Earlier this year, our team wrote about the implications of the American Rescue Plan (ARPA) for the Commonwealth . Massachusetts received about $5.3 billion in state fiscal relief—in addition to $3.4 billion for local governments. As Beacon Hill comes back from session, the questions we asked then are more relevant than ever. Today, we’ll update this analysis with recent developments and new information that will affect citizens, businesses, and politics across the state.
Tensions Between the Governor and the Legislature Persist
Since our writing, the Legislature has moved about $4.9 billion of the remaining $5.1 billion into a fund that cannot be accessed without legislative approval—allocating just $200 million to the Governor. Tensions between the Governor and the Legislature have understandably not abated.
In July, the Joint Committee on Ways and Means held a 5-hour hearing soliciting testimony from key experts regarding national trends, best practices, and recommendations on spending. Notably, the Committee solicited testimony from Governor Baker—clearly establishing his authority to make recommendations, not decisions. They held a second hearing a week later , further asserting legislative authority to disburse funds.
As we move into the fall, we may see increased pressure both to and from the Governor and Legislature. Though the Governor has developed an executable plan, key legislators will not move forward with any plan before “ stakeholders and members of the general public provide feedback and share ideas .” This is the most prominent issue the Legislature is considering this calendar year—and it will receive commensurate attention.
How Might the Commonwealth Spend This Money?
There are some restrictions governing how the money can be spent, but they are extremely broad when compared to typical language accompanying federal money. The Legislature may look at so-called “big buckets” to move the money into; development or production plans, housing overhauls, infrastructure updates, or construction megaprojects are likely targets.
They may also consider what programming COVID has prevented. Education, healthcare access, and nonprofit services have all suffered from pandemic-related expenses—a spending plan is almost certain to address some of these concerns.
Meanwhile, the Governor likely will continue advocating for the issues highlighted in his initial pitch to disburse approximately $2.8 billion: housing, hospital relief, skills training, tourism, and downtown development. Though this plan was rejected when the Legislature established their fund, Baker quickly proposed a nearly identical $2.9 billion spending bill, signaling commitment to the priorities outlined in his initial plan.
As the fall schedule picks up, the Joint Committee on Ways and Means and the House Committee on Federals Stimulus and Census Over will hold several hearings on ARPA funding with some initial spending legislation emerging prior to Thanksgiving. The intent is to focus on the areas of economic development, transportation, arts and tourism, climate, and infrastructure projects.
Tenax Strategies will continue to issue updates as plans develop. Follow us on LinkedIn to never miss an update .
The post American Rescue Plan Spending in Massachusetts: A Legislative Update appeared first on Tenax Strategies.
