Baker signs $4B ARPA bill but pushes back on how to deploy bonuses, health funds

Dec 13, 2021Boston Business Journal, Council in the News

December 13, 2021
Boston Business Journal 
By: Staff

Gov. Charlie Baker on Monday signed $4 billion legislation allocating a large chunk of the state’s American Rescue Plan Act funding, but he rejected a handful of provisions approved by lawmakers that he said would delay distribution of the money.

Gov. Charlie Baker on Monday, December 13, 2021 signed $4B ARPA Bill

Massachusetts Governor Charlie Baker W. MARC BERNSAU

Baker’s signature marks the culmination of a months-long process to determine how to best use the federal Covid-19 aid, which must be allocated by 2024 and spent by the end of 2026. The Democratic-controlled Legislature must now weigh whether to seek to override any of Baker’s vetoes.

One of Baker’s vetoes concerned the bonuses. The Republican governor approved the $500 million allocated to lower-wage employees who worked in-person during much of the pandemic, he said in a letter to lawmakers. However, he vetoed parts of the bill calling for a 28-member advisory panel to counsel on the design of the program.The bill relies on $2.55 billion of the state’s ARPA funds and $1.45 billion in state surplus from fiscal year 2021. Priorities in the legislation include spending on the state’s health care system, housing, unemployment insurance relief and bonuses for essential workers. (For a more detailed rundown of the approved spending, see the list below.)

The panel is designed in such a way “that is virtually guaranteed to significantly hinder disbursement of the funds,” Baker said. By signing two of the sections making up the bonus program, he added, his administration can begin the process of sending out the money.

“We could send out $500 checks to almost 1 million Massachusetts residents as soon as possible. Reinstituting the panel-driven process envisioned by the Legislature will simply disrupt the rollout midstream,” Baker wrote in the letter. “We urge you to let our administration proceed with this important program today.”

Baker also sent back his own amendment watering down the power of a behavioral health advisory commission tasked with recommending how to spend money from the behavioral health trust fund.

In the bill passed by lawmakers, the state would launch a 20-member advisory commission that would send recommendations to the Legislature on how to spend some $198 million the trust fund. Instead, Baker proposes having Health and Human Services Secretary Marylou Sudders distribute the funding with the option of taking the advisory commission’s input.

“The advisory commission should be just that: advisory, not the first step in a second round of an already protracted appropriations process,” Baker wrote in a separate letter to legislators.

His proposed amendment also replaces the secretary as a member of the advisory commission with the commissioners of the Department of Public Health and the Department of Mental Health.

Baker vetoed language in six other provisions, including certain reporting requirements that the governor called “unduly burdensome.” Baker’s vetoes would remove the reporting requirement for a $115 million line item for production and preservation of affordable rental housing; $150 million line item to fund improvements to state-aided public housing; a $65 million line item funding home ownership assistance and a $14 million line item offering grants for agriculture, commercial fishing and cranberry growers.

The governor has tussled with lawmakers for much of 2021 over the speediness with which the ARPA funding should be spent. Baker put forward a nearly $3 billion package this summer, but Democratic legislative leaders opted to hold hearings on proposed uses of the money through the fall, not passing a final version of the legislation until earlier this month.

The final legislation includes $107.5 million for job training initiatives, significantly less than what Baker had originally sought.

It also includes $500 million for the state’s unemployment insurance trust fund. Some business groups had pushed two or three times as much money, though the current financial status of the fund remains unclear because the administration has not produced a monthly report on the fund since June.

“To put the $500 million in UI relief into perspective, consider that the Massachusetts UI system has paid out more than $24 billion since the start of the pandemic in the spring of 2020,” the Massachusetts High Technology Council said in a statement. “As a result of these unprecedented outlays, the Commonwealth’s private sector is still on the hook for billions in outstanding payments and obligations.”

Here are the major spending provisions lawmakers and Gov. Charlie Baker approved in the relief package:

 

Health care

  • $400 million for mental and behavioral health initiatives
  • $260 million in aid for financially struggling hospitals
  • $200 million for the state’s local and regional public health system
  • $50 million for nursing facility and workforce improvements
  • $150 million to support the production of permanent supportive housing for the homeless
  • $150 million to rehabilitate and modernize public housing
  • $115 million to aid first-time homebuyers
  • $115 million to support affordable rental housing
  • $65 million to create and maintain opportunities for homeownership in communities disproportionately hurt by the pandemic

Environment/climate change

  • $100 million for infrastructure improvements to help cities and towns prepare for climate change
  • $100 million for water and sewer infrastructure
  • $90 million for the development of offshore wind and port infrastructure

Workforce development

  • $107.5 million for state programs like the Workforce Competitiveness Trust Fund and Career Technical Initiative
  • $100 million for vocational high schools and other schools with career and technical education programs

Covid-19 business relief

  • $135 million in grants for arts, cultural and tourism organizations hurt by the pandemic
  • $75 million in grants for small businesses hurt by the pandemic, including those without access to previous aid because of a lack of revenue loss in 2020

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