Menendez, Murphy Stress Need for Robust Flexible State Aid in Next COVID-19 Federal Stimulus

Menendez’s bipartisan SMART Fund would provide $500B in flexible aid to state, local governments to bolster pandemic fight, stave off mass layoffs, help economy recover

TRENTON, N.J. – U.S. Senator Bob Menendez today demanded that the federal government do “a lot more” to help frontline states and communities “if we’re going to successfully defeat COVID-19 and move our economy forward.”  He joined Governor Phil Murphy at the daily New Jersey pandemic briefing to urge Congress to include robust, flexible funding for states in the next COVID-19 stimulus package.

“New Jersey can’t do it alone.  A national emergency requires a national response,” said Sen. Menendez.  “The federal government cannot sit on its hands and watch our states go bankrupt and our people suffer.  The time to act is now, and I will not give up on this fight.”

Sen. Menendez recently unveiled the $500 billion State and Municipal Aid for Recovery and Transition (SMART) Fund, co-authored by Sen. Bill Cassidy (R-La.), which builds upon the existing $150 billion set aside in the Coronavirus Aid, Relief, and Economic Security (CARES) Act to help state and local governments, and gives them greater flexibility to use those funds to plug revenue losses due to the COVID-19 outbreak, while targeting funding to the nation’s coronavirus hot zones.

New Jersey has the most coronavirus cases in the nation second only to New York, with 139,945 infected and 9,310 deaths.

“The SMART Fund ensures New Jersey gets its fair share of federal funding,” the senator continued.  “These flexible, federal dollars can help our state dramatically expand its testing capacity and continue to treat COVID-19 patients.  It will help stave of massive layoffs and deep, painful cuts to the essential services that make our state the great place to live, work, visit and shop.”

Gov. Murphy called the need for direct federal aid to states the most pressing issue to ensure the delivery of essential services for residents—namely police, fire and EMS, frontline public health workers, educators, Department of Labor employees processing unemployment claims, public works and sanitation.

“A fiscal disaster is not months away; hard and unpalatable decisions will be on our doorstep in just a few weeks.  Several cities are currently as we speak preparing for layoffs,” said Gov. Murphy.  “Senator Menendez knows—just as some of his Republican colleagues know—we need significant federal investments in our states to allow for our recovery.  Without it, there will likely be no recovery.  Time is of the essence, and Congress needs to act, and act now.  And, I thank Senator Menendez for his tenacity in making our case, and bringing along his reasonable Republican colleagues.  This fight is not over, and I will do everything I can to see that it is won.  I know that Senator Menendez will do everything he can to see that it is won.”

The SMART Fund falls in line with requests made by the National Governors Association and would deliver funding to state and local governments, U.S. territories and the District of Columbia in three equal tranches based upon a new formula that takes into consideration areas of the country with the greatest need:

1)     One-third to eligible entities based on population size to ensure they each receive additional federal resources to meet their growing needs;

2)     One-third to eligible entities based upon the number of COVID-19 cases relative to the U.S. population to target the urgent public health challenge;

3)     One-third to eligible entities based upon state revenue losses relative to pre-COVID-19 projections to target the urgent economic challenge.

Last week, Sen. Menendez heard directly from New Jersey mayors who are grappling with tough choices at the local level due to rising costs to respond to the pandemic amid dramatic drops in revenues.

“We’re all in this together,” Sen. Menendez said in response to a question on how to get President Trump’s support for providing states robust, flexible aid.  “We generate 20 percent of GDP for the entire nation.  You want to see the economy thrive, then you have to make sure this region thrives and states, in general, thrive in order to create the employment, the tax revenues and the consumer confidence that’s necessary.  So, I think we have common ground in that regard with the President to seek the type of solutions we want.”

Sen. Menendez said he continues to build bipartisan support for the SMART Fund in the Senate and announced that Congresswoman Mikie Sherrill (N.J.-11) will lead the bipartisan effort to pass the SMART Fund in the House of Representatives.