Business leaders tell NJ how to use $6.4B in COVID relief funds
New Jersey business groups don't put an endless amount of trust in the state's ability to budget properly.
So business leaders have created a number of recommendations on how to best use the $6.4 billion coming from the federal government for recovery from the devastating impacts of the COVID-19 pandemic.
In the meantime, New Jersey is awaiting guidance on how funding from the American Rescue Plan can be spent.
"It's crucial that the state makes smart decisions and be strategic about how the dollars should be deployed," said Ralph Albert Thomas, CEO and executive director of the New Jersey Society of CPAs.
During a virtual press conference run by the New Jersey Business Coalition, Thomas said the Garden State should use a portion of the federal relief funds to help pay down some of the its $44 billion in debt.
"It's no secret that New Jersey is one of the most indebted states in the country," he said.
Thomas said if the state has the ability, it should reserve at least a third of the federal funds for a special short-term surplus that can be drawn down from over multiple budgets, to help make up for any spending growth.
"And legislation should be passed to guarantee that these funds are not raided for other purposes," he said.
In order to get by during the pandemic, New Jersey incurred an additional $4 billion in debt in 2020.
Michele Siekerka, president and CEO of the New Jersey Business & Industry Association, noted that the federal funds can be used for costs incurred through December 2024. For that reason, the state has the ability to take a multiyear approach to relief-fund spending.
Millions of dollars are also coming from the federal government to county and municipal governments in the state.
"To avoid redundancies, there must be a central point in the Governor's Office to coordinate the efforts in collaboration with the Legislature," Siekerka said.
Speakers on the virtual press conference stressed the importance of focusing expenditures on non-recurring items — ones that don't require payment year after year — such as the grants that were awarded to small businesses through federal money awarded under the Trump administration. Any new programs that require yearly funding, they said, could result in increased taxes on New Jersey residents.
Christina Renna, president and CEO of the Chamber of Commerce Southern New Jersey, said New Jersey is very fortunate to have more than $6 billion coming its way, but "it's all going to be for naught" if not used wisely.
"Historically, New Jersey has not always been the most fiscally prudent in its approach to budgeting," Renna said. "We want this money to be spent responsibly and in a way that really helps those most in need and those that have been most vulnerable and the most impacted by the course of the pandemic."