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N.J., Pa. await federal stimulus money

State leaders in New Jersey and Pennsylvania are closely watching the federal stimulus plan moving through Congress, expecting billions of dollars to help plug budget holes, spark construction, and widen safety-net services.

State leaders in New Jersey and Pennsylvania are closely watching the federal stimulus plan moving through Congress, expecting billions of dollars to help plug budget holes, spark construction, and widen safety-net services.

Gov. Corzine is counting on $300 million to close a gap in New Jersey's current budget, and has set up a team of aides with Capitol Hill experience to extract the most funding possible from the $819 billion stimulus package. Gov. Rendell said the billions that could come to Pennsylvania would help balance the state's budgets for the next three years.

"We're thrilled we have a partner down in Washington now, and we think we can work with him," Corzine said recently of President Obama.

Rendell and Corzine are among governors across the nation - many facing the prospect of deep budget cuts, tax hikes or both - who are looking to the stimulus plan to ease the pain of a difficult year. In states such as California, Washington and Maryland, leaders are drawing up plans for what they would do with the stimulus money that could flow to their capitals and schools.

"Many [governors] are essentially assuming that at least some of this money will come through," said Nicholas Johnson, director of the Center on Budget and Policy Priorities' state fiscal project.

According to estimates by the Federal Funds Information for States, which analyzes how federal actions affect states, New Jersey could see $5.2 billion and Pennsylvania could receive $8.2 billion, though the governors have made more modest assumptions. The exact funding amounts are difficult to predict because many questions remain about the various facets of the bill and the final details that will emerge from the House and Senate.

Forty-five states have budget deficits for this fiscal year, next year or both, according to the center. As business profits, personal income and consumer spending shrink, so do state tax revenues. At the same time, more people hit by the recession may need state services such as unemployment aid or medical coverage.

The stimulus package could, among other things, pay for increased unemployment benefits; increase Medicaid coverage; support school budgets; and boost road and rail projects.

Corzine has said that without federal aid, he may have to delay a plan to expand preschool for low-income children. A proposal to redistribute federal unemployment dollars would help New Jersey avoid a tax increase on business, which is looming because the state's unemployment fund has dwindled.

The governor's stimulus team has advised the state's congressional delegation on how to best shape the package and has prepared New Jersey agencies to meet the requirements in the bill.

House approval of the stimulus package yesterday came nearly two months after an unusual meeting in Philadelphia in which dozens of governors, led by Rendell, pressed Obama for support. Many of the primary items sought that day - help paying for health care, extension of unemployment coverage and billions for infrastructure plans - are included in the House bill.

Rendell has said a significant portion of Pennsylvania's aid would cover rising Medicaid costs. The rest likely would help patch holes in the state budget.

"We will use more of the federal stimulus package than anticipated," Rendell said. But he said federal aid alone would not cure all of Pennsylvania's fiscal problems.

Even with the federal help, Rendell said, he planned to set federal dollars aside to help in his final two years in office because he wanted to avoid handing his successor a huge deficit.

Much of the federal money is expected to come with strings attached. Estimates of how much each state may receive and what the money may be used for vary widely because the formulas for giving out the money have not been nailed down.

The package proposed by House Democrats includes dozens of categories of funding. Among the largest allocations are $87 billion for Medicaid, plus $79 billion in aid for states and school districts and an additional $41 billion in targeted education aid. About $43 billion would be used for unemployment benefits and job training.

New Jersey mayors have drawn up a wish list of more than $730 million in projects, said William Dressel, executive director of the New Jersey League of Municipalities. It is not clear how many, if any, of the plans would get funding.

"Our fight is going to be directed to the gold dome on State Street to make sure Main Street is not forgotten," Dressel said, referring to the Capitol in Trenton.

Nestled among the larger items are some that have drawn the ire of House Republicans, including $600 million to buy alternative-fuel vehicles for the federal government, $400 million to "National Treasures" such as the National Mall, Smithsonian Institution and National Endowment for the Arts, and $650 million in coupons to help people convert from analog to digital television signals.

Brian Riedl, senior federal budget analyst at the Heritage Foundation, said states were hurting because they had failed to plan when times were good.

"The reason states are looking for bailouts is because they've continued to increase spending," Riedl said. "The real losers are taxpayers from fiscally responsible states, because they played by the rules and they're paying to bail out irresponsible states."

N.J. Towns Draft Wish List

Fifteen local municipalities have drawn up plans for more than $75 million in projects they say could be launched within 90 days of receiving funds from the federal stimulus.



Wheatley Avenue and Pine Street improvement projects, $550,000.


Street projects, $509,300.

Maple Shade:

Road and utility-system improvements, $5.5 million.


Town Hall renovation; Kossuth, Taylor and Filmore Street reconstruction, $720,000.


Prince Street, Cedar Drive, Laurel Lane and Oak Street reconstruction, $1.6 million.



Water, streets and sewer projects, $16.9 million.


Police and Municipal Court Complex, Public Works Complex and water projects, $15.5 million.

Gloucester Township:

Road, sidewalk, drainage and septic projects; solar panels on public buildings; brush-recycling facility, $11.2 million.


New municipal building; Jefferson and Ashbourne Avenue reconstruction; sewer repair, $3.7 million.


Community center; sewer project; police and fire department parking lots, $3.3 million.


Haines Road and Springfield and Derousse Avenue projects, $1.4 million.


Details unavailable.

Winslow Township:

Solar-panel project; well-water radium remediation; streets and pump-station projects, $9.5 million.



Water and sewer projects, $3.7 million.

Woolwich Township:

Russell Mill Road reconstruction, $1.0 million.

SOURCE: N.J. League of Municipalities