Governor Deval Patrick's Budget Recommendation - House 2 Fiscal Year 2009

Governor's Budget Recommendation FY 2009

Economic Development Initiatives

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Governor Patrick    FY09 House 2 Budget Recommendation:
    Issues in Brief

    Deval L. Patrick, Governor
    Timothy P. Murray, Lt. Governor



Over the course of 2007, total employment in the Commonwealth grew by over 24,000 jobs from the December 2006 level, improving the State's national ranking in job growth from 49th place for the years 2001-2006 to 15th. Building on the 2007 successes the Governor's budget proposes key investments in State economic development tools which serve to strengthen the economic climate in the Commonwealth and expand job opportunities for its residents.

Massachusetts Jobs
(Seasonally Adjusted)
Unemployment Rate
(Seasonally Adjusted)
These two charts one titled Massachusetts Jobs and Unemployment Rate.  The chart Massachusetts Jobs shows a steady increase of, seasonally adjusted, jobs from November 2006 with 3.25 million jobs to November 2007 with 3.28 million jobs.  Also shown on the Massachusetts Jobs chart is a breakout by month with November 2007 with an employment number of 3,285,300, October 2007 with 3,278,600, and November 2006 with 3,256,000. The Unemployment Rate chart, seasonally adjusted, shows the percentage drop in the unemployment rate by month from November 2006 to November 2007.  A summary chart shows November 2007 with a Massachusetts rate of 4.3% and US rate of 4.7%; October 2007 with a Massachusetts rate of 4.3% and the US rate of 4.8%; November 2006 with a Massachusetts rate of 5.2% and a US rate of 4.5%.
Month YearEmployment
Dec 20073,282,100
Nov 20073,284,800
Dec 20063,258,000
Month YearMAUS
Dec 20074.5%5.0%
Nov 20074.3%4.7%
Dec 20065.2%4.4%

New investments in the Life Sciences sector will support the Governor's proposed legislation to further establish Massachusetts as the global leader in biotech and pharmaceutical research, medical manufacturing, and life-saving innovation. The Governor proposes to expand funding for small business grants to support growing companies' efforts to develop and broaden their business activities while providing financial support to local communities for efforts to expedite permitting and make Massachusetts a more attractive place to do business. The H.2 budget provides funding to expand and broaden efforts by the State and its regional tourism partners to retain in-State tourism spending and promote the Commonwealth as a tourism destination for out-of-state and overseas tourists.

Life Sciences

In July of 2007, the Governor filed legislation that would build off the successes of the State to attract world leading researchers and life sciences companies, providing $1 billion over 10 years in tax incentives for job growth, grants for research and innovation, and investments in infrastructure necessary to further discovery and broaden opportunities for commercialization. The H.2 recommendation provides $25 million in FY09 funding to support research and innovation grants awarded by the Massachusetts Life Sciences Center ( Outside Section 5). These grants, in combination with targeted tax incentives for job creation and capital investments, will build on the Governor's efforts to spur growth across the State in the Life Sciences industries. The $25 million would be made available through the Bay State Competitiveness Investment Fund, which is funded with the first $100 million in FY08 year-end surplus.

Small Business and Expedited Permitting Technical Assistance Grants

The Governor's H.2 recommendation would provide $1.5 million in new funding to be made available to community development organizations which provide technical assistance and training to businesses with 20 or fewer employees (line item 7007-0334). The H.2 recommendation also maintains $3.5 million in technical assistance grants to municipalities across the state in order to support their efforts to reduce the time necessary to permit local development projects (line item 7002-0013). Both programs have been helpful tools in expanding growth opportunities for the State's communities.

Tourism and Grants Program

The FY09 H.2 recommendation provides $13.7 million for the Massachusetts Office of Travel and Tourism (MOTT), the state agency responsible for promoting Massachusetts as a premier tourist destination to State residents, out of state visitors, and overseas travelers (line item 7007-0900). The tourism industry in Massachusetts is a major contributor to economic growth across the state, from the Berkshires to the Cape and Islands. In fact, in 2006 there was roughly $14 billion in direct tourism spending in the Commonwealth. Directly or indirectly, this spending supported over 200,000 jobs, according to the Travel Industry of America. MOTT, funded solely with revenues generated from the State's room occupancy tax, plays an integral role in working to maintain and expand the domestic and international demand for Massachusetts' natural, cultural, and historical attractions. In FY09, MOTT will be responsible for building further on its efforts to restart the State international marketing program, after assuming this role again in FY08. The agency will provide no less than $1.5 million in funding for this initiative. In short, investments in the state's tourism industry pay off; it is estimated that the state's economy receives $48 in tourism spending for every $1 invested in marketing by MOTT.

The Governor's H.2 recommendation provides $4.75 million in new funding in matching grants to support local and regional entities' efforts to attract tourism (line item 7007-0950). These grants will leverage innovative programs across the state and will build off existing relationships between the State and regional organizations and municipal groups to market Massachusetts. Furthermore, in FY09 the budget would provide $9 million in financial assistance to the regional tourism promotion agencies, which collaborate with MOTT on regional branding and marketing initiatives.

Massachusetts Cultural Facilities Fund (CFF)

CFF grants, which are awarded by the board of the Mass Development Finance Agency, are selected on a competitive basis to provide essential funding to non-profit cultural organizations, municipalities, and institutions of higher education to support their efforts to preserve and maintain cultural facilities. This program, initially created in 2006 by the Massachusetts Legislature, is a vital tool in providing investments in cultural and historical attractions across the state. Grant awards are based on a variety of factors including community and financial need, benefit to the local and regional tourism market, and local support for the project. All grants from the Fund must be matched with cash contributions from the private or public sector. The Governor's H.2 proposal would provide $7 million in FY09 funding through a transfer from the Bay State Competitiveness Investment Fund ( Outside Section 5).

This chart shows the summary of Economic Development Initiatives new investments.  Life Sciences fund with $25,000,000 in FY09; small business Technical Assistance Grants with $1,500,000 in FY09; Regional tourism Grant Program with $4,750,000 in FY09; Cultural Facilities Fund with $7,000,000; Total of the Governor's proposal is $38,250,000.

Prepared by the Executive Office for Administration and Finance • Rooms 373 & 272 • State House
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