Federal aid, rainy day fund unlocked money for small biz grants
Photo | Edd Cote
Downtown Worcester
When Gov. Charlie Baker sprung a massive $668 million small business relief grant program on Massachusetts last week, he seemed sure about its potential but was vague about its funding sources, saying the plan hinged on flexibility in allocating federal funds that have poured into the state in the form of COVID-19 aid.
On Friday, the administration shed some more light on the plan.
According to an administration official, who communicated on background only, a just-approved one-year extension in the time allotted to spend $550 million in federal Coronavirus Relief Fund revenues means that instead of spending those funds by Dec. 30 in the fiscal 2021 state budget, the monies can instead be used for the new program to aid businesses slammed by pandemic-related impacts.
The official said the $550 million that was slotted for the $45.9 billion state budget is now "being solved by" savings associated with government program caseload estimates, mostly in MassHealth, and a higher stabilization fund withdrawal included in the budget that the governor signed on Dec. 11.
The budget authorized a $1.7 billion draw from the state rainy day fund, rather than the $1.35 billion withdrawal that Baker initially recommended.
"The most recent federal legislation included a critical one-year extension on the use of Coronavirus Relief Fund dollars as well as additional funding for many key efforts, including testing, tracing, and eviction diversion -- the combination of these two factors provided the Administration with important flexibility and revenue for the new $668 million small business relief program," said Administration and Finance secretariat spokesperson Patrick Marvin.
The official who described the flow of funds said roughly $100 million in remaining Coronavirus Relief Fund dollars, which stem from the CARES Act approved at the start of the pandemic, were also being used for the grant program rather than for COVID-19 testing, tracing, and housing assistance cost overruns.
However, the $900 billion federal COVID-19 aid bill signed Sunday by President Donald Trump also includes an infusion of $452.1 million for testing, tracing, and COVID-19 mitigation in Massachusetts, as well as $459 million for federal rental assistance, the official said.
The Baker administration on Friday announced $67.4 million in awards to 1,366 small businesses in the second round of grants through the COVID-19 Small Business Grant Program administered by the Massachusetts Growth Capital Corporation (MGCC).
The new Sector-Specific Small Business Relief Grant Program, also administered by MGCC, is also now accepting applications from sectors most impacted by the COVID-19.
The administration said that restaurants and bars, beauty and personal services, health care and retail are among the top sectors receiving relief in the second round of awards. The first round of grants went out last week and totaled $49 million in support of 1,158 small businesses.
WBJ Web Partners
Most Recent
Most Recent
0 Comments