A spending tug-of-war

Gov. Baker is angry at the Massachusetts House and Senate — “I-can’t-tell-you-how-frustrated-I-am” — because their members failed to approve a $3.8 billion American Rescue Plan Act (ARPA) spending package before legislators took their holiday break.

The legislative leadership is continuing to meet and could, according to the State House News Service, reconcile House and Senate spending plans and send an agreement to Baker for review and his signature any day now.

Baker stands on solid ground when he points out that Massachusetts is one of the few states waiting to spend money intended to help accelerate the economy after more than a year of COVID-19-driven social distancing measures slowed it and disrupted supply chains.

Competing desires to control spending are fueling Baker’s frustration and the Legislature’s inaction. Baker wanted to start doling out ARPA money six months ago. Legislators made it clear they wanted a say in the process.

The House and Senate have crafted spending lists for the money, including one allocating $6.9 million in proposed spending in Lynn and neighboring communities, including significant investments in community health care.

Governors and legislators express competing desires on spending state tax dollars every year when they craft, compromise on, and eventually approve a state budget. This year’s spending tug-of-war is that much more strenuous because the dollars in question are much more numerous.

In addition to ARPA money, the state has $1.5 billion in unbudgeted state tax revenue. An estimated $7 billion to $9 billion in money from the infrastructure spending legislation signed by President Biden is headed Massachusetts’ way and $2 trillion in additional federal spending approved by the U.S. House of Representatives could pour more money into state and local coffers, depending on what action the U.S. Senate takes.

All told, Baker and the Legislature have a so-called “happy problem,” given that the amount of money to be spent is not at issue in their disagreement. The debate boils down to who gets to call the most shots on how the money is spent.

The sooner cities and towns receive ARPA, infrastructure and additional federal spending, the better.

But a close reading of the legislation guiding this spending makes it clear that a good share of the money is intended to be spent over multiple years with the ARPA spending timeline stretching into 2026.

Congress has already debated the merits of commiting trillions of dollars in federal spending on COVID-19 recovery initiatives. Now it’s up to Baker, the Legislature and, ultimately, Massachusetts communities to ensure the money is allocated wisely and to ensure that spending oversight is firmly in place.

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