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Defending the use of more than $4 billion in federal funds to plug holes in the state budget, Gov. Deval Patrick’s budget chief on Tuesday applauded the outlays as “quick spending into the economy” and said the funds are preventing the economic downturn from being worse.
Administration and Finance Secretary Jay Gonzalez also told lawmakers he expected Washington to further extend fiscal relief lines to states coping with continuing budget imbalances. The administration's latest budget, released last week, relies on $600 million in federal revenues that have not yet received approval.
Since billions of dollars started to flow to the states from the $787 billion American Recovery and Reinvestment Act, debate has swirled on Beacon Hill and nationally over the balance between the role of the funds in stimulating private sector job growth and saving public sector jobs. The state’s jobless rate surged to 9.4 percent in December.
During testimony Tuesday afternoon before the Legislature's Joint Committee on Federal Stimulus Oversight, Gonzalez told lawmakers that the state was required to spend $4.028 billion in ARRA funds on the state budget, which mainly funds programs and services provided by public employees or contracted workers.
Stimulus funds have been "critical" to the state's efforts to confront a collective $9 billion gap between projected revenues and spending during what some have called the Great Recession. Patrick and Democratic legislative leaders have also raised numerous taxes during the recession and slashed spending in many state budget accounts.
Some Democrats have raised the possibility of a second stimulus bill, a notion endorsed by the Patrick administration’s stimulus spending chief Jeffrey Simon, who said a new stimulus “would also have a positive impact.”
“Nobody predicted the depth, the severity or the speed this economic downturn would grip us by the throat,” he said.
Gonzalez, in an apparent attempt to undercut Republican portrayals of "tax and spend" Democrats, also pointed out that state spending during Patrick's four years in office is up an average of 0.6 percent, a rate that he compared to the average 4.6 percent spending rate increase over the previous 16 years.
Gonzalez chose the 16-year timeframe, which corresponds with the duration of the Republicans hold on the Corner Office prior to Patrick's election in 2006. The Legislature was controlled by Democrats throughout the 16-year period, which began William Weld defeated John Silber and succeeded Gov. Michael Dukakis in 1991. Weld had a veto-proof Senate for one term before Democrats regained enough seats to turn back gubernatorial vetoes.
Defending the use of more than $4 billion in federal funds to plug holes in the state budget, Gov. Deval Patrick’s budget chief on Tuesday applauded the outlays as “quick spending into the economy” and said the funds are preventing the economic downturn from being worse.
Administration and Finance Secretary Jay Gonzalez also told lawmakers he expected Washington to further extend fiscal relief lines to states coping with continuing budget imbalances. The administration's latest budget, released last week, relies on $600 million in federal revenues that have not yet received approval.
Since billions of dollars started to flow to the states from the $787 billion American Recovery and Reinvestment Act, debate has swirled on Beacon Hill and nationally over the balance between the role of the funds in stimulating private sector job growth and saving public sector jobs. The state’s jobless rate surged to 9.4 percent in December.
During testimony Tuesday afternoon before the Legislature's Joint Committee on Federal Stimulus Oversight, Gonzalez told lawmakers that the state was required to spend $4.028 billion in ARRA funds on the state budget, which mainly funds programs and services provided by public employees or contracted workers.
Stimulus funds have been "critical" to the state's efforts to confront a collective $9 billion gap between projected revenues and spending during what some have called the Great Recession. Patrick and Democratic legislative leaders have also raised numerous taxes during the recession and slashed spending in many state budget accounts.
Some Democrats have raised the possibility of a second stimulus bill, a notion endorsed by the Patrick administration’s stimulus spending chief Jeffrey Simon, who said a new stimulus “would also have a positive impact.”
“Nobody predicted the depth, the severity or the speed this economic downturn would grip us by the throat,” he said.
Gonzalez, in an apparent attempt to undercut Republican portrayals of "tax and spend" Democrats, also pointed out that state spending during Patrick's four years in office is up an average of 0.6 percent, a rate that he compared to the average 4.6 percent spending rate increase over the previous 16 years.
Gonzalez chose the 16-year timeframe, which corresponds with the duration of the Republicans hold on the Corner Office prior to Patrick's election in 2006. The Legislature was controlled by Democrats throughout the 16-year period, which began William Weld defeated John Silber and succeeded Gov. Michael Dukakis in 1991. Weld had a veto-proof Senate for one term before Democrats regained enough seats to turn back gubernatorial vetoes.
In a phone interview, House Minority Leader Bradley Jones tore into the Patrick administration for the comparison, saying Patrick has had the benefit of billions of dollars in federal funds, more than $1 billion in increased taxes and a now-nearly-depleted $2 billion rainy day fund that most of the previous Republican administrations didn’t have. In addition, Jones argued it was “apples to oranges” to tie previous governors to the levels of state spending because the Democrat-controlled Legislature often overrode their attempted vetoes. Patrick himself, Jones noted, restored $400 million that was cut from the budget by Gov. Mitt Romney on his way out of office.
“Now, he’s using that against them by saying look at the growth they had in their budget,” Jones said. “If spending grew during that time it’s because of growth in the economy.”
Committee co-chairman Rep. David Linsky took issue at the outset of Tuesday’s hearing with a newspaper report that said stimulus funds have paid to retain the jobs of public sector “hacks.” Referencing emergency response workers, those who care for the mentally ill and the home health aides who cared for his mother until she died three weeks ago, Linsky said, “As far as I’m concerned those people aren’t hacks.”
Gonzalez said state government under Patrick has reduced the amount of one-time revenues used to support state spending, from $3.1 billion in fiscal 2009 to $1.9 billion under Patrick’s fiscal 2011 budget proposal.
“We need to wean ourselves off the one-timers,” he said.
According to the Patrick administration, $4.3 billion in ARRA funds have been awarded, with $3.1 billion committed and $2.4 billion of the committed funds spent to date. Of the $2.4 billion, $1.7 billion has been spent on unemployment assistance, food assistance, Medicaid and other so-called safety net programs and the remaining $675 million on “programs and infrastructure.” Another $1.7 billion is expected to flow through state government, according to Simon, head of the Patrick administration’ Recovery and Reinvestment Office.
According to an administration analysis, 71 percent of jobs tied to stimulus spending in the last quarter of 2009 were retained jobs and 29 percent of job tied to ARRA in the last quarter are considered “created” jobs. Also on a quarterly basis, 71 percent of stimulus jobs were in the public sector, primarily in education, and 29 percent in the private sector. In a report to the state’s citizens, the administration said ARRA funds paid for more than 4,700 full-time equivalent jobs in the fourth quarter, which translates into 13,882 actual workers
Republicans on the legislative panel criticized the effect of the stimulus but were quick to mute any perceived criticism of the Patrick administration.
“I won’t go all Scott Brown on anyone here today,” said Sen. Michael Knapik (R-Westfield), referring to Brown’s complaint that the Patrick administration was sitting on stimulus funds rather than spending them.
Knapik said the stimulus had been described by President Obama and Gov. Patrick as a way to create and preserve jobs rather than “plug budget holes.” He also noted that the stimulus failed to keep the state unemployment rate below 8 percent – a rate he said was “no fault of this administration’s, I get that.” Of the talk about a new “jobs bill” in Washington, D.C., Knapik said “I thought [the stimulus] was the jobs bill.”
Rep. Viriato DeMacedo (R-Plymouth) questioned the use of stimulus funds to fund contracts with companies implicated in faulty Big Dig construction. Committee co-chair Sen. Marc Pacheco (D-Taunton) immediately cut in to say he supports debarment of companies that have violated their contracts but added that laws prohibit Massachusetts from refusing to do businesses with companies that aren’t debarred.
“We would not be eligible for certain federal funds if we had taken that option,” Pacheco said.
During the two-hour hearing, Pacheco said he was pleasantly surprised there hadn’t been a “front-page story” about major fraud or abuse related to stimulus funds. Simon agreed, saying, “It’s gratifying that we haven’t had the kind of problems that some places have.”
Simon said his office is expected to remain in operation through April or May 2011, when the stimulus act is set to expire.
“I think things will be substantially better economically, the unemployment rate should be better substantially. Hopefully the economy will be solidly in recovery,” he said. “That’s what I hear from economists.”
He added that the next year would entail capturing the remaining $1.7 billion in federal funds marked for Massachusetts and overseeing its implementation. He said he will be spending time touring the state and visiting construction projects, including a visit to Quincy Wednesday.
