Healey releases interest from rainy day fund in effort to attract federal money

BOSTON — With billions of dollars in federal funding at stake, Gov. Maura Healey on Thursday freed up $800 million from interest accrued on the state’s $8 billion rainy day fund to use as the state aggressively pursues federal money.

Healey said $12 million would be allocated to help municipalities identify federal funding opportunities and prepare the best applications possible to compete for that money. Another $50 million will serve to ensure the state and municipalities have cash on hand when federal funding is contingent on local or state matches.

The funds will be added to $2 billion already in reserve from other funding sources, including the Capital Investment Plan, in budgets through fiscal 2028. Healey attributed the successes already enjoyed by the state in part to having matching funds to commit to specific projects.

“This is an important, exciting new step to win federal funding,” Healey said at a morning press conference where she gathered her administrative team. Healey also memorialized the creation of the federal funds and infrastructure office, and its director, Southborough native Quentin Palfrey. She created the office soon after her inauguration.

“It’s important we hustle, compete to get every last federal dollar available,” Healey said. She praised the Biden administration for its investment in infrastructure, noting that the president funneled trillions of dollars toward the rebuilding of the nation.

Office already boasts successes

The administration says that, since Palfrey's office was created:

• Massachusetts has been awarded $108 million by the U.S. Department of Transportation for the West-East railroad project.

• The state was designated as a microelectronics hub for research and development of chip technology. That designation by the Department of Defense brings $20 million to Massachusetts the first year, with the potential of $100 million overall.

• The state received a clean energy grant for $250 million.

• The state also received funding for the Allston multimodal transportation project.

And Healey cited the state's aggressive application for funding to address the aging Cape Cod bridges.

“This is capital in hand, not borrowed money,” Healey said.

One of Healey’s top priorities is to ensure Massachusetts is in a position to aggressively chase federal funding opportunities, said Matthew Gorzkowicz, secretary of administration and finance.

“With Massachusetts putting money on the table, the state is sending a clear message to Washington, D.C., that it is ready to start on projects,” Gorzkowicz said. He pointed out that the funds are cash assets, not a plan to borrow matching funds that may be needed to attract the federal money.

State projects needing federal funds include addressing issues caused by deferred maintenance on the state’s existing assets. Many have already been approved by the Legislature but have been deferred.

“We’re committed to fixing the infrastructure that has long needed attention, some TLC,” Healey said.

Gorzkowicz pointed out that the principal in the state’s Stabilization Fund will not be touched and if financial conditions in Massachusetts deteriorate, the state will stop dipping into the accrued interest until the state returns to stable financial footing.

“This is an opportunity for Massachusetts to make a transitional change,” Palfrey said. “Team Massachusetts is not just competing for federal funding but is applying to win.”

Encouraging families to stay in Mass.

With federal and state investments, the Healey administration hopes the economy will grow.

“This is a jobs engine,” Healey said. She expects the influx of capital to fuel the construction industry, research and development, expansion of transportation and housing growth.

“I don’t want people leaving Massachusetts, it’s a great state. What isn’t great is the high cost of housing,” Healey said. Aggressively pursuing federal funding opportunities, coupled with a housing bond bill Healey is touting, will go a long way to keeping Massachusetts residents in the Bay State, Healey said.

This article originally appeared on Telegram & Gazette: Mass. Gov. Healey taps rainy day fund interest to court federal money