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The following was submitted by the Office of Sen. Jason Lewis:
State Sens. Jason Lewis and Pat Jehlen and state Reps. Michael Day and Michelle Ciccolo joined their colleagues in the Massachusetts Legislature to pass a bill that will enable the Commonwealth to effectively compete for federal grant funding across multiple sectors, including transportation, housing, climate, economic development, and technology innovation.
An act to provide for competitiveness and infrastructure investment in Massachusetts leverages the interest the Commonwealth’s Stabilization Fund accrues to provide the state matching funds that the federal government requires to compete for many federal funding opportunities.
Three pieces of federal legislation — the Infrastructure Investment and Jobs Act (IIJA), the Inflation Reduction Act (IRA), and the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act — are making more than $2 trillion available to states through competitive grant programs and formula allocations. With the passage of this bill, the Commonwealth will be maximizing its ability to capitalize on these substantial federal funding opportunities.
“We should do everything possible to maximize our share of federal grant opportunities that help save money for Massachusetts taxpayers,” said Lewis. “Using excess interest from the Commonwealth’s Stabilization Fund to unlock these federal opportunities is a smart way to do so, and will enable the state and local municipalities to fund many important infrastructure projects in the years to come.”
“Investing in our infrastructure is an ongoing project we must prioritize for the advancement of the Commonwealth,” said Jehlen. “Making the most of federal funding opportunities is crucial to be able to help our communities fund the improvements they need and to better support residents.”
“Ensuring that we capture every federal dollar available will help us to continue making Massachusetts the best place to live in the nation,” said Day. “I was proud to support the passage of this bill through the House, and I look forward to putting this money to work as we bolster existing programs and support new and innovative projects here in the Commonwealth.”
“This legislation will greatly advance the ability of our Commonwealth to bring significant federal dollars back to Massachusetts and support meaningful capital improvement projects and economic investments,” said Ciccolo. “I extend my gratitude to the governor for leading on this issue and to House and Senate leadership for making this proposal a reality.”
At its current level, the Stabilization Fund will accumulate approximately $250 million in interest annually. This bill will allow the state to transfer interest from the Stabilization Fund to the Commonwealth Federal Matching and Debt Reduction Fund when amounts exceed 10% of the revenues budgeted for the previous fiscal year and the balance of the fund has not decreased in the previous year.
When a diversion does occur, the state will use the interest for two key purposes: funds required for federal grants during this unique opportunity to capture federal investments; and long-term debt management strategies.
Over the coming years, this bill is expected to unlock more than $800 million in funds that the state can use to cover the state or municipal match requirement for federal competitive grant opportunities, as well as planning work that will help municipalities with the process of preparing applications for federal grants.
Once federal grant opportunities expire, money left in this fund will go toward reducing the Commonwealth’s long-term liabilities.
After final passage in both the House of Representatives and the Senate, Gov. Maura Healey signed the bill into law on Sept. 24, 2024.
