BOSTON (SHNS) – Federal requirements governing the use of American Rescue Plan Act funds have “definitely lightened up,” which should help get those dollars out the door through a new economic development law, a Baker administration undersecretary said Tuesday.
Administration and Finance Undersecretary Catharine Hornby told municipal officials that Gov. Charlie Baker’s team had “serious concerns” that the Legislature’s original plan to leave more nearly $1.8 billion in ARPA dollars saved for a future date “seemed like it was putting us as a state at risk.”
That money must be committed by the end of 2024 and spent by the end of 2026. When he signed a $3.76 billion economic development bill into law, Baker vetoed language setting a $510 million cap on the use of ARPA money toward the measure, a move that Hornby said will allow the executive branch to “prioritize the expenditure of the federal funds.”
“Initially, there was a lot of federal oversight of these funds that made that seem like it would be difficult. Over time, the federal government has definitely lightened up on the compliance side, so as we start to release this money, it will come with certain federal requirements, but they’re not onerous,” Hornby said at a Local Government Advisory Commission meeting.
“There’s no what’s called sub-recipient monitoring required. Essentially, we’re required to say ‘spend this money in a federally compliant way.’ We’re not obligated to check up on you,” she added. “We think prioritizing federal funds and allowing the money to go out, federal money first, will be efficient for the commonwealth, it will be efficient for the cities and towns, and we think it will work quite well.”
The economic development bill, which lawmakers sent Baker in November, includes more than 600 earmarks. Hornby said the administration plans to launch a website soon allowing municipal officials to track the status of their earmarks and reach out to relevant state government contacts. Top Democrats scrapped previously approved tax relief measures from the final bill, frustrating the Baker administration and many advocates who have been pushing for reforms.
Attention will turn now to Gov.-elect Maura Healey, who supported many of Baker’s proposed tax measures and has said tax relief will be one of her top priorities when she takes office next month. “Good work, half a loaf, but I think it’s important and obviously we have more to look forward to when the next administration gets going,” Lt. Gov. Karyn Polito said of the economic development bill Tuesday.