Gov. Charlie Baker responded to the economic upheaval of the COVID-19 crisis on Friday by rolling out a series of proposed changes and adding millions of dollars to a jobs bill he filed in early March, as others came forward with their own suggested revisions to revive the state’s battered economy.
At a press conference Friday morning, Baker, Lt. Gov. Karyn Polito and Economic Development Secretary Mike Kennealy announced that the administration was now proposing a $275 million COVID-19 recovery package as an update to the $240 million bill offered before the pandemic.
The governor said the updated version targets investments towards three main buckets: housing, community development, and business competitiveness as a response to the dramatically different economic situation created by the pandemic.
“By funding more affordable housing, implementing critical zoning reform, stabilizing neighborhoods, and supporting minority-owned businesses with record levels of funding, these proposed changes will bring critical relief and promote equity across Massachusetts amidst the COVID-19 pandemic,” Baker said.
Meanwhile, the Economic Development and Emerging Technologies Committee held a live-streamed hearing on the original bill, where Kennealy was among several speakers recommending adjustments.
With the unemployment rate at 16.3 percent and Beacon Hill watching to see what shape the next federal stimulus package will take, the committee, chaired by Rep. Ann-Margaret Ferrante and Sen. Eric Lesser, will have the opportunity to rewrite Baker’s jobs bill to address dynamics that have emerged over the past few months.
Lesser called it “a time of great challenge and consequence for our state” and suggested an appetite for going beyond what the administration proposed.
“The moment we are in and the risk to the economy I don’t think are adequately addressed in this plan,” he told Kennealy.
Kennealy said he looked forward to collaborating with lawmakers.
“This will not be the only tool we propose to deploy in an economic recovery strategy,” he said.
Ferrante said that the pandemic’s economic disruptions have been “overlaid with revelations” about pre-existing inequalities throughout society.
“I think what this pandemic has shown is that there are areas in which a little more understanding and attention is required so that we spread equity and opportunity equally across the commonwealth,” she said.
Several speakers, including Kennealy, referenced the pandemic’s disproportionate impact on communities of color.
“The COVID-19 pandemic is not only threatening Black lives at disproportionate rates but the economic cataclysm is threatening our livelihood as well,” said Jessicah Pierre of the Black Economic Council of Massachusetts.
Pierre said federal programs like the Paycheck Protection Program have “glaring defects” that have kept minority business owners from accessing their resources and that issuing loans “ignores the history of racist lending practices.”
She said loans are important but that minority-owned businesses “need grant funding first to stabilize themselves” and that the bill should include language prioritizing minority-owned businesses to ensure they reach their intended target.
William Watkins of the Urban League of Massachusetts asked lawmakers to redistribute the money in the bill to steer dollars to communities where “racism has caused us not to be wealth creators.”
“We have to be very intentional about going in there and making sure that these people are made whole,” he said. “The death of George Floyd, eight minutes and 46 seconds, all it has done is brought light to the policies that have been on the necks of Black and brown communities. We have an opportunity right here in the commonwealth, because the world has stopped to see all of the inequities.”
At the press conference, Baker administration officials said they proposed to shift how the funding in the initial bill is allocated and create new tools to promote equity in economic development.
Lt. Gov. Karyn Polito highlighted the administration’s proposal to allocate an additional $15 million for neighborhood stabilization investments in blighted and distressed homes, for a total of $40 million in funding.
“As residents face increased economic insecurity and high housing costs, increasing state investment in distressed homes is critical to bringing safe and affordable housing units back on the market,” she said.
The updated plan also calls for a total of $35 million for Community Development Financial Institutions, which Polito said will allow the state to “direct loans and assistance to small businesses.” That’s up from $10 million in the original bill.
Funding for grants to support micro businesses through the Mass. Growth Capital Corporation would be tripled to $15 million under the new plan, Polito said, and the plan gives “preference to businesses that are [in a] low- or moderate-income area, or are owned by women, veterans, immigrants, or minorities.”
The tweaked proposal would reduce the authorization for transit-oriented housing from $50 million to $35 million along with the increases in other areas, according to information Kennealy presented to the committee.
Polito, who leads the administration’s Reopening Advisory board with Kennealy, said small businesses “have been very patient and cooperative as we have combated the COVID-19” and “have certainly sacrificed a lot in the interest of our public health and our safety.”
“And while we keep striving to grow and build our economy, we must first help many of our small businesses bridge the gap to reopening and reach recovery and to reach higher levels of stabilization and opportunity,” she said.
Joe Kriesberg of the Massachusetts Association of Community Development Corporations said his group was pleased by the administration’s adjustments, but said the economic crisis was too vast for the money to be spent over the five-year period envisioned in the bill. He said the state should raise its bond cap or find another way to accelerate the investments.
“To achieve meaningful impact, the Legislature and the Governor will have to find creative ways to generate resources for investment. We think the state should increase its General Obligation Bond cap to ensure that the programs authorized in this legislation can be implemented quickly and robustly â€“ not spread out over 5 years,” the association said in its written testimony. “We also believe new revenues are necessary and can be raised in progressive ways through proposals put forward by Raise Up Massachusetts and through an increase in the deeds excise tax to fund Climate and Housing investments â€“ a proposal put forth by a broad coalition earlier this year.”
The jobs bill (H 4529) also includes the text of Baker’ s “housing choices” legislation, which he has been pushing the Legislature for years to adopt to support his administration’s goal of producing 135,000 new housing units by 2025. The bill would lower the local approval threshold for some zoning changes from a two-thirds majority to a simple majority.
“This is a chance for us to find new ways of encouraging housing production at the local level,” Kennealy said. “The Housing Choices reforms, still included in this legislation, are designed to foster more production and to promote equitable access to opportunity while respecting the local decision making process.”
Some advocates and lawmakers have said that the bill should be considered as part of a larger housing package.
“I appreciate my colleagues taking the time to consider the Governor’s bill, which includes *many* great elements,” Rep. Mike Connolly wrote on Twitter during the hearing. “However, Black-led and [people of color] POC-led housing justice orgs have made it very clear that consideration of the Governor’s Housing Choice bill must also come with affordability measures and strong tenant protections such as lifting the statewide ban on rent control.”