$502 MILLION FOR CITIES AND TOWNS FOR COVID-19 COSTS

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By Bob Katzen

Governor Baker announced that he is preparing to distribute up to $502 million from the state portion of the federal Coronavirus Relief Fund to local cities and towns for their costs related to the COVID-19 pandemic. The plan will allow cities and towns to apply for estimated fiscal year 2020 needs immediately and then apply for fiscal year 2021 funds at a later date.

The funds must be utilized by municipalities for eligible costs related to the COVID-19 response effort, consistent with parameters established by the federal Coronavirus Aid, Relief and Economic Security Act (the “CARES” Act) and guidance from the U.S. Treasury Department.

The Baker administration said the available funds represent approximately 25 percent of the funding the state received from the federal Coronavirus Relief Fund and will help ease municipal cashflow pressures. It plans to distribute money to cities and towns quickly and efficiently and maintain necessary flexibility to allocate additional funds if unanticipated needs arise, or if federal rules change. These resources will also help ease municipal cashflow pressures.

“The COVID19 funding being released today is a much-needed resource to offset the unprecedented core municipal services costs being absorbed by all 351 cities and towns in the commonwealth,” said Rep. Russell Holmes (D-Boston). “The demands on our first responders, the need for personal protection equipment in our nursing homes, IT upgrades needed for staff to support constituents from home and much more will be needed for the foreseeable future. This funding will enable the mayors and city administrators to continue to focus on constituents’ welfare and not divert their time and energy to cuts that would have a devastating impact on our communities.”

Not everyone agrees. “Never let a crisis go to waste,” said Chip Ford, executive director of Citizens for Limited Taxation (CLT). “This one has clearly defined who the ‘essential workers’ are and [who] are not. Municipalities and the state now have their own ‘new normal starting points’ when it’s over. Federal helicopter money dropped over the states to assist in this crisis of course needs to be distributed to the cities and towns as designed. Fortunately, limited by CLT’s Proposition 2½, municipalities can’t raise revenue through property tax hikes over 2.5 percent annually, and squeezing that from the record number of unemployed won’t be easy.”

“The funding is an important first step in recognizing the tremendous costs incurred by communities in helping to address the pandemic and helping them maintain their fiscal stability,” said House GOP Minority Leader Brad Jones (R-North Reading).

“The state is awarding money to cities and towns that they are borrowing from the federal government,” said said Massachusetts Fiscal Alliance Executive Director Paul Craney. “Massachusetts is already the highest indebted state in the country per capita,” said Massachusetts Fiscal Alliance Executive Director Paul Craney. “The best way out of this economic depression is to allow business owners and their workers to safely get back to work. Small businesses are the backbone of the Massachusetts economy, without them, the state is doomed.”

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