Top Massachusetts lawmakers on Monday offered a sweeping plan for spending $3.65 billion in federal stimulus money and state surplus funds, including to set aside a half-billion dollars for bonuses to essential workers, funnel hundreds of millions of dollars toward struggling hospitals, and commit $600 million to help spur more housing.
The proposal unveiled by House leaders uses, for now, about $2.5 billion in federal American Rescue Plan Act funds and another $1.15 billion from a state surplus to buttress an array of programs affected and priorities amplified by the COVID-19 pandemic.
It comes months after the state first received a bonanza of federal stimulus cash, and Governor Charlie Baker proposed his own plan to begin doling out what one legislator called “once-in-a-lifetime” funds. But while Baker sought to primarily target housing and infrastructure needs with $1 billion apiece in federal funding, the House chose a more sprawling approach, seeding everything from special education to prison reentry grants and gun violence prevention programs.
The approach reflected the variety of competing demands legislators said they faced. Representative Daniel J. Hunt, who chairs the House federal stimulus committee, said between a half-dozen hearings and hundreds of meetings, House officials faced more than $30 billion in requests.
“While this bill is not a panacea, we believe it specifically targets, through a cornucopia of funds, the issues that we identified over the last six months that are in most need,” said Hunt, a Dorchester Democrat.
House leaders said they expect to vote on the 37-page bill later this week followed by a vote in the Senate in the weeks ahead.
The plan is the first indication of how legislative leaders intend to spend a chunk of a $1.5 billion state surplus and $4.9 billion in so-called ARPA funds: Roughly $600 million would go toward housing programs; another $500 million would be infused into the state’s in-debt unemployment insurance trust fund; “financially strained” hospitals would get $250 million; and $150 million would help those who need training or more education to rejoin the workforce.
Another $150 million is tapped to help local and regional boards of health over the next three years, while another $70 million would help nursing homes hire more staff or modernize their facilities.
Notably, the plan would leave unspent about $2.75 billion between both pots of state and federal money, which legislative leaders said they would revisit. Lawmakers had long resisted calls from Baker and others to move more quickly in dispersing the federal cash that arrived in May.
“Part of the benefit of being deliberative is that we can take a pause, see what this money does and what impact it has on our economy and make additional decisions,” said House Speaker Ronald Mariano, a Quincy Democrat.
One of the biggest single spending areas is for “premium pay bonuses” for low-income essential workers. The bill would set aside $460 million for those who make up to 300 percent above the federal poverty limit and worked in-person during the state’s 16-month COVID-19 state of emergency.
The bonuses would range between $500 and $2,000, depending on how many workers qualify. The exact guidelines of eligibility would be shaped at a later point, lawmakers said, though both House and Senate leadership support creating the program.
House officials said there have been studies showing up to 800,000 front-line workers in Massachusetts, but it wasn’t clear how many could ultimately qualify. At 300 percent above federal poverty levels, an individual with an annual income of $38,640 could be eligible, as could a family of four whose income is $79,500.
“We didn’t want to make it overly generous,” Mariano said. “We wanted to benefit the folks who stayed at their post through the whole pandemic — the folks who worked in the nursing homes, that drove the buses, that worked in the supermarkets.”
The bill separately would commit $40 million for bonuses up to $2,000 for “front-line state employees” who were required to work in-person during the winter of 2020 to 2021, replicating a proposal Baker had previously filed.
Tim Foley, the executive vice president of 1199 SEIU, which represents health care workers, hailed the $500 million announcement as recognition of employees who often have to work without protective gear or with limited sick leave. “These workers . . . have rightly been hailed as the heroes of the health crisis and House and Senate leadership today recognized that,” he said.
The House proposal also includes $200 million worth of tax breaks for small businesses that paid personal income taxes on state and federal grants or loans that they received during the pandemic.
The plan features a slew of smaller buckets of funding: $10 million to help educators of color get licensed, $5 million for the state’s inspector general to set up a public database tracking the federal funds, or $12 million to help with the resettlement of Afghan refugees in Massachusetts.
The plan expands on some areas and diverges from others compared to what Baker had proposed in the spring, when he called for $1 billion on housing initiatives, another $1 billion on infrastructure projects, and $240 million on workforce development programs, among other buckets of funding.
Under the House plan, $350 million would go toward infrastructure and development, including $100 million for helping the state’s marine and offshore wind development. Lawmakers said the state could see another federal infusion should Congress pass a $1 trillion infrastructure bill that has already cleared the US Senate.
In a separate spending bill he proposed during the summer, Baker sought $1 billion for the unemployment insurance trust, but House leaders are proposing half that.
Lawmakers earlier this year passed a bill that would extend the cost of what’s known as a solvency assessment over two decades, to cover $7 billion in unemployment payments tied to the COVID-19 pandemic. But businesses had sought more help in lessening the burden on them, with one trade group representing small businesses saying the unemployment insurance system is in “crisis.”
State Representative Aaron Michlewitz, the House budget chairman, said legislative leaders, including in the Senate, agreed on the $500 million contribution after looking at 15 other states that made similar deposits, which he said averaged around a half-billion dollars.
Combined with the tax relief the bill proposes, Michlewitz said he believes it’s a “significant amount of money toward helping solve some of the issues that the business community has been confronted with.”
Baker, who has said he wants a bill to reach his desk by next month, said he hopes the unemployment insurance proposal is a starting point.
“The employer community generally was looking for more. We were, too,” Baker said.
Jon Hurst, president of the Retailers Association of Massachusetts, said that lawmakers should do more to address what he called “government-triggered” fraud and layoffs during the pandemic. “Small employers will be disappointed if this proves to be the only government step,” he said.
Lawmakers had opted for a slower approach to appropriating the funds in recent months, moving billions into a separate fund that they control while holding a series of hearings to gauge ideas on how to spend it.
In the meantime, they set aside $200 million of the federal aid for Baker to spend in the short term, with the vast majority of it going toward fiscally distressed hospitals, bridging staffing gaps in inpatient psychiatric facilities, and investing in workforce development.
Another $200 million also went to various places, such as $109 million for four communities that received far less than neighboring towns and cities under the federal COVID-19 relief, and $10 million to pay for the state’s vaccination lottery program.
Lawmakers have wide leeway when they have to actually commit the federal stimulus funds, which must be obligated by the end of 2024 and spent by the end of 2026.