Romney unveils $600m job-growth plan
Governor Mitt Romney yesterday proposed a $600 million plan to boost job growth by streamlining development rules, cutting unemployment insurance taxes, increasing the state's marketing efforts, and targeting incentives at companies that expand or relocate in Massachusetts.
Under fire for an anemic economic recovery and corporate takeovers costing the state thousands of jobs, Romney outlined one of the most comprehensive and ambitious economic initiatives of his administration at a breakfast meeting of the Greater Boston Chamber of Commerce. He estimated his plan would create at least 20,000 jobs over five years.
Implementing it, however, may be a challenge. Many of the proposed initiatives require approval from the Democrat-dominated Legislature, a body with which the Republican governor has not had much success.
In addition, several economists questioned the impact that Romney's proposals would have. State economies are at the mercy of national and global trends, and, at best, state policies can create conditions that allow states to make the most of job growth when national and global trends become favorable.
Even then, the big costs that drive business decisions, such as labor and energy, are mostly out of state government's control. ''If governors have any effect, it's just on the margin," said James Diffley, chief regional economist at Global Insight, a Waltham forecasting firm.
Beacon Hill Democrats also expressed skepticism. State Representative Daniel Bosley, a North Adams Democrat and House chairman of the Economic Development and Emerging Technologies Committee, said Romney's plan is hardly groundbreaking, incorporating often-tried but not very effective proposals, and missing opportunities, such as promoting international trade at a time when a weak dollar enhances Massachusetts exporters' competitive advantages.
''There is nothing particularly innovative here," Bosley said. ''If you want to be innovative, we shouldn't be talking about offering companies incentives," but rather providing high-speed wireless Internet access to every town center.
Business officials, however, praised Romney's proposals, saying they are policies they have long urged. Richard Lord, president of Associated Industries of Massachusetts, the state's biggest employer advocacy group, said that such policies could change the perception of Massachusetts as unfriendly to business, which could spark new investment and job growth.
''What the governor and Legislature can do is affect the business climate here," said Lord, ''and I really do think that makes a difference."
The state's still-struggling economy has been a particular problem for Romney, who won on promises he would revive job growth in the state. In recent weeks, the pending takeover of Gillette Co. by Procter & Gamble Co. of Cincinnati, with the expected loss of thousands of Massachusetts jobs, has underscored the employment problem, and invited attacks by Democratic rivals on the governor's handling of the economy.
Halfway through Romney's term, the state still has around 46,000 fewer jobs than when he took office in January 2003, according to the most recent employment figures. Romney yesterday said the state has turned the corner, adding 22,000 jobs in the last year, and whittling the unemployment rate to 4.6 percent.
But, he conceded, ''Neither one of those makes you go home and say we're doing just great."
Romney said the state needs to move on several fronts to make Massachusetts more attractive to corporate investment and competitive with other states. For example, while Texas sets aside nearly $300 million to lure companies with financial incentives, Massachusetts has no similar fund, Romney said.
The governor proposed spending $185 million over five years to pay companies that create at least 100 jobs -- by expanding or relocating in Massachusetts -- up to $10,000 per job. The incentives would target key industries, such as biotechnology, medical devices information technology, and others that bring in money from outside Massachusetts.
In addition, Romney would spend $300 million more, raised through long-term borrowing, to improve roads, sewers, and infrastructure related to business expansion, and support commercial research and development at the University of Massachusetts.
In other areas, Romney proposed an overhaul of unemployment insurance that would slash business payments by nearly $250 million. He said Massachusetts employers pay about the highest unemployment insurance taxes in the nation -- more than 50 percent higher than Pennsylvania's and more than double North Carolina's. And Massachusetts benefits are among the most generous in the country, Romney said, noting that the state provides coverage of up to 30 weeks, compared to 26 weeks for most states.
His overhaul of the program would cut the unemployment tax on employers by about $100 per worker, slicing the average costs to about $588 per worker, but still higher than Pennsylvania's $444. Romney would adopt the 26-week maximum for benefits.
Romney also proposed spending millions of dollars to speed the permitting of commercial developments, offering communities technical assistance and incentives to permit developments within six months. While business can get their developments permitted within months in many states, it can take years in Massachusetts, another impediment to investment, Romney said.
''Every dollar in our society stems from a good or service produced in the private sector," Romney told nearly 600 members of the business community. ''You're the goose that lays the golden egg, and we want to make sure you are well and thriving."
Robert Gavin can be reached at rgavin@globe.com.
