Feds Grant NJ More Flexibility On CARES Act Funding

TRENTON, NJ — After several days of discussion between state and federal authorities, New Jersey has been granted some additional flexibility for its use of federal coronavirus funding, Gov. Phil Murphy said Tuesday.

The state, which could receive up to $2.4 billion in aid under the Coronavirus Aid, Relief, and Economic Security (CARES) Act that passed in late March, will be able to use more of the funding "to meet our emergent needs," Murphy said at his daily news conference on the impact of the coronavirus on the state.

"The new guidance doesn't get us all the way to where we want," he said, "but we are grateful we now have room to meet some of our immediate needs."

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Two weeks ago, Murphy said the state might be facing having to give back $1.8 billion in CARES Act funds because of tight guidance on the use that was issued at the time.

Murphy said there were multiple conversations with Treasury Secretary Stephen Mnuchin, President Donald Trump, and House Speaker Nancy Pelosi over the days since, seeking additional flexibility.

"I am grateful for the spirit of cooperation with which the administration and specifically Secretary Mnuchin and his and his team have taken these discussions, and for their willingness to listen to our concerns," Murphy said.

"We will put this money to good use, for our first responders and small businesses," he said.

The flexibility also gives the administration the ability to make the $467 million school funding payment to districts across the state later this week, which Murphy called a win for students and teachers, as well as taxpayers.

Matt Platkin, Murphy's chief of staff, said the guidance helps with the short-term cash flow problem that resulted in part from the state moving the income tax deadline from April to July.

"They accepted most of our requests," he said. "Obviously, in an ongoing conversation like this you don't get everything you ask for."

Platkin said the state is facing a tough budget problem for at least the next 14 to 15 months due to the dramatic drop in revenues across the state.

"This gives us more flexibility about what we can use immediately, before the next budget cycle," he said.

Murphy said now the energy is primarily directed at the discussions of the next round of assistance under negotiations in Congress. Pelosi has been pushing a bill to provide as much as $1 trillion in funding to hard-hit states, to shore up small businesses. The Republican-controlled Senate has been balking at the proposal.

"That's our next big ask," Murphy said.

The state is still in the earliest stages of reopening businesses and relaxing the stay-at-home order Murphy issued on March 21 as efforts remain in place to limit the spread of the coronavirus. There have been more than 180,500 New Jersey residents who have tested positive for the virus, and more than 8,200 who have died as of Tuesday, according to the state Department of Health.

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