Council In the News Index

Baker: ‘I Don't See’ Patrick's Mending and Movement (State House News)

By Jim O’Sullivan
STATE HOUSE NEWS SERVICE

BOSTON, JUNE 10, 2010…...Republican gubernatorial candidate Charles Baker on Thursday challenged Gov. Deval Patrick’s campaign message that the state’s economy is recovering adequately, proposing $175 million in business tax cuts and curbs on unemployment assistance eligibility for workers.

“The governor says Massachusetts is on the move and on the mend. I don’t see it,” Baker told the Greater Boston Chamber of Commerce.

Patrick for months has called the state’s economy in recovery and likely to stand in the vanguard nationally of a broader turnaround.

“It’s not getting worse anymore, and I guess that’s not enough. That seems to me to be a pretty bad place to jump for joy. Our goal here ought to be to lead the national recovery, not to lag it or follow it,” Baker said, pointing to 320,000 unemployed people in Massachusetts.

Baker conceded “the economy is recovering,” but said the state needed to go further in encouraging businesses to create jobs.

The economic development package Baker unfurled Thursday would pare the overall corporate tax rate from 8.75 percent to 5 percent, hastening and steepening an already scheduled drawdown ratified in 2008 as part of a deal between businesses and the state that saw massive corporate tax hikes. Currently, the rate would decline to 8 percent. Baker's plan would take it down to 5 percent in increments phased over four years.

Asked about Patrick’s criticism that his campaign is balanced on the state’s failure, Baker said, “I want nothing more for Massachusetts than booming success, but booming success means dealing with our business climate, cleaning up our fiscal house, and creating a climate in which people and businesses will invest in Massachusetts. That’s what I want.”

“I think settling for this notion that we’ve done enough, and from here on out it’s smooth sailing – it’s not,” he told reporters after his speech.

Baker, who has assailed Patrick as a tax-and-spend manager of state finances, has proposed shrinking state government and cutting back services, arguing that Beacon Hill needs to curb its appetite while offering policy assistance to employers.

A former top fiscal aide under Govs. William Weld and Paul Cellucci, Baker helmed Harvard Pilgrim Health Care for 10 years before leaving last year to launch his bid for the Corner Office. In recent polls, he has trailed Patrick by double digits, but led Independent Treasurer Timothy Cahill by a larger margin. Green-Rainbow candidate Jill Stein consistently slots fourth, with single digit support.

Baker also proposed extending from 15 weeks to 20 weeks the duration for which a worker must hold a job in order to qualify for unemployment insurance once the job is lost.

Baker said he wanted to abolish the state's "sting tax," which elevates the tax rates on small employers as they expand, the campaign official said. That levy is applied to the net incomes of "S" corporations' with annual receipts over $6 million. "S" corporations generally avoid the overall corporate income tax.

In an emailed statement, Patrick campaign spokesman Alex Goldstein said there was “a lot to like about some of Charlie’s proposals and many we are already implementing.”

“This is the exact wrong time for Republican Charles Baker's proposal to make it harder for people to get unemployment benefits when they lose their job,” Goldstein said. “The Patrick-Murray administration has already worked with the business community to lower the corporate tax rate while maintaining our commitment to funding education, health care reform, and local aid.  Baker owes it to the people of Massachusetts to not balance this tax cut on the backs of the unemployed, and to be straight about what cuts he will make in education, health care or local aid to pay for his proposals."
Cahill spokeswoman Amy Birmingham said in an emailed statement that Cahill’s plan “presented back in May gives state income tax credits for entrepreneurs far beyond what Charlie Baker is proposing and will actually grow jobs. It will allow for the creation of new businesses that will expand here instead of moving out of state as so many start ups do."

Former Weld chief of staff and Baker predecessor as budget chief Mark Robinson, who backed Patrick in 2006 over the derision of GOP nominee Kerry Healey’s campaign, attended the speech, standing in the back of the room.

Commended numerous times by Chamber President Paul Guzzi – who mused at one point, “How do you ask someone a question who knows a hell of a lot more than you do?” – Baker also encountered some grief over the Republican Governors Association attack ads against Cahill, from which Baker has distanced himself, claiming he cannot legally collaborate with the independent group under federal campaign finance law.

Guzzi called the ads, which cost more than $1 million on the airwaves and depicted Cahill as wasteful and an orchestrator of cronyism at the Treasury, “rather despicable.”

Baker replied, “I can control what I can control, which is my message, my agenda, what I would want to do if I were to win and get elected governor. That’s what I can control.”

“I would love to have none of these folks involved in Massachusetts electoral politics,” he said. “They’re independent organizations. I can’t coordinate with them."

Baker said the $175 million pulled from the state budget by his tax cuts would be offset through reforms he has already proposed, including a slimming of the state’s workforce and cutting back on services to illegal immigrants. Those savings, which Baker estimated at $1 billion annually, were rolled out in response to a $2 billion budget deficit anticipated for fiscal 2011. Baker said Thursday he would use the same set of reforms to compensate for a prospective gap of nearly $700 million threatened by Washington’s refusal so far to authorize Medicaid assistance upon which state budget authors had relied.

Baker said he expected legislative turnover to grant the Corner Office an expanded opportunity to steer reform measures into law.

“I think the Legislature’s going to have a different look to it than it does now,” Baker said, pointing to roughly 35 open seats in the 200-member branch. “I think there’s probably going to be a bigger appetite for reform next year than there is this year.”

Baker, a former Swampscott selectman, said he had been convinced by his running mate, Senate Minority Leader Richard Tisei, to oppose a ballot-slated repeal of Chapter 40B, the state’s affordable housing law, but said he thought it needed major alterations.

“I managed to develop a pretty serious grinding of my teeth about 40B” as a local official, he said.

The Baker proposal would also set a flat, $125 filing fee, down from $500 for C corporations.

Baker would level a split unemployment insurance levy, charging more to employers with high layoff rates, and less to those with a “stable workforce history.” UI rates would be based on three- to five-year average payrolls instead of 12 months.

Baker would set a moratorium on new regulation and order a stem-to-stern review of existing regulations.

Baker would set up a licensing and regulatory oversight board that would review all regulations, licenses, permits and certification classes.

Another bullet point in Baker’s plan called for “stop the madness,” and he said he would “veto any bill that is overly burdensome, anti-competitive, or excessively restrictive for businesses.”

A former Chamber board member, from 2003 to 2009, Baker drew a noticeably smaller crowd than Patrick two months ago when he addressed the group.

Interest group reaction to Baker’s rollout was mixed.

Mass. High Technology Council Christopher Anderson said in a statement, “Baker’s plan recognizes the urgent need for a stable, predictable and competitive employer and employee cost structure. While Massachusetts made significant progress during the 1990s in undoing its deserved image as a high-tax state, recent tax increases on employers have eroded its competitive advantage over peer states. Massachusetts today has a higher corporate tax rate than all but seven other states, and higher sales tax rates than all but nine.   Furthermore, in recent years state tax policy has been focused on setting aside special tax incentives for ‘hot’ economic sectors, rather than making a more competitive playing field for all employers.”

Timothy Sullivan, a spokesman for the state chapter of the AFL-CIO, said in a statement, “Charlie Baker has a tax cut and business appeasement strategy he hopes will create jobs. We need to speed up the recovery, but it's dangerous to speed it up with the car in reverse. Handing over the store to business and hoping they create jobs has never worked. It never trickles down because the elites have deep pockets and alligator arms and never reach into all that change that trickled into their pockets to create jobs. This is why profits are healthy during every jobless recovery: because they choose profits over hiring every time. They use handouts like Charlie Baker serenaded them with today to create profits that they share amongst a smaller and smaller group of themselves.”

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06/10/2010