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House leaders detailed a $3.65 billion spending package Monday that would invest in housing, hospitals, schools and workforce development, proposing to draw from last year’s state budget surplus and over half of its American Rescue Plan Act funds to prop up workers, industries and communities hurt by the COVID-19 pandemic.
The long-awaited plan to spend federal relief dollars gives the Legislature flexibility to spend more at a later date, depending on if and where Congress directs additional spending.
Ways and Means Chairman Aaron Michlewitz said the bill proposes to leave up to $2.4 billion in ARPA funds untouched, and would spend about $1.15 billion of an estimated $1.5 billion in unbudgeted surplus funds.
“The spending of this money is critical to getting Massachusetts back better than before. Our goal is to responsibly fund priority areas that will stand the test of time and make systemic and equitable changes,” House Speaker Ron Mariano said.
Mariano detailed the bill alongside his budget chief Ways and Means Chairman Aaron Michlewitz, Ways and Means Vice Chair Ann-Margaret Ferrante and Reps. Dan Hunt and Bud Williams, who he put in charge of the committees overseeing federal stimulus and racial equity.
Earlier in the morning, Michlewitz and Senate Ways and Means Chairman Michael Rodrigues issued a statement announcing an agreement between leadership of the two branches to put $500 million into the state’ unemployment insurance trust fund and to use another $500 million for bonuses for low- and middle-income workers who provided critical services during the pandemic.
Employees who worked in-person during the state of emergency who earned up to 300 percent of the federal poverty level would qualify, Michlewitz said, noting that additional details for the program would come after conversations with the Baker administration.
Michlewitz said those were the two areas where the branches are in agreement, and although he said he expects the Senate to take up the bill in the coming weeks after it passes the House, he did not guarantee that a bill would reach Gov. Charlie Baker’s desk before the Nov. 17 mid-session recess.
The bill proposes to put $600 million into housing, $777 million into economic development, $750 million in the workforce, $765 million in health and human services, $265 million in education and $350 million into the environment and climate change mitigation including climate-resilient infrastructure funding, but no money specifically to help property owners adapt.
The housing component breaks down as:
- $150 million to fund the creation of supportive housing for the formerly homeless.
- $150 million for repairs to public housing units.
- $100 million for down payment assistance and similar programs.
- $100 million for the CommonWealth Builder program, which subsidizes new for-sale units to be sold at affordable rates, leaving them unencumbered by affordability deed restrictions for subsequent resale.
- $100 million to fund affordable housing production.
Of the economic development investments, $200 million would be put toward tax relief for small business owners that paid personal income tax on state and federal relief grants during the pandemic.
Business groups have also been lobbying the legislature to use federal stimulus and state surplus dollars to replenish the UI system, which was drained during the height of the COVID-19 pandemic, and reduce the long-term financial liability for employers.
Baker had proposed to use $1 billion of the state’s fiscal year 2021 surplus for that purpose, but Democratic leaders are eyeing a smaller amount.
Along with $250 million for financially stressed hospitals and $70 million for nursing providers, Mariano said he and Health Care Financing Committee Chairman John Lawn have been working on policy reforms to “close loopholes” and “stabilize” the health care market.
The House also plans to release a health care reform bill as soon as this week with policy changes that Mariano said “dovetails” with spending lawmakers are targeting for the industry, though he did not elaborate on details.
The bill’s unveiling comes more than four months after the Legislature rejected Baker’s proposal to spend close to $3 billion of the ARPA pot immediately on priorities such as home ownership, substance abuse treatment and workforce training.
In the time since then, Baker has continued to push lawmakers to act quickly.
The Republican governor said Monday that he is glad the House will embark on a debate but indicated he is “a little concerned” about the timeline, noting that the House and Senate so far appear to have agreed only on two items totaling $1 billion in spending.
“There are as I understand it two items that are considered to be pre-conferenced out of many, which means the only thing I’ll be a little concerned about is the clock’s going to be ticking between now and the end of the formal session,” Baker said. “I expect and anticipate and hope that the branches will be able to see their way through to a bill that they can both agree on.”
