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Cities are trying to relax the rules on spending federal pandemic

The Roma Verde Recreation Center, south of San Diego, is in the process of demolishing a $ 24 million project to rebuild a facility with a new pool from scratch. The iconic bridge to Oceanside Wharf, an hour’s drive north, has deteriorated due to the city’s lack of funding for rehab of about $ 25 million.

President Joe Biden and Congressional Democrats have defended and invested billions of dollars in state and local governments why one project is underway and the other isn’t centered around the US rescue program. There is a wide range of COVID-19 remedies.

Under the rules developed by the US Treasury, some governments are more flexible than others to spend their share of money as they wish. That’s why the new swimming pool was successful and the rehabed pier is no, at least for now.

Similar disparities between cities across the country have prompted opposition from local authorities who want the Treasury to loosen its rules before the program goes further.

Wade Kapsukievich, Mayor of Toledo, Ohio, said:

At issue is the $ 350 billion in states, counties and cities that were part of the large COVID-19 bailout bill signed by Biden in March. The money aims to support their finances, pay ongoing costs to fight the virus, and invest in long-term projects that may strengthen the community over the next few years.Funds have been available by the Treasury since May — but States and cities are slow to start using it..

Treasury guidelines spend money from over 60 subcategories, including COVID-19 vaccination, premium payments to specific workers, housing assistance, corporate grants, water and sewage and internet infrastructure improvements. Gives the government a choice for.

However, certain categories stand out for their flexibility. Governments that have lost their income can use federal aid for almost all services, up to the amount of the loss. That is, they can spend money on roads, recreation centers, or piers, but otherwise they may not be eligible.

Treasury spokesman Liz Bourjois said the plan would give the government the resources and flexibility needed to “avoid cuts, hire or retain workers, provide essential services, and get out of the pandemic more strongly. Said to give “sex”. Democratic parliamentary leaders also admire the Treasury’s flexible guidance.

However, some local officials believe that the Treasury formula for calculating lost income is too restrictive. Instead of calculating losses by fund, summarize most sources of income. This allows the government to claim losses with dedicated funds, such as a road petrol tax, even if other income increases. Local governments also want to exclude recently enacted tax increases from their calculations, claiming to mask the depth of their pandemic losses.

In Toledo, voters approved a temporary quarter-percent income tax hike in November last year, which is projected to raise $ 19 million a year on roads. As a result, that revenue will offset other losses under Treasury calculations, which means the city will not have the flexibility to use relief money to replace old police vehicles, Capsuzuki said. Evic said.

“Now the economy seems to have recovered, but it actually reflects the income that puts an extra burden on them,” the mayor said. “It’s ridiculous.”

Since 2018, more than 250 cities and counties have enacted voter-approved tax increases in California. This will occur during or after the 2018-19 fiscal year, which is the basis for calculating loss on revenue, according to an analysis conducted by Government Finance on the Associated Press. Consultant Michael Coleman.

The suburbs of Chula Vista in southern San Diego, which did not enact new taxes, calculated a loss of more than $ 32 million based on Treasury guidelines. This covers more than half of the $ 57.5 million allocation under the US Rescue Program. In particular, the city has ordered $ 12.2 million to repair Culvert at the two intersections to mitigate floods and $ 8 million to add new aquatic facilities to the planned renovation of the Roma Verde Recreation Center. If the city couldn’t take advantage of the income loss category for federal funding, those projects could have been postponed indefinitely, said Chula Vista city engineer William Valle.

By doing it all at once, “open to the community-boom, everyone is happy,” Valle said.

On the oceanside, however, authorities have less tolerance for their federal aid. Voters there approved a sales tax of 0.5 cents, which came into effect in April 2019, reducing financial revenue losses from $ 22 million to $ 12 million, limiting spending flexibility. To make matters worse, the city spent about $ 2.6 million from its reserves to provide food, homeless services, and business grants during a pandemic. However, Treasury rules prohibit federal aid from being used to replenish reserves.

Oceanside officials want to be able to devote much of their federal funding to repairing the seismically dangerous 1920s bridge that leads to the pier.

Rick Wright, CEO of Main Street Oceanside, a downtown business association, said: There is a serious need for repair, but if you look closely enough, you can see where the cracks and debris that have already fallen are. “

Other cities have also sent letters to the Treasury asking them to loosen the rules for revenue losses and give them greater say in money. It’s a reasonable request, but the dispute emphasizes that local governments are receiving “dramatically more money” than necessary, and a senior deputy nonprofit commission for a responsible federal budget. President Mark Goldwayne said.

Treasury officials said they were considering comments, but did not say whether to change the rules or when the final version would be released.

Meanwhile, Des Moines, Iowa has postponed the $ 47 million spending decision it received. The city wants to clarify whether it can count losses of $ 34 million, which is not currently allowed by Treasury rules. This gives you much more flexibility.

In Lincoln, Nebraska, the Treasury’s revenue loss rules have postponed plans for a new parking lot. According to Kate Bolts, an aide to the mayor, parking revenues plummeted during the pandemic, but the new sales tax assigned to the road caused a loss of revenue of $ 13.5 million in 2020, according to the Treasury official. The city cannot make up for it all, as it has dropped from $ 2.4 million to $ 2.4 million.

Flagstaff, Arizona, has also put pending plans for downtown parking due to Treasury rules and may need to delay the replacement of aging snowplows, street cleaners, and trucks. New income from a combination of dedicated taxes and stormwater charges offset the city’s losses under the Treasury formula and deprived it of flexibility for federal aid.

“The purpose of what Congress wanted was to help cities that suffered these huge losses continue to serve,” said city treasurer Rick Tadder. Income during this pandemic. “

Cities are trying to relax the rules on spending federal pandemic

Source link Cities are trying to relax the rules on spending federal pandemic

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