State House News – The new federal stimulus is expected to funnel billions of dollars to Massachusetts for state and local government aid, education and transportation funding, and direct payments to more than three million families.
Passage of the American Rescue Act that will provide state governments with direct federal aid for the first time since the pandemic began happened on the one-year anniversary of Gov. Charlie Baker declaring a state of emergency around the coronavirus that has since gone on to kill more than 16,000 people here and infect almost 550,000 others.
The version of President Joe Biden’s bill that cleared the U.S. Senate over the weekend was approved by a 220-211 vote of the U.S. House with only Democratic Rep. Jared Golden of Maine crossing the aisle in either direction. Biden is expected to sign the bill into law Friday.
Democratic leadership in the U.S. Senate projected that Massachusetts state government and municipalities would receive more than $8.1 billion in direct government aid, including $4.513 billion for the state, $3.415 for city, county and other local government aid, and $174 million in capital project funding.
Baker has described state and local government aid as “critical” to helping states like Massachusetts rebuild their economies as more of the public becomes vaccinated against COVID-19 and he has been calling on Congress to approve state aid for months.
“When we began our work, hundreds upon hundreds of community leaders reached out to us asking for help. They told us the relief in this bill would mean recovery instead of recession,” New York Rep. Carolyn Maloney, who chairs the Oversight Committee responsible for the bill’s $362 billion in dedicated aid to state and local governments, said.
“It can be used for vaccines, increased testing and countless jobs. Cities across this nation, states, have lost billions in expected tax revenue. This bill helps.”
Massachusetts is among the states that have not seen their tax collections live up to pre-pandemic revenue estimates, but the Bay State has nonetheless collected $1.123 billion or 6.1 percent more in taxes through two-thirds of fiscal year 2021 than it did during the same eight pre-pandemic months of fiscal year 2020.
Using Department of Revenue benchmarks for the remaining four months of fiscal 2021, Massachusetts is on track to collect $29.878 billion in taxes this year. While that would be $788 million more than DOR’s most recent estimate and $282 million more than what was collected throughout fiscal 2020, it would still be $1.27 billion less than the pre-pandemic consensus revenue estimate of $31.15 billion for fiscal 2021.
Massachusetts is also in line for more than $1.039 billion in transit assistance and $2.68 billion in total education aid, according to Senate estimates. And that’s on top of other stimulus spending that would flow to schools, businesses, testing and vaccination programs, the unemployed and more than $7.3 billion in direct checks to more than 3.1 million families in Massachusetts.
Baker said Wednesday that the extension of unemployment benefits is “a big deal for a lot of people who are in a pretty crummy place with respect to COVID generally,” and that the money for vaccination and testing “will also make a big difference.”
As Baker’s administration continues to prod communities to resume full-time in-person learning, the governor said Wednesday that the federal education aid “should make it possible for every school district and every municipality to find a way to do whatever they think they need to do as we go forward to either support summer schools or acceleration academies or additional work around building construct and all the rest to support that stuff going forward.”
As of March 3, the federal government had already sent more than $61 billion in aid to Massachusetts since the pandemic began, according to the Peter G. Peterson Foundation. Much of that money went directly to businesses, families, non-profits and public entities like regional transit authorities.
And while much of the federal money is earmarked for specific purposes, Democratic leaders on Beacon Hill have shown a desire this session to play a more active role in deciding how Massachusetts spends the billions in general government aid included in this round of federal relief.
The House this session created a new Committee on Federal Stimulus and Census Oversight that will be tasked with reviewing federal spending, including stimulus bills and block grants, and recommending ways Massachusetts can tap into additional federal resources. Rep. Daniel Hunt of Dorchester was named chairman.