GOP bill would allocate $300M more from CARES Act to small business — and do it this week

Gov. Phil Murphy and the state’s top Republican leaders both say they want to get more financial assistance to small businesses in the state. They just can’t decide where that money should come from.

On Friday afternoon, Murphy put the issue on Republicans in the U.S. Senate, specifically Majority Leader Mitch McConnell (Ky.), who Murphy said is holding up a stimulus package that could help small business owners everywhere.

“It’s shameful that they have not acted in Congress — especially McConnell and the Republican Senate — to throw a lifeline to small businesses,” Murphy said.

Republican leaders in the state shot back hours later, saying Murphy should free up more of the $2.4 billion dollars in CARES Act money the state received last spring.

Sen. Tom Kean. (File photo)

Senate Republican Leader Tom Kean (Westfield), Assembly Republican Leader Jon Bramnick (Westfield), Senate Republican Budget Officer Steve Oroho (Sparta) and Assembly Republican Budget Officer Hal Wirths (Sparta) called for both houses of the New Jersey Legislature to hold a special session before Thanksgiving to approve an emergency aid package to help small businesses and nonprofits impacted by COVID-19.

The Republican legislators called for an emergency session to consider S3210, which appropriates $300 million of those federal block grant funds to the New Jersey Economic Development Authority to provide financial support, such as loans or grants, to small businesses and not-for-profit organizations for the costs associated with business operation interruptions caused by any state-required closures due to the impacts of the COVID-19 pandemic.

Assemblyman Jon Bramnick. (File photo)

“Gov. Murphy is right that struggling small businesses and nonprofits need immediate help, which is why we’re calling for a substantial portion of New Jersey’s remaining unspent CARES Act funds to be dedicated immediately for that purpose,” Kean said. “It’s imperative that the Legislature take action immediately to pass a substantial aid package that would protect employers, families and the New Jersey economy.”

The Republican leaders say the governor has delayed spending much of the CARES Act funds the state has received.

But Darryl Isherwood, a spokesperson for the governor, said all $2.4 billion of the CARES Act allocation has all been allocated.

“We could not spend $300 million more on small business aid without taking away funds committed to other programs, and it is unlikely we could spend that amount by the Dec. 30 deadline imposed by federal law,” Isherwood said.

Sen. Steve Oroho. (File photo)

Oroho said the time to release the money is well past due.

“For months, we’ve been trying to get Gov. Murphy to do the right thing and release CARES Act funds for their intended purposes of helping our economy stay afloat,” he said. “Instead, the governor’s biggest dedication of relief funds has been to subsidize his own administration’s spending while he’s building a massive surplus that won’t help anyone. The Legislature needs to step in and correct course to prevent unnecessary harm to New Jerseyans who have already gone through so much.”

Isherwood said nearly $1.1 billion of the CARES Act money has been spent so far, and that the state is processing reimbursements now for institutions of higher education and local governments — so, the number will continue to increase quickly.

(The state’s transparency website is here.)

State officials say the EDA has distributed — or is in the process of distributing — $250 million in assistance to small businesses. This total was reached earlier this month when $60 million was added to phase 3 of the Small Business Emergency Grant Program.

Assemblyman Hal Wirths. (File photo)

This total does not include other programs to aid businesses, such as the state’s personal protective equipment program, which allows small businesses to buy PPE at a reduced rate — and with additional grant reimbursements. Some individual counties also have provided grant money for small business from CARES Act money they received separately from the state.

Republican leaders, however, say it isn’t enough to hold off a dire situation that could end up costing the state more in the long run if a large number of small businesses cannot survive.

“Many of our businesses are on the brink of permanent closure if they don’t get help,” Bramnick said.

Wirths said other states have been much more effective than New Jersey in distributing CARES Act funds.

“Other states are recognizing that waiting for additional federal action is no longer a viable option, and that the economic cost of doing nothing will far outpace the cost of expanding grant programs,” he said. “The governor is still considering more restrictions after what has already been a very hard year.

“Expanding our state grant program would send a lifeline to thousands of local businesses that are struggling to remain open right now.”

Murphy said more federal aid would help the state on the health front, too — saying it would make a potential second lockdown easier to implement if businesses could be paid for lost revenues.

“That’s the trade,” he said. “That trade should be available.”