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Investing in Innovations & Infrastructure to Create Jobs, Expand Opportunities

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    FY 2015 Budget Recommendation:
    Key Initiatives
    Deval L. Patrick, Governor
 

In the wake of the global economic recession, the nation experienced a dramatic increase in unemployment. Job creation has been a central facet of Governor Patrick’s strategy to create broad-based opportunity and shared prosperity within the Commonwealth. This commitment to fostering economic growth has created 180,800 jobs since August 2009, the height of the Great Recession. The Patrick Administration has further made a commitment to building a world-class education system in the Commonwealth that will provide students with the skills that continue to attract businesses and grow jobs in Massachusetts.

The Governor’s FY 2015 budget includes investments that will increase employment opportunities, link job seekers with expanding industries and continue our record of success in leveraging education, innovation and infrastructure to grow jobs. In addition, the Governor is proposing targeted investments to improve the Commonwealth’s competitive business climate, especially in innovative fields, including life sciences, advanced manufacturing and green jobs.

Job Creation Strategy and Administration Achievements

The Patrick Administration continues to advance its three-pronged strategy for economic growth, centering on education, innovation and infrastructure. The Economic Development Planning Council, created in 2010, is tasked with creating an economic development plan for the Commonwealth and has defined five strategies that led Massachusetts out of the global economic recession faster than the rest of the nation: 

1. Advancing education and workforce development for middle-skill jobs through coordination of education opportunities;
2. Investing in economic development and workforce development programs;
3. Supporting innovation and entrepreneurship;
4. Promoting regional development through infrastructure investments and local empowerment; and
5. Increasing the ease of doing business and addressing the Commonwealth’s cost competiveness.

These strategies describe ways in which government, business and academia can work collaboratively to make Massachusetts more competitive and successful. The Patrick Administration job creation accomplishments include:

• Small Business Innovation Research – Launching the START program, specifically focused on accelerating the commercialization of certain Small Business Innovation Research (SBIR)-funded technologies.  START is focused on activities essential to successful commercialization, such as protecting intellectual property, performing market and competitive research, investigating regulatory requirements, building commercial prototypes and writing business plans to attract additional capital.  Through the START Matching Grant Program, MassVentures has provided grants totaling $3 M to 20 companies.
• Expanding Internet Access – The Massachusetts Broadband Institute (MBI) at the Massachusetts Technology Collaborative was created in August 2008 by the Patrick Administration and the Legislature with a mission to expand affordable broadband access to the underserved and unserved communities of the Commonwealth.  The MBI was initially funded with $40 M in state bond funds and has used these funds to leverage over $110 M in additional public and private investment, including more than $83 M in federal funds.  These funds were used to successfully deploy the $90 M, 1,200-mile fiber-optic MassBroadband 123 network, bringing high-speed Internet access directly to over 1,200 facilities in more than 120 western and central Massachusetts communities.  Many communities are already harnessing the potential of this new network, which will be fully operational in 2014.
• Mass Life Sciences Center – Massachusetts has demonstrated its commitment to the life sciences community through investments in infrastructure to accelerate promising science, as well as the creation of a business-friendly environment.  The Patrick Administration created the Massachusetts Life Sciences Center (MLSC) in recognition of the state’s leading position in the biotechnology industry. The MLSC is committed to ensuring that there is a strong supporting platform for innovation in Massachusetts.  This includes funding the creation of novel resources that companies and researchers will be able to find only in Massachusetts. The Governor has committed to investing $1 B in life sciences funding over ten years.  To date, MLSC has invested and committed nearly $500 M throughout the Commonwealth, leveraged approximately $1.2 B through matching outside investments and created over 5,700 jobs.
• Investing in Infrastructure – The Patrick Administration created the MassWorks Infrastructure Program to consolidate state infrastructure grant programs that support economic development and to provide one-stop shopping for municipalities seeking to participate in these programs.  This program coordinates state review of applications and decision-making. The MassWorks Infrastructure Program and the associated prior grant programs have supported over 150 infrastructure projects to advance housing, economic development and small town transportation safety improvements across the Commonwealth since 2007.  MassWorks Infrastructure Projects represent not only thousands of construction jobs but also the creation of thousands of new full and part-time jobs, hundreds of new housing units and millions of private investment dollars, which are leveraged through the strategic investment of MassWorks funding.

Targeted investments made in the Governor’s FY 2015 budget that continue this strategy of economic growth include:

Fostering the Innovation Economy through Life Sciences and Advanced Manufacturing

Source: Commonwealth of Massachusetts

The FY 2015 budget provides $25 M in funding to the MLSC through consolidated net surplus (CNS) funds and assumes distributing $25 M in tax incentives to companies expanding their life sciences activities and creating jobs within the Commonwealth.  The FY 2015 budget continues to make essential investments targeted towards job growth, business expansion and new revenues for the Commonwealth by making additional funding available to the MLSC.  These FY 2015 investments will provide research grants and accelerator loans to researchers and early-state companies, while continuing efforts to promote Massachusetts as a global leader in all stages of business development in life sciences industries, from discovery to commercialization.

The Governor’s FY 2015 budget invests in growing our advanced manufacturing industry:

• Workforce Development Grants – $1.8 M in Workforce Development Grants will help job seekers gain the skills needed for today’s manufacturing jobs;
• Massachusetts Manufacturing Extension Partnership – A $2 M investment will promote manufacturing as an integral part of the economy of the Commonwealth and for programs designed to assist small and mid-sized manufacturing companies; and
• Regional Economic Development Councils – A $637 K investment in Regional Economic Development Councils will provide a consistent and efficient response to businesses seeking assistance from the Commonwealth.

State Capital Investments in Economic Growth

The state’s annual Capital Investment Plan invests in job creation across the state, including construction projects in the life sciences industry, higher education and transportation.  Governor Patrick’s FY 2014-2018 Capital Investment Plan will invest more than $3.3 B in bond-funded infrastructure projects, which is more than double the level of state capital investments in 2007.  While many of these planned investments create construction jobs and otherwise support economic growth, $126 M of these capital investments are specifically targeted to economic development programs, which will prioritize projects that invest in state infrastructure that supports private development and job growth. 

The MassWorks Infrastructure Program is a one-stop shop for municipalities seeking public infrastructure funding that supports housing, economic development and job creation. The Governor’s FY 2014-2018 Capital Investment Plan allows the Executive Office of Housing and Economic Development to provide up to $56.2 M in public infrastructure grants to local cities and towns during the 2014 construction season through MassWorks. This program will spur the creation of an estimated 2,927 new jobs from the calendar year 2013 investments and approximately 5,000 new jobs and 2,500 new housing units from investments made in calendar year 2014 by supporting infrastructure projects that leverage private investment in economic development and housing projects.

Additionally, the Infrastructure Investment Incentive (I-Cubed) program is ramping up to invest more in private, transit-oriented development projects. The I-Cubed program represents yet another innovative financing model that allows government to invest in economic growth while limiting taxpayer costs. This program allows for the issuance of bonds to finance public infrastructure improvements like train stations and road improvements only when developers can prove that the private development they propose will generate jobs and new state tax revenue that will more than repay the debt service on the bonds in each year. Several pending economic development proposals at various stages of review could increase the number of I-Cubed projects in Massachusetts to as many as nine in the next few years. Ongoing I-Cubed projects in Somerville (at Assembly Row) and Boston (at Fan Pier) are expected to leverage $1 B in private investment, generate over $475 M in new state tax revenue over 30 years to repay the investment and create 2,700 construction and 2,000 permanent jobs.

Finally, the Infrastructure Development Fund (IDF) was established in the FY 2011 year-end supplemental budget to create jobs and stimulate long-term economic development through infrastructure-related investments. 

Health Care Workforce Transformation Trust Fund

The Health Care Workforce Transformation Fund was established by the landmark Health Care Cost Containment legislation and capitalized in FY 2013 at $20 M. The fund allows the Executive Office of Labor and Workforce Development (EOLWD), in consultation with a wide range of key stakeholders including the Health Policy Commission, the Department of Public Health, health care providers, health care insurers, health care employers, labor organizations, consumer representatives and educational institutions to issue grants to:

• Support the development and implementation of programs to enhance health care worker retention rates;
• Address critical health care workforce shortages;
• Improve employment in the health care industry for low-income individuals and low-wage workers;
• Provide training, educational or career ladder services for currently employed or unemployed health care workers;
• Provide training or educational services for health care workers in emerging fields of care delivery models; and
• Fund rural health rotation programs, clerkships and health preceptorships at medical and nursing schools.

EOLWD engaged in a planning grant procurement during summer of 2013.  These implementation grants will be accepted on a rolling basis, the first having arrived in October 2013, and are currently under review.

Massachusetts Growth Capital Corporation

In its first three years, the Massachusetts Growth Capital Corporation (MGCC) has committed $45 M in loans to 129 companies and four micro-lender intermediaries, leveraging over $156 M in private financing. MGCC loans foster the creation and preservation of jobs in small businesses and in women and minority-owned firms, and promote economic development in underserved, gateway municipalities and other low and moderate-income communities. MGCC’s current portfolio of active projects, which includes projects financed through the Economic Stabilization Trust and Community Development Finance Corporation, consists of more than $39 M in loans and has leveraged $182 M in private financing. Recently, the federal government awarded Massachusetts $20.4 M in State Small Business Credit Initiative funds to support state-level, small-business lending programs. MGCC and the Massachusetts Business Development Corporation (MBDC) will distribute loan funds to recipients. 

Making Massachusetts a Global Tourism Destination

Source: Commonwealth of Massachusetts

Visitors to Massachusetts spend nearly $17.7 B annually, generating $1.1 B in state and local taxes each year, while the Massachusetts tourism sector employs 126,500 people. Last year, the Administration increased investments in the tourism and marketing industries to capitalize on Massachusetts’s historic culture and diverse population.  These investments also expanded domestic and international marketing campaigns in neighboring states and emerging markets that have shown an increase in the number of visitors to Massachusetts over the last few years, such as China, India and Brazil. The Patrick Administration will continue to support the tourism industry in FY 2015 with $13.3 M in funding dedicated to expanding domestic and international marketing initiatives.

Expanding Job Opportunities for Veterans

Veterans make significant contributions to the nation and to Massachusetts in times of both peace and war. Massachusetts is proud to support its veterans and the Patrick Administration will continue to work to keep its status as a national leader in veteran services and support. One significant achievement of the Patrick Administration in pursuit of getting our veterans hired was the creation of the Interagency Taskforce on Hiring Veterans. In 2013, the Taskforce released a Strategic Plan to Increase Employment Opportunities for Veterans and has made hiring veterans for state service a priority.  Through the work of the Taskforce, each Secretariat has identified and removed barriers to employment for veterans in an effort to increase employment within state agencies by increasing awareness for hiring managers about the value and benefits of hiring veterans. Now, approximately 5.5% of the Executive Branch workforce in the Commonwealth comprises self-identified veterans.

Governor Patrick has made veteran employment initiatives a priority in his FY 2015 budget.  Boots to Business introduces employers to service veterans aligned with individual company goals or, if employers are not ready to hire, employers who may have a lasting, rewarding impact on veterans’ future through mentoring assistance and ongoing professional development. The goal of this volunteer program is to increase veteran employment in the Commonwealth by creating meaningful mentoring and networking relationships. In FY 2015, the Department of Veterans’ Services will continue to make the Boots to Business program a priority. 

Governor’s Priorities in the Program Budget

For more information on the Governor’s job creation priority in program format, please visit www.mass.gov/budget/governor, the online version of the FY 2015 Governor’s Budget.  Click on the Administration Priorities tab in the FY 2015 Program Budget Recommendations Quick Link.  The tab will open to show a list of the Governor’s four priorities and the core set of programs that are critical in supporting the goals of each priority. 

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Prepared by the Executive Office for Administration and Finance ·
www.mass.gov/budget/governor
For more information email: contactanf@massmail.state.ma.us (617) 727-2040

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