Murphy: Federal assurances on use of rescue funds 'apparently were empty'

Gov. Phil Murphy on Thursday blasted the Trump administration for its “empty assurances” on how New Jersey could use billions of dollars of Covid-19 rescue funds after the U.S. Treasury Department issued guidance on how the money could be spent. The guidance requires that money from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, H.R. 748 (116), goes toward “necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019” that were incurred between March and December of this year. The guidance specifically bars state and local governments from using the funds as a form of revenue replacement. Murphy said during his daily briefing in Trenton that he was “assured that this funding would be able to be used flexibly by states, filling holes we now must deal with.” “Those assurances apparently were empty. Treasury’s guidance renders much of this funding virtually unusable,” Murphy said, adding that the state could wind up having to “return a good chunk of it. Murphy administration Chief Counsel Matt Platkin said at the briefing the guidance means state can’t use the funds for anything it budgeted for prior to the pandemic hit. “As we’re falling off a fiscal cliff, this money that was put into the CARES Act is now of little to no use to us,” Platkin said. “Sadly, the message from Washington to our first responders and to our educators and to others on the front lines is clear: As you work tirelessly to stop this pandemic, to keep people safe, our national leadership thinks you are not essential and that you should in fact fear for your jobs,” Murphy said. New Jersey has just shy of 100,000 known coronavirus cases and more than 5,300 residents have died of the disease since early March. Murphy has ordered all “nonessential” businesses closed, which is expected to deplete state tax revenues. Under the state Constitution, New Jersey’s state budget is not allowed to run a deficit. “If the federal government doesn’t do its job and support New Jersey’s families, we might not be able to keep our teachers, cops and paramedics employed — the very people who are on our front lines every day, and we’ll have to send this money back to Washington,” Murphy said. Murphy, a progressive Democrat and former diplomat, has toned down his criticism of President Donald Trump as the state seeks help to deal with the coronavirus, but this is the second time in as many days he’s clashed with Washington over funding. On Wednesday, Murphy criticized Senate Majority Leader Mitch McConnell, who suggested states should consider declaring bankruptcy instead of seeking federal bailouts. “At the very least we should be able to support our people and help keep the funding that municipalities and school districts are expecting to stay whole,” Murphy said. Murphy doubled down on his comments during Thursday’s briefing, saying the revenue shortfalls New Jersey faces because of its Covid-19 mitigation efforts apply to “many of our sister states — red and blue alike.” “Senator, if you are watching, remember that you are from the party of Abraham Lincoln, of Theodore Roosevelt and Ronald Reagan; three American presidents who when faced with challenges found ways to meet those challenges, to be greater than the challenges, to rise up,” Murphy said, referring to McConnell. “They did not get small, they got big in that moment, and that is the challenge, Senator, to you and to all leaders in this country.” Murphy has repeatedly said New Jersey will require federal block grants to stave off calamity, including “historic” layoffs for a huge swath of the state’s public workforce. While Murphy emphasized first responders and schools in his response to the Treasury Department guidance, he left unsaid that New Jersey’s pension system, which is underfunded by roughly $100 billion, presumably would not be eligible for rescue with federal funds. The $41 billion state budget Murphy proposed in February — which he and the Legislature have pushed back three months to Sept. 1 and acknowledged will need to change substantially — includes a $4.6 billion pension payment. Sam Sutton contributed to this report.

Murphy: Federal assurances on use of rescue funds 'apparently were empty'

Gov. Phil Murphy on Thursday blasted the Trump administration for its “empty assurances” on how New Jersey could use billions of dollars of Covid-19 rescue funds after the U.S. Treasury Department issued guidance on how the money could be spent.

The guidance requires that money from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, H.R. 748 (116), goes toward “necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019” that were incurred between March and December of this year.

The guidance specifically bars state and local governments from using the funds as a form of revenue replacement.

Murphy said during his daily briefing in Trenton that he was “assured that this funding would be able to be used flexibly by states, filling holes we now must deal with.”

“Those assurances apparently were empty. Treasury’s guidance renders much of this funding virtually unusable,” Murphy said, adding that the state could wind up having to “return a good chunk of it.

Murphy administration Chief Counsel Matt Platkin said at the briefing the guidance means state can’t use the funds for anything it budgeted for prior to the pandemic hit.

“As we’re falling off a fiscal cliff, this money that was put into the CARES Act is now of little to no use to us,” Platkin said.

“Sadly, the message from Washington to our first responders and to our educators and to others on the front lines is clear: As you work tirelessly to stop this pandemic, to keep people safe, our national leadership thinks you are not essential and that you should in fact fear for your jobs,” Murphy said.

New Jersey has just shy of 100,000 known coronavirus cases and more than 5,300 residents have died of the disease since early March. Murphy has ordered all “nonessential” businesses closed, which is expected to deplete state tax revenues. Under the state Constitution, New Jersey’s state budget is not allowed to run a deficit.

“If the federal government doesn’t do its job and support New Jersey’s families, we might not be able to keep our teachers, cops and paramedics employed — the very people who are on our front lines every day, and we’ll have to send this money back to Washington,” Murphy said.

Murphy, a progressive Democrat and former diplomat, has toned down his criticism of President Donald Trump as the state seeks help to deal with the coronavirus, but this is the second time in as many days he’s clashed with Washington over funding.

On Wednesday, Murphy criticized Senate Majority Leader Mitch McConnell, who suggested states should consider declaring bankruptcy instead of seeking federal bailouts.

“At the very least we should be able to support our people and help keep the funding that municipalities and school districts are expecting to stay whole,” Murphy said.

Murphy doubled down on his comments during Thursday’s briefing, saying the revenue shortfalls New Jersey faces because of its Covid-19 mitigation efforts apply to “many of our sister states — red and blue alike.”

“Senator, if you are watching, remember that you are from the party of Abraham Lincoln, of Theodore Roosevelt and Ronald Reagan; three American presidents who when faced with challenges found ways to meet those challenges, to be greater than the challenges, to rise up,” Murphy said, referring to McConnell. “They did not get small, they got big in that moment, and that is the challenge, Senator, to you and to all leaders in this country.”

Murphy has repeatedly said New Jersey will require federal block grants to stave off calamity, including “historic” layoffs for a huge swath of the state’s public workforce.

While Murphy emphasized first responders and schools in his response to the Treasury Department guidance, he left unsaid that New Jersey’s pension system, which is underfunded by roughly $100 billion, presumably would not be eligible for rescue with federal funds.

The $41 billion state budget Murphy proposed in February — which he and the Legislature have pushed back three months to Sept. 1 and acknowledged will need to change substantially — includes a $4.6 billion pension payment.

Sam Sutton contributed to this report.

Source : Politico USA More