State races to meet expedited deadline to distribute water assistance — or lose it

New Jersey and other states that received federal funding to help struggling residents pay overdue water bills will lose it if they don’t demonstrate by early next month that they can spend it.

In a Feb. 1 memo, federal authorities warned states lagging in distributing $1.1 billion in federal funds for the Low Income Household Water Assistance Program that unused money will be redistributed to states that have already spent their allotment, like Pennsylvania, or are on track to spend it, like New York.

For New Jersey, that means more than $17 million is at risk.

The state received $24 million in 2021 with a deadline to distribute it by this September. But so far state officials will spend more to administer the program — $3.6 million — than they’ve given out in assistance, with just $3.3 million paid to 3,400 residents, according to the state Department of Community Affairs.

Larry Levine, a senior attorney with the Natural Resources Defense Council, which has lobbied legislators to create a permanent water assistance program for low-income residents, called this “a real problem.”

“These are funds that were provided as COVID relief funds recognizing that people have been struggling to pay their utility bills,” Levine said. “There’s money sitting there, and there’s really no excuse for the state not to be doing a better job of getting that money out.”

New Jersey was among the last states to launch the program, and utilities’ resistance to cooperating has slowed aid distribution.

For residents to receive up to $5,000 in assistance, their utility must participate. But most don’t, with just 132 of about 600 utilities statewide signed on as of this week, said Lisa M. Ryan, a spokeswoman for the state Department of Community Affairs. A state legislator in November introduced a bill to compel participation, but utilities have balked, citing contractual concerns.

Sen. Nilsa Cruz-Perez (D-Camden) said she is working to amend the bill in response to utilities’ concerns so that the Senate’s economic growth committee can vote on it Feb. 16.

States have to submit a “spend-down forecast” to the feds by March 6, and any money they might not spend will be frozen for redistribution.

New Jersey officials are “confident” they’ll be able to spend the remaining $17 million by the Sept. 30 deadline, Ryan said.

To hasten distribution, the department “continues to strongly encourage” utility participation, Ryan said. Officials also plan a new marketing campaign to get the word out and are collecting names and addresses of customers with arrearages so they can better target their messaging, she added.

Cruz-Perez said the new March deadline should jolt everyone into action.

“We believe that the federal government wants states to feel the pressure and have a plan to move forward without waiting until a month before the deadline,” she said. “With the issue now in the forefront, we can all work together so eligible customers can get the relief they need.”

Other obstacles

Poor public messaging and outreach, combined with an “overly complicated” application process, also have dampened distribution, Levine said.

The program has received almost 11,800 applications for assistance, but more than 8,000 were incomplete, Ryan said. To ensure those applicants get aid, the state directed outreach agencies to dispatch workers to visit homes in person — especially those with elderly and disabled residents — to complete unfinished applications, she said.

But even if all those applications get approved, that’s just a fraction of the need. Levine estimated last month that nearly a million people in more than 360,000 households could owe as much as $200 million in water and sewer arrearages.

The true need is tough to pinpoint because only privately owned utilities — which serve just 40% of the state — publicly report arrearages. Those numbers show nearly 144,000 households served by private utilities owed almost $45 million in overdue water bills as of September.

Lawmakers last fall passed a state law requiring all utilities to publicly report not only arrearages, but also things like shutoffs and tax liens for nonpayment. That reporting was supposed to begin in October, but the state Board of Public Utilities has not yet posted it online. A BPU spokesman didn’t immediately respond to questions about the holdup.

“We still haven’t seen that transparency happening,” Levine said. “We’re still very much in the dark on what the scale of the problem is.”