DeLeo backs smaller, narrower tax package

Launches push for community colleges in speech

 

TODAY MARKS MY FIFTH SPEECH to the Greater Boston Chamber of Commerce. It’s always a pleasure to address this group, mostly because you and I always seem to have the same item at the top of our agendas: creating jobs. We share the same goals: to innovate and to help Massachusetts stand out amongst our competitors.

As in years past, my focus this year is jobs. Today, I will talk about two areas that are tied directly to our competitiveness and our ability to create jobs – transportation and higher education, including some ideas I have to better prepare our future workforce. I will conclude my comments by providing the House of Representative’s perspective on the size of any potential revenue plan.

When I addressed the Chamber three years ago, our unemployment rate stood at 8.7 percent and our working trades were in the worst of what is known as “the blue collar depression.” Today, unemployment is at 6.7 percent — still too high, but far lower than the national rate of 7.9 percent. Our bond rating remains at AA+, the highest in the state’s history, and we are one of a handful of states with a healthy stabilization fund, holding $1.27 billion.

Our earlier focus on the Life Sciences is reaping benefits. The president of the Massachusetts Life Sciences Center, Susan Windham Bannister, said last week that three Japanese companies had made the choice to open up operations in Massachusetts. I’m proud that I met personally with one of them, Reprocell, at the BIO International Conference last May, to convince them to come to Massachusetts.

This is the venue where we discuss big ideas that create and save jobs. Previously, I talked to you about wisdom of bringing gaming to Massachusetts – and the role that this industry could play in generating not only revenue, but jobs.

 One year later, I presented my plan to cut municipal healthcare costs, an initiative that ultimately reaped more than $175 million, almost doubling the savings of what any expert predicted – but one that also saved the jobs of countless firefighters, teachers, police officers, and public works employees.

 Despite these achievements, our challenges are as great as ever – and we now face critical decisions that will drive the economic future of our Commonwealth. Over the past several months – while we work to finalize our fiscal plan – I have been meeting with business leaders, union officials, fellow representatives, constituents and others. In all of these discussions, as I listen to the ideas and proposals I’m asked to consider, I first ask myself one question: What impact would this idea have on the creation or retention of jobs in our state? My goal is creating and retaining jobs. If there is one common element to all of the discussions I’ve had, it’s the following: A strong transportation system and highly educated work force are critical to the economic health of Massachusetts. A recent study completed by A Better City, The Boston Foundation, and the Massachusetts Competitive Partnership backs this up, stressing the relationship between a strong transportation system and a growing economy. The report indicates that – and I’m quoting here – “failure to maintain the transportation network creates uncertainty about future conditions and costs. This leads to a loss of business confidence and a reluctance to invest and expand, limiting economic development.” The report goes on to say: “When firms consider building new offices and factories, they take into account the long-term commitments to operate in that location. Rising congestion and deteriorating network reliability are signals that future business conditions may be more challenging, leading potential investors to consider other locations.”

This principle is of course not unique to Boston. A nationwide trade publication conducts an annual survey of corporate executives, and survey results always emphasize the importance of transportation to economic development. And, of course, whether I’ve met with executives from large companies or start-ups, business leaders always talk to me about the importance our transportation system holds for their workers. The success of start-ups, for example, often rests on recruiting young, highly talented workers who prefer to use public transportation to get to work. Our hospital and health care sectors rely on the MBTA as a lifeline that supplies its workforce at often late hours.

The need then, is real, and the House has long been aware of this. That’s why in 2009 we passed a major reform of our transportation system, one that combined several different agencies into a new, streamlined authority. This change helped bring considerable savings and efficiency to the system and lowered pension and health care costs. In fact, these reforms have saved more than $500 million in the four years since they were implemented.

But before we commit any new dollars to our transportation system, we still have to look at every opportunity there might be to take out any unnecessary costs – as the Massachusetts Taxpayers Foundation and the Massachusetts Business Roundtable indicated earlier this week. On March 12, the Transportation Committee will hold oversight hearings into our transportation system to determine if additional savings can be identified. One obvious area where I’m certain savings can be achieved is in the way we fund our operating expenses. Right now, we borrow to pay operating costs – and ultimately, we’ll pay $1.75 – in principle and interest – for every $1 we borrow. As anyone who’s run a household can tell you, you’ll never get ahead by paying routine bills with a credit card. We have to wean ourselves off of this system.

With that said, I think we need to be honest about what the scope of this problem requires. Even as we continue to look for efficiencies, we are committed to developing – and we will develop – a well thought-out and fair new source of revenue to help fund a transportation system; one, that is commensurate with job creation, job retention, and economic growth.

Positioning our region to take the national lead in job growth hinges on more than a top rate transportation system – as important as that is. It also requires a workforce that is educated and prepared for the tasks that employers need done now. In that light, I’m proud of the reforms we made to our community college system last year. These changes helped bring increased oversight of our community colleges and linked our employers and their needs more closely to workforce training programs at these institutions. We also made it easier for community college students to transfer their credits to state universities. All of these changes are in line with what public policy professionals are considering in higher education.

Last weekend, I attended a conference at Miami-Dade Community College. There we focused on best practice with respect to community colleges. I am now more convinced than ever that we must make investments in this area for Massachusetts to thrive. Funds spent in our community colleges are seed money to employ our population and grow our economy. As we remain proud of our state university system, we understand that the nature of  higher education is changing. Enrollment in community colleges has gone up dramatically and continues to accelerate. And perhaps surprising to some, nationwide only a small percentage of students now attend 4-year colleges and live on campus.

There is no question that community colleges generate a substantial return for every dollar we invest in them by producing productive and successful members of the workforce. After the Second World War, the GI bill gave thousands the opportunity for upward economic mobility. Community colleges are the present-day gateways to economic opportunity. I will work with our leaders in education, business, economic development, and labor to build on the steps we took via legislation last year to increase not only public and private investment in community colleges, but to foster improvement in the two areas I see as most crucial: information and coordination.

In order for community college students and Massachusetts’ employers to get the most out of our community colleges, we need first to collect and share data on job opportunities that are at higher wages and in higher demand. Then, we need to give students this information so they can make smart decisions when it comes to career choices.

Coordination is also essential. Community colleges need to be in constant contact with employers, our Department of Labor, other community colleges, and with the High Schools that supply their student body. Only by working together can we maximize the collective potential of our community college system. We need to train our students to go where the jobs are — in the so-called STEM skills: science, technology, engineering, and math.

We know that Massachusetts will need to fill 300,000 jobs by 2018, some of which can be filled by community college graduates. The problem is that, according to recent studies, between 60 and 70 percent of students placed into remedial math either do not successfully complete the sequence of required courses or avoid taking math altogether and therefore never graduate. For our economy to thrive, that needs to change.

In order to make sure our community college students have the necessary math and science skills to train in the STEM areas, I envision a new initiative – the STEM Starter Academy. The academy would be an intense, dedicated program at our community colleges – one that provides students with the more basic STEM training they need to succeed, along with support and encouragement to complete the program. Once students successfully complete the academy, they will have the confidence and skills to go on to more advanced training that will make them job-ready.

How can we pay for these new education programs with funds so tight and such a large obligation for transportation upcoming? I am pleased to report that soon we will have access to gaming licensing revenues. Of the $195 million expected, almost $30 million will be available for our community college fund, as our 2011 legislation provided. This money could help fund our STEM Starter Academy and other initiatives.

Transportation and Education: These are the two priorities embraced by the governor in his budget proposal and two priorities I embrace as well. I also agree with the governor that these areas cannot be sufficiently addressed without the injection of additional revenue into the system. While we agree we need to focus on these two areas, I do differ on the amount of new revenue that Massachusetts’ families and businesses should be asked to contribute to these important initiatives.

Sensitive to today’s economic realities, I’m worried that the administration’s proposal places too heavy a burden on working families and businesses struggling to survive. We want to minimize the pressure on Massachusetts citizens as we find ways to meet our goals. If we are to pass a new revenue package, I believe it should be far more narrow in scope and of a significantly smaller size.

We seek to fund the priorities we need to enhance the economy, without creating collateral damage. In this manner, we will lay the course and foundation for future investments in these key areas. Strengthening the foundation of the Massachusetts economy is not something that happens quickly or easily. During my time in the House, I have learned the importance of tenacity. Each year over the course of this economic downturn, the worst since the Great Depression, I have worked to help the House take the necessary and often difficult steps to improve our job climate and fiscal standing.

Meet the Author

 I know that with your help, we can continue to do that.

(Robert DeLeo is Speaker of the Massachusetts House.)