RELEASE: Treasury Department Amends Rule in Response to Auchincloss Letter
WASHINGTON, D.C.— Following a letter to Secretary Janet Yellen from the Massachusetts Congressional Delegation led by Congressman Jake Auchincloss and Senator Ed Markey, the Treasury Department announced plans to reconsider the way the agency is calculating pandemic-related revenue losses.
Due to the unique way that Massachusetts funds public education, many Massachusetts cities and towns have reported that they are unable to claim general revenue loss, which is reimbursable under the American Rescue Plan Act (ARPA). The Treasury Department’s initial proposal required a complex calculation that disproportionately limited municipalities in Massachusetts from demonstrating that they had lost general revenue due to the pandemic. As a result, many Bay State communities were at risk of being unfairly barred from flexible funding that would allow them to build and upgrade critical infrastructure, expand health services, advance environmental remediation, and improve public safety.
Under the new rule, the Treasury Department addressed the Massachusetts Delegation’s concerns by allowing all cities and towns to claim up to $10 million in general revenue loss, rather than using the calculation that made many of them ineligible for flexible, direct funding from ARPA. This streamlined approach responds to the Delegation’s request for a “fair and accurate accounting of lost revenue” and “flexibility to reinvest in government services impacted by the pandemic—in line with Congressional intent.” Additionally, the Treasury Department agreed to the Delegation’s request to host Q&A sessions with local officials regarding the final rule.
A copy of the original letter sent to the Treasury Department can be found here.
"We should be empowering local governments, not wrapping them in red tape. I'll continue to go to bat for the cities and towns of the 4th as Congress oversees the funding rollout,” said Rep. Auchincloss.
“I applaud the Department of Treasury for listening to the unique circumstance many cities and towns across the Commonwealth faced when utilizing American Recuse Plan Act funding,” said Senator Markey. “This new rule from Treasury will ensure the hardest-hit towns and cities in Massachusetts will have the flexibility to access critical funding to support a wide range of services for localities during the COVID-19 economic recovery. Cities like Fall River, New Bedford, and many others will no longer be punished for long-overdue investments in education. This rule will allow for a more equitable and just recovery.”
“Treasury’s decision is a win for municipalities across the Commonwealth and will make a major impact in cities like New Bedford and Fall River. Further, this decision ensures fairness by giving our cities and towns the same access to federal funds enjoyed by municipalities in other states,” said Congressman Bill Keating.
“The Massachusetts Congressional Delegation worked hard to ensure that the American Rescue Plan included robust funding and support for state and local governments to avoid steeps cuts to basic services during COVID-19,” said Congressman Jim McGovern. “Now, our delegation is once again working together to make sure that Massachusetts cities and towns have the flexibility to use this funding as Congress intended—for economic stabilization, and to address disparities by improving government services. I’m proud of our teamwork, and grateful to Representative Auchincloss and Senator Markey for their leadership on this critical issue of equity and fairness.”
“We fought hard to deliver billions in flexible federal relief to help the Commonwealth and our localities weather the ongoing pandemic,” said Rep. Pressley. “I’m glad the Treasury Department is being responsive to our calls and working with us to ensure our cities and towns across the Massachusetts 7th receive federal support that reflects their true needs.”
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