With the Legislature's fall recess fast approaching, House leaders on Monday detailed a $3.65 billion spending package that would pour state surplus and federal COVID-19 relief money into areas like housing, schools and workforce development, while also reserving about $2.75 billion to be allocated at a later date.
The long-awaited plan to spend American Rescue Plan Act dollars arrived five months after the state first received roughly $5.2 billion in federal discretionary funds, and the Legislature resisted calls from Gov. Charlie Baker and others to put some of the money to use quickly as it gathered information on the existing needs.
Two of the cornerstones of the proposal, which will get a vote in the House later this week, are a $500 million investment in the state's unemployment insurance system and $500 million for bonus pay for low-income workers who could not stay home during the pandemic. Leaders also said all the investments were designed with an eye on racial equity, and helping people and communities most impacted by the pandemic.
"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.
While House and Senate leaders said they have already agreed to the $1 billion for UI and bonus pay, the remaining details of how to spend the unprecedented amount of one-time federal stimulus funding must still be worked out between the branches.
The House plans to debate the bill (H 3922) on Thursday, and the Senate said it would take up a version of the bill "within the next few weeks." House lawmakers have until 3 p.m. on Tuesday to file amendments.
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 decision to leave about $2.75 billion in one-time money uncommitted, legislative leaders said, will give the Legislature flexibility to address other needs depending on whether Congress can strike a deal over a major infrastructure bill and social program support.
"We are mindful of a potential infrastructure package still being negotiated at the federal level," Mariano said.
House and Senate leaders have said that they hope to finalize a bill before Thanksgiving, but the mid-session recess begins in just over three weeks and Michlewitz could not guarantee that a bill would reach Baker's desk before that Nov. 17 deadline.
"We're going to try to get something done as quickly as we can," Michlewitz said, calling conference committee talks "hard to predict." The North End Democrat said there have been "extensive conversations" with the Senate, but he said the two branches have only agreed so far to the UI and bonus-pay.
Housing, health, economic development top spending
Mariano and Michlewitz detailed the bill alongside 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.
The bill proposes to put $600 million into housing, $350 million into the environment and climate change mitigation, $777 million into economic development, $750 million in the workforce, $765 million in health and human services, and $265 million in education.
Of the economic development investments, $200 million would be put toward tax relief for small business owners that paid personal income taxes on state and federal relief grants during the pandemic. Another $20 million would help resettle Afghan refugees who have started arriving in Massachusetts following the U.S. military withdrawal from Afghanistan.
Other pots of money include $100 million for home ownership assistance; $100 million for water and sewer infrastructure, $100 million for marine port development and offshore wind, $125 million in grants for the cultural sector, $78 million for food security, and $100 million for heating, air conditioning and ventilation systems in public schools.
"We intend to help so that our students can remain in our classrooms and learn in a healthy environment," Mariano said.
Hunt said that through six public hearings and 1,200 pieces of written testimony the Legislature received $30 billion in requests for money from the pot of ARPA dollars.
"While this bill is not a panacea, we believe that it specifically targets through a cornucopia of funds the issues that we identified over the last six months that are in most need," Hunt said.
How to monitor spending
To track the spending, House leaders have proposed to give Inspector General Glenn Cunha $5 million to create a public website and database to specifically ensure that money reaches hard-hit communities, and to track the number of contracts awarded to minority-owned businesses.
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."
Formal sessions this year are set to end Nov. 17, and pick back up again in January.
Health care bill coming
One of the largest chunks of the bill would go toward the health and human services industry that faced upheaval during the pandemic, with $250 million to buoy financially strained hospitals and $70 million for nursing facilities.
Representatives will also soon be asked to vote on a range of other health care reforms. Mariano said he wants to pair the spending with "meaningful policy changes" that could "stabilize" the market in the short term and "close loopholes." The ARPA bill itself does not contain any policy changes, and the speaker said he and Health Care Financing Committee Chairman John Lawn are working on a separate policy-focused bill that "dovetails" with the spending proposal.
Mariano said the health care bill will emerge "this week," but declined to offer specifics. Asked if the bill would hit the House floor for a vote or just be released this week, Mariano said he is "not exactly sure."
"A lot remains to be seen," Mariano said. "I think we'll return to that later in the week."
The ARPA bill includes $250 million for behavioral health programs, with $100 million carved out for workforce supports such as student loan assistance and tuition reimbursements, and a three-year, $150 million investment to improve data collection and address health disparities.
Community health centers would receive $20 million for technical infrastructure, community gun violence prevention programs would receive $10 million, and another $15 million would go toward prison reentry grants for those released from incarceration during the pandemic.
Before House leadership released its bill, Michlewitz and Senate Ways and Means Chairman Michael Rodrigues issued a statement announcing an agreement between leadership of the two branches on the $1 billion in spending on UI and bonus-pay.
Employees who worked in-person during the state of emergency who earned up to 300 percent of the federal poverty level would qualify for one-time bonus of $500 to $2,000, Michlewitz said, noting that additional details for the program would come after conversations with the Baker administration.
The bill would carve out $40 million of that fund for state workers and deploy the remaining $460 million to other qualifying workers.
Baker's bill to spend the state surplus similarly included a $40 million proposal to provide premium pay for essential state workers who had to show up to work during the pandemic, but the Legislature's plan would go further.
The governor on Monday said he would withhold his thoughts about the premium pay proposal "until I see some more of the details about how it's actually supposed to work and what it is we're supposed to do."
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. On Monday, Baker called their $500 million proposal "a great number to start that conversation on" and reiterated his support for a larger investment.
"Obviously, I'd like to see more there because at the end of the day, that's a big hole that we have to fill and it will come out of the pockets of many small businesses and their employees without our help," Baker said.
Retailers Association of Massachusetts President Jon Hurst said the small businesses he represents will be looking for additional money, as well as system reforms to address UI abuse and "eligibility loopholes," early next year.
"The proposal acknowledges there is a need for the state to share in the responsibility to address this UI debt and unprecedented tax increase, but small employers will be disappointed if this proves to be the only government step," Hurst said.
Equity a focus
House leaders said they crafted the bill with a specific focus on equity, noting that the pandemic wrought disproportionate devastation on communities of color and lower-income families.
Some of the spending aims directly at those groups, such as the premium pay for front-line workers that will be limited to those who earn 300 percent or less of the federal poverty limit or $125 million in cultural sector grants that will focus on minority populations.
"In nearly every category of spending contained in this bill, you will see a focus or a carve-out for funds to be directed or prioritized toward these areas and constituencies," Michlewitz said. "By doing that, we feel we are presenting before the House a truly equitable spending package."
Williams, a Springfield Democrat who co-chairs the new Racial Equity, Civil Rights and Inclusion Committee, said Black and brown communities have been overburdened for decades, bearing the brunt of the AIDS crisis, the 2008 recession and the war on drugs.
The COVID-19 pandemic, he said, "really pulled the veil back" on the structural obstacles that people of color face, particularly in health care access.
"We're trying to fix a system that has been broken for many generations, and this opportunity we have to make communities whole is very important," Williams said.
Rep. Chynah Tyler, chair of the Black and Latino Legislative Caucus, said Monday that the House Ways and Means Committee package largely lives up to expectations about "how we can level the playing field moving forward."
"Of course, there need to be more tweaks made as we begin to iron this debate out over the next couple of days, but on face value, it speaks through an equitable lens," Tyler said in an interview.
Tyler said the provision requiring the inspector general to launch a public website tracking the disbursement of funds will ensure the Legislature pursues "smart spending and equitable spending."
She also praised sections of the bill focused on housing, including a proposed $100 million to support home ownership and another $100 million for affordable housing production, as well as the premium pay that would flow to employees who worked in-person.
"A lot of constituents didn't have an opportunity to take off work or work remotely throughout COVID," Tyler said. "We have an opportunity to be able to help them get ahead again."
Tim Foley, executive vice president of 1199 SEIU, also praised the proposal to cut checks for front-line workers who "worked tirelessly and at risk to their own health and families throughout the COVID-19 pandemic."
"These workers, often without the protective equipment they so badly needed and with limited sick leave or childcare help, have rightly been hailed as the heroes of the health crisis and House and Senate leadership today recognized that," Foley said.
The House's proposal for environmental spending drew praise from Environmental League of Massachusetts Assistant Vice President for Government Relations Casey Bowers.
"We welcome the inclusion of language and funds for ports to accommodate offshore wind, parks and open space, forestry and urban tree planting, climate resiliency, and water and sewer infrastructure," Bowers said. "However, this is just a down payment on the work that needs to be done to meet the moment. We look forward to continued collaboration with the legislature to increase funding to address climate change at the scale necessary."