Legislature Passes $4 billion in American Recovery Plan Act (ARPA) Spending Package
The Massachusetts House and Senate recently agreed on a spending plan that allocates almost $4 billion of the $7 billion received from the federal government as part of the American Recovery Plan Act. The bill signed by the Governor includes $115 million for the production of individual homeownership units for low-income residents and $115 million for the production and preservation of low-income rental units. Both appropriations will be administered by the Commonwealth Builder Program which provides up to $150,000 in subsidies to developers for each unit constructed. The housing is earmarked for Boston and 26 other gateway cities in addition to many other qualified low-income census tracts in other communities throughout the state. The legislation also allocated $500 million to help fund the Unemployment Insurance Trust Fund. $107 million was allocated for workforce and career skills training programs and $100 million to upgrade the public vocational school training programs.
Administration Considering Unemployment Tax Rates for 2022
Governor Baker’s administration is continuing to review the data relative to the solvency of the Unemployment Insurance Trust Fund as they move towards establishing the new unemployment insurance tax rates for employers in 2022. The impact of the Covid-19 pandemic resulted in the largest claim for benefits in the history of the fund. In 2020 and 2021 the fund paid out a record $33.5 billion in unemployment benefits. In December of 2021 the net trust fund balance available to pay future claims was only $135 million. The Legislature recent appropriation of $500 million to help replenish the account will not be sufficient to prevent an increase in the tax rates charged to employers. The Governor and business groups are continuing to call upon the Legislature to allocate an additional $500 million to help reduce the financial impact on employers. There is a significant state budget surplus and an additional $3 billion in American Rescue Plan Act funds available to be distributed and advocates are hoping that additional funding will be allocated to the trust fund before the new rates are established.
Zero-Net Energy Goals in Jeopardy
Governor Baker and the Legislature have committed to achieving net-zero emissions by 2050 with aggressive goals for utilizing renewable energy sources, eliminating greenhouse gas emissions, and banning the sale by 2035 of gasoline-fueled vehicles. Those plans were dealt a setback recently when the voters in Maine rejected a transmission project which would have brought renewable hydro-electric power from Canada through Maine and into Massachusetts. It is estimated the transmission project would have supplied about 17 percent of the state’s electricity demand which would have significantly increased the renewable energy usage and reduced our reliance on fossil fuels. The action by Maine voters will likely cause Massachusetts to reconsider how they will meet their aggressive emission reduction goals. A lack of critical mass of support from the New England and other northeast states has caused Gov. Baker to end his support for the Transportation Climate Initiative (TCI). The program would have created a regional commitment to capping vehicle emissions and allowing fuel suppliers to purchase allowances for carbon dioxide those products would have emitted. The main argument opponents used against the TCI was that it would have substantially increased fuel costs for businesses and consumers, including a 5-17 cents per gallon hike in gasoline prices. The carbon emission reductions that were forecast from the state’s participation in the TCI were a major component of the state’s carbon reduction strategy. As one of the largest sources of emissions, it is now possible that the residential and commercial construction industries could face further energy savings requirements to make up for the loss of renewable energy from Canada and the termination of the TCI program.