The Massachusetts House of Representatives passed a so-called “jobs bill” May 23, and sent it to the Senate. But my interviews with state officials reveal that there is no estimate of how much the bill will cost, or how many jobs it will create.
Still, I could not find one person who was not celebrating it as a great victory.
On May 25, J.D. Chesloff, deputy director of the Massachusetts Business Roundtable, said, “We’re pretty excited about it.”
Tamara Small, director of government affairs for NAIOP, a commercial real estate development association, believes it will help sustain the “fragile recovery” in the state’s commercial real estate market. Jim Klocke, executive vice president at the Greater Boston Chamber of Commerce, said, “It’s a very good bill.” And Debi Kleiman, president of MITX, a digital media trade group, enthused about how the bill would “bring people together so they can collaborate and share ideas.”
The jobs bill would take several steps to encourage internships, research, and infrastructure developments. These include establishing and funding a program that matches stipends for interns at technology and innovation start-up companies; funding select state university research projects with matching grants; and giving cities and towns a way to use private funding for infrastructure improvements. If the Senate passes its own version of the bill, the two versions will go into a so-called conference from which a reconciled version could emerge for Gov. Deval L. Patrick to sign.
While enthusiasm for the bill is high among those I interviewed, nobody can put a number on the cost of the bill, or on how it will benefit the economy. I asked, for example, how many new jobs the bill would create, how much it would reduce the unemployment rate, how many new companies would locate in Massachusetts thanks to the bill, and how much those new companies and jobs would boost Massachusetts tax revenues.
Massachusetts Secretary for Housing and Economic Development Gregory Bialecki told me that such quantitative estimates had not been done, and that explaining the benefits is “one of the real challenges of my job.” However, he believes that the jobs bill will help out the state’s economy. For example, small company CEOs tell him that they’d like to take on interns but they lack time to interview candidates at the state’s campuses. The jobs bill would use state IT resources to build websites, so students could post credentials that companies could review to pick the best applicants.
Furthermore, Mr. Bialecki believes that the state matches to corporate internship budgets will help boost the number of interns in the state. Funding this seems to be up in the air. Mr. Patrick’s budget — while continuing to fund life sciences and green technology internships — does not include funding for new internships. However, House Speaker Robert DeLeo’s bill includes $1 million to $2 million to fund these internships.
The business community likes the state’s efforts to “improve the business climate.” This means cutting taxes and regulation. Specifically, Massachusetts has “cut the state income tax every year for the last three years.” Mr. Bialecki threw my questions back in my face — noting, “If I ask any business person or any economist ‘Was that good for business?’ and ‘How many more jobs are added?’ I won’t get a consistent answer. But a wide range of people think this is good for business.”
Mr. Bialecki also believes that cutting regulations will improve the business climate. To that end, over the next one or two years, the state is “getting rid of 50 to 100 state regulations.” As he asked, “How many jobs will that create? I have no idea. But there are over 100,000 businesses in Massachusetts. If I ask each of them, ‘Will you hire one more person because Massachusetts has a better business climate?’ Some may say yes.”
My own interviews with small company CEOs do not confirm this claim. Companies hire when they don’t have enough people to meet growing demand. Tax cuts don’t make a difference when it comes to hiring.
One thing Mr. Bialecki told me sounded quite effective. He says companies come to Massachusetts for the high-level talent — biotech researchers, engineers or fund managers — in Boston west to I-495. Mr. Bialecki has made the argument, often successfully, that those companies can perform lower-paying activities — such as manufacturing and call centers — in Worcester or Springfield. To that end, he has made the case to pharmaceutical companies that design drugs in Kendall Square to manufacture in Worcester after they’ve received FDA approval. And he helped persuade Liberty Mutual, headquartered in Back Bay, to open a 300-person call center in Springfield.
Another provision of the jobs bill — a $50 million matching grant fund to be financed through a bond issue — is quite popular. According to my May 24 interview with Ed Blaguszewski, spokesman for UMass Amherst, half of the money would be for UMass, with the rest for projects at other Massachusetts research institutions.
Peter Cohan of Marlboro heads a management consulting and venture capital firm, teaches business strategy and is the author of 10 books. His column also runs Mondays and Wednesdays on telegram.com. His email address is peter@petercohan.com.
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