The state House has authorized a plan to make use of the a whole bunch of thousands and thousands in curiosity spun off the Rainy Day fund to compete for federal funding and assist pay the Commonwealth’s payments.
Lower chamber lawmakers unanimously handed the proposal which might ship Rainy Day fund curiosity into a brand new “Commonwealth Federal Matching and Debt Reduction Fund” and permit the state’s test writers to faucet the cash as down fee when making use of for the billions in federal funding at present out there and sort out a number of the state’s excellent money owed.
According to an estimate accompanying an identical proposal supplied by Governor Maura Healey final 12 months, the Rainy Day fund earns about $250 million in curiosity every year. The fund — formally its referred to as the Commonwealth Stabilization Fund — at present carries a report steadiness of $8.2 billion.
Talk of tapping into the cash made by the fund comes as lawmakers stare down a sequence of sudden income shortfalls which have stretched by means of most of this fiscal 12 months.
“Ensuring that the Commonwealth is able to aggressively compete for the federal funding being made available to states is critical, especially given the challenging revenue conditions that we are facing here in Massachusetts this fiscal year,” House Speaker Ron Mariano mentioned.
It additionally comes simply when Massachusetts might want to compete with the opposite 49 U.S. states for grant cash supplied by the Biden Administration’s passage of the $1.2 trillion Infrastructure Investment and Jobs Act, the about $800 billion Inflation Reduction Act, and the $53 Billion CHIPS and Science Act. Those payments, based on policymakers, current a once-in-a-generation alternative to sort out costly however essential infrastructure initiatives — however they’re provided that the cash is there for matching funds.
“The projects and investments that will be funded throughout the U.S. because of Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and the CHIPS and Science Act will transform this country and create a significant number of jobs in the process. It’s vital that Massachusetts does everything that it can to share in that prosperity,” Mariano mentioned.
The proposal would enable Administration and Finance Secretary Matthew Gorzkowicz to spend the curiosity made by the Rainy Day fund to “pay down the Commonwealth’s debt or pension obligations, OPEB, capital leases, general or special obligation contract liabilities, or transfer any amount back to the Stabilization Fund.”
The invoice would additionally enable as much as $750 million to be transferred from the Rainy Day fund “to provide matching funds for federal programs through December 1, 2026.”
The state Senate handed its personal model of the invoice on a 39-0 vote earlier this 12 months and it’s fairly totally different from the House plan, notably altering the formulation by which the Stabilization Fund is fed by the state’s extra capital beneficial properties taxes. The differing variations will possible require a convention committee to iron out the distinction earlier than a ultimate plan sees the governor’s desk.
Source: www.bostonherald.com”