Biden admin releases $12.7B for NY state, $4.3B for NYC in COVID stimulus

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The Biden administration on Monday began to distribute $350 billion to state and local governments from his $1.9 trillion COVID-19 relief bill — with $12.7 billion going to New York state alone and billions more flowing to cities and counties.

New York City is getting $4.3 billion.

But the money comes with strings attached — the Treasury Department has a list of “eligible uses” that states and localities must adhere to.

Officials said the funds must be spent on public health, to counteract the negative economic effects of the pandemic, to replace lost public sector revenue, to provide bonus pay for essential workers and for water, sewer or broadband internet projects.

The amount of money going to New York’s state government wasn’t a surprise. It is consistent with what was projected before Biden’s $1.9 trillion stimulus bill was passed by Democrats — with no Republican support — in March.

Each of New York’s cities and counties also get a windfall of cash. In addition to the Big Apple’s $4.3 billion, Albany gets $80 million and Buffalo gets $331 million. Additional funding for boroughs — from a pool allocated for each county in the state — pushes New York City’s total appropriation close to $6 billion.

Biden administration officials told reporters that the guardrails on uses are imposed to ensure the will of Congress in putting the funds toward relevant uses.

Republicans last year blocked some state and local aid, arguing it amounted to a bailout of poorly run Democratic states that had long-running deficits, citing New York as an example.

Funds cannot be used by states to finance tax cuts or make pension fund deposits, the Treasury Department said. They also cannot pay for long-planned infrastructure projects unrelated to water and broadband. The use of funds must be reported to the federal government.

On a background call with reporters, an official said the funds can be used through 2024 — and there could be broad justifications invoking racial disparities, such as in health and education, if those gaps worsened during the pandemic.

But the rules broadly mean that governments can only offset financial holes in budgets that were created by COVID-19, officials said.

The “eligible uses” are broad enough, however, that states like California that are reporting budget surpluses can still use their money. An official told reporters on a background call that the Golden State, for example, could put its $1.2 billion toward addressing homelessness.

The local government funds will be delivered in two tranches. Half will be delivered this month and another batch will come in 12 months, even though that’s after the pandemic is expected to end in the US.

For states, the delivery is more complicated.

“States that have experienced a net increase in the unemployment rate of more than 2 percentage points from February 2020 to the latest available data as of the date of certification will receive their full allocation of funds in a single payment; other states will receive funds in two equal tranches,” the Treasury Department said.

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