Gov. signs economic development, supplemental budget package, vetoes limit on ARPA spending

Gov. Charlie Baker signed a $3.7 billion spending package on Nov. 10 that is a combination of an economic development bill and a fiscal 2022 supplemental budget.

The bill, passed by the Legislature on Nov. 3, includes investments in small businesses and communities, broadband, housing production, relief for rising energy costs, and assistance for the MBTA.

Legislators had tabled a $4 billion economic development bill as the formal legislative session ended on July 31, when it came to light that a large portion of the state’s fiscal 2022 budget surplus would need to be returned to taxpayers under a 1986 law known as Chapter 62F. In September, the state auditor certified that nearly $3 billion needed to be returned to taxpayers under 62F, which left a surplus of $3.17 billion.

The Legislature added $510 million of the state’s American Rescue Plan Act funds to the remaining state surplus to fund the economic development and supplemental budget package, expending the remainder of the surplus and leaving $1.75 billion in state’s ARPA allocation.

The governor vetoed the outside section capping the use of ARPA funding at $510 million, saying his veto will allow the Commonwealth to prioritize the use of those time-limited federal dollars. The ARPA law requires that the funds be entirely committed by the end of 2024 and spent by the end of 2026. The vetoed section was referred to the House Committee on Ways and Means on Nov. 17 for consideration.

The law signed by the governor includes major investments strongly supported by the MMA, including in the areas of broadband, housing, water infrastructure, and the Community Preservation Trust Fund.

The law provides:
• $50 million for the Broadband Innovation Fund and an additional $25 million for a reserve for broadband infrastructure investments, including the Last Mile Infrastructure Grant program
• $304.5 million for housing programs, including $100 million for the Affordable Housing Trust Fund, $100 million for a workforce housing initiative, and $100 million for the CommonWealth Builders program
• $20 million for migrant and refugee programs to streamline access to housing, shelter, food, health care and legal services (a topic discussed in an MMA webinar on Oct. 31)
• $115 million for the Clean Water Trust Fund, which helps communities finance significant, complex and urgent water projects
• $20 million for the Community Preservation Trust Fund, which would increase the state’s match from an estimated 35% to 43%, approximately the same level as in fiscal 2022.

The CPA item would benefit the 194 communities that have adopted higher local property taxes to address environmental and housing challenges.

Economic development bills passed by the House and Senate earlier this year incorporated roughly $1.2 billion in state bonding authorizations, but borrowing provisions require roll call votes, which are not an option during the current informal session. As a result, bond-supported programs, such as MassWorks, were not included in the final legislation.