Healey Gets Wish on Rainy Day Fund Use

Despite lacking quorums, the House and Senate on Thursday morning agreed to a compromise bill designed to help the state pay down long-term debt and better compete in the battle for federal funds. The branches sent the bill to Gov. Maura Healey by early afternoon.

Estimating a current balance of around $8 billion in the Stabilization Fund, Sen. John Cronin, one of the bill's negotiators, said the legislation will enable the state to use about $250 million in annual rainy day fund interest as matching funds for federal grants or to help manage long-term debt.

"This proposal will allow us to pay down long-term liabilities at a faster pace when the Stabilization Fund is at a healthy level," he said.

It's the fourth major bill to emerge from conference committees since the end of formal sessions on Aug. 1, following proposals to make more alcohol licenses available in Boston and to overhaul the long-term care and maternal health care sectors.

Rainy day fund interest revenue is currently steered back into the fund, which has helped drive its balance to a record high and in turn generate even more in interest revenue. Under the bill, Stabilization Fund interest would only be redirected when the fund's balance exceeds 10 percent of budgeted revenues for the previous fiscal year and has not decreased in the previous year.

"Unless these two conditions are met, no diversion will occur," Cronin said, speaking remotely during a sparsely-attended Senate session.

Healey originally filed the bill and expressed enthusiasm about its potential to deliver matching funds that will enable the state to tap into the billions of dollars in federal infrastructure aid that states compete for.

The bill also proposes using up to $50 million for a match on local and regionally-led projects, and $12 million in technical assistance to municipalities to help them apply for matching funds. The legislation also creates a task force to make recommendations regarding appropriate funding levels for the Stabilization Fund and the use of capital gains taxes above a certain threshold.

"The conference report strikes the right balance between protecting the Stabilization Fund for rainy days while maximizing our competitiveness and responsibly tackling our known long-term liabilities," Cronin said.

Both branches accepted the compromise bill on voice votes during sessions where quorums were not present in the chambers.