March 2007
Volume 30, Number 3
March 2007
Gov. Patrick Discusses Economy, Education, Taxes at Council Annual Meeting
Governor Deval Patrick served as the keynote speaker at the Massachusetts High Technology Council’s 2007 Annual Meeting on March 7. Also taking the podium to address the state’s technology leadership at the Burlington Marriott were Fidelity Management & Research Vice Chairman Peter Lynch, Massachusetts Commissioner of Education David Driscoll and MKS Instruments Chairman John Bertucci, who began his second year as chairman of the Council.
Patrick Outlines Economic Philosophy
Patrick called for an economic strategy that is built around science and technology and winning the global competition for talent. He said that “sustaining the economy is job one.” His budget was designed as a “blueprint for reaching our goals” by making tough fiscal decisions and investing in priorities.
Patrick said he wants to support growth in technology sectors including life sciences and clean energy. But he stressed that the state economy needs to be “much more than stem cells and windmills.” Recently, Patrick endorsed the concept of global challenge centers, like those proposed through the Council-supported Global Mass 2015 campaign. At the Council meeting, Patrick indicated he hoped to make “significant capital investments in higher education,” which could help create incentives for the University of Massachusetts and the state’s private universities to collaborate on landing significant federal Research & Development awards – an expanded version of the low-risk, high reward matching grant model through the John Adams Innovation Institute. Patrick also touted his hiring of a much-needed new permitting ombudsman to help business expand or cite new facilities in Massachusetts.
Taking a New Tone on Taxes
The new Governor directly addressed his proposal to close so-called corporate tax loopholes included in his budget. His recommendation to increase corporate taxes nearly $500 million annually has been met by universal opposition by the business community. While the Administration has labeled the tax code changes as closing loopholes, employers feel that the changes are tantamount to a significant tax hike that will make Massachusetts less competitive.
While Patrick has taken a more strident tone when discussing the tax code with other audiences, the Boston Globe’s Peter Howe reported that Patrick “assured a powerful association of high-tech chief executives that he's not saying they're tax- evading scofflaws.” Patrick believes that his tax proposal “won’t hurt our ability to compete” and he sees it “as an aspect of modernizing the tax code so we can make the kinds of investments we need to make for individuals and corporations in the Commonwealth.”
Bertucci cautioned that with a higher corporate tax burden, “it is certainly possible to imagine that businesses will be driven out of the state or they'll be put in such a competitive disadvantage that they'll stagnate and fail." But he emphasized that the Council is committed to working with the governor to create a comprehensive economic development strategy for Massachusetts, including potential reforms to the state tax and business cost structure.
Patrick Praises Council’s Education Efforts
Patrick lauded the Council and President Christopher Anderson, through his role as Board of Education Chairman, for leading efforts to take the state’s education system to the next level. Patrick said his administration is committed to creating a “world-class education system” in Massachusetts and that his budget provided $250 million in new education funding.
Anderson highlighted the Council’s Education Leadership Initiative, led by Council Directors Ray Stata of Analog Devices and Henri Termeer of Genzyme. The collaborative, which will meet at the end of the month, is bringing new constituencies into a group that includes the state’s teachers’ unions, school superintendents, lawmakers, higher education officials and business leaders. For more information on the effort, please visit the education page at www.mhtc.org.
Lynch, Driscoll Talk Education
Continuing a theme that reflects the priority of public education among the technology community, both Lynch and Driscoll focused on education during their remarks. Lynch discussed his efforts to support The Catholic School Foundation/ Inner-City Scholarship Fund and the contribution of parochial schools in the K-12 education continuum. Driscoll, in his typical direct style, said that the United States is “sleeping through a crisis” and falling behind competitor nations in educational excellence. He credited Anderson and BOE members for raising the MCAS proficiency standard and enrolling the state in a global student performance benchmarking program.
CEO Survey Points to Job Growth
The results of the Council’s 2007 CEO High Tech Business Climate Survey point to a positive year for job creation in the state’s diverse technology economy with more than two-thirds of participating CEOs planning to add jobs this year. But it also indicated that technology leaders are increasingly concerned about the state’s tax climate and public education pipeline.
“Education and fiscal issues came in as the top priorities for the Council’s CEO members,” said Bertucci. “It is a global imperative for Massachusetts to improve its education system, particularly in math and science. And we must maintain a stable, predictable and competitive cost climate to compete in the global economy.”
Bertucci noted that for the third straight year a majority of CEOs planned to grow their workforce in 2007. The survey revealed that 68 percent of participating CEOs expect job expansion this year, a 13 point increase from 2006. Only four percent anticipate their company to reduce workforce in 2007.
The survey also revealed:
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75 percent view Massachusetts as a good or outstanding place to run a high tech company – up from 70 percent in 2006;
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88 percent believe the state’s technology economy is “improving” or “holding steady,” up nine points from last year but down from 96 percent in 2005;
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14 percent say the climate is improving, down from 20 percent last year; and
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12 percent say the climate is worsening, down from 21 percent in 2006.
“While the job and climate numbers are heading in the right direction there are still some concerns because of the growing threat of global economic and educational competition,” said Anderson. “Massachusetts needs a long-term, technology based economic development strategy that builds on our core technology strengths and links to the state’s public education system.”
Economy, Education Dominate Policy Priorities
The annual survey helps set the Council’s public policy agenda this year. Top priorities for technology employers, as defined by the CEO survey, include:
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Supporting the development and implementation of a statewide tech-based economic development plan;
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Opposing new taxes and protecting existing competitive tax policies, including the creation of a more competitive state capital gains tax rate;
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Creating a world-class public K-12 education system, with a particular focus on math and science teachers;
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Reforming the state’s Unemployment Insurance system to make it competitive with other states; and
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Strengthening UMASS as a world-class public higher education system.
For a full view of the survey results and the Council’s 2007 public policy priorities, please visit www.mhtc.org.
Council Elects 2007 Board of Directors
The Council also elected its slate of new directors and officers for 2007. Joining Bertucci on the leadership team are: new Vice Chairman, Joshua Boger, President & CEO of Vertex Pharmaceuticals; returning Treasurer, James Regan, Chairman, President & CEO of Dynamics Research; and long-time Secretary, Paul Gauron, a Senior Partner at Goodwin Procter.
For a complete listing of the Council’s 2007 Board of Directors, please visit www.mhtc.org.
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