Patrick's summer sizzle

GOVERNOR Deval Patrick will be in Hollywood and San Diego this week to pitch the state to filmmakers and biotech firms. No doubt he will promote Massachusetts as a great place to do business. Meanwhile, companies here are closing their doors and moving operations to other states because they can no longer afford to do business in the state. Over the past four years our state has ranked close to last when it comes to job creation.

In the 18 months since Patrick has taken office, he has offered an inconsistent and at times counterproductive economic development policy. Rather than concentrating on assisting the state's struggling core industries, the governor's efforts have focused primarily on more "sexy" endeavors such as movie stars, casinos, and life sciences.

Patrick takes with him to California one of the nation's most generous film tax credits. The movie industry had a banner year in 2007, posting a record $9.7 billion in box office receipts. It also raked in another $138.7 million in tax credits and sales tax exemptions courtesy of Massachusetts taxpayers.

Both liberal and conservative budget watchdog groups, including the Massachusetts Budget and Policy Center and Beacon Hill Institute, have assailed this credit as a giveaway that at best creates temporary part-time jobs. The Department of Revenue reported that the state collects less than 18 cents for every dollar in tax credits issued. Moreover, according to the department, these tax credits are primarily helping to pay the salaries of actors, producers, and directors earning more than $1 million per film.

Patrick is also bringing with him his new $1 billion life sciences plan. The plan creates a system of generous tax credits awarded on a company-by-company basis, permitting Patrick to pick winners and losers within the industry. If two companies are developing nearly identical products, one could be selected for a tax credit while the other is left out. This lack of broad-based applicability is a point that will undoubtedly be left out of the conversations in San Diego.

Patrick's inconsistent economic development policy is out of step with the realities and needs of the state. Core industries, from financial services to manufacturing, technology, and defense, are suffering due to the high cost of doing business in Massachusetts.

Instead of offering giveaways to selected industries, Patrick should introduce legislation that makes Massachusetts more competitive for all businesses, followed by special sessions of the Legislature later this summer dedicated solely to improving Massachusetts' competitiveness. The sessions should address unemployment insurance rates, healthcare costs, and electrical and utility rates - which are all among the highest in the nation. Workers' compensation, homeowners insurance, and taxes, both state and local, should also be addressed.

And then there is Patrick's soon to be enacted $500 million corporate tax hike. Decisions are being made looking only at the immediate need to increase bottom line revenues without considering the longer view of whether these policies will fairly balance tax policy and state revenue necessities with economic development.

The corporate tax bill primarily affects large multi-state corporations. These companies - including Fidelity, Bank of America, Citizens Bank, General Electric, Verizon, and many lower profile companies - serve as easy targets. However, these corporations employ 40 percent of the state's workforce and are responsible for a large portion of the state's highest paying jobs, the majority of which are portable and can move to other, less costly states.

While the governor has pushed for over-the-top tax credits to pay the salaries of movie stars and is picking winners and losers in the biotech industry, many Massachusetts employers are either transferring jobs out of the state or looking elsewhere to invest and grow. For example, Fidelity and General Electric, once mainstays of the state's economy, are choosing to expand and add new jobs in other states.

Making Massachusetts competitive again will take real leadership, and it requires a change in attitude throughout state government that employers are not the adversary. The global economic structure is rapidly changing; the state must act now or it will be poorly positioned for the new economy.

Richard R. Tisei, a Republican from Wakefield, is the minority leader of the Massachusetts Senate.