Testimony of Renee Koubiadis to American Rescue Plan Act Virtual Hearing

July 27, 2021

Good afternoon. My name is Renee Koubiadis and I am the Anti-Poverty Program Director for New Jersey Citizen Action (NJCA), a statewide grassroots organization fighting for social, racial, and economic justice. I am here representing the collective views of the NJCA team. Thank you for the opportunity to testify this afternoon on the use of remaining American Rescue Plan Act (ARPA) funds.

As we all know, the public health and economic crises of the last year have laid bare and exacerbated inequities for people of color who have suffered more economic harm, become sicker, and died at higher rates than whites. The policy decisions you make now will have a strong impact on the recovery of those at the bottom in our state – making the difference between a slow recovery and a strong one for our state, between further harm to people who have been disproportionately impacted and true racial and economic justice.

While NJCA has highlighted today what we think are some of the most urgent priorities to which we hope to see ARPA funding dedicated, we also contributed to and wholeheartedly support the more comprehensive list of public needs highlighted in the For the Many American Rescue Plan Funding letter.

First, we are pleased to see the administration and legislature work together to dedicate about one third of the ARPA funds to critical needs for those most impacted during the pandemic like additional emergency rental assistance, utility assistance, child care, and working family tax credits.

With current pending legislation, about $1.1 billion dollars has been dedicated to emergency rental assistance. However, it is estimated that the amount of rental arrears is closer to $2 billion dollars. Therefore, we ask that additional money be dedicated to provide further housing assistance going forward for renters still struggling to recover, to rapidly rehouse people who were illegally evicted during the pandemic, and to provide mortgage assistance.

Similarly, with the gas, electric, and water utility assistance dedicated to date through federal funding, it looks like we are short what is needed to keep the lights on, water running, and people healthy and safe during a continuing pandemic. Based on estimates of need from the data submitted by utility companies recently, we ask that an additional $250 million be dedicated towards this critical assistance.

With a 91% decline in enrollment between 1996 and 2018, the WorkFirst New Jersey program only reaches people at 30% of the Federal Poverty Level, not 50% as the program intended. This stagnation means this key safety net is shrinking at a time when there is increased need. However, we don’t get the true picture of need when the eligibility has decreased artificially keeping many families from qualifying in the midst of great struggle. Increases in the benefit level will help us get on a path to expanding the program longer term to truly reach all families in deep poverty.

In his executive order 91 issued on November 13, 2019, Governor Murphy outlined his reasons for establishing a state bank in New Jersey. In the order Governor Murphy appointed an implementation board to provide him with recommendations for how to establish a public bank that would strengthen and expand community development of affordable housing, economic development for small businesses, infrastructure improvements and to provide less expensive terms on student loans.

The 2008 recession, Superstorm Sandy, and COVID 19 pandemic and economic crisis that it triggered revealed just how great the need is to maximize public investment in the four key areas Governor Murphy outlined as his reasons for establishing a public bank.  The implementation board has already outlined critical needs in each of these areas. The time is now to invest in the establishment of the public bank to ensure that the social safety net, the physical infrastructure and the economic infrastructure are made to be as resilient as possible and to combat persistent wealth inequality.   

A public bank will make New Jersey fairer and stronger, but also much more resilient in the event of another natural disaster, health emergency, or economic crisis. We urge the state to set aside $10 million to fund the first steps for establishing A New Jersey Public Bank. This initial funding is critical to raising additional money for a Public Bank.

Further, many essential workers who are mostly Black, Brown, and women have not been able to access the kind of help needed over the last year and a half since they may not have a valid lease to get rental assistance or have been left out of direct federal relief. Therefore, we urge you to include significant additional funding for undocumented immigrants and to fund the proposal for hazard pay put forth by SEIU 32BJ for essential workers.

Lastly, I wanted to touch on an inappropriate use of the ARPA funds. Master Trust, one of the state’s 2 existing Multiple Employer Welfare Associations (MEWA), has filed for bankruptcy protection. Self-insured MEWAs are deliberately structured to avoid more stringent state insurance regulation. Being organized as a MEWA has allowed them to severely limit their reserves, avoid state assessments and payments into the guaranty fund required of all fully regulated insurance plans.

This MEWA is petitioning for state treasury and COVID relief funds to offset their losses. This is NOT an appropriate use of COVID funds. Instead we urge the state to help our residents who have been most severely impacted by the pandemic.

Real investments in all of our state’s residents are required to see valuable returns in our state’s economy and for New Jersey to be a place where all of our residents can recover and thrive. If we take the right steps now, we can protect New Jersey residents from harm and impediments for years to come.

Thank you again for the opportunity to submit testimony.