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12-27-2021 9:29pm
MA Reps. and Senators Advocate for American Rescue Plan Act Reimbursements to Local Governments
Darlene Cancell
Editor
Last Monday, December 20, 2021, the Massachusetts congressional delegation, that included U.S. Congressmen Jake Auchincloss and Stephen Lynch and U.S. Senators Ed Markey and Elizabeth Warren, sent a letter to U.S. Treasury Secretary Janet Yellen urging the Treasury Department to reconsider the way the federal agency is calculating pandemic-related revenue losses that impact local governments and that are reimbursable under the American Rescue Plan Act (ARPA).
The Massachusetts congressional delegation was led by Congressman Jake Auchincloss and Senator Ed Markey. It expressed concern that Massachusetts municipalities would be unjustly penalized in calculations for ARPA reimbursements due to additional or unusually high levels of state funding that recently have been directed to local areas. They say this recent infusion of state level funding to local areas can obscure revenue losses due to COVID-19.
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Massachusetts has recently acted to address a longstanding problem of perpetually underfunded low-income urban school districts by boosting funding to some of those districts. In some cases, the boost was by an amount equivalent to an additional $30 million more compared to the previous year. The “once-in-a-generation” additional funding to state education in 2021 under the Massachusetts Student Opportunity Act of 2019 will "falsely offset COVID-19 related revenue losses reimbursable under ARPA,” say the letter writers.
The senators and representatives also note a similar situation has resulted under the state’s recent increase of available funding to cities and towns for constructing public school facilities through Massachusetts School Building Authority (MSBA) grants. Where cities and towns have experienced increased revenues through assessing additional taxes in excess of their levy limit for school construction or other significant capital projects, such added revenue will also serve to obscure COVID-19 revenue losses, they say.
For example, Westwood residents, motivated in part by the availability of a MSBA grant, recently approved future collection of taxes in excess of the levy limit to fund a new Hanlon-Deerfield elementary school. Assistant Town Administrator and Finance Director Pam Dukeman has previously stated that Summer 2022 is the earliest time that a major portion of the bond would issue. Therefore, Westwood may not be currently encountering the problem of additional revenue obscuring reimbursable revenue loss related to COVID-19 losses. But if federal ARPA reimbursements for COVID-19 losses include calculations for the year 2022, this could become an issue for Westwood. Ms. Dukeman has stated that hotel receipts have remained depressed and that the town will likely experience ongoing increased public health costs related to COVID-19 for some time into the future.
“[M]unicipalities are reporting they cannot calculate any lost revenue for 2020 and future ARPA years if the additional funds are counted as ‘intergovernmental transfers’ or Actual General Revenue as specified in the Treasury’s Interim Final Rule. We urge you to clarify in the final rule that these earmarked funding streams should not be included in municipalities’ calculations of revenue loss,” the letter reads.
The Massachusetts delegation also requests that the Department of Treasury hold virtual public events that include state and local representatives. They propose an opportunity for local leaders to ask the Department questions “to learn how to navigate the implementation of ARPA and to achieve ARPA’s full intended benefits at the local level.”
Thanks to the Office of Jake Auchincloss for sharing its news with Westwood Minute.
