Chairmen Rodrigues, Michlewitz, and Hunt, and Members of the House and Senate Ways and Means Committees and the House Committee on Federal Stimulus and Census Oversight,

My name is Suzanne Bump, and I am the State Auditor. Thank you for allowing me to address you today.

There are two matters that I will address in my testimony, one concerning infrastructure support for rural communities, the other concerning oversight of the federal pandemic relief dollars that have come to the Commonwealth. 

Earlier today the Division of Local Mandates within my office issued a report entitled, “Public Infrastructure in Western Massachusetts,” with findings that argue convincingly for greater equity in regional infrastructure investment. In fact, the report, and others issued in recent years by DLM, challenges the Commonwealth to create a rural rescue plan.

There has never been and probably will never be again such a tremendous opportunity to reverse decades of disinvestment in our rural communities, especially in the four counties of Western Mass. – Berkshire, Franklin, Hampden, and Hampshire.

After the textile mills, paper mills, and other employers and generators of wealth left town, there was no high-tech boom, no health care and life sciences juggernaut, no knowledge economy to take their place – as there has been in Eastern Mass. The result is cash-strapped towns, with shrinking populations and labor forces, declining property values, maxed out tax levy capacity, and crumbling public infrastructure - all of which are detriments to the civic health of these communities and deterrents to the private capital investment necessary to reverse these demographic and economic trends.

Consider the common characteristics of these 101 cities and towns.

• Median population of 1800
• Property tax-exempt entities including state agencies and land trusts as major property owners.
• Some of the highest property tax rates in the Commonwealth.
• Municipalities unable to pave roads, replace culverts, or repair bridges.
• Fire houses without running water. New fire trucks that remain outside year-round because they too big to fit in old fire stations.
• Public buildings which, if they were in private hands, may well be condemned.
• Internet speeds among the slowest in the state.

It is a challenging present and a discouraging future outlook for the very viability of some of these communities.

The municipal infrastructure programs that the state has put in place are well-intentioned but underfunded. Take STRAP, the Small Town Road Assistance Program, part of the very popular MassWorks program at MassDOT. Available to towns with populations under 7,000 on a competitive basis, it has a cap on awards of $1 million. With the average culvert replacement project costing about $850,000, STRAP is of limited value. Its overall value to the region is equally limited since, for instance, in FY20, $22.6 million worth of proposals from the 4 counties yielded $5.2 million in state financing. As the numbers indicate, the program does not meet local needs.

Further, Western Mass. towns are challenged to even prepare and file applications to compete for the awards, since they typically do not have planning and engineering professionals to write the grants. Some use a portion of their Chapter 90 assistance for grant writers, but that detracts from the amounts they can spend on actual road repair.

And, speaking of Chapter 90 - this funding is distributed to communities under a formula that hasn’t been updated since the ‘70’s. It is a vitally important source of funding for the towns in these four counties and accounts for an average of 63% of their road spending. But the formula weighs community population much more heavily than road miles. It means, for instance, that the allocation per roadway mile is $4,383 in Franklin County, while in Suffolk County it is $12,169.

Clearly, as the Mass. Municipal Association has advocated, Chapter 90 funding must be increased for all communities, but the formula must also be changed to take into consideration a community’s road miles as well as a community’s ability, or lack thereof, to self-fund their improvement programs. Rep. Smitty Pignatelli has offered a revised formula that addresses the gap for Western Mass., and it deserves strong consideration.

As for assistance for other municipal infrastructure, like town halls, senior centers, public works barns, and police and fire stations, there is no state support, apart from the occasional legislative earmark. The Mass. School Building Authority provides a model for how the state might assist communities, especially those in Western Mass. to repair and improve their public infrastructure so as to better serve their public and attract private investment.

Broadband is the brightest spot in this report, not because of its current state in the four counties, but because Congress has established its expansion and strengthening as an infrastructure priority. With continued investment by the Commonwealth to cover the last mile, we can provide the connection to the wider world of commerce and information that the residents of the four counties need and deserve.

I urge you to consider the findings and recommendations contained in this report as well as others previously released by DLM concerning regional school support, waters and sewer infrastructure needs and PILOTS on state-owned lands, as you deliberate on federal stimulus spending and also as you fashion state appropriations bills in the years to come. 

The second item I will address is a proposal to fund those of us statutorily charged with ensuring the integrity of the programs distributing the federal aid that has come to the Commonwealth.

It is already apparent that these historic federal relief programs have also been subject to “historic levels of fraud, waste, and abuse.”  Those aren’t my words, they are the words of the Pandemic Response Accountability Committee, created by Congress and comprised of federal inspectors general. The urgency of getting relief dollars into the hands of state and local governments, businesses, and individuals necessitated the lowering of some of the normal barriers that regulate eligibility for government contracting and relief programs. Through those openings flooded identity thieves and fraudsters.

A decade ago, when federal recession relief provided job retention and stimulus funding, Governor Deval Patrick made resources available to the AG, IG, and Auditor’s offices on a temporary basis. Following completion of the projects, the Government Accountability Office identified Massachusetts as a model of transparency and oversight. With the Governor’s central office dedicated to administering the federal aid and the spending website, we now have in place two of the three legs that supported that model. Missing is the financing for “rigorous and independent oversight.”

That is why the Attorney General, the Inspector General, the State Comptroller, and I have collaborated on a proposal to create a reserve fund for our offices to use to support our investigations, audits, and accounting activities to identify weaknesses in state agency controls, uncover misspending, and identify those that wrongly claimed and received payments from the Commonwealth.

As I stated in my testimony at the FY22 budget hearing, my auditors have begun our work, but we are limited to working pandemic relief auditing objectives into our annual audit plans. That provides some measure of oversight, but budgetary limitations make us unable to devote staff exclusively to pandemic relief program auditing, despite the high level of risk associated with these programs.    

The reserve fund is modelled on that created for the Hinton Lab drug testing scandal. That fund enabled multiple parties to access the funding needed to conduct their respective investigations. We believe it to be a workable model that would support our efforts.

Messrs. Chairmen and Committee members, I respectfully ask you to consider these proposals. The first, a rural rescue plan, is a challenge to the entire Commonwealth to recognize regional equity and support those communities whose very viability depends upon state support for infrastructure. The second, is a request to ensure accountability and integrity in the expenditure of pandemic funds.

I thank you for your careful deliberations, which I am certain will lead to a better Commonwealth with a brighter future for all its residents.