Category: Politics

Did the $525,000,000 Massachusetts Poured Into Biotech Generate 571 or 17,994 Jobs?

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Yes? No? Maybe? The state of Massachusetts has spent $525 million encouraging the development of the state’s biotech industry, just over half of the $1 billion budgeted for this purpose. This public investment is being applied to grants, tax breaks and business loans for companies planning on moving to Massachusetts or expanding their operations in the state, and is intended to encourage a healthier state economy. But, just how many jobs are really being created by this taxpayer investment?

One academic study by Pioneer Institute claims that Massachusetts’ $525 million directly created only 571 new jobs in life science industries. This figure applies to a period starting in 2009 and ending in 2013. In contrast, consider a study from Northeastern University that claims that between 2006 and 2012, life sciences and related industries added 17,944 jobs in the state. While Northeastern’s period of study doesn’t exactly match Pioneer Institute’s, the astounding variance of the results illustrate that questions remain about public investment Massachusetts biotech industry.

Questions need to be answered. Should the government of Massachusetts take tax dollars collected from businesses and individuals and give them to other businesses? Should government be picking industry winners and consequently with businesses that pay taxes but don’t receive tax breaks and cash investment by government losers? If government should take money from some businesses and give it to other businesses, should the alleged investment be made from politicians who are being lobbied by special interests or independent professionals?

Creating new jobs isn’t the only way public incentives can aid select businesses and potentially the economy of Massachusetts. Specifically for a more complete picture of how biotech incentives are working, other questions should be answered. For example, one could ask how much private capital biotech firms have attracted and what kinds of returns backers have seen on their investments.

It is also useful to ask how much extra tax revenues the state may see from capital gains. Until questions like these are answered, it will remain impossible to know just how much Massachusetts has received for its $525 million biotech investment.

Is Refugee Resettlement Good for Mass. Businesses?

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There has been a lot of controversy lately about the effectiveness of refugee resettlement programs that the federal government employs to settle refugees in the United States. Earlier this month, Dominic Sarno, mayor of the Massachusetts city of Springfield, wrote to prominent Massachusetts politicians urging a moratorium on resettlements in Springfield, claiming that the refugees have overwhelmed the ability of social services to meet their needs. Other New England mayors in Maine and Rhode Island have expressed similar complaints.

But what effect do these immigrants have on Massachusetts’ businesses? From this narrower perspective, the issue becomes more complex. Here are some of the ways that refugees can have an impact on the businesses in the communities in which they relocate:

Customer Base

Obviously, any increase in the population of a community increases the size of the customer base that businesses have to draw on. When refugees first arrive in a community, the relocation agencies and social welfare programs provide them with money. Coming almost always from a poverty-stricken background, these refugees have to buy many basic goods and services. Therefore, at least initially, the refugees cause a surge in economic activity for the businesses in the communities in which they relocate.

 

Crime

The financial aid that refugees receive lasts only so long. According to the government, about 75% of refugees become self supporting within a year of arriving in the United States. Unfortunately, the remaining refugees sometimes fall back into poverty and become problems to law enforcement. The resulting crime can be directed against the business community.

 

Employment

Those refugees who get jobs are usually good workers, often more eager to please and willing to do difficult or unpleasant tasks than native workers. Therefore, refugees often become hard-working members of the local labor pool and are valuable employees to many businesses.

Although some refugees can be a problem to the business community when they fail to adjust well to resettlement, the overwhelming majority of refugees make good customers and employees for Massachusetts’ businesses. The key appears to be how successfully the refugees are integrated into the community at large.

 

Worcester on the Affordable Care Act

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Recently a panel was held in Worcester to discuss health care reform. Secretary of administration and finance, Glen Shor acted as the keynote speaker and spoke positively on the Affordable Care Act (ACA). He claimed it would help break down barriers to health care, along with assisting Massachusetts in receiving extra federal Medicaid reimbursements, that are issued to help cover uninsured or low-income patients. There is still plenty of room for improvement, and Shor is quoted saying, “Positive does not mean perfect.”

Other speakers on the panel include Patrick Farrell, Peter J. Martin, Jack Myers and Jean Yang. Topics were covered such as small businesses incentives to provide health care and how company culture relates to health care. Peter Martin was optimistic stating that Massachusetts has  “a relatively easy path ahead of us.” Employers are encouraged to keep up with the law as it changes and take a look at what others in the industry are offering.

Read more on the affordable care act panel here.

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Millbury competes for state’s only casino

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Recently, representatives from Mass Gaming & Entertainment LLC (MGE) unveiled their plans for a $200-million slots parlor on McCracken Road in Millbury. The plan will compete with other towns in Massachusetts for the state’s only slots parlor, including nearby Leominster. With traffic already a major concern due to the Shoppes at Blackstone Valley, MGE quickly addressed the issue, saying the project will “improve traffic in the area.”

According to MGE’s plan, the casino will bring 400 permanent jobs to the town and its design will incorporate elements of Millbury architecture. The developer plans to seek LEED Gold certification in using environmentally sustainable building practices and materials.

Residents in Millbury will vote on September 24 to determine if MGE can submit a final proposal.

Read the full article in the Worcester Business Journal.

Millions in Massachusetts State Tax Credits To Life Science Companies

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The 2012 Mass Tax Credit Transparency report revealed that about $17 million was awarded to life science companies. In total $159.2 million in state tax credits were issued this year, with 11% going to life science companies. The $17 million was distributed to 28 different companies to improve life science research and investments

The largest category in the life science is the research credit, which received just under $7 million. This is due to the yearly increases in expenses in the state. $1.8 million of that seven went to Biogen Inc., a biotechnology company, that manufacturers drugs for the treatment of multiple sclerosis as well as other diseases. Shire Human Genetic Therapies Inc. was awarded $3 million, the largest amount for investment tax credit. In 2010 Shire began a $400 million venture into Lexington Technology Park. Along with investment and research credits, job credits were also awarded. Enough was issued to create at least 50 total new full-time jobs in the state of Massachusetts.  

Read more details about the tax credits to life sciences companies here.

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MassWorks Infrastructure Program Enters New Round

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Applications opened earlier this summer for the MassWorks Infrastructure Program – a program available for eligible public entities in need of funding to support economic development and job creation. The program opens a short window (September 3, 2013 – September 13, 2013) for entities to submit their applications for grant consideration. Grants offered this year will support housing or commercial growth opportunities that help support Massachusetts sustainability.

In 2012, the Patrick Administration awarded $38 million to 26 MassWorks Infrastructure projects. Last year’s grants supported projects requiring infrastructure upgrades or expansions in order for new growth to take place. This year Gregory Bialecki, a spokeswoman for the Housing and Economic Development Secretary, announced that there is roughly $25 million available for projects. In past years, funding ranged from $200,000 to $10.1 million.

 

To read the full article, click here.