New York, New Jersey could lose $1 billion in Sandy aid

Federal government, local officials disagree on what law stipulates for distribution of funds

Post-Sandy damage on Staten Island
Post-Sandy damage on Staten Island

The federal government allotted the state of New York and New Jersey $3.6 billion in rebuilding aid following Superstorm Sandy, but $1 billion of that money may soon be headed elsewhere.

The U.S. Department of Housing and Urban Development is mulling the redistribution of the funds to other disaster areas. Officials at the agency believe that spreading the disaster assistance among different areas is required by federal law, according to the Wall Street Journal. New York officials, however, disagree with that interpretation.

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Congress earmarked $60 billion for Sandy aid in 2013, with more than $15 billion going to HUD for local-level distribution. The agency has distributed roughly $10.5 billion so far, and HUD officials in Washington believe legislation specified that the HUD money be distributed to areas other than those affected by Sandy. New York officials, though, believe the bill allows other regions to receive aid if needed, but that the legislation does not require it.

HUD is also eyeing a proposal that would launch a national resiliency competition in which projects aiming to fortify areas against future disasters would be rewarded with federal disaster money. The plan, should it come to fruition, could pit New York City, New York State and New Jersey against other states angling for aid. For now, other states are already presenting cases for why they should receive a larger share of the federal disaster funds.

“I’m competing against other members who are aggressively advocating for their state,” Staten Island Representative Michael Grimm, whose district was impacted by Sandy, told the Journal. [WSJ]Julie Strickland