State Representative Lipper-Garabedian Joins the Massachusetts House in Passing a Bill to Increase the Commonwealth’s Competitiveness for Federal Funds
March 1, 2024 – On Wednesday, February 28, State Representative Lipper-Garabedian joined the Massachusetts House of Representatives in passing 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.
"It is critical Massachusetts maintain a competitive edge when applying for Federal funding, particularly during a time of challenging state revenue conditions," said State Representative Lipper-Garabedian (D-Melrose). "The House’s legislation ensures that the Commonwealth is well-positioned to compete for funding opportunities by leveraging the interest from our Rainy Day Fund, which has a historically high balance, to seek Federal investments that will enhance the economic vitality and infrastructure of our State, supporting workforce opportunities in the process. I am grateful to Speaker Mariano, Chair Michlewitz, and Chair Lewis for their leadership on this bill".
The legislation passed today 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.
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