More than $1 billion in federal stimulus cash still unspent

Somerville officials said they have already spent $5.9 million of the $7 million allocated to them through the state’s CARES Act fund distributions and plan to spend the rest this year.Josh Reynolds for The Boston Globe

Even as Massachusetts pushes Congress for more federal stimulus funding, new state data show it had spent only half the $2.7 billion it received last year through the federal CARES Act’s Coronavirus Relief Fund.

State and local officials say the numbers illustrate some of the logistical challenges associated with obtaining and spending the money, including some uncertainty about how precisely the funds can be spent. And with the pandemic still ongoing, some cities and towns have been trying to reserve portions of the money while they determine how much additional cash they will receive from the federal government and what restrictions those funds may carry.

“There’s a logic to keeping your powder dry,” said Phineas Baxandall, an analyst with the Massachusetts Budget and Policy Center, a think tank. State officials expect all the money to be spent by the deadline at the end of the year.

Meanwhile, Governor Charlie Baker and Representative Richard Neal, Democrat of Springfield, held a joint press conference last week in Boston to promote a new $1.9 trillion relief package moving through Congress. Neal, who chairs the House Ways and Means Committee, predicted the bill will pass by mid-March.

As of the end of 2020, Massachusetts had spent about $1.4 billion of the relief funds, a quarter of which was spent on salaries payroll for public safety staff.

Specifically, the state allocated $150 million for the Department of Correction, $99 million to the state police, and smaller amounts to local sheriffs’ departments. The funds accounted for nearly one-third of the Department of Correction’s payroll spending last year.

Other major expenses included contact tracing, testing, and grants for small businesses. More than $140 million was spent on helping schools reopen. And a tiny fraction of the money, $35,243, went to the grim task of opening temporary morgues.

State officials set aside another $502 million for municipalities. But only $324 million of that has been distributed so far, as some cities and towns have not yet requested the full amount allocated for them. And of the money they have received, much still remains unspent, state figures show.

That’s partly because then-President Trump signed a law on Dec. 27 extending the deadline to spend the CARES Act funds until the end of 2021, giving local officials more time to figure out how best to use the money.

“What you may be seeing in a lot of these municipalities is a reassessment of how they want to use some of this stuff in light of the fact that they have another year to spend it,” said Doug Howgate, executive vice president of the Massachusetts Taxpayers Foundation. “Everyone involved wants to make sure people spend it on appropriate issues and make sure the money stays in Massachusetts.”

Some cities and towns say they have also faced logistical and administrative obstacles, including sorting through the regulations on how the funds can be used.

In Blackstone, a small community on the Rhode Island border, officials have spent just $169,562 of the $822,252 they’re eligible for, though they hope to tap more, said acting town administrator Greg Balukonis.

“In larger communities with more of an administrative structure, it’s probably easier” to spend the money quickly, Balukonis said. “But I’m not trying to use that as an excuse.”

Cummington, a small town in Western Massachusetts, made a paperwork error that delayed funding for months, said Eliza Dragon, who serves on the town’s select board.

Somerville officials say they have already spent $5.9 million of the over $7 million allocated to them through the state’s CARES Act fund distributions, and plan to spend the rest this year.

But Ed Bean, the city’s finance director, said “there have been avoidable bureaucratic hurdles that make it impossible to access the Cares Act funds, including lack of clarity, overly strict rules and short deadlines that make it difficult to meet contractor bidding requirements.

State data, while incomplete, show that much of municipal spending has been on administrative expenses, payroll, and improving telework options for public employees. Local leaders also have spent millions of the federal funds on personal protective equipment, food programs, and cleaning efforts.

While Massachusetts was charged with distributing the bulk of federal relief money to cities and towns, Boston received aid directly from the federal government and Plymouth County insisted on handling distribution of funds to 27 communities within its borders, even though some argued the state was better equipped to dole out the money.

City officials say Boston has already spent the majority of the $121 million it received, with a small amount reserved for emergencies during the rest of the year. Expenses included protective equipment and small business grants. Plymouth County has disbursed $26 million of the $91 million it received, and plans to reimburse another $30 million in claims shortly, said county Treasurer Tom O’Brien.

The CARES Act’s Coronavirus Relief Fund was just one small portion of all federal funding allocated to Massachusetts, but it provided relatively flexible funds that officials could use on many unexpected expenses incurred due to the coronavirus pandemic. However, federal officials barred government agencies from using the funds to pay off debt or cover routine expenses, even if governments suffered revenue shortfalls due to business closures and other problems related to COVID-19.