The Federal Reserve Board on Monday expanded the number of counties and cities eligible to borrow from a money lending program through the central bank, which has allocated up to $500 billion to help municipalities struggling during the coronavirus pandemic.
The program, known as the Municipal Liquidity Facility, was announced April 9 and made the lending program available to counties and cities with populations of 2 million and 1 million, respectively.
The population threshold was lowered Monday, and the facility is now available to counties with populations of 500,000 people and cities of at least 250,000.
The program will help municipalities borrow money to deal with cash flow issues during the coronavirus crisis. The facility will buy up to $500 billion in new short-term borrowing notes, such as bonds, from eligible municipalities. Suffolk County can borrow up to $541.4 million, and Nassau can borrow up to $618.1 million, according to the Federal Reserve.
Members of Congress from Long Island had lobbied for the lowered threshold, which now makes Suffolk and Nassau counties eligible to borrow from the Federal Reserve.
Rep. Lee Zeldin (R-Shirley) said in a statement, "Suffolk County is one of the hardest hit areas in the country, and is in desperate need of financing assistance in its continued battle against coronavirus."
Angelo Roefaro, a spokesman for Sen. Chuck Schumer (D-N.Y.) said: “Senator Schumer made the case directly to Fed Chair Powell and Secretary Mnuchin to make this happen because he knew how critical this was for Suffolk County.”
Rep. Thomas Suozzi (D-Glen Cove) said the expansion "will allow both Nassau and Suffolk counties to access much needed financing and will make it easier for towns throughout Long Island to receive the funds they need during this difficult economic period."
On Thursday, Zeldin and Suffolk County Executive Steve Bellone, a Democrat, spoke with U.S. Treasury Secretary Steve Mnuchin on the phone, and made the case for expanding the program.
Suffolk officials said their expanded access could improve cash flow as revenues dry up. The county owes $410 million in debt payments this summer and is expected to see its sales tax revenues drop by $100 million.
Access to the program could help the county afford to extend the deadline for property tax payments without penalties or interest charges.
Bellone said in a statement that "Suffolk County has been working to identify a solution to provide temporary property tax relief for homeowners reeling from the COVID-19 crisis. Today, our pleas were heard by Washington."
Nassau County Executive Laura Curran said in a statement: “Nassau County is the second hardest hit area in the entire country, so having access to this critical funding mechanism is an important tool in our toolbox."