State Launching $115M Program to Boost Small Businesses

Looking to further boost an economy that has added back tens of thousands of jobs since April but has a long way to climb out of the hole dug by the pandemic, Gov. Charlie Baker rolled out a multi-pronged strategy Thursday to infuse small businesses and workforce training programs with new money to cover payroll, rent, protective equipment and other expenses.

The economic stimulus strategy comes as Baker and Beacon Hill Democrats continue to criticize and wait for Congress to deliver additional relief, aid that the governor reiterated Thursday is still needed.

"To be clear, there's no substitute for the size and scope that a federal aid package could deliver. But that doesn't seem to be in the offing and we certainly don't believe that we can wait," Baker said at a State House press conference, where he also nudged the Legislature to finalize a $275 million borrowing bill that would invest in affordable housing, tourism and other economic development needs.

The newest component of Baker's plan, he said, is $115 million in initiatives that include a $50.8 million grant program for small businesses who have been hit the hardest by the COVID-19 pandemic. Baker said the grants would be made available quickly - officials described a three-week application period - to support small businesses hurt by the pandemic, train workers in growth areas like manufacturing, subsidize internet for low-income residents and support community efforts to create new opportunities for commerce.

Some business groups, like the Greater Boston Chamber of Commerce, were already encouraging members to apply quickly, though Baker said the money would be more targeted than prior investments, and not dispersed first come first serve.

The grants will be made available through the Massachusetts Capital Growth Corp., and businesses with 50 or fewer employees will be eligible to receive up to $75,000 or up to three months of supported expenses for employee payroll and benefit costs, mortgage interest, rent, utilities and interest on other debt obligations.

Businesses with five or fewer employees may access up to $25,000 to cover business costs like rent, staffing, and utilities, or to purchase personal protection equipment.

"Small businesses can apply now, that means now," Baker said.

The money for the grants is being drawn from the state's allocation from the Coronavirus Relief Fund approved by Congress and federal community development block grants, but to fully execute his plan, the governor will need help from the Legislature, which has been mostly dormant since July.

Baker said the $115 million in new funding is part of a larger $775 million strategy to bolster economic growth, some of which had already been announced or proposed in the governor's revised fiscal 2021 budget plan, and at least $175 million of which requires legislative approval.

The full plan includes the governor's $171 million eviction diversion program announced on Oct. 12, and the $100.7 million small business recovery plan that he included as part of his revised budget, and proposed funding through an accelerated sales tax collection reform.

"The plan, we believe, can help stabilize in many parts of the commonwealth growth that's already started to take place and hopefully kick start it in other parts of the state as well," Baker said.

The repackaging of earlier proposals and the spotlight put on programs that are already part of the state's economic development work created some confusion among legislators about what was new, what required their approval and what, if any, spending had been crowded out to make room for the administration's new program.

For instance, Baker said $323 million in existing capital program funding would be directed toward "doing more of what works."

Baker said, "The sources and uses chart on this is complicated," describing a "a giant quilt of funds coming from a whole bunch of places."

In addition to the $50.8 million grant program, new investments announced Thursday include another $10 million for the Shared Street and Spaces program, which has been used to facilitate activities like outdoor dining; $10 million for local recovery planning grants, $10 million to support museums, theaters and other cultural facilities, and $8.3 million in small business technical assistance to help businesses access grant programs and loans.

On the workforce front, Labor Secretary Rosalin Acosta said that from April through August the state's economy has added back 270,000 private sector jobs, or 41%, but unemployment remains at 9.6%, and many people have left the workforce altogether.

"We still have a long way to go in order to achieve full employment," Acosta said.

A new pot of $25 million announced Thursday for workforce supports included $10.4 million to expand partnerships with large employers and align job training and employment pathways, $9.2 million to subsidize internet for low-income residents and expand broadband hotspots in underserved communities, $3.2 million to connect unemployment benefit recipients with MassHire job search supports, $2 million to buy a standardized virtual manufacturing job training program, and $300,000 to augment the governor's budget request of $8.4 million for career technical institutes.

All of these investments are being made as House and Senate leaders begin to weigh Baker's $45.5 billion budget proposal for fiscal 2021, and negotiations over a biennial jobs bill drag on into the fall.

Baker said his administration continues to have "discussion and collaboration" with lawmakers over the bill, and hopes to see it finalized soon.

"We look forward to seeing that one get done so that we can add it to the tools in the toolbox to continue to help people find their way back to productive employment or sustained employment they managed to put together, post spring," Baker said.

The governor said he's aiming to put most of the money in his $775 million recovery plan to work soon. "If all goes according to plan, a lot of this will be out of the door before the end of the calendar year," he said.

As Baker tried to put the focus on economic recovery Thursday, the state continued to see a surge in COVID-19 transmission, with 986 new confirmed cases reported and 30 new deaths.

Just a day earlier, Boston Mayor Marty Walsh announced that the city's schools would retreat and move to 100% remote learning until it saw transmission rates start to recede again.

Baker continued to stress that the data has shown social gatherings, and not the return to school or more formal activities like shopping, to be the cause for the increase in positive COVID-19 tests, but he said he wouldn't second-guess Walsh's decision.

"Look, our goal is to try to be supportive and helpful to our colleagues in municipal government, and I'm not going to Monday-morning quarterback this stuff," he said, despite his administration actively encouraging schools to allow students to return to the classroom earlier this fall.