On Friday, State Treasurer Elizabeth Maher Muoio announced that State revenue losses in the current Fiscal Year, which now will end on September 30, will total $2.75 Billion. As you recall, back in March, in anticipation of COVID’s economic fallout Treasury’s Office of Management and Budget (OMB) announced that some $920 million items of appropriations had been frozen and placed in reserve. These included a total of $44,738,465.18 municipal revenues.
This announcement states that the Governor will ‘de-appropriate’ approximately $1.32 billion, including State balances available as the result of the application of certain federal revenues towards State spending. That will subtract $29.9 million from the Transitional Aid program.
In addition, the Governor will also be asking the Legislature for permission to delay September Consolidated Municipal Property Tax Relief Aid (CMPTRA) and Energy Tax Receipts (ETR) payments until October. It appears that the July and August payments will be delivered as anticipated. The one-month delay from September to October delays the payment into the first month of the State 2021 fiscal budget (FY2021), which will now run from October 1, 2020 to June 30, 2021.
The Administration’s proposal will use a portion of State government’s Federal CARES Act Coronavirus Relief Fund (CRF) funding to create a $250 million Local Government Relief Fund. The Department of Community Affairs (DCA) will administer this as reimbursement-based grants to local governments for eligible CRF related costs that have not been reimbursed through other sources, including FEMA. Local units will need to demonstrate financial hardship directly attributable to COVID-19. That would include substantial COVID-19 related expenditures in public safety overtime, health services, self-insured health benefit outlays, and public works, which will substantially heighten local governments’ budgetary and cash-flow challenges. $5 million from this relief fund will be dedicated toward supporting projects that improve local government dispatch and public health services to enhance emergency response preparedness and system resilience. However, DCA would be directed to prioritize the twelve counties that were not eligible for their own Coronavirus Relief Fund allocations.
Looking forward to the 2021 State Fiscal Year, which will begin on October 1 and conclude June 30, 2021, the Governor calls for the elimination of the SFY ‘21 increases of $336 million for school aid, which had been included in the Governor’s February request to the Legislature. School aid, like the September ETR/CMPTRA, will be delayed into the beginning of SFY ’21.