Baker laments ‘massive delay’ in spending ARPA funds
Says Mass. was already behind rest of country
ON WEDNESDAY NIGHT, Gov. Charlie Baker’s worst fears about giving the Legislature control of $5.3 billion in federal money came true.
The House and Senate blew past their self-imposed deadline of getting Baker a spending bill by Thanksgiving, leaving the procrastination-prone Legislature with no firm near-term deadline by which to spend the money.
“The Baker-Polito Administration believes the Legislature’s original decision six months ago to freeze these funds and subject them to the legislative process created a massive delay in putting these taxpayer dollars to work,” Baker press secretary Terry MacCormack said in a statement Thursday morning. “Massachusetts was already behind most of the country in utilizing these funds before the latest setback, and further delay will only continue to leave residents, small businesses, and hundreds of organizations frozen out from the support the rest of the country is now tapping into to recover from this brutal pandemic.”
The Republican governor announced his plan to spend the federal American Rescue Plan Act money in June. But the Democratic-led Legislature gave themselves control over the funds. Baker has been pushing lawmakers to get some money out quickly to deal with immediate needs – like job retraining for unemployed individuals – and to start making longer-term investments, like building housing.
Legislative leaders are vowing to continue working on the bill during the holiday recess, but in informal sessions, which continue through December, the opposition of a single lawmaker can derail a bill’s passage, and it is unlikely a massive spending plan would be passed informally.
Evan Horowitz, director of the Center for State Policy Analysis at Tufts University, has said previously that there is no economic imperative to put money into the economy right now since in many cases there is more demand for products than supply. But he said Wednesday that there is a political imperative.
“You have lots of complicated questions about who’s going to get it because everyone wants a piece of it, so you need something that’s going to force a compromise or force decisions,” Horowitz said. Horowitz said it appeared the Thanksgiving deadline lawmakers set for themselves would be that force. Without that, he said, “You can imagine kicking this can all but indefinitely and ending up in 2024 when we have to make all the spending decisions in a month.” Under federal law, the money must be appropriated by 2024 and spent by 2026.
Bills coming out of Congress could also influence state spending. President Biden just signed an infrastructure bill that is expected to steer $9 billion to Massachusetts. Congress is considering the Build Back Better bill, another massive spending plan. But Horowitz said given the priorities included in the legislative proposals, he does not see any areas where if more federal money were to arrive, lawmakers would regret the earlier spending.
Both the House and Senate versions of the bill would allocate around $3.82 billion from the American Rescue Plan Act and some state surplus.While the bodies agreed on some of the biggest provisions – spending $500 million on premium pay for essential workers and $500 million to reimburse the unemployment insurance trust fund – there were significant differences. According to the Massachusetts Taxpayers Foundation, the House had $790.8 million in unique spending, line items or amounts not shared with the Senate, and the Senate had $837.6 million in unique spending. The Senate would spend more on mental health, while the House would spend more on education.
Horowitz said the size of the federal largesse actually creates political problems because no one is in a “triage” mindset. “It’s a complicated situation, because people aren’t expecting to be cut out because there’s a sense there’s a ton of money, but it isn’t enough to avoid cutting some people and priorities out,” Horowitz said.