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Baker considers merger of tech, biotech, energy agencies

Mar 5, 2015Boston Globe, Council in the News

By Robert Weisman and Priyanka Dayal McCluskey

The Baker administration is considering a plan to merge the Massachusetts Life Sciences Center with quasi-public agencies that support the clean energy and high-tech industries.

Jay Ash, the state’s new housing and economic development secretary, said state officials have been talking to business groups about possibly consolidating the agencies.

“It’s being discussed,” Ash said. “We’re looking at ways to better coordinate our services. Everything’s on the table for economic development. But there’s no proposal.”

Meanwhile, future funding for the Life Sciences Center, an agency that promotes the biotech and pharmaceutical industry, appears to be uncertain. Baker’s budget plan, unveiled this week, does not include money for the agency, though a spokesman said that would not prevent the administration from providing funding in future supplemental budgets.

“This doesn’t mean the Life Sciences Center would go unfunded,” said Dominick M. Ianno, chief of staff at the Executive Office for Administration and Finance.

The agency typically receives funds from state budget surpluses. It is operating with about $11 million this year to finance its grant programs and a staff of 18 people.

Ianno said Baker deeply values the life sciences industry but is reviewing all state agencies to determine the most effective way to deliver government services.

Baker’s budget for next fiscal year includes $24.5 million for tax credits for life sciences companies, the same amount allotted in the current budget. The tax credits are part of a law that former governor Deval Patrick signed in 2008.

That life sciences initiative, which envisioned state spending of $1 billion over 10 years to boost the industry, was a signature achievement for Patrick, who regularly met with biotech industry executives and urged them to do business in Massachusetts.

The Boston area has become a biomedical research hub, and Patrick credited the state’s industry-friendly policies with adding jobs here.
But incentives for the industry have come under fire, including in a report last year from the conservative-leaning Pioneer Institute, which said the perks created modest job growth, at best — and at the expense of other industries.

“Massachusetts would be much better off giving tax credits to the broader research and development industry rather than a relatively small subset,” said the Pioneer Institute’s research director, Gregory W. Sullivan, a former state inspector general who will update his report on Friday.

The idea of consolidating the Life Sciences Center with the Massachusetts Technology Collaborative and the Massachusetts Clean Energy Center has been pushed by some executives in other innovation sectors who complain that the incentives offered to life sciences companies are more generous than those for other industries.

Christopher Anderson, president of the Massachusetts High Technology Council, said council leaders and others proposed an “uber agency” to the Legislature and the Baker transition team last fall.

“We are interested in having a coordinated economic development strategy for promoting our technology sectors, and you don’t do that efficiently with multiple agencies that have their own overhead,” said Anderson.

The idea was debated by the transition team before the new governor took office, according to two people familiar with the deliberations, but no decision was made. It is opposed by the Massachusetts Biotechnology Council, a life sciences industry trade group.

“Having an industry-specific agency for one-stop shopping has been very helpful,” said council president Robert Coughlin. “The Life Sciences Center has played a significant role in recruiting the companies that have moved here in the last eight years and assisting the smaller companies that want to grow. They understand the life sciences industry. If you have an uber agency, you could dilute that knowledge.”

Angus McQuilken, spokesman for the Life Sciences Center, said the agency is proud of the impact it has had.

“We understand that the state is facing challenging budget circumstances,” he said. “We look forward to working with the administration and the Legislature as the budget process moves forward.”

Baker’s budget proposal is the first draft of a budget that ultimately must be approved by the Legislature and signed by the governor.

Increasingly, the Massachusetts High Technology Council is stepping up to create, execute, and lead critical statewide competitiveness strategies. Fostering a vision for our innovation economy under the MassVision2050 banner, the Council solidifies its position as a thought leader providing valuable insights to navigate emerging technologies, facilitates long-term planning, and reinforces the Council's commitment to excellence and action in the evolving Massachusetts tech-driven economy.

To learn more, contact Council President Chris Anderson.