Baker reiterates Legislature’s reluctance to spend on US bailout

Massachusetts lawmakers on Tuesday kicked off an actual version of the “what would you do if you won the lottery” game, except in this case the windfall is not hypothetical and is already in state coffers.

Massachusetts received about $ 5.3 billion in American Rescue Plan Act funds from the federal government more than two months ago, and until Tuesday most of the talk around the money centered on who could spend it. The Legislative Democrats won this one, but gave Gov. Charlie Baker the opportunity on Tuesday to introduce his bill (H 3922) to spend $ 2.9 billion, starting what could be a hearing process months to make spending decisions.

Baker wants to allocate more than half of the state’s ARPA allocation to support for housing and home ownership, vocational training, water and sewer infrastructure, treatment of drug addiction and other areas. Speaking virtually from Aspen, Colorado on Tuesday, he urged lawmakers on the Joint Ways and Means Committee and the House Committee on Federal Stimulation and Census Oversight to act quickly.

“The types of projects that are needed to deal with the impacts of COVID are important in terms of scale and time. We need to start making the investments I have proposed now, not in months,” the governor said. . “Some of these programs, especially housing and infrastructure projects, require a long period of implementation. For others, time is of the essence to meet urgent needs.

He added, “Some of these things have to be done quickly to be done right.”

The Legislature and some economists have touted the benefits of a slower, more deliberate approach to spending special funds over several years.

Evan Horowitz, executive director of the Center for State Policy Analysis at Tufts, was scheduled to tell lawmakers on Tuesday that, given the current heat in the economy, a delay in ARPA spending “may be a good thing.” .

“At the moment, the economy does not need any short-term stimulus. Inordinate federal spending and low interest rates are already driving economic growth to exceptional and perhaps unsustainable levels,” he said. he declared to the committees, according to prepared testimony. He adds, “In this environment, with high inflation and an economy facing real short-term constraints, efforts to quickly spend federal ARP dollars are not only procedurally difficult, but also economically risky, spurring economic growth. recovery already hyper-stimulated. “

Horowitz suggests that the economy “should be in a better position to absorb new government spending” six months to a year from now and that the investments would have more impact if they were made then.

But he also echoes Baker with a recommendation that all immediate spending be “narrowly targeted to help those in greatest need or to support efforts to expand the state’s long-term economic capacity through the government. through broadband subsidies and workforce training “.

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