Governor Charlie Baker rebuked state lawmakers a day after they went on recess without a deal on how to spend billions in federal stimulus and state funds, arguing it leaves Massachusetts “stuck in neutral” in its circuitous climb out of the COVID-19 pandemic.
Baker’s pointed criticisms on Thursday reignited his months-long dispute with Democratic leaders over how quickly the state should be spending the nearly $5 billion it still has in federal American Rescue Plan Act funds.
Lawmakers have long rejected the second-term Republican’s calls to move with alacrity in allocating the money, instead holding a half-dozen hearings to take public feedback while arguing that deliberation — not speed — was most important in dividing up a “once-in-a-lifetime” pot of money.
But legislative leaders failed to reach a compromise on a nearly $4 billion spending package before formal sessions ended for the year on Wednesday, and in the process, blew past their own self-identified deadline to send Baker a bill built using a portion of the federal aid as well as state surplus cash.
Senate and House leaders have said they are still negotiating, and they raised the possibility a deal could emerge in the informal sessions slated for the coming weeks during which bills can be approved as long as not even one lawmaker objects. But the uncertain timing prompted a rare escalation of Baker’s criticism of Democrats, with whom he’s often sought compromise.
“The Baker-Polito Administration believes the Legislature’s original decision six months ago to freeze these funds and subject them to the legislative process created a massive delay in putting these taxpayer dollars to work,” Terry MacCormack, a Baker spokesman, said in a statement issued just after 7 a.m. Thursday.
“Massachusetts was already behind most of the country in utilizing these funds before the latest setback, and further delay will only continue to leave residents, small businesses, and hundreds of organizations frozen out from the support the rest of the country is now tapping into to recover from this brutal pandemic,” he said.
Speaking later at an unrelated event, Baker bemoaned the delay — “We’re basically stuck in neutral,” he said — while arguing that other states have pushed more money out the door.
“The Legislature made a commitment to get it done before they went home for the holiday season and I can’t tell you how frustrated I am,” Baker told reporters. “Not just for me but for all the mayors and small businesses and folks who are looking for an opportunity to do something other than what they were doing before, and getting the skills that would be required to do that.”
Aides to Senator Michael J. Rodrigues and Representative Aaron Michlewitz — the lead negotiators on the bill for their respective chambers — either declined to address Baker’s remarks or did not respond to requests for comment.
The House and Senate unanimously passed differing versions of a $3.8 billion spending package in recent weeks. In doing so, they left themselves just three days of formal talks before legislative rules required they wrap up formal sessions for the calendar year. The Legislature’s full two-year session continues into 2022.
The bills are both broad in scope, dedicating hundreds of millions of dollars toward local public health systems, hospitals, housing initiatives, and other programs that will likely take time to ramp up spending.
Lawmakers have argued federal officials gave states wide leeway in when they have to actually commit the federal funds, which must be obligated by the end of 2024 and spent by the end of 2026.
In some cases, initiatives the bills seed may also have long runways for spending cash. For example, in the Senate version, at least $95 million in direct funds to local boards of health would be distributed through a five-year program.
“There is time sensitivity to it, but we are appreciative that [legislators] are working hard and diligently and thoughtfully about how to spend these resources,” said Carlene Pavlos of the Massachusetts Public Health Association.
Other buckets of spending, however, are more urgent, advocates say. Both versions of the bill would put $12 million toward helping with the resettlement of Afghan refugees, while the Senate version added $8 million to help arrivals from Haiti.
The state is expecting about 1,100 Afghans to arrive, while an unknown number of people have begun arriving from Haiti, many of whom have access to few resources or little, if any, legal assistance, according to advocates.
Groups in place to help those from Haiti are “already under water” without more funding, said Amy Grunder, director of legislative affairs for the Massachusetts Immigrant and Refugee Advocacy Coalition.
“I think every day of delay has an impact,” Grunder said. “This is a humanitarian emergency in the state.”
There’s also intense pressure on the state to begin speeding housing production, which both bills seek to address.
“It takes time to build housing,” said Rachel Heller, chief executive officer of the Citizens’ Housing and Planning Association, which has advocated for money to help spur more affordable rental housing options. “The quicker that funding gets out, the quicker we can create new opportunities for people.”
Baker’s office, which proposed broad plans to spend the federal aid in June, on Thursday pointed to a database kept by the nonpartisan National Conference of State Legislatures to argue Massachusetts is lagging behind other states.
The data may not be complete. For example, the database shows Massachusetts has spent just $85 million in so-called ARPA funds: $75 million for an emergency COVID-19 sick leave program and $10 million to pay for the state’s vaccination lottery program.
But lawmakers months ago set aside another $200 million for Baker to spend, with the vast majority of it going toward fiscally distressed hospitals, bridging staffing gaps in inpatient psychiatric facilities, and investing in workforce development. Baker also dedicated another $109 million for four communities that received far less than neighboring cities and towns under the federal COVID-19 relief law.
Still, other states have moved faster in dedicating funds. As of mid-October, 16 out of 39 states with publicly available plans — a group that includes Massachusetts — reported allocating at least half of the funds they had received at that point, according to the National Association of State Budget Officers. The median allocation rate was 41 percent, the association reported.
Massachusetts, meanwhile, has yet to allocate $4.9 billion of the $5.3 billion it received, or about 92 percent of the money.
Legislative leaders have said they were in agreement on two major pillars of the spending bill: $500 million for the state’s unemployment insurance trust fund, and another $500 million to fund one-time bonuses to essential workers.
The latter, however, would face a specific clock under the House proposal: It calls for the one-time bonuses of up to $2,000 to be distributed by the end of January.
Baker on Thursday argued the delay has specifically hobbled efforts to seed workforce training programs, toward which he wanted to put $240 million in federal funds. The House and Senate proposed less in their spending packages for workforce funding: $160 million and $170 million, respectively, according to an analysis by the Massachusetts Taxpayers Foundation.
“That’s a lot of people — thousands of people — we could have been putting into apprenticeship programs starting early last summer,” Baker said. “We have the programming. We don’t have the resources to actually help them.”