U.S. states, cities await tips on spending stimulus By Reuters

© Reuters. FILE PHOTO: A household’s stimulus test from the U.S. Treasury for the coronavirus illness (COVID-19) assist arrived within the mail in Milton By Karen Pierog CHICAGO (Reuters) – U.S. states and native governments are raring to faucet billions of {dollars} coming their approach in new federal stimulus funding, however are anxiously awaiting steerage



© Reuters. FILE PHOTO: A household’s stimulus test from the U.S. Treasury for the coronavirus illness (COVID-19) assist arrived within the mail in Milton

By Karen Pierog

CHICAGO (Reuters) – U.S. states and native governments are raring to faucet billions of {dollars} coming their approach in new federal stimulus funding, however are anxiously awaiting steerage to find out whether or not gadgets on their want lists are allowed.

U.S. Treasury Division steerage can also be anticipated to make clear states’ capability to chop taxes and should tackle utilizing stimulus cash to repay debt.

The $1.9 trillion American Rescue Plan Act, signed by President Joe Biden in March, allocates $350 billion for states, municipalities, counties, tribes, and territories to assist restore their coronavirus-damaged budgets and economies. The federal authorities has a decent deadline to begin distributing the cash.

“The clock is actually ticking. They need to get the cash out the door by Might 10,” stated Mark Ritacco, authorities affairs director on the Nationwide Affiliation of Counties.

In contrast to the $150 billion governments obtained beneath final 12 months’s federal CARES Act, which was restricted to pandemic-related spending, the brand new cash can be utilized to exchange income misplaced because of the pandemic, present “premium pay” for important staff, and to spend money on water, sewer, and broadband infrastructure, in accordance with the U.S. Treasury.

Governments have “tons and tons of questions” about eligible makes use of for the cash together with financing different capital enhancements that have been deferred because of the pandemic and parking stimulus funds in curiosity bearing accounts, in accordance with Emily Swenson Brock, director of the Authorities Finance Officers Affiliation’s Federal Liaison Middle.

“There’s simply this large berth of interpretation within the (legislative textual content) and that is why we’re a bit anxious to see if the Treasury steerage makes limitations or if it permits for larger alternative,” she stated.

Brock added that a number of state legislatures are speaking about utilizing stimulus cash to repay excellent debt, a transfer not addressed within the act.

New Jersey has recognized bonds that might be retired within the subsequent few years if the state “is afforded larger flexibility,” in accordance with Jennifer Sciortino, spokeswoman for the state treasurer’s workplace.

“At this level, it’s fully unknown if the federal authorities will allow us to make use of funds to repay current money owed,” she stated.

Illinois Governor J.B. Pritzker needs to make use of stimulus {dollars} to take out the rest of the $3.2 billion his state borrowed final 12 months by way of the U.S. Federal Reserve’s Municipal Liquidity Facility to ease a money crunch.

The act doesn’t permit the cash for use for pensions or to subsidize new state tax cuts.

The latter prohibition sparked 5 lawsuits in opposition to the Biden administration by Republican attorneys common in a number of states. Ohio filed the primary case on March 17, contending “Congress lacks constitutional authority to restrict states’ taxing energy on this method.”

With the case nonetheless pending, the Ohio Home of Representatives on Wednesday authorized a 2% revenue tax minimize totaling about $380 million over two years.

Payments have been launched in 16 different states as of April 6 to chop private or company revenue taxes, in accordance with the Nationwide Convention of State Legislatures.

U.S. Treasury Secretary Janet Yellen has stated nothing within the act prevents tax cuts and that additional steerage could be forthcoming.





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