May 2008
Volume 31, Number 3
May 2008
DTI Goes Regional, Health Care Bill Hits Biopharma, Biz Tax Bill Falls Short, MHTC Clean Energy Program Launched
Defense Technology Initiative Goes Regional
On April 9, the Massachusetts High Technology Council joined with leading technology organizations from across New England to launch the Defense Technology Initiative (DTI), a new six-state network that will work to grow the region's premier defense technology cluster. DTI's mission is to create jobs, strengthen the regional workforce and increase the defense community's political clout with the Pentagon and on Capitol Hill.
The new DTI will broaden the mission of MassDTI, which previously worked to strengthen the Massachusetts defense sector after successfully leading the state's private sector efforts in the 2005 federal Base Realignment and Closure (BRAC) . DTI has created partnerships with leading technology organizations throughout New England to create a regional defense technology agenda. DTI partners include the New Hampshire High Technology Council, the Rhode Island Economic Development Corp., TechMaine and the Connecticut Technology Council.
"Recent political, economic and workforce trends have highlighted the need to create strategic alliances throughout New England and design a strategy to grow the broader regional defense sector," said Steve Jamison, DTI Chairman and BAE Systems VP & General Manager. "We believe that a unified New England defense community is stronger than the sum of its parts."
DTI, based in Waltham, will be run by executive director Brigadier General Donald Quenneville USAF (Ret.). In January, Quenneville was named executive director of MassDTI.
DTI's regional partners indicated an eagerness to implement a regional agenda.
"Taking a regional approach to addressing defense industry needs makes sense for our member companies and the DOD," said Matt Pierson, Chairman of the New Hampshire High Technology Council.
"DTI will help partner states rally around a regional vision for the sector that creates new connections across traditional boundaries and positions the region for a level of growth that is only possible through collaboration," said Saul Kaplan, Executive Director, Rhode Island Economic Development Corporation. "We are pleased to be a part of this important initiative."
DTI will continue to be governed by its board of directors, which includes Jamison, Dynamics Research Corp. Chairman and CEO James Regan, MITRE Senior Vice President Robert Nesbit and University of Massachusetts President Jack Wilson. An advisory board representing each of the New England states has been recruited to tap the expertise of industry, government and university leadership throughout the region.
Senate Bill Addresses Health Care Costs …..
During the debate leading up to passage of the state's 2005 universal health care bill, the Council was a leading voice encouraging the state to address the skyrocketing costs of employee health coverage as it worked to expand access to all residents. In 2004, the Council teamed with more than 20 state business associations declaring support for e-health initiatives and creating cost transparency at hospitals, among other measures, that would address the challenges facing employers in Massachusetts.
Recent reports have shown the state's universal health care program is facing significant funding shortfalls. This is in large part due to the fact the focus of the 2005 law was almost exclusively on increasing access to health care. To remedy this situation, Senate President Therese Murray sponsored legislation that attempts to create cost savings throughout the system. The bill, passed unanimously by the Senate, includes many longstanding Council priorities, including enhanced e-health programs and cost transparency for medical providers. The Council applauds President Murray for initiating the debate on controlling health care costs.
…But Anti-Biopharma Provision Remains
Unfortunately, the bill includes a provision that would seriously undercut steps to grow the state's life sciences cluster. The provision would make Massachusetts the only state in the nation to effectively ban drug and medical devices education for doctors. The provision would derail the ability of biopharma companies to deliver vital information about potentially life saving drugs, and goes as far as threatening jail terms and significant fines for physicians who accept speaking fees, many marketing materials and even participate in symposia that involve meals. It also seeks to license and charge certain pharmaceutical and medical devices employees a fee for doing business in Massachusetts.
On March 31, Council President Chris Anderson penned an op-ed piece in the Boston Globe clearly articulating the long-held belief that the business community strongly favors increased transparency and cost mitigation in the health care field. The piece was published as the bill, SB 2650, was being considered by the Senate for a vote. In the op-ed Anderson wrote:
"However, the recommendation to prohibit pharmaceutical companies from effectively educating doctors on life-altering drugs runs counter to the stated goal of controlling costs, as evidenced by the lack of specific cost savings projections publicly tied to the education ban. Unfortunately, it is more of a political proposal than a fiscal one.
"It would be shortsighted for the Commonwealth to commit $1 billion for the state's life sciences industry while simultaneously undercutting biopharmaceutical employers that are expected to create jobs here. Last year, a High Tech Council study conducted by the University of Massachusetts discovered that from 2000-2006, 13 of the leading pharmaceutical firms invested more than $13.4 billion in state biotech companies - far outpacing venture capital biotech investment. The study revealed that this investment typically occurs during the early stages of drug development when many drugs fail due to lack of funding. The lesson is clear: if the state deliberately works against the biopharmaceutical sector, it is hurting the entire life sciences community - and ultimately hurting patient care."
Despite a last minute amendment to strip the damaging provision from the bill, the anti-business language remained and the bill was unanimously passed by the Senate. The Council will continue to fight diligently to separate the strong cost saving measures in this bill from the anti-business education ban that undercuts a well-intentioned effort as the bill is taken up in the House.
Despite Goals, Biz Tax Bill Clouds Economic Climate
The Massachusetts House recently passed HB 4488 the "Corporate Tax Fairness" bill. This bill emerged from a Corporate Tax Task Force appointed by Governor Deval Patrick, Senate President Murray and House Speaker Sal DiMasi that was originally tasked with "closing corporate tax loopholes" while creating a "meaningful" reduction in the corporate excise tax to mitigate the burden caused by the former.
This bill adds both 'check the box' and 'combined reporting' measures to the Massachusetts tax code. 'Check the box' requires that companies use the same classification under state and federal tax filings. 'Combined reporting,' frequently known as a 'unitary tax,' levies state taxes based on a survey of a company's holdings throughout the US, rather than within the state. The meaningful reduction in the corporate excise tax has been diminished from the House's original proposal of a rollback from 9.5%-7% from 2009-2111 and the bill now heads to the Senate with a three-year reduction ending in a 2111 rate of 7.5%.
The Council has consistently called for a stable, predictable and competitive tax climate - a philosophy that is even more salient in a sluggish national economy. It is counterintuitive during an economic downturn to add new costs on employers already saddled with the nation's highest unemployment insurance burden and skyrocketing health care costs. With key business development initiatives like the life sciences bill nearing final approval, now is not the time to send the conflicting messages to industry that the Commonwealth is at once open for business and contemptuous of its presence here.
Additionally, this bill provides too much discretionary power to the Commissioner of Revenue. In a bill that was ostensibly designed to bring "fairness" and predictability to the state's Byzantine tax code, this provision only increases uncertainty about the business climate among employers.
Council Holds Clean Energy Summit
On March 26 the Mass. High Tech Council and New England Clean Council hosted an important climate change program: Clean Energy for High Tech. The event featured an unveiling of the MHTC Clean Energy Program as well as a discussion of strategies and solutions to enable companies to reduce energy costs and carbon emissions.
More than 125 attendees heard from a variety of speakers in the clean energy field as well as environmental and sustainability executives from Genzyme and Staples, companies who have led the charge in clean energy. Copies of the presentations are available at www.mhtc.org.
The High Tech Council also announced the MHTC Clean Energy Program, a new feature of our existing energy program which has saved more than 35 participating members an aggregate $50 million over the past 12 years. The Council's program has a current annual load of 1.85 billion kWh or approximately four times Boston's Municipal energy usage.
The clean energy feature was developed in response to significant interest from High Tech Council members. The primary goals of this program are to help establish and meet carbon emissions reduction targets via a series of supply and energy efficiency strategies, and provide increased opportunities for energy customers to participate in appropriate demand response programs in New England. The program is supported by a team of energy services professionals from Constellation NewEnergy, SourceOne, EnerNOC, Aircuity, National Grid, and NStar.
If you're interested in learning more about the MHTC Clean Energy Program, please contact Daniella DeChristopher, the Council's Director, Member Services at daniella@mhtc.org.
Mass. Teacher of the Year to be Honored at Fenway
Massachusetts Teacher of the Year Michael Flynn will be honored by the Boston Red Sox at Fenway Park on May 22. Flynn, a second grade math and science teacher at the Norris Elementary School in Southampton, will throw out the ceremonial first pitch at the Red Sox game against Kansas City Royals.
Flynn was a featured speaker at the Council's gala 30th Anniversary Dinner and has incorporated elements of baseball and other sports to engage students in his science and math curriculum. Through the efforts of Council President Chris Anderson, the Red Sox and other area teams are recognizing excellence in the classroom and the importance of STEM education by honoring the Massachusetts Teacher of the Year at sporting events throughout this year.
Tsongas and Quenneville to Headline Defense Breakfast
Defense Technology Initiative and WolfBlock Public Strategies
Present: Congresswoman Niki Tsongas Friday, May 16, 2008, 7:45-9:30 am (continental breakfast served)
Hosted by Mercury Computer Systems, Inc. 199 Riverneck Road, Chelmsford Cost: $25 per person (cash or check) Directions: www.mc.com/about/default.aspx? id=6818
Please join us to hear Congresswoman Niki Tsongas, a member of the House Armed Services Committee, discuss her work on behalf of national defense issues that impact the country and Massachusetts businesses and citizens. The event will also feature Defense Technology Initiative Executive Director Brigadier General Donald J. Quenneville (USAF, Ret.).
The event is intended for executives and representatives of defense firms of all sizes as well as organizations that have a connection to the defense industry. It is an ideal opportunity to personally meet with a key member of the Massachusetts congressional delegation and engage with businesses, academic institutions and many involved in defense.
Congresswoman Tsongas is currently serving her first term as a Member of the US House of Representatives representing the Fifth Congressional District of Massachusetts, which contains a significant number of defense employers. She is the first woman to be elected to Congress from Massachusetts in 25 years.
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