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Baker Says The Country Needs A Stimulus Bill But Is Concerned With Trump's Plan

Gov. Charlie Baker voiced concern with President Trump's plan for funding a scaled-down version of the nation's enhanced unemployment benefit and said it's important for Congress to reach agreement on a fourth stimulus bill to support states and the health care system.

"There are very real issues that states and municipal governments have associated with almost everything associated with COVID, and that's no longer just a Northeast issue," Baker said during a Tuesday press conference. "That's an issue if you look at any map of the United States. People are going to continue to have costs and expenses associated with this, and a health care community that's going to remain under significant stress, just, period. I think it's really important that there be a fourth package."

The U.S. House in May passed a $3 trillion coronavirus relief package that, along with many other provisions, included nearly $1 trillion in aid to state, local, territorial and tribal governments and an extension of the $600 weekly federal unemployment payment that expired July 31.

Senate Republicans in late July put forward a plan that did not involve state and local government aid, and featured a smaller enhanced unemployment benefit. Their proposal would direct an extra $200 per week to all recipients through September, before switching in October to a system in which state and federal aid combines to cover 70% of lost wages.

Over the weekend, Trump signed an executive order extending the enhanced benefits for workers who lost their jobs during the pandemic, but in a new format.

The president renewed the benefits at $400 a month, with states required to cover 25% of the new benefit if they choose to participate, and the program set to expire no later than Dec. 6, or when funding runs out.

Baker said the "biggest concern" he has with the order is the plan to pay for the benefit through Federal Emergency Management Agency funds.

"Now, you can make an argument, a credible one, that FEMA money would be an appropriate resource. It's an emergency and all the rest," Baker said. "But the problem with that is, the FEMA money, as far as most states were concerned, is what's there for us to apply to be reimbursed for all the costs that we incurred in March, April and May during the original emergency and to be reimbursed by the feds."

Baker said he supports the idea of the federal government "doing something about an enhanced unemployment benefit" but believes "it needs to be done through a separate appropriation, not by taking money from FEMA, which is how we, the states, are planning to get reimbursed."

$1.1 billion COVID-19 spending bill Baker signed on July 24 relies on FEMA reimbursement and other federal funding to reach an expected net state cost of zero dollars. The allocations in that bill included $350 million for personal protective equipment, $44 million for the contact tracing collaborative, and $85 million for field hospitals and shelters.

Massachusetts is now on its second temporary budget of the 2021 fiscal year, and lawmakers have yet to produce a full annual spending plan that takes into account the economic disruptions of the COVID-19 crisis. Legislative leaders have said they want a better picture of what level of aid might become available to them through another federal stimulus.

Massachusetts in July took in $4.456 billion in tax collections, approximately $2.293 billion of which came from income taxes that would have been due in fiscal 2020 if the filing deadline had not been pushed back from April to July. The remaining $2.163 billion will be recorded for fiscal 2021.

After adjusting for deferred taxes, the revenue collected for July 2020 was about $88 million more than what was collected in July 2019, according to the Department of Revenue.

Asked about last month's numbers Tuesday, Baker said July typically accounts for only a small portion of the revenues collected throughout the year. He said sales around the country experienced a "pretty big bounce" after March and April, and that auto sales "for reasons that I don't fully appreciate, have also been pretty good."

"If you're asking me if I'm drawing lots of conclusions about what fiscal '21's going to look like based on July numbers, the answer to that is no," Baker said. "I think we were pleasantly surprised by the withholding number and the sales number, but let's face it, I think we all know that there's still a lot of real challenges associated with our economy out there, and it's going to be a tough year with respect to that."

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