Lawmakers approve $700M of COVID-recovery spending (updated)

State legislators cleared  the $700 million in COVID-recovery spending sought by Gov. Phil Murphy.

The proposal calls for major spending on Hackensack Meridian Health, the New Jersey Wind Port in South Jersey, and hundreds of millions of dollars toward other projects meant to bolster the state’s health care infrastructure and economic recovery.

Murphy’s $700 million proposal was passed by at the bipartisan Joint Budget Oversight Committee during a Nov. 30 meeting held remotely.

The two Republican members – incoming Senate Republican Leader Steven Oroho and Assemblyman Hal Wirths, both from the 24th Legislative District – criticized the spending as insufficient to finance the state’s pandemic recovery. Both abstained from the panel’s vote.

“Republicans have proposed a detailed plan to use billions of federal pandemic relief funds to support small businesses, prevent unnecessary tax increases on employers, fix broken computer systems at unemployment and the [Motor Vehicle Commission], help tenants and homeowners, and provide relief to property taxpayers,” they said in a joint statement.

“The Murphy administration, in contrast, has presented no comprehensive plan, no strategy, no process for selecting what gets funded, and no explanation for anything that was submitted to JBOC for approval.”

Murphy had the option to use the ARP funds to maintain the weekly $300 supplemental unemployment payments, but declined to do so, saying the state would burn through the cash too quickly.

The governor and Democratic legislative leaders also declined to use the funds to offset tax increases employers began paying this fall to replenish the state unemployment fund, which was drained during months of COVID-19 business closures.

“If we took every single dollar that we had to offset the unemployment, it wouldn’t have been enough,” outgoing Senate President Stephen Sweeney, D-3rd District, said during a morning panel hosted by the New Jersey Business and Industry Association.

“Do you use the dollars to try to improve the economy? Do you use the dollars to fix things that are broken in the state of New Jersey?” Sweeney continued. “It’s a tough position at the end of the day because there’s not enough money.”

Republicans also complained that the proposal came out during Thanksgiving weekend, when most New Jerseyans were traveling or with family. Murphy rejected that criticism.

“It just so happened it came together in that timing,” the governor said during his weekly COVID-19 briefing on Nov. 29. “There’s nothing either that we’re trying to hide or are ashamed of.”

But both Democrats and Republicans on the committee were critical of the state Treasury Department for not having any representatives present – a rare occurrence in the legislative budget process. Senate Budget Committee Chair Paul Sarlo, D-36th District, said he could not recall that happening in the last 13 years. And retiring Senate Majority Leader Loretta Weinberg, D-37th District, expressed displeasure.

Officials from the state Treasury did explain the agency had no representatives at the meeting, but said they submitted written answers and other information, and that all lines of communication remained open with state lawmakers.

“Treasury remains ready to answer additional questions from the Legislature as the administration and Legislature work together to support their shared priorities,” Danielle Currie, a spokesperson for the department, said in an email.

Of the $700 million in proposed spending, $262.6 million would come from the $6.4 billion of federal pandemic relief funds the state received under the American Rescue Plan. The remaining $435 million would be drawn from a fund established to prevent the state from taking on more debt.

Treasury officials told lawmakers that the $435 million from the New Jersey Debt Defeasance and Prevention Fund would keep the state from having to add another $8.7 million next fiscal year to its $44 billion debt obligations and avoid another $508 million in future debt service payments.

“We think it’s money that will be well-spent – going to great uses – including helping bolstering public health institutions and doing some great things that the state really needs,” Murphy said. “We think these are smart investments across the board, up and down the state.”

The administration is seeking $265 million for the New Jersey Wind Port in South Jersey, and $75 million to build the Rowan University School of Veterinary Medicine. Another $45 million is being proposed for dredging at the wind port; $35 million for the South Jersey Port Corporation for port upgrades and improvements and $15 million for the expansion of the Cooper Medical School of Rowan University.

Hackensack University Medical Center  would get $100 million to improve its health care infrastructure.

The Department of Community Affairs and the Housing and Mortgage Finance Agency would receive $40 million to “fill COVID-induced” supply chain gaps in affordable housing and community development projects.

Another $37.5 million would be used to help rent-relief applicants most at risk of eviction, and $25 million is earmarked for the state to buy land in Essex and Hudson counties as part of a planned $65 million Greenway transportation corridor spanning the two counties.

Under the plan, the state would also spend $20 million in COVID relief to help Inspira Health purchase Salem Medical Center, and smaller sums of money on a variety of other projects.

This story was updated at 3:50 p.m. EST on Nov. 30, 2021 to add comments from legislative Democrats and the state Treasury Department.