New Jersey will end special unemployment benefits put in place during the pandemic when they expire on Saturday, rather than using federal relief funds to extend them, the state’s governor announced on Monday.
The governor, Phil Murphy, said at a news conference that he had decided to let three federal assistance programs expire because it would cost the state millions of dollars to preserve them. At least 500,000 people will lose benefits. The programs set to expire are Pandemic Unemployment Assistance, Pandemic Emergency Unemployment Compensation, and Federal Pandemic Unemployment Compensation.
President Biden had suggested earlier this month that states like New Jersey, which has an unemployment rate of 7.3 percent, could use federal Covid-19 relief funds to extend benefits beyond Sept. 4.
New Jersey received $6.2 billion from the American Rescue Plan, but Mr. Murphy said it would cost the state’s taxpayers $314 million a week to maintain the benefits. “In other words, we’re talking about well more than $1 billion per month to maintain this benefit at its current level,” he said during the news conference.
Mr. Murphy said that since the start of the pandemic last year, the state has spent $33.7 billion in various kinds of assistance funds to about 1.6 million people. As the federal benefits come to an end, Mr. Murphy said the state will use Covid relief funds to fund other programs, including those that provide people help with rent, food and child care.
“We must ensure that we are appropriating these funds judiciously for the greatest possible long term recovery,” he said.
In neighboring New York State, a host of pandemic-related unemployment benefits were also scheduled to expire in the coming days, even though its economic driver, New York City, has one of the highest unemployment rates among large cities in the country.
The benefits about to stop in New York include a $300 per week federal supplement, which has been paid on top of state unemployment benefits. Also expiring soon are unemployment payments for self-employed workers and contractors, who would not normally qualify for assistance.
More than 4.7 million New Yorkers have received unemployment benefits totaling more than $97 billion in the pandemic, the state said.
Most parts of New York State have an unemployment rate near the national average, around 5.4 percent. But the lagging economy in New York City has driven the overall state rate up to 7.6 percent, the second highest in the country. In the city, the unemployment rate is 10.5 percent.
Matthew Haag contributed reporting.