Providing opportunities for all
Economic development bill hold great promise -- if used the right way
GOV. CHARLIE BAKER introduced a major economic development package last week. Reading the tea leaves, one conclusion can be drawn for sure: The administration is serious about empowering its leaders to put forward bold ideas. Line by line, the legislation reflects the energy and insight for which Secretary of Housing and Economic Development Jay Ash is well-regarded. It establishes priorities, funds economic development initiatives at meaningful levels, and revises a slew of programs to make them more effective. But the big question is whether the governor’s bill, entitled An Act to Provide Opportunities for All, can live up to the ambition reflected in its name.
Answering this critical question requires foresight on whether the bill results in actual spending patterns that serve to reverse longstanding geographic inequities in economic development funding. The fate of the Transformative Development Initiative (TDI) is perhaps the most central pivot point. TDI is a new initiative led by MassDevelopment, the state’s quasi-public economic development arm. TDI works strategically to leverage limited economic development dollars in Gateway Cities that drive regional economies across the Commonwealth. Within these urban centers, TDI targets public investments in districts that have the potential to blossom into anchors for growth. In contrast with past revitalization attempts, TDI is not about one particular employer or building, but rather the combination of activities in the district creating synergies and spurring a virtuous cycle of private investment into the area.
Through this “placemaking” approach, it should be possible to reweave the urban fabric of communities that have been suffering from decades of disinvestment without resorting to costly mega projects. While the $50 million in the legislation is a magnitude or two lower than what it will take to reach all of our urban centers that need reaching, it’s in the right range for now. Stage one of TDI is helping communities map out a strategy for market-driven investments and working with them to assemble parcels of land for redevelopment. The hope is that the Legislature will embrace this proposal, that the administration will spend up to the $50 million bond authorization in the coming years, and that this predevelopment work sets the stage for a higher level of state support in the future. The ifs in this scenario are many, but Gov. Baker deserves much credit for moving in a promising direction.
The $75 million career and technical education fund is another potential game-changer for Gateway Cities. While economies are weaker outside of Boston, the demand for skilled labor is equally high with so many talented youth picking up and moving elsewhere and far too high a percentage of youth not gaining the skills needed to participate fully in their local economy. Better career and technical education is part of the answer. Massachusetts has built many excellent vocational schools, but these programs only have the capacity to serve a fraction of the students that could benefit from them. Meaningful progress on this challenge will allow more students to gain the skills necessary to fully contribute their talents.
Boston once eschewed tax incentives, but the city seems to be increasingly hungry for these limited funds. First there was Liberty Mutual, then Vertex, and now GE. A skeptic might call this the GE bill. Changes to economic development statutes, most notably the Economic Development Incentive Program and the Infrastructure Investment Incentive Program, or I-Cubed, seem intended to make these tax tools work for GE. While most analysts agree that this particular deal is a home run for Massachusetts, and I would tend to agree, changing the general laws to accommodate the GE package makes it far easier for Boston to access these resources in the future. There are real questions about whether tax incentives work in the first place. And while it’s not a perfect comparison, one need only look at the historic rehabilitation tax credit for egregious examples of how state subsidies can find their way into Boston projects even when the need is nonexistent.More and more often I hear state leaders articulate a powerful need to ensure that future growth is balanced across our entire Commonwealth. Gov. Baker’s economic development legislation is an excellent starting point for a conversation about how we can best accomplish this objective. However, we all must remember that whatever gets passed in July is only the beginning. Unity and vigilance will be needed to ensure that this act truly provides opportunities for all.
Ben Forman is the research director at MassINC.