The state of New Jersey and local governments will begin receiving billions in federal aid this month, the US Treasury Department said on Monday.

The $ 1.9 trillion coronavirus stimulus bill included $ 350 billion in aid to states and local governments. New Jersey and its municipalities will receive $ 10.2 billion.

For the most part, federal money will be distributed in two phases, this month and next year. But New Jersey will likely be able to get its $ 6.4 billion in lump sum funding due to its unemployment rate soaring due to the coronavirus pandemic.

The state’s unemployment rate rose to 7.7% in March, from 3.7% in February 2021. Any state with an increase of more than 2 percentage points from February 2020 is eligible for a single payment .

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Unlike the $ 1.8 billion New Jersey received under the $ 2 trillion CARES Act, there are far fewer restrictions on how states and localities can use their federal funds.

Gov. Phil Murphy said during his last coronavirus briefing in Trenton on Monday that state officials were reviewing Treasury information and it was too early to know how the money would be spent.

“Now we need to have a very precise idea of ​​the parameters,” Murphy said.

The money can be used to make up for lost tax revenue, fund rising healthcare costs due to COVID-19, rehire laid-off public service workers, help residents who are hungry or facing a crisis. eviction, help small businesses and provide additional wages for essential workers.

In addition, the money can be used to help communities hardest hit by the pandemic, including addressing long-standing issues; develop high-speed Internet; and improve water and sewer systems.

“With this funding, communities hard hit by COVID-19 will be able to regain some semblance of normalcy; they will be able to rehire teachers, firefighters and other essential workers – and help small businesses reopen safely, ”Treasury Secretary Janet Yellen said.

Aid cannot be used to consolidate pensions or reduce taxes.

Congressional Democrats lobbied for state aid last year, but were pushed back by then-President Donald Trump and Senate Republicans. But when President Joe Biden was elected and Democrats took control of the Senate, they were able to pass aid to the GOP’s unanimous opposition.

In a briefing with reporters on Monday, administration officials said the lesson learned from the Great Recession of 2008 was that the recovery was much less robust because Congress failed to provide sufficient assistance to governments state and local.

“One of the things that held back the 2008 recovery was the contraction of state and local governments,” said Gene Sperling, who coordinates the White House’s response to the economic downturn induced by the coronavirus. “The whole character and strength of the recovery would have been effective if Congress had wanted to put in place a stronger and stronger package of assistance for state and local governments.”

Direct allocations went to municipalities designated as metropolitan cities of at least 50,000 inhabitants or “major cities” designated by the US Census Bureau in designated metropolitan statistical areas.

Unlike using the CARES Act, New Jersey will receive $ 578 million to distribute to small municipalities.

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Jonathan D. Salant can be reached at [email protected]. Follow him on @JDSalant.

Brent Johnson can be reached at [email protected].

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