Republican Guv to Legislature: Start Spending Now
In an attempt to end the battle over who gets to spend nearly $5.2 billion in federal relief money, Gov. Charlie Baker on Thursday pitched a plan that would see him cede much of his control over the aid to the Legislature, as long as lawmakers agree quickly to spend more than half on priorities such as home ownership assistance, substance abuse treatment and job training.
Baker visited a new housing development in Haverhill on Thursday where he detailed his proposal to allocate about $2.8 billion in federal relief money, attaching a sense of urgency to a plan that would also allow the Legislature to determine for itself how to spend the remaining funds.
The governor made his pitch on the same day he faced a deadline to act on a bill passed by the Legislature that would sweep nearly $5.18 billion in American Rescue Plan Act funding into the Coronavirus State Fiscal Recovery Fund. That fund is subject to appropriation by lawmakers, meaning the APRA relief funding would go through a more traditional budgeting process.
“While we’re willing to agree to move this aid into a separate fund, we need to work together to get part of this funding out the door to start addressing the immediate needs we have in our communities across the commonwealth,” Baker said.
The governor has asserted that he does not need legislative approval to spend the federal relief money, but said Thursday he was willing to meet Democratic leaders half-way. The governor returned the bill (H 3827) with an amendment that would allow the full amount to be transferred to the trust fund, but would also appropriate more than half of it immediately.
If he had vetoed the bill, House and Senate leaders likely would have had the votes to override the governor. But with his spending plan, which gives Democrats a vehicle to begin advancing their own ARPA spending bill, the Republican governor gave lawmakers something new to think about.
House Speaker Ron Mariano and Senate President Karen Spilka didn’t need to think too long, however, dismissing the governor’s proposal mere hours after he made his case publicly.
“The Legislature has made clear its belief that appropriating American Rescue Plan funding must be done through a transparent and deliberative process. We appreciate the Governor’s spending proposal, but we continue to believe that this once in a generation opportunity demands a thoughtful public vetting. To that end, we will continue to pursue placing these one-time federal dollars, which were intended to be spent over multiple years, into the segregated fund so that we can hear from communities and stakeholders throughout the Commonwealth,” Mariano and Spilka said in a statement.
Overall, the governor proposed putting $1 billion toward housing, including $300 million earmarked to help first-time home buyers in communities of color disproportionately impacted by the COVID-19 pandemic.
His amendment proposes another $200 million to support housing production through the CommonWealth Builder program, $200 million for rental housing production and $300 million for supportive senior and veteran housing.
“Folks in these communities are going to have a harder time getting back to work and a harder time getting back on their feet the longer we go thinking about how to spend this money,” Baker said. “And we chose areas that we that we believe the Legislature will be every bit as interested in spending resources on quickly as we are.”
The spending plan also includes hundreds of millions of dollars for job training, broadband internet infrastructure, addiction treatment and behavioral health, downtown development, tourism and nearly $1 billion for parks, culverts, dams, water and sewer infrastructure and other climate change resiliency projects.
“This $2.8 billion plan will jump-start our recovery, and it keeps the focus where it needs to be on the families and communities that have been hardest hit by the virus, and by the pandemic,” Baker said.
Baker’s return of the bill to the Legislature keeps the federal funding in limbo a month after Massachusetts received the lump sum aid through the American Rescue Plan Act.
Legislative leaders have not laid out a specific timetable for developing a spending plan of their own, but Baker said he was reticent to just start spending the relief money on his own with the House and Senate on record as wanting more control over how the funding gets spread around. Mariano previously mentioned decisions could be made “around June.”
“I think we’re trying to pursue this in what I would describe as a good faith manner,” Baker said.
Mariano and Spilka said they would consider Baker’s priorities, but made no commitments on timing or how they would prioritize the money.
“As this process unfolds, we will consider the Governor’s proposal and the worthy causes he identified as we collaborate with all parties to ensure a robust, sustained, and equitable recovery,” the Democratic leaders said.
The governor has already released $109 million from the $5.3 billion in ARPA funding for Massachusetts to the cities of Chelsea, Everett, Methuen and Randolph who missed out on a chunk of federal aid due to quirks in the federal funding formula.
Earlier this week, he also said he intended to use ARPA funding to pay for a new vaccine Lottery.
The “VaxMillions” giveaway rolled out by Baker and Treasure Deb Goldberg is intended to encourage unvaccinated residents to get the shot and features 10 prizes totaling $6.5 million, including five $1 million prizes, and five scholarships of $300,000 each for entrants under 18.
The Massachusetts chapter of the National Federation of Independent Businesses said it was “disappointed” Baker did not propose to use any money to replenish the unemployment insurance trust fund.
Baker recently partnered with lawmakers to relieve the sticker shock felt by businesses when they got their UI bills this spring by borrowing the money to recapitalize the depleted fund and allowing businesses to repay the money over 20 years.
Some states, however, have used chunks of their ARPA funding to rebuild their unemployment insurance trust funds and permanently reduce the debt burden on employers.
“The state-mandated restrictions and overly generous state benefits helped fuel the current UI crisis, and now the state should help employers pay for it,” said NFIB State Director Christopher Carlozzi.
Other groups reacted warmly to the governor’s plan.
Deb Markowitz, state director of The Nature Conservancy in Massachusetts, said the governor’s proposed use of the federal funding would help by “fostering healthy communities, providing clean water, addressing the impacts of climate change, and supporting our natural and working lands.”
“This type of bipartisan collaboration between our federal and state policymakers is essential for our nation to achieve a green recovery,” Markowitz said.
