Flush with federal stimulus cash, New York creates $2 billion fund for those living in the US illegally

Since Democrats’ $1.9 trillion American Rescue Plan (ARP) was enacted in February, states have been busy designing ways to spend their share of the $350 billion in one-time federal “state and local aid” provided by that legislation. One of the most novel may be in New York, which just created a new $2.1 billion program for those living in the US illegally — or what the state formally dubs its “excluded workers fund.”  

Here’s how Governor Andrew Cuomo’s office describes the policy included in a recent budget deal between him and the state legislature: “The FY 2022 Enacted Budget creates a $2.1 billion program to provide cash payments to workers who have suffered income loss due to COVID but who are ineligible for Unemployment Insurance or related Federal benefits due to their immigration status or other factors.” The same document notes the budget “deploys the first $5.5 billion of the $12.6 billion provided for in the federal American Recuse (sic) Plan Act 2021. These funds are integrated throughout the budget in accordance with available federal guidelines.”

New York Governor Andrew Cuomo speaks with people after a news conference on COVID-19 vaccination at Suffolk County Community College in Brentwood, New York, U.S. April 12, 2021. Michael M. Santiago/Pool via REUTERS

Naturally, the
new $2.1 billion fund is only one part of the state’s $212 billion annual budget.
But it’s hardly a coincidence this new
program was created only after New York received an unprecedented infusion of
federal cash — which the governor notes is “integrated throughout the budget.”

The liberal Fiscal Policy Institute estimates funds from the new program will flow to 290,000 individuals across New York, including 92,000 who may soon receive $15,600 in a lump sum payment — the equivalent of $300 per week of unemployment in the past year. That’s for those who, despite not being authorized to work in the US, can prove they lost employment during the pandemic. Others who cannot document they lost employment will also receive checks, as the fund will make payments of $3,200 to an estimated 200,000 “who can prove at least their residency and identity.”

Criticism is already rising. For example, Representative Mo Brooks (R-AL) has noted that “US military veterans are struggling to get the benefits they earned serving our country, but New York is sending $15k checks to illegal aliens.”

Nonetheless, New York may not be alone in offering new benefits to those living in the US illegally following this latest infusion of federal cash. For example, recent reports suggest New Jersey Governor Phil Murphy “is considering using federal funds to provide around $40 million in one-time stimulus payments to the state’s undocumented immigrants.” And lawmakers in Colorado recently announced their plan to create similar benefits in that state:

“People who are in the country unlawfully would have access to state, and possibly local, public benefits under a bill at the state Capitol. It’s one of several immigration bills introduced this session. The bills include a legal defense fund for those facing deportation, a special unemployment fund for undocumented workers, $4 million dollars for free contraception for women who are non-citizens, and access to state and local licenses, certificates, and registrations regardless of immigration status.”

Money is fungible, so some may claim there is no trail of breadcrumbs connecting federal stimulus cash to New York’s new fund. But that won’t deter critics who are already connecting the two. As the public comes to learn more about state spending decisions in the wake of recent record stimulus, federal stimulus backers may become increasingly tied to controversial state spending decisions, whether they like it or not. In the end, that could show that blame is fungible, too.