Can ARPA spending spur transformative change?
So far, most of the money is going into existing programs
FOUR MONTHS AGO, CommonWealth reported that jockeying was underway for a slice of the $5.9 billion pie of federal money coming to Massachusetts state government from the American Rescue Plan Act.
“It’s a lot of money, but it’s not infinite money. Not even close,” Evan Horowitz, director of the Center for State Policy Analysis at Tufts University, said.
That comment proved prescient as House leaders said this week that they had gotten requests from 400 individuals and organizations totaling more than $30 billion. They whittled that down to a $3.65 billion plan.
State representatives then proposed 1,128 amendments seeking another $5.8 billion, according to the Massachusetts Taxpayers Foundation.
The big question for lawmakers is whether they can take once-in-a-generation federal largesse and use it to make transformative changes. Lawmakers and Gov. Charlie Baker have committed to steering the money as much as possible toward poor communities of color – those most directly impacted by COVID-19.
Baker’s approach, in his $2.9 billion proposal, has been described by administration officials as take what’s working and do more of it, by putting more capital into existing programs. Part of the advantage of this approach for the governor is by putting money into programs the Legislature already supported, he increases the chances that lawmakers will fund them again.
The House plan is in some ways similar. It does not include many new programs. The biggest new one – premium pay for low-income essential workers who worked during the pandemic – would significantly help individuals but is unlikely to fundamentally restructure society.
Many of the programs it funds already exist. For example, the plan would enhance the CommonWealth Builder program to spur housing production; increase funding for a workforce training fund; and put $25 million into greening Gateway Cities, $40 million into youth job programs, and $10 million into gun violence prevention.
That said, depending on how programs are implemented, some of the investments could potentially take a large step toward spurring new industry or solving long-standing societal ills.
Both Baker and the House want to spend $100 million on marine port and offshore wind development. If successful, that could make Massachusetts a national leader in the offshore wind industry, and permanently transform places like New Bedford, Salem, and Somerset into economic hubs.
The House is proposing $250 million for financially strained hospitals, which House Speaker Ron Mariano says will be paired with health policy legislation. Will this investment spur the state to finally address disparities in insurance reimbursement that force community hospitals to struggle? That depends on the policy details.
Baker officials argue that the $1 billion the governor wants to spend on housing, half of which would go toward homeownership support and production, would address the generations-old racial disparity in homeownership rates and permanently improve the economic well-being of Black and Hispanic families. The House would spend less on housing – $600 million – with just $200 million going toward homeownership.
One question is how much authority the administration will have to gear the spending toward particular areas that fit its priorities. The House bill as introduced gave the administration a fair amount of discretion. But the amendments are primarily local earmarks – directing specific sums to a Brockton food pantry for the Latino community, a homeless women’s shelter on Martha’s Vineyard, or a Brookline senior center.Another question is what the Senate will do. While the House and Senate have agreed on broad priorities and a couple of large expenditures – like premium pay – the Senate will have its own priorities and earmarks. Baker will then have line-item veto power, although the Democratic-controlled Legislature can generally override him.
In other words, the bill has a long way to go before becoming law. Let the jockeying for funds continue.