Tax/Economic Policy 
 
The Council was the only employer association to urge the Legislature to freeze 2009 Unemployment Insurance rates to avoid a $110 million increase in payroll costs to all Mass. employers.  We were unsuccessful.  Claims that Mass. unemployment rates would soar into the double-digits and exceed the national unemployment rate turned out to be incorrect.  Our unemployment rate remains at single digits, below the national average.
 
Expanding on a top-line comparative review of Massachusetts and competitor state tax policies presented to the Board in December 2008, the Council further established a framework for regaining "best-in-nation" tax incentives in work conducted by Ernst & Young, KPMG and Deloitte.  This framework will allow the Council to make tax reform a key issue during the 2010 gubernatorial and legislative elections, which are expected to be the most intense and competitive contests in decades.
 
The Legislature voted to create a more streamlined state transportation system consistent with the Council's recommendation, which was presented to the Joint Committee on Transportation hearing held on March 11.  The new law consolidates various transportation agencies and puts system reform ahead of new toll or gas tax increases.   The new system, which went into effect on November 1, is expected to produce $1 billion in efficiencies over 10 years.

Defense Technology Initiative
 
After launching the Natick Army Soldier Systems Center Science and Technology Board in 2008, the Defense Technology Initiative (DTI), under the direction of Executive Director Gen. Donald Quenneville, helped establish a similar board at Hanscom Air Force Base.  Incoming Council Chairman Jim Regan (see below) was elected chair of the new board at its inaugural meeting on October 14. The Council and DTI worked closely with Hanscom Air Force Base Commander, Lieutenant General Ted Bowlds, throughout 2009 to create the Hanscom Air Force Base Electronic Systems and Software Science and Technology Board.  This board will connect the region's industry, university and military assets to enhance cooperation between Hanscom's Electronic Systems Center and New England's premier defense technology cluster.
 
DTI has taken up the challenge of protecting critical networks from intrusion, password theft, denial of service, data manipulation, data modification or any other of the myriad of network attacks. To this end, DTI is proposing to establish a Consortium (the DTI Cyber Technology Consortium) of cyber technology companies, academic institutions and non-profit organizations that will enter into agreements with the federal government (initially intended to be the Electronic Systems Center at Hanscom AFB) for the purpose of streamlining the acquisition process for cyber technologies. A proposal for consideration by the Council's leadership team is targeted by the end of 2009.

Council Opposes Healthcare Tax Increase 
 
In November, an obscure Patrick Administration labor board quietly voted to double the employer tax that funds the Medical Security Trust Fund (MSTF), a relic of Governor Dukakis' failed single-payer healthcare efforts during the 1980s.  The MSTF is scheduled to incur a significant deficit next year in large part because the fund has been raided by the Legislature in recent years to balance the state budget.  The Administration - and some employer groups - touted the $44 million annual tax increase as part of a deal that could potentially mitigate the scheduled, astronomical increase in unemployment insurance rates for 2010.  We disagree.  As of now, UI rates on you and every employer in Massachusetts are set to increase by approximately 30%-40% in 2010.  Unfortunately, none of the reforms that attack the cost-drivers are even close to being addressed.
 
During the 2006 healthcare reform debate on Beacon Hill, the Council called for the elimination of the Medical Security Trust Fund (MSTF), which is funded by a tax on employers to provide temporary healthcare coverage for displaced workers.  The Council argued that because workers would have enhanced access to coverage through the 2006 healthcare reform law, this fund would no longer be needed.  In addition, an administration official admitted that the main reason why the MSFT balance was low was due to a $104 million legislative raid on the account in 2002.
 
This "deal" is bad economic policy in many ways.  Rather than adding new costs and creating a less stable and predictable business cost climate, the employer community and government leaders should embrace the historic opportunity to reform the state's uncompetitive UI structure - the most costly in the nation and up to ten times more expensive on average than some competitor states.  Massachusetts' overly-generous UI benefit and eligibility structure are outliers to the rest of the nation and the mechanism for setting annual UI rates is antiquated and unpredictable.

2010: A Sneak Peak
 
The High Tech Council will be ushering in a new team of officers at our 2010 Annual Meeting which will be held in early 2010 (details are in development).  Under the stewardship of our members, directors, and current and incoming team of officers, we are poised to strengthen our membership and build on our record of results-oriented public policy accomplishments and influence. Our public policy agenda will continue to be focused on transforming our public education delivery system to create more alignment with the future workforce required by our innovation economy; redouble our focus on regaining a competitive tax environment in Massachusetts that more effectively supports our diverse technology economy; and begin developing a comprehensive energy/environmental policy strategy to support clean energy technology and job growth.

Season's Greetings 
 
During this time of year we take stock of the things that are truly meaningful to us.  No matter what holiday tradition each of us follows, the most important focus in life goes beyond what we occupy ourselves with at work.  It's about our family, our friends, our community and our faith.  As you gather with those closest to you in the coming days and weeks, each of us at the High Tech Council wish you our heartfelt holiday wishes for peace and love.