Spending

Charlie Baker signs economic development package, with preference for ARPA spending

Months of uncertainty over the fate of a multibillion-dollar spending package ended Thursday when Governor Charlie Baker signed into law a $3.76 billion compromise bill that, to his disappointment, does not include the tax relief promised by the Democrats.

Baker used his pen of veto to remove just $1.1 million from the bill’s bottom line and returned two proposed amendments regarding certified nurse aide exams and pension buyouts. He also vetoed two dozen outside sections, most dealing with in-state tuition retention language Baker said would be more appropriate in an annual budget or “considered part of an overall effort.” reform of the financing of public higher education, and not piecemeal”.

Baker also struck down a section of the bill that would have created a special commission to examine “the potential negative environmental and economic impacts” of radioactive spent fuel pool water discharge, which lawmakers included as Holtec assesses the dumping of contaminated water into Cape Cod Bay in the process of decommissioning the former Pilgrim Nuclear Generating Station.

The governor said the committee’s proposed work “would be redundant and interfere with ongoing work on waste disposal and decommissioning issues by responsible federal and state agencies.”

The most significant change made by Baker is more or less accounting. He vetoed language setting a $510 million cap on the amount of American Rescue Plan Act federal funds that could be spent to achieve the bill’s goals, a move the administration says would allow Massachusetts to prioritize committing its full pot of $2.3 billion in remaining ARPA money.

This veto does not change the bottom line of the legislation, but it will effectively shift the sources of spending so that elected government Maura Healey and the legislature will have to decide the fate of the deferred state tax revenue surplus for the fiscal year 2022 rather than untapped federal aid.

In his signing letter, Baker said he was “deeply concerned” that the proposed cap would have left so much ARPA money unused before a late 2024 deadline to commit the full pot and an end date. 2026 to spend it. .

“It is imperative that the Commonwealth does not put these funds at risk by further delaying their allocation. Therefore, I veto Section 264, which would limit ARPA-FRF expenditures to only $510 million,” Baker wrote. “This will allow the Commonwealth to first allocate federal dollars to uses permitted in the sections of this bill. Under the bill passed, the same amount of money will remain unallocated, and that money will still be appropriated, but it will be state money and it will not expire.

The bill will direct funding to a range of industries and to many public programs. It includes $850 million in relief for hospitals, social service providers, nursing homes, nursing homes and community health centers in financial difficulty, as well as $200 million for the COVID-19 response. current status.

Other significant expenditures include hundreds of millions of dollars for housing production and homeownership support, $150 million for early childhood education and care providers, $150 million dollars for clean energy initiatives and $100 million for port infrastructure improvements.

The new law further provides the MBTA with an additional $112 million for critical work and safety improvements following a blistering investigation by the Federal Transit Administration, which uncovered myriad issues and prompted plans to mandatory corrective actions. This money is in addition to the $666 million that lawmakers and Baker have already approved for the T to address these issues.

“The significant investments in this bill will strengthen health and social services, advance clean energy and resilience efforts, expand affordable housing production, and support communities, businesses and families across the country. Massachusetts,” Baker wrote.

Legislative leaders spent months weighing spending ideas and tax relief measures behind closed doors before both branches in July unanimously approved versions of the bill. These plans each included $500 million in one-time rebates for middle-income Bay Staters and authorized about half a billion dollars a year in permanent estate tax reforms and tax relief for tenants, seniors, caregivers. and others.

However, top Democrats threw their original plan on the shelf when they learned in late July that Massachusetts owed taxpayers nearly $3 billion in relief under an approved 1986 tax cap law. by voters. The compromise they revived after months of inaction did not include any of the tax reforms previously approved as legislative leaders warned of an uncertain economic future.

“As I have also expressed previously, I was disappointed that the permanent tax relief reforms were not included in this bill. The measures that I proposed in January and which were supported by the Legislature in previous versions of this bill are affordable and badly needed by Massachusetts taxpayers,” Baker wrote in his signing letter. “Recognizing the importance of investing in child care, I endorse sections of this bill that redirect $315 million from the Commonwealth Taxpayer Relief Fund to the High-Quality Early Education & Care Affordability Fund However, we can invest in child care and make sensible tax changes at the same time With the state in a historically strong fiscal position, the tax cuts the Legislature has pledged to prioritize in the next session will be affordable without a hit. special side.

In addition to authorizing spending for economic development purposes, the bill includes measures that will allow Comptroller William McNamara to close the state’s financial books for the fiscal year that ended June 30.

McNamara, under state law, faces an Oct. 31 deadline to file an annual financial report, but delayed action on the closing budget pushed his work past that date.