Mass. Needs Tough Choices to Spawn Jobs and Innovation (Mass High Tech)

Friday, December 19, 2008

“The Chinese use two brush strokes to write the word ‘crisis.’ One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger — but recognize the opportunity.” — John F. Kennedy in a speech in Indianapolis, April 12, 1959.

Certainly much has changed since John Kennedy spoke these words, but the fundamental principle of clear thinking and innovation in the face of a difficult situation is timeless. During the past several months we have witnessed unprecedented economic tumult, and it is important for lawmakers, business leaders and the public to recognize both the danger and opportunity at hand.

Gov. Deval Patrick has shown leadership this fall by making $900 million in cuts, freezing spending and paring payroll, without relying on new or increased taxes. In fact, he made the biggest one-time cuts by any governor in history. He has also publicly suggested that he is willing to take a new look at state spending by taking a zero-based budgeting approach that requires a justification of any spending — old or new — throughout state government.

The governor’s leadership in addressing the fiscal crisis head on is commendable, but Beacon Hill leaders will be tested in 2009 with continued slowing revenue, a national recession, a budget-busting health-care program and other challenges. This comes on the heels of a two-year legislative session that on the whole made Massachusetts less globally competitive.

In 2008 we saw taxes and health-care assessments increase more than $500 million for employers, and in 2009 we are scheduled to see a $100 million-plus increase in unemployment insurance rates. These actions were reflected in the Massachusetts High Technology Council’s biennial MassTrack Legislative Scorecard on which the average score dropped from 80 percent in 2005-2006 to 42 percent in the 2007-2008 session.

The economic downturn presents opportunities to enhance our state competitiveness by reforming antiquated and inefficient government policies and programs. For more than 30 years the council has fought for a solid, competitive, and predictable public policy climate that fosters economic growth. For Massachusetts, it means transforming our education system to help our students compete with students from around the world, reducing tax barriers that inhibit job retention, fixing archaic systems before looking for new taxes, and expanding incentives for new job growth to the entire innovation economy.

In light of the current situation, Gov. Patrick has intimated that he will make the tough but wise decision to pursue efficiencies in education. Adopting cost-effective health-care options without sacrificing coverage for education professionals and regionalizing procurement in order to finance the top priorities of the Readiness Project is a sign of good faith to taxpayers. Additionally, we must continue to improve on the basic tenets that have made us the gold standard for education in the U.S., including a strict adherence to standards and expansion of proven reforms, including charter and pilot schools.

In the spirit of the efficiencies-first education and zero-based budgeting reforms now under consideration, we urge that unemployment insurance reform be reconsidered as well. Massachusetts is out of sync with the rest of the country, boasting the second highest payroll tax in the nation. 

There is room for sparking growth in 2009. The life sciences industry continues to grow, and key expansion projects foretell a promising future. Expanding the life sciences tax credits to the entire technology sector will signal a strategic policy shift to encourage job growth throughout the tech economy. Clean energy, defense and information technology (among others) are major sectors of our innovation economy, and technology job growth is a boon for the Massachusetts economy.

Together, we need to consider and act on making the tough choices brought on by tough times in order to realize the opportunity inherent in the danger we currently face.

Chris Anderson is president of the Massachusetts High Technology Council, based in Waltham.