MASSACHUSETTS HOUSE PASSES BILL TO INCREASE THE COMMONWEALTH’S COMPETITIVENESS FOR FEDERAL FUNDS

BOSTON – Wednesday, February 28, 2024 – The Massachusetts House of Representatives passed a bill that will enable the Commonwealth to leverage the interest earned by the Stabilization Fund, which currently stands at a historically high balance of $8.2 billion, to bolster our ability to compete for federal funds and pay down debt obligations, such as pensions and other post-employment benefits. With the passage of this bill, Massachusetts will be able to more aggressively compete for federal funding made available through the Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and the CHIPS and Science Act.

“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,” said House Speaker Ronald J. Mariano (D-Quincy). “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. I want to thank Chairman Michlewitz and Chairman Lewis for their work on this issue, as well as all my colleagues in the House for recognizing the importance of this legislation.”

“Giving the Commonwealth a competitive edge when it comes to competing for Federal dollars is paramount. By building off the interest earned from the historic high balance of the Rainy Day Fund we will be better positioned to compete for Federal matching grant to improve our infrastructure and other critical needs,” said House Committee on Ways and Means Chair Rep. Aaron Michlewitz (D-Boston). “I want to thank Speaker Mariano and Chair Lewis for their hard work and determination on this issue and I look forward to seeing this bill over the finish line in the weeks ahead.”

“This legislation expands our Commonwealth’s competitive edge as we compete for federal funds and pay down our debt obligations. The Bipartisan Infrastructure Act, CHIPS Act, and Inflation Reduction Act, all contain time-sensitive opportunities for our Commonwealth and our local communities, opportunities that require us to have matching resources available,” said Rep. Jack Patrick Lewis (D-Framingham), Chair of the House Committee on Federal Stimulus and Census Oversight. “The passage of this bill ensures that we can properly compete for all available federal funds. I am grateful to Speaker Ron Mariano and Ways and Means Chair Aaron Michlewitz, along with the House Committee on Federal Stimulus and Census Oversight, for their support of this legislation.”

“I want to thank Speaker Mariano, Chairman Michlewitz and Chairman Lewis for their work on prioritizing this issue and making sure that we remain competitive in Massachusetts, especially when it comes to federal funding,” said Rep. Jessica A. Giannino (D-Revere). “It is critical that as we look at challenging financial times, we are thinking ahead and looking at creative and forward-thinking ways to leverage our ability to access and compete for any available funding opportunities.”

“I was pleased to support this important piece of legislation. At a time of shrinking state revenues, this legislation allows us to leverage existing rainy day fund interest monies while protecting our reserve balances,” said Rep. Jeffrey Rosario Turco (D. Winthrop). “Smartly used, this legislation can leverage large amounts of federal funds into the Commonwealth.”

The legislation passed establishes the Commonwealth Federal Matching and Debt Reduction Fund to be administered by the Executive Office for Administration and Finance (A&F). The fund will consist of the interest earned on the Stabilization Fund in each fiscal year, any money appropriated to the fund, and interest earned on the fund. The Comptroller will transfer interest from the Stabilization Fund to the newly established Commonwealth Federal Matching and Debt Reduction fund each quarter, but as a safeguard, no transfer will occur if the balance has decreased over the preceding year, or if it no longer exceeds 10 percent of budgeted revenues.

A&F may expend the funds 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. A&F may expend up to $750 million from the fund to provide matching funds for federal programs through December 1, 2026:

• Up to $50 million may be used for matching funds for federal programs in the form of grants, loans, and other financial assistance to cities, towns, tribes, and regional organizations.
• Up to $12 million may be used to provide grants to support municipal, tribal, and regional organizations in planning efforts.

Having passed the House of Representatives 152-0, An Act to provide for competitiveness and infrastructure investment in Massachusetts now returns to the Senate for further consideration.