressure and legislative oversight, the value of the grant programs continues to be eroded by inflation and administration decisions being made about how programs will work will become harder and harder to influence or correct when correction is necessary.

Here are some of the “hard questions” that need to be asked, the Republican legislators said:

• “Why are billions of dollars being allowed to be consumed by inflation?”
• “Of the small amounts advanced, why is it that cash payments for criminals and new SUVs for the Governor and Lt. Governor are priorities?”
• “Why are our proposals to use funds to head off planned tax and toll increases and establish local capital projects and emergency preparedness being ignored?”
• “What thoughtful proposals have been offered by the public that have been ignored?”

“Legislative oversight is required in the Appropriations Act,” the four lawmakers said. “It has been promised. It’s past time to deliver.”

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