Legislative leaders announce agreement on economic development bill, FY22 supplemental budget

Looking to close the books on fiscal 2022 and advance a long-awaited economic development package, House and Senate leaders announced today that an agreement has been reached on a $3.7 billion spending bill.

The bill, released in the late afternoon, 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 approximately $3.17 billion.

Legislators added $510 million in state American Rescue Plan Act funds to the remaining state surplus to fund the economic development and supplemental budget bill. The bill would expend the remainder of the surplus and leave $1.75 billion remaining in state American Rescue Plan Act funds.

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 current bill.

The bill does include major investments strongly supported by the MMA, including in the areas of broadband, housing, water infrastructure, and the Community Preservation Trust Fund.

The bill includes:
• $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 187 CPA communities that have adopted higher local property taxes to address environmental and housing challenges.

The House and Senate were both scheduled to meet in informal session on Nov. 3, when it is widely expected that the bill will emerge, be passed, and sent to the governor.