BOSTON (SHNS) - Nearly three months into the new fiscal year, about one quarter of the state's planned capital spending for economic development is tied up in an ongoing dispute among top House and Senate Democrats, according to a new report.  Gov. Maura Healey's capital plan for fiscal 2025, which began July 1, calls for $269 million in economic development spending, a 13 percent increase over fiscal 2024, but much of that spending requires passage of authorizations in the competing bills, according to the Massachusetts Taxpayers Foundation, a business-backed group that is trying to turn up the pressure on Beacon Hill. Without the bill's passage, popular investments "will not occur" in artificial intelligence, climate-related technology and a new MassImpact program that supports "unique, transformational economic development projects," the report said. The Legislature waited until June (House) and July (Senate) to pass an economic development bill and then couldn't agree on a consensus bill on July 31 despite meeting all night and into the morning of Aug. 1.  Part of the problem was procrastination, the branches did not even send the bills (H 4804 and S 2869) to conference committee for resolution until July 18.  The conference committee met for the first time on July 22 but two of its members, Rep. Aaron Michlewitz and Senate Michael Rodrigues, were also juggling other major bills. The conference committee negotiates in private only and is co-chaired by Michlewitz and Sen. Barry Finegold. The fact that the bill features core elements of the state's economic strategies and has failed to pass sends a "wrong" message, the report said, and is part of the Legislature's pattern being unable to deliver on timely economic development priorities. "The consistent inability to enact planned legislation over a two-year session indicates a policymaking process that is not working effectively," the report says. "The fact that the legislation in question defines and implements core elements of the state’s economic development plan sends the wrong message to communities and employers in the state who are looking to work with the public sector to expand economic opportunity and respond to changing conditions. Failure to act also makes the case for attracting people and investment to Massachusetts even tougher." The foundation is also urging lawmakers to put aside differences over borrowing authorizations in the bills, suggesting that going with the higher amounts is responsible because annual capital spending is strictly restricted and more authorizations just give the state "flexibility." "Capital authorizations that are out of line with likely spending levels can create expectation management challenges, as program supporters may expect a level of investment that never materializes, but incorporating higher authorization levels in the final economic development bill has some real advantages as well: the greater the level of authorization, the greater the flexibility the administration has to adapt to changing economic development needs and opportunities," the report said. The bills, which cleared the House 155-2 and the Senate 40-0, each call for continued investments in the life sciences sector and new investments in climate technology. Citing those common goals, the report calls on lawmakers to compromise on investment levels. "From a perception standpoint, the ability of Massachusetts policymakers to effectuate a shared economic development strategy during a time of increasing uncertainty sends a strong, positive message," the report said. "Failing to do so sends a different message and exacerbates some of the challenges that the state faces in the short and long-term related to competitiveness and economic growth." The Legislature has been able to advance some weighty legislation since ending formal sessions for the year on Aug. 1 but would need to make special arrangements if they can agree on an economic development bond bill.  Legislation authorizing borrowing requires recorded votes in the Legislature, and such votes must be taken during formal sessions. Legislative leaders say they are open to doing what it takes to pass the bond bill this year, but don't have an agreement on a bill, and therefore don't have any concrete plans to hold another formal session.  House and Senate Democrats downplayed the import of their disagreements on major bills this summer, saying they would continue to work on bills and try to come up with accords for passage during lightly attended informal sessions, where any lawmaker can block any bill because there's no quorum present. They reached deals and passed maternal health, and long-term care bills during informal sessions, but other key bills governing clean energy development, hospital oversight, prescription drugs, and substance use disorder remain hung up in conference committees. During a MASSterList forum in Boston on Wednesday, Finegold predicted the economic development bill would get done. "So with our economic development bill, which we will get done, which I do expect in the next few weeks that we will get done, I think there'll be a robust commitment and investment in clean tech, biotech and food science," said Finegold, who co-chairs the Legislature's Economic Development Committee. "These are all areas that we've been leading, that we're going to continue to lead." Finegold said he understands that people in business in Massachusetts "sweat every month" thinking about their competitors but said he's encouraged that Boston in 2024 attracted 4.2 percent of recent U.S. college graduates, comparing that to 3.4 percent in 2015. "I think the mantra of Massachusetts has to be is we can never be satisfied," Finegold said. "We can never accept where we're at. We can always do better. And I do think there's a lot of good things that we should feel good about about Massachusetts, but there's a lot of things that we need to improve on." About 780,000 international graduate students applied to stay in the U.S. in 2023, he said, and about 10 percent were able to. "So we almost turned away 700,000 people that had degrees that wanted to work here, but we wouldn't let them stay," he said. "So there are not only things that Massachusetts has to do, but we also have to work with our federal partners to make sure that the kids that we're educating here, if they want to stay in Massachusetts, or frankly anywhere in this country, that would give them the opportunity." Finegold also predicted lower interest rates will unlock activity to address the state's housing affordability and inventory woes. "Economics right now are not in our favor," he said. "There are 30,000 permits in the city of Boston ready to go, but the numbers don't work because construction prices are so high and interest rates are high. Once those come down, I think we're going to see a lot more production, because the way we're going to solve our housing problem is only production. That's the only way we're going to solve this. And we need more production. And I do think we're going to see that." In addition to the message on competitiveness that would be sent if the economic development bill is punted into the next session, MTF notes risks involved in that strategy. "It is also not a foregone conclusion that action occurring next session would happen quickly," the report said. "A new economic development bill would require two rounds of hearings and could be delayed as committee appointments are made. The longer the delay, the greater the chance that existing programs will run out of resources to use this year."