For governor, employment is the bottom line

Feb 14, 2010 — The Boston Globe

Feb. 14, 2010 (The Boston Globe delivered by Newstex) --

As the election year begins, Governor Deval Patrick is struggling to revive a state economy beset by high unemployment and multiple barriers to business expansion, including lack of credit for small businesses and ever-rising costs of health care and energy delivery.

In a discussion with Globe reporter Casey Ross and other business staff, Patrick defended his record on economic issues and outlined several measures to create jobs and promote business growth. He pressed his case for legislation to control health care costs, reiterated his support for resort casinos, and confronted questions about whether his proposed $2,500 jobs tax credit will induce companies to start hiring.

With five opponents lining up, Patrick also acknowledged that he must fight to convince a recession-weary electorate that he deserves another term.





When you took office, your goal was to create 100,000 jobs, but because of the recession, you may end up with fewer jobs than you started with. Are you doing enough to spur the recovery?

We have had to make some very, very difficult decisions, but so have those families, so have those folks who are out of work. And sometimes when you talk about the fact that our unemployment rate is not as high as the rest of the country, I'm the first to point out that, if you're out of work, you could care less what the statistics say.

So what people should know is that every day - every day - I am working in every way I can to strengthen this economy and expand opportunity and get people back to work. And that ranges from bills we file to individual phone calls I make to CEOs who are here or are thinking about coming here . . . and it extends to the work I do in Washington with our congressional delegation and the Obama administration to bring resources here that enable us to stimulate economic growth.







Do you think your proposed jobs tax credit will be enough to get businesses hiring again?

This bill is in the `leave-no-stone-unturned department.' We didn't start out focusing on job creation today. We've been working on this from the first day of the administration. That's what the permitting simplification initiatives have been about. That's what the cut in the corporate tax rate is about. It's what the investments in infrastructure, life sciences, and clean technology have been about.

I think we'll get a particular pickup from the tax credit if the Feds do what Congress is thinking about doing right now [on a jobs bill], so this will be a multiplier.







But isn't the tax credit providing a total of only $50 million going to go to people that would be hiring anyway?

If they hire and it helps, great. If the import of your question is that we should just do nothing and wait for the economy to turn on its own, as you can see, we take a different view here. We would do more if we could afford it. I think this is a prudent and balanced approach, and we think it will encourage 20,000 new hires.







Some businesspeople complain that they see a lot of ad hoc measures being taken to improve the economy. When is the state going to deal with the underlying challenges of energy costs, unemployment insurance, and the overall business climate?

We have been working on those things, and some of those very concerns are reflected in this [jobs] bill. There is unemployment insurance reform in this bill, not just the freezing of the rate, but some changes in the underlying system and the cost of that system. The emphasis on clean technology is not about adding costs; it's about transitioning to tomorrow's economy. If we don't get this right, then costs are going to continue to surge.

By the way, if we do get it right, it's a huge economic upside for us, and it will produce a whole host of jobs that aren't subject to being shipped overseas. It is also true that in government, we have to worry about multiple bottom lines. We've got to be about the business bottom line. But there are other bottom lines: environmental, human, and community bottom lines, and they count, too.







But the view of some in the business community is that state government sees energy price increases as incremental costs - small costs that are not looked at in the larger picture.

I'm glad you framed it that way, because that's exactly what I'm strongly disagreeing with you about. There's a quarry in western Massachusetts (Williams Stone Co. in Otis) that I visited. They use a tremendous amount of power digging that stone out of the ground. They put a windmill up, and we helped through a state program. They are off the energy grid now, and they sell power back into the grid.

It's not one-offs. It's not increments. A market and the conditions for doing business have to start somewhere and have to start . . . in the same way transformation has happened in the past: by using our extraordinary advantage in technology and the concentration of brain power that has made invention a part of our character.









Explain the rationale behind your emergency legislation to cap health care price increases?

We're seeing double-digit premium increases year-over-year, and we need to have the conversation with people about what to do. Everyone says that's a great idea, but we can't do it because something else will happen [economically] over here. You can keep going that way to the point where nothing happens, nothing moves. And small businesses, at 85 percent of our economy, are getting these increases. It's one of the reasons they are saying they can't afford new hires because they're having to make choices on account of escalating premium increases.

So we have proposed to use some existing authority in the insurance commissioner to put what we are describing as a soft cap on increases pegged to the [consumer price index] for medical services, which is at 3.2 percent. That's where you start, and if you can justify that your increase above that is reasonable, then we obviously have to approve it. But there is existing authority to disapprove unreasonable rates. Then we propose some legislation to permit us to use the same kind of thing, a soft cap, for the providers, because that power does not exist today in the commissioner.









What about the impact that will have on the health care industry, which is a large part of the state's economy?

That's the element of the conversation that stops the conversation over and over again: This is an important part of our local and regional economy, and therefore you can't ask the question about their cost structure, about why their rates go up.

Boston Medical Center, which has an incredibly important mission, is the most costly hospital in the Commonwealth. It has a higher cost per discharge than Massachusetts General Hospital and Brigham, even when you account for acuity, but you can't ask the question about why the cost structure is so out of whack from other teaching hospitals without the conversation turning to, `Well you must not respect our mission.' It's like you can't have the conversation for fear a push down here is going to come up somewhere else.







On expanded gaming, why not compromise with Massachusetts House Speaker Robert DeLeo and allow gambling at racetracks to win approval for development of casinos that would produce the jobs you promised?

We both agree that if we expand gaming, it has to be done thoughtfully and it has to be done in a way that maximizes the number of jobs created and revenue generated, because the revenue is necessary to services related to the human impact of gaming, but that are also needed in communities all across the Commonwealth.

I think we agree that most of the jobs are created in the destination resort setting and that for a whole host of reasons having to do with the character as well as the economic strengths of those investments, they should be few in number. I proposed up to three. I haven't seen where the speaker is going with that. My concern with the so-called `racinos' - slots at the tracks - is that we won't get the jobs; and what we would get is the human impact without the economic upside. I want to have that conversation with him. . . . It seems to me if we are really about [creating] as many good jobs at good wages with benefits as possible, than the focus has got to be on destination resort casinos.









Are you concerned about the gaming issue dividing your base of political support in an election year?

Sure, I've heard those voices. I'm not enthusiastic about gaming as such. The issue for me isn't the gaming; it's the jobs and the revenue. And we needed them when we proposed this idea in the last session and we need them today. Another thing, to be clear, is that I don't believe, and I don't think there is anything we have shown in this administration, that our economic development agenda depends on expanded gaming. It depends on transitioning to the innovation economy that in the long term is our greatest strength.

PATRICK ON JOBS

The governor outlines his plans to create jobs and spur economic development. Watch the video at www.boston.com/business.

Newstex ID: BGL-1035-42051669