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Cities seek to loosen rules on spending federal pandemic aid

Some cities say the Treasury Department's rule for calculating revenue losses masks the depth of their financial problems.

Credit: AP

A man bikes under a bridge connecting the Oceanside pier to Pacific Street Friday, Oct. 15, 2021, in Oceanside, Calif. The iconic bridge is deteriorating because the city lacks the money for a roughly $25 million rehabilitation. One reason the project has slowed while projects in other cities are moving ahead revolves around the American Rescue Plan — the sweeping COVID-19 relief law championed by President Joe Biden and congressional Democrats that is pumping billions of dollars to states and local governments. (AP Photo/Gregory Bull)

CALIFORNIA, USA — Some cities are urging President Joe Biden's administration to loosen its rules for spending $350 billion of coronavirus relief money directed toward state and local governments.

The American Rescue Plan already provides significant leeway on spending decisions.

But local governments that can show revenue losses have even greater flexibility to spend the money as they see fit.

Some cities say the Treasury Department's rule for calculating revenue losses masks the depth of their financial problems.

They want the Treasury to allow them to exclude newly enacted tax hikes from the formula and to count losses on a fund-by-fund basis.

The Treasury has not said when it will release a final version of its rule.

Read the full story HERE.

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