Trenton Also Set to Accept First American Rescue Plan Payment of $36.5 Million
Trenton, N.J. – Mayor W. Reed Gusciora announced today that the City of Trenton will start public discussions about the transition to a calendar year budget cycle and the acceptance of Trenton’s first payment under the American Rescue Plan during City Council meetings this week.
Ordinance 21-012 will move the City’s budget from a fiscal year cycle to a calendar year cycle starting Jan. 1, 2022. The N.J. Department of Community Affairs (DCA) will make a presentation outlining the benefits of the transition before City Council tonight, May 25, 2021. The related public hearing and second reading will be June 10, 2021.
If passed, Trenton will begin a six-month transition period in July 2021 before shifting to a 12-month calendar at the start of 2022. The move will streamline the budget process and align Trenton with how most municipalities and counties in the state operate. Trenton is one of just seven municipalities in the entire state that still operate under a fiscal year budget calendar. Paterson made a similar conversion last year.
Despite the next budget only covering a six-month period, Trenton could potentially be eligible for a year’s worth of anticipated state aid. In addition, the City would be required to only make one pension payment over the next 18 months.
“Overall, a calendar year budget would put Trenton in the best position to pass another budget that has a zero-tax increase for city residents and help build up a surplus,” said Mayor Gusciora. “Not only would this transition help us embrace the best budget practices already at work in municipalities across the state, it could also make us eligible for more state aid during the first six months, which would be a major benefit as we work to overcome the COVID-19 pandemic.”
City Council will also consider Resolution 21-201 accepting the first $36.5 million in American Rescue Plan funds. The $1.9 trillion American Rescue Plan contains $360 billion in state and local aid to help employ essential workers, assist struggling families and small businesses, and make critical infrastructure investments. Trenton will receive $72,913,998 across two payments, the first of which was received on May 19.
On May 10, 2021, sixty days after President Biden signed the American Rescue Plan Act into law, the U.S. Department of Treasury issued its “Interim Final Rule,” which details eligible uses for funds. The Interim Final Rule is currently open for a 60-day comment period, which will close on July 9, 2021 after which Treasury will issue its Final Rule based on questions and comments from state and local governments.
Eligible uses include supporting public health expenditures, addressing negative economic impacts related to COVID-19, replacing lost public sector revenue, providing premium pay for essential workers, and investing in water, sewer, and broadband infrastructure. Generally, municipalities must assess whether and how the use would respond to the COVID-19 public health emergency and identify the connection between the negative impact and how the assistance responds to that impact.
The guidance offers wide latitude to support public health initiatives and resources, including COVID-19 mitigation and containment, medical expenses, and behavioral and mental health services. This also includes capital investments in public facilities to meet operational requirements related to the pandemic. Municipalities are also empowered to address negative economic impacts for individuals, households, small businesses, and non-profits, especially in low-income and socially vulnerable communities.
The City is currently developing proposals based on the updated guidance. Following the passage of the American Rescue Plan, the Office of the Mayor also assembled an advisory committee of city officials, policy experts, and community leaders to help evaluate upcoming projects. In addition, the City awaits additional guidance from DCA on how to budget the funds.
Residents interested in learning more about the budget transition can visit the City’s website at https://www.trentonnj.org/ for instructions on how to tune in to tonight’s City Council meeting, which begins at 5:30 p.m.