Massachusetts might flip to a further $800 million in state {dollars} to assist bolster its place when making use of for federal grants beneath laws Gov. Maura Healey filed Thursday.
A trio of legal guidelines — the Inflation Reduction Act, the CHIPS and Science Act, and the Inflation Reduction Act — signed by President Joe Biden made greater than $1 trillion in federal funds out there to states. Local officers estimate Massachusetts can compete for a remaining $17.5 billion that might help every little thing from transportation to expertise providers and safety.
Most federal grant packages require states to place up money to cowl a portion of proposed mission prices and Healey mentioned having cash in hand to match federal {dollars} will make purposes from Massachusetts extra aggressive when they’re despatched right down to Washington. Healey’s invoice creates a fund to construct up matching {dollars}.
“This Capital Investment and Debt Reduction Fund will give Massachusetts a competitive edge in pursuing this historic federal funding grant opportunities,” Healey mentioned. “And after we get through the push for federal funding, the remaining funds will be available to invest in state assets, taking pressure off traditional capital programs and our debt portfolio.”
Officials have already recognized greater than $2 billion in state matching funds from varied sources just like the fiscal 2024 finances and the state’s capital funding plan.
But estimates present a necessity for roughly $3 billion in matching funds if Massachusetts applies for and receives all $17.5 billion in grants the state is eligible for, based on the Executive Office of Administration and Finance.
Healey proposed utilizing curiosity earned on the state’s wet day fund, an $8 billion account that’s usually reserved for emergencies, to pay for the $750 million in state matching {dollars}.
State officers anticipate the curiosity producing $250 million every year for the Capital Investment and Debt Reduction Fund, which may also be seeded with $50 million in income from a surtax on incomes over $1 million.
The principal of the stabilization fund “will remain preserved for mitigating the impacts of a substantial, unanticipated reduction in revenues that cannot be managed with normal budgetary reductions and savings measures,” the Executive Office of Administration and Finance mentioned in a coverage memo.
The state would cease drawing on the curiosity of the wet day account if its stability is declining or it drops beneath 10% of the state’s whole working finances, which in fiscal 2024 neared $56 billion.
“We think those are guardrails that are both fiscally responsible and support our needs in terms of what we’re trying to accomplish, while not jeopardizing the commonwealth’s physical health in terms of its ability to weather a rainy day,” Administration and Finance Secretary Matthew Gorzkowicz mentioned.
Having a “plan of attack” for going after federal grant packages that require state matching funds “is a really solid approach,” mentioned Massachusetts Taxpayers Foundation President Doug Howgate.
He mentioned defending the stability of the stabilization is necessary.
“We got to make sure we protect our stabilization fund, right, and we’re not kind of robbing Peter to pay Paul. And so I think the idea of ensuring that our stabilization fund balance doesn’t decline as we’re gonna go down this road is a really important thing to have,” he mentioned. “As a principal, that makes sense.”
Healey additionally signed an govt order establishing the Federal Funds and Infrastructure Office led by Director Quentin Palfrey, who unsuccessfully ran for lawyer normal in 2022. Healey mentioned Palfrey and his crew have already “yielded results” even earlier than the workplace was cemented.
Healey pointed to $108 million from the U.S. Department of Transportation for East-West Rail, a profitable bid to function one in every of three hubs for a Biden administration-backed “nationwide health innovation network,” and an software for roughly $1.5 billion for the Cape Cod bridges as examples of Palfrey’s work.
“Today’s executive order also creates a new clearinghouse that will help us to be systematic and strategic and thoughtful in our pursuit of these federal funds,” he mentioned.
Source: www.bostonherald.com”