From food stamps to rental aid: Pandemic-era funding is ending, and Mass. wants to build an off-ramp

Federal aid was crucial in the earliest days of the pandemic, but now some of it is drying up.Craig F. Walker/Globe Staff

During the COVID-19 emergency, the federal government sent Massachusetts an unprecedented amount of aid to help residents navigate the pandemic’s darkest times, with money going to help cover rent payments, keep child care centers open, and buy groceries.

But that federal aid is drying up and temporary policies are expiring, leaving Massachusetts and other states grappling with whether, or how, to keep some pandemic-era programs alive.

Those decisions are taking place as lawmakers begin to craft spending plans for the coming fiscal year. Governor Maura Healey is seeking at least $800 million in state funds — split between two separate spending proposals — to either plug funding shortfalls or extend programs that relied on federal pandemic-era aid.

The predicament raises a difficult question: What role should state government play in picking up where the federal government left off? Answering it opens a host of issues for state policy makers, from weighing what they can reasonably pay for, to, morally, what they should.

“We need to be thinking critically about the things that the state should be doing — but also very mindful that there is a state-federal partnership,” said Doug Howgate, president of the Massachusetts Taxpayers Foundation, a business-backed budget watchdog. “It’s not feasible for us to say, ‘We’re going to do everything that the feds did.’ ”

In her $55.5 billion proposed state budget, Healey aims to cover at least some of the initiatives for which the federal government once footed the bill.

Her budget commits $475 million for so-called C3 grants for child care providers, effectively extending a program that was supported entirely with federal funds last fiscal year. A mix of state and federal resources funded the grants this year, and, under Healey’s plan, they would rely entirely on state funds next year.

She is also attempting to provide an “off-ramp” from the extraordinary influx of federal funds that helped people stay in their homes during the pandemic.

In fiscal years 2021 and 2022, the state distributed $800 million in federal Emergency Rental Assistance Program funds; the program stopped taking applications last spring. Healey now is proposing to set aside more than $162 million to provide $7,000 to households in need of emergency rental assistance — well more than the $4,000 the state provided before the pandemic.

Shifting federal rules also mean Massachusetts and other states must begin thinning Medicaid rolls that ballooned during the pandemic, as people lost their jobs and health insurance.

With the blessing of the federal government, Massachusetts did not reassess people’s eligibility to remain on the state program known as MassHealth for three years. Now the annual eligibility process will resume, starting in April, and Healey’s administration estimates roughly 300,000 people will be removed from state-sponsored health insurance by next spring.

Healey also is pushing a separate short-term spending bill to inject millions into emergency shelter, school meals, and expanded food aid programs that expired Thursday and left thousands of the state’s poorest residents in a lurch.

The House on Wednesday unanimously passed a version of her bill, which in addition to extending some soon-to-expire pandemic-era policies — allowing for remote public meetings, and expanded outdoor dining, among them — would allocate more than $350 million to cover housing and food assistance programs.

That includes $130 million to pay for the newly expired Supplemental Nutrition Assistance Program benefit. Early in the pandemic, the federal government allowed eligible households to receive at least $95 more in SNAP benefits per month, but the clock ran out Thursday, setting benefits back to pre-pandemic levels.

The bill Healey filed and the House approved this week would soften the reduction by providing more than 647,000 families who receive SNAP benefits with a bit more than they got pre-pandemic, for another three months — an average of $60.58 per household monthly.

The goal was “to provide people a little bit more of a glide path so it wouldn’t be so abrupt,” Healey said Thursday on GBH’s “Boston Public Radio.”

“It’s so that people wouldn’t go overnight losing what’s estimated to be an average of $150 a month,” she said.

As of now, the $5.3 billion in American Rescue Plan Act funding the state received has all been obligated.

Representative Aaron Michlewitz, a North End Democrat and the House’s budget chief, said lawmakers are still analyzing how much they can afford to spend on furnishing stopgaps to programs like food aid. Extending programs on a temporary basis is very different from building them into an annual budget, he said.

“We’ve always been reliant on federal programs and federal dollars, and obviously we became more so during the pandemic,” Michlewitz said. “Now, as some of the programming is winding down, I think we have to take [spending] on a case-by-case basis . . . and ask, are there more strategic ways for us to maximize these dollars?”

The short-term spending bill also includes an additional $65 million to sustain a universal school meals pilot program through the end of the school year. Last year, the Legislature committed $110 million to expand the federal initiative, which began in 2020, for one year, and some Democratic lawmakers are pushing to make it permanent.

Healey did not seek to do that in her budget, but she is planning to soon file yet another short-term spending bill that would extend the pilot through at least the next school year, according to a spokesperson. That bill would also fund caseworkers to help families impacted by the drop-off in enhanced SNAP funding, an aide said.

Representative Andy X. Vargas, who is pushing legislation to make the school meals program permanent, said it not only helps keep kids fed and focused academically, it’s a vast improvement over the previous system, where a family with two children needed to make less than $24,000 to qualify for free meals.

“Some tough decisions are going to have to be made as a state,” the Haverhill Democrat said.

Erin McAleer, chief executive of Boston-based Project Bread, which helps connect people to reliable food sources and advocates for policy change, said she applauds the governor and the House for supporting extending the school meals program and creating a step-down from the expanded SNAP benefit. She warned, however, that eventually, residents will feel the shock of having less aid while dealing with the rising costs of groceries, rent, and other expenses.

Instead, benefits should be increased to assist the nearly 1 million people in the state who rely on the program, McAleer said. Even before the pandemic, she said, the supports were not enough.

The burden, however, shouldn’t ultimately fall on the state, she said.

“I don’t think it’s feasible‚” McAleer said. “It’s too big. And we don’t want the federal government to totally abdicate on their responsibility to fund these programs.”