Editorial: Spending the state's rescue money wisely
The first federal coronavirus relief plan – the $2.2-trillion CARES Act from March 2020 – provided much-needed calm in the early phases of the coronavirus pandemic. The law’s Paycheck Protection Program was particularly helpful to businesses, infusing capital stability during an unstable economic time. The second relief plan – the $900-million Consolidated Appropriations Act from December – threw more funding to the CARES programs, including a second round of PPP focused on smaller businesses.
The latest relief plan – the $1.9-trillion American Rescue Plan, signed into law on March 11 – seeks to systematically address many of the weaknesses in American society exposed by the coronavirus pandemic, focusing on poverty, health care, infrastructure, including transit, and a new $10-billion small business credit program. Oh, and $1,400 stimulus checks are going out to 85% of Americans. The spigot has been turned on and record amounts of government money is flowing through the economy. The question now becomes: What do we do with all this money?
Aside from direct payments to residents and private organizations, Massachusetts governments will receive $3 billion. The intention is to make up for lost revenue, boost businesses, and fund infrastructure. The slice for Central Mass. includes $151 million for Worcester, $33 million for Fitchburg, $28 million for Framingham, $20 million for Leominster, $12 million for Marlborough, and $9 million for Milford.
While local governments certainly have been challenged economically during the pandemic, the bulk of their budgets remain based on property taxes, so it wouldn’t seem at first blush that lost revenue for many communities is a major issue. That leaves businesses and infrastructure among the priorities.
In Worcester, many businesses have been hurting, particularly small businesses in the hospitality industry and those serving low-income neighborhoods. In this vein, the American Rescue Plan’s $10-billion State Small Business Credit Initiative will help, as it provides money for states to access to capital for those who struggle to find such financing, particularly enterprises owned by women and people of color, and those with 10 or fewer employees. This certainly will help, but cities like Worcester already know many of the needs of their small businesses, and should offer incentive programs for initiatives like rental assistance, building renovations/rehabilitations, and employee training.
On infrastructure, local governments have long to-do lists for roads, bridges, and enhanced transit routes. This is likely the time for the Worcester Regional Transit Authority to permanently adopt a fare-free program, as studies such as those by the Worcester Regional Research Bureau have shown a dramatic benefit to disadvantaged populations and the businesses where they work, all at a minimal cost.
The process of deciding where these funds go needs to be a thorough and transparent process, one that assures our businesses can make it through the pandemic intact, and all our citizens can bask in the light at the end of the tunnel.
WBJ Web Partners
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