Additional Talking Points/Background On The
House Economic Stimulus Package H4404, Passed 10/6/05.
• The core of the House economic stimulus package passed by the Massachusetts House of Representatives last week is an astounding $200 million for land development by large corporations. The requirement that corporations must promise to create 100 or more new jobs provides little justification for such a generous commitment of taxpayer dollars, since the record of jobs actually delivered in exchange for corporate subsidies of this type is very poor.
• Further, there is little evidence to support the claim that such corporate subsidies effectivelystimulate the economy. There is far greater evidence to support the economic benefits of properly funding health care, affordable housing, education, energy conservation and efficiency. The state’s shameful underfunding of these programs – following the massive budget cuts since 2001 – should be addressed before revenues are diverted into corporate land development schemes.. (See http://masschc.org/story.php?id=220.)
• The economic stimulus bill is one portion of a two-part plan providing both public land and tax-payer funded infrastructure to large corporations. The outlines of the plan were proposed by Speaker DiMasi in March of this year. (See http://masschc.org/story.php?id=182.) The House economic stimulus bill provides the funding for the infrastructure. A separate land-privatization bill before the House known as H4278, or Jones-Stanley would provide the access to public lands, valuable parcels on which these corporate subsidies can be applied. Dividing this double-dose corporate welfare scheme into two poorly scrutinized bills has helped keep it out the of public eye. Yet such a major commitment of public lands and resources deserves scrutiny before being rushed into law.
• There are additional provisions of serious concern – about which there has been little public discussion. They include the following:
• A so-called “regulatory relief” measure targets state environmental protections that exceed Federal Standards for the purpose of “identifying regulatory burdens that place Massachusetts companies at a competitive disadvantage”. The rationale for identifying these “burdens” is for the stated “purpose of” facilitating economic development and job growth.” By creating a target list of state regulations that are more protective than the frequently inadequate Federal standards, pressure is created to prevent future protections exceeding Federal standards. The list also lays the groundwork for a race to the bottom among states competing to attract business by cutting environmental protections. This short-sighted proposal ignores the importance of a healthy environment and effective regulatory standards to a healthy economy (Section 88 in the text, 89 in the bill summary)
• A property tax exemption for R&D; Companies is made possible by a provision allowing research and development to be defined as manufacturing for this purpose. Extending this exemption to R&D; companies would be a local option, but the possibility itself pressures municipalities to adopt the exemption to compete with each other to draw R&D; businesses. This exemption will place further pressure on home property taxes that are already under severe strain. The potential costs of this exemption to the Commonwealth’s municipalities should be calculated as part of the needed debate on the measure. (Section 33-39 in the text, 34-40 in the bill summary)
• A new council on Science, Technology, Engineering and Mathematics (STEM) Education, within the board of higher education, will bring major industry representation to higher education policy recommendations. The so called “Goddard Council” will advise the Chancellor of higher education and the legislature regarding STEM education and workforce development. The Council will also pursue alternative funding for STEM programs. Representatives of private industry (or quasi-public agencies promoting private development) will occupy nearly one-third of the seats on the 23 member board. Bringing such a strong industry voice to higher education policy-making has important implications for the culture and quality of public higher education that deserve public debate before such administrative entities are voted into law.
• It should be noted that the House Stimulus Package provides support for valuable initiatives such as workforce development and environmental clean up . These initiatives are in the range of $150 million. (The official cost is not currently available.) These programs are important concerns, but do not justify $200 million in corporate subsidies that will drain state coffers of funds needed by these very priorities. These measures should be advanced without the baggage of H4404.
• Neither the Economic Stimulus Package or the Jones-Stanley state land-privatization bill have received adequate public hearings. There has been no objective economic analyses of whether their expenditures are justified. Both should be subject to adequate regional hearings and review by objective economic experts. A full accounting of the tax expenditures in the bills should be presented so that the final price tag to the taxpayer is known. Results of these efforts should be used to write a much better bill that addresses urgent, unmet community needs and does not squander scarce state revenues on ineffective corporate welfare.