Economic Secretary Presses Priorities for Federal Funds

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Economic Secretary Presses Priorities for Federal Funds

Budget, Tax, & Finance Economy News | September 25, 2021
By: Chris Geehern

The top economic official in the Baker Administration urged the Legislature Friday to approve the governor’s plan to spend $2.9 billion from federal stimulus funds on housing, job training and other economic-recovery initiatives.

Secretary of Housing and Economic Development Mike Kennealy said in a speech to the AIM Executive Forum that the $5.3 billion Massachusetts received through the American Rescue Plan Act (ARPA) is “a once-in-a-generation amount of money that can be used for generational opportunities.”

“It’s really important for us to get that done,” Kenneally said during the virtual AIM event.

Governor Charlie Baker has proposed spending $1 billion on affordable housing, $350 million on downtown revitalization, $240 million on workforce training, $900 million on energy and environmental projects, $100 million on tourism and $100 million on broadband development. The Legislature has conducted multiple hearing on potential uses for the money and continues to work on its own proposal.

A former private equity executive, Kennealy has been a key figure in the commonwealth’s economic response to the COVID-19 pandemic. He drove the effort in 2020 to encourage manufacturers to turn out personal protective equipment and later helped to oversee the successful four-step re-opening of the economy.

Kennealy is now spearheading the Baker Administration’s effort to move employers and workers alike down the road to recovery.

The secretary told the AIM Executive Forum audience that the governor’s recommendations for spending dovetail with the administration’s broad economic strategy and the recent Return to Work report developed with McKinsey.

Those documents highlight for the need for Massachusetts, a high talent and high cost state, to remain competitive in a world in which workers are now able to punch in from virtually anywhere in the world. Changes in work patters during the pandemic, Kennealy said, have underscored the important of providing affordable housing and re-training workers who lost their jobs in hard-hit industries like hospitality with the skills demanded by growth sectors such as biotechnology and advanced manufacturing.

AIM supports the use of federal money for one-time economic recovery initiatives. The association also wants to use ARPA to pay down the negative balance in the UI Trust Find to help Main Street businesses offset higher-than-expected unemployment insurance burdens and allow employers to rehire people.

Keneally said Massachusetts survived the COVID pandemic because of extensive collaboration among employers, the government, the health-care and financial sectors and employees who managed to keep the economy moving during the crisis. He said the administration met weekly with the business community to exchange ideas and lay the foundations for economic recovery.

The result – manufacturers began to make critically needed protective equipment, bankers pulled all-nighters to process small-business loans and biotech companies developed a vaccine in record time.

“This was period to time when world looked to Mass for leadership,” Keneally said.

He later added, “How do we leverage those partnerships and those levels of collaboration going forward?”