Remarks by Deputy Secretary of the Treasury Wally Adeyemo Before the National Council of Nonprofits

As Prepared for Delivery

Thank you, David, for that introduction, and thank you to all of you for inviting me here today.

My name is Wally Adeyemo, and I serve as the Deputy Secretary of the Department of the Treasury. I’m excited to join you all today for a conversation about how we can help recipients of the American Rescue Plan’s State and Local Fiscal Recovery Funds (SLFRF) invest in their workforces and expand their communities’ affordable housing supply.

I’m particularly excited to speak with you all because I know that nonprofits are crucial partners to state and local governments. As we approach the final stretch of this program, nonprofit partners are critical to “last mile” implementation to ensure that this historic investment of Federal resources will have a transformative impact in communities across the country.

This is also a timely conversation because of the importance of helping SLFRF recipients obligate their funds by the December 31, 2024, deadline set by Congress. For many state and local governments, we are heading into what will be their final budgeting season before that deadline.

Treasury is committed to doing what we can to support localities as they deploy their SLFRF funds efficiently, effectively, and responsibly. In my remarks today, I’ll outline a few areas we’re especially focused on where we think the SLFRF funds can have transformative impacts.

Workforce

The Bipartisan Infrastructure Law, the CHIPS and Science Act, and the Inflation Reduction Act are expanding economic opportunity to urban and rural communities in every corner of the U.S.; and SLFRF investments in workforce development are making sure that those opportunities are available to all American workers – whether they have a college degree or not. SLFRF resources are creating opportunities to launch or scale on the investments in workforce development in communities across the country. Our focus is on ensuring that all workers benefit from the historic economic growth and job creation we’ve seen over the past three years ensuring multiple pathways to middle class jobs and an inclusive economic recovery that benefits all Americans.

We’ve already seen communities budget nearly $13 billion in SLFRF funds to create jobs and opportunities for workers. These include efforts like expanding registered apprenticeship and credentialing programs in sectors we expect to be critical in the decades ahead: from construction and electrification to nursing and teaching.

Communities are also partnering with non-profits like your membership to facilitate job training; fund supportive services like childcare, home care, and transportation assistance; and offer counseling to help people enter (or re-enter) the workforce.

For example, Bridgeport, Connecticut is using Fiscal Recovery Funds to partner with non-profits to offer job certifications, host job fairs, recruit and connect individuals to apprenticeship programs, and more.

I want to encourage all of you to think about how you can partner with cities with remaining Recovery Funds to ensure the greatest impact for your local workforces.

Affordable Housing

Another key focus for supporting workers is increasing access to affordable housing, which is why we are encouraging recipients to use their SLFRF award funds to build and improve access to affordable housing.

In July 2022, Treasury announced new flexibilities and tools to make it easier for SLFRF recipients to use their federal funds to invest in long-term affordable housing projects, including increasing flexibility to fully finance certain long-term affordable housing loans.

We also plan to release updated guidance in the coming weeks that further expands recipients’ flexibility to invest SLFRF funds in projects to increase housing supply in their communities.

Non-profits can play a critical role as partners in constructing and operating affordable housing. For example, Travis County, Texas is spending $35 million in Fiscal Recovery Funds to partner with non-profits on a collaborative that will build affordable units specifically intended for unhoused people.

Inflation Reduction Act

SLFRF represents one of the many ways federal funds are unlocking new opportunities for economic growth in communities. Talking to a group of nonprofits, I would be remiss to not also mention the Inflation Reduction Act.

The Treasury Department’s pandemic recovery efforts delivered real results and contributed to the fastest and fairest recovery in history – creating a blueprint for equitable implementation of other legislation, including the IRA. The National Council of Nonprofits can play an important role in ensuring that nonprofits understand the various tools and benefits provided in the IRA – most notably, the Direct Pay provision.

With Direct Pay, tax-exempt entities such as nonprofits can receive a tax-free cash payment from the Internal Revenue Service (IRS) equivalent to the amount that can be claimed as a tax credit by a for-profit institution.

As a result, nonprofits can advance clean energy transitions, such as the installation of solar panels – at a much reduced price point. Clean energy installations or energy efficiency retrofits would be natural component of an affordable housing project, as those investments will generate ongoing cost savings, while also helping to preserve our planet.

Closing

As communities work to maximize the impact of legislation like the American Rescue Plan and Inflation Reduction Act, the Treasury Department is doing what we can to lift up promising examples and best practices from governments engaged in this important work.

But Treasury cannot do this work alone.

I know that many of you are already engaged with your local governments to encourage them to invest SLFRF funds in affordable housing, workforce development, and other projects that will help support their local communities for years to come.

Thank you for joining me here today, and for your partnership with recipient governments to help them use SLFRF award funds for investments in local communities that can support a full and robust economic future.

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