Efforts by South Portland city officials to lobby the federal government for more pandemic-related funding have paid off with nearly $8 million in new money for the city, according to City Manager Scott Morelli.

Appeals to Maine’s congressional delegation led to an increase of allocations to South Portland under the American Rescue Plan Act of 2021, from an initial $2.55 million to $10.5 million, Morelli said. As to whether the money can be used, even indirectly, to offset the impending residential property take hike expected this summer, officials are discussing if and how that can be done.

“We may be able to use it to fund budget items so that means we would need less property tax, so in effect that is relief,” Morelli said.

The city is awaiting the results of the mandatory revaluation that officials expect will lead to a big increase in residential property values and a corresponding hike in tax bills, possibly up to 30% or more.

A change in federal law forbids states to use the funds “to directly or indirectly offset a reduction in net tax revenue,” according to a fact sheet supplied by Morelli, but he said the city is exploring ways it could use the money to help alleviate the revaluation’s impact while still obeying the letter of the law.

Mayor Misha Pride said the City Council will hold a workshop in early June to discuss how the funds will be used.

Pride said this week that he and Morelli began lobbying the offices of Sens. Susan Collins and Angus King and Congresswoman Chellie Pingree earlier this year to make the case that the federal government’s formula for calculating allocations was flawed.

The formula, Pride said, was based on the formula used to calculate allocations of Community Development Block Grant funding. In 2006, he said, the city gave up its status as a CDBG entitlement community in order to allow Cumberland County to get the entitlement status. That meant, he said, that the city got less funding, but more would come into the county and trickle downward.

The federal government not only used the formula to calculate an unusually low amount of money to give the city, but the county did not get as much funding as expected either.

“It hurt us twofold,” he said.

Morelli said city officials began researching to see if other communities were missing out on funding due to a similar technicality, and Pride said they found communities in Michigan, California and Pennsylvania all had suffered in a similar fashion. It was this information, Pride said, that helped convince the federal government to increase South Portland’s allocation.

The U.S. Department of the Treasury, in a statement regarding the funding, spelled out how the funds could be used, grouping allowances into the following categories:

• Supporting public health expenditures: paying for local COVID-19 mitigation efforts, medical expenses, behavioral healthcare, mental health and substance misuse treatment and public health and safety personnel responding to the crisis
• Addressing negative economic impacts caused by the public health emergency: rehiring public sector workers, providing aid to households facing food, housing or other financial insecurity, offering small business assistance, and extending support for industries hardest hit by the crisis
• Aiding the communities and populations hardest hit by the crisis: addressing immediate and long-term harms of the pandemic, such as public health, economic and educational disparities
• Providing premium pay for essential workers
• Investing in water, sewer and broadband infrastructure