Boston Globe, Scott Greenberger and, Author: Scott S. Gre 2005-03-18
DiMasi to Seek Tax Breaks for Job Creation
Scott S. Greenberger and Janette Neuwahl, Globe, staff and Globe Correspondent
Boston Globe, The (MA) March 18, 2005
House Speaker Salvatore F. DiMasi yesterday unveiled
Beacon Hill’s latest plan to create jobs, telling a
group of business leaders that the state should give
tax breaks and lease its surplus land to companies that
pledge to hire at least 100 workers.
“I am committed to finding new ways to make it easier
for companies to grow or locate in Massachusetts,”
DiMasi told the roughly 300 people at a breakfast
sponsored by the Greater Boston Chamber of Commerce.
“Together, we can cut through red tape, provide real
tax incentives, and demonstrate that we understand how
to attract new business and create expansion
opportunities for existing business.”
Under DiMasi’s plan, the state would open some of its
3,700 acres of surplus land to businesses and take over
the permitting process for the selected parcels,
cutting red tape for the companies. Currently, it takes
an average of two years to permit a property, DiMasi
said. Businesses that pledge to create 100 jobs, adding
5 percent each year after that, would be eligible to
lease the parcels. They would also be exempt from
paying state corporate excise taxes for five years.
“Why sell off state land for a quick cash infusion when
you can leverage these properties for long-term
sustainable investments by the private sector?” DiMasi
said.
Compared with the rest of the nation, the Massachusetts
economy’s emergence from the doldrums has been
painfully slow: The Bay State still has 181,000 fewer
jobs than it did at its peak of February 2001, before
the recession.
Although the employment numbers have picked up in
recent months, legislators and Governor Mitt Romney
have been discussing ways to jump-start job creation.
Last month, Romney proposed a $600 million plan that
would streamline development rules, cut unemployment
insurance taxes, and pay companies $10,000 per new job.
Representative Daniel E. Bosley, the North Adams
Democrat who is cochairman of the Committee on Economic
Development and Emerging Technologies, said DiMasi’s
approach makes more sense than Romney’s.
“We’re saying: `Let’s go into this for the next five
years. We’ll do this for you if you can keep 100 jobs
here,’ ” Bosley said. “It’s a much better way to do
something than just throwing money at businesses. This
anchors businesses by giving them land.”
DiMasi said the ideas he put forth yesterday are part
of a larger package of measures the House will consider
in the coming months. His remarks left out significant
details, such as how much surplus land the state would
make available and how much the incentives would cost.
Neither he nor his aides could answer those questions
yesterday. DiMasi has not determined whether the land
would be leased to companies at market rate or whether
they would get a discount.
“The cost is minimal for what we could get in return
from the development and creation of new jobs,” he told
reporters after the speech.
Romney spokeswoman Shawn Feddeman said agreement
between the governor and the House leader on the need
to speed permitting is “an exciting development.”
Romney’s plan calls for quicker permitting on land
selected by cities and towns, but Feddeman said the
governor is open to DiMasi’s idea.
Business leaders also reacted favorably to the
speaker’s proposal. Jim Klocke, vice president of the
Greater Boston Chamber of Commerce, said “businesses
will be glad he wants to address the permitting issue.”
Richard Lord, president of Associated Industries of
Massachusetts, called it “one component of an overall
economic development strategy.”
Aaron Gornstein, who heads the Citizens Housing and
Planning Association, sounded a cautionary note, saying
he hopes DiMasi’s initiative doesn’t hamper the
development of more affordable housing. In the past two
fiscal years, according to Gornstein, the Division of
Capital Asset Management has raised about $25 million
by auctioning the land from former state hospitals and
armories to private developers, and much of it has been
converted to housing. Because yesterday was a Suffolk
County holiday, officials could not be reached to
confirm that figure.
“We would hope that affordable housing would be part of
what’s being considered when it comes to disposing of
state surplus land,” Gornstein said. “It would make
sense to have housing located near new business
development.”
In addition to leasing the surplus land, DiMasi said
lawmakers should bolster Bay State businesses by
encouraging stem-cell research, looking into wireless
Internet access for the entire state, and refurbishing
aging roads, railways, and bridges.
He also promised to scrutinize Romney’s proposal to
close about $170 million in what the governor described
as corporate tax loopholes. That measure, the third
such plan in three years, has angered many business
leaders.
“The whole tone was positive,” Lord said.
But Alan Clayton-Matthews, an economist and professor
of public policy at the University of Massachusetts at
Boston, said states have tried all kinds of incentives
to entice businesses to relocate or expand, with mostly
unimpressive results. Overall economic health tends to
be determined by much broader, even global, factors
that are beyond a governor or legislature’s control, he
said.
Clayton-Matthews said DiMasi’s plan sounds reasonable,
as long as parcels are selected carefully. Generally,
such incentives “have some small impacts, but not big
impacts,” he said.
