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New York to Receive First Half of $12.7 in Federal COVID Relief Funds, With Restrictions

New York to Receive First Half of $12.7 in Federal COVID Relief Funds, With Restrictions

     The Biden administration begins to distribute the $350 billion that he designated from his COVID relief stimulus for state and local governments today, and New York will be receiving the first half of its $12.7 billion. New York will receive its second portion of funds in May 2022, after the pandemic is expected to end in the US.

     The staggering amount in federal relief coming to New York nears the $15 billion wanted by Gov. Andrew Cuomo to help the state recover, fund more educational programs, and provide middle class tax cuts. 

     In January, before details of Biden’s massive $1.9 trillion stimulus emerged, Gov. Cuomo said the state was preparing two budgets: one that assumes that New York would receive $6 billion from Biden’s COVID relief bill. At the time, Gov. Cuomo said that the state needed $15 billion to compensate for New York’s current budget deficit.

     When news of Biden’s stimulus emerged in the early months of 2021, New York Democrats adjusted their budgets to allow for increased spending with their federal windfall.

     Republicans who blocked some state and local aid argued that the funds amounted to a bailout of poorly run Democratic states, such as New York, which had long-running deficits.

     Although New York state is getting nearly $13 billion, and New York City is getting $4.3 billion, the use of the funds comes restrictions: the Treasury Department has a list of “eligible uses” to which states and localities must adhere. In addition, states must report their use of the funds to the federal government.

     Officials said the funds must be spent on public health, public sector revenue, fund water, sewer, and broadband internet projects, and on bonus pay for essential workers.

     The federal government is putting guardrails on the uses of the stimulus funds to ensure “the will of Congress” that the money is put “toward relevant uses,” Biden administration officials told reporters.

      For instance, the funds cannot be used by states to finance tax cuts or to make pension fund deposits, the Treasury Department said. Localities also cannot pay for long-planned infrastructure projects that are unrelated to water and internet broadband.

(Photo by: Official White House Photo by Adam Schultz)


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