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Cities seek to loosen rules on spending federal pandemic aid

Los Angeles County fairgrounds
Posted at 11:04 AM, Oct 17, 2021

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.