It’s no secret that Boston is an innovation boomtown that’s home to an ever-growing number of startup companies., Boston was ranked the sixth best city for new tech companies in a study conducted by Startup Genome, a data-collection resource for startups.
The state’s new tech tax, however, has left many of these businesses reeling. At 6.25%, the tax on software and IT services is the highest in the country. The tax, along with high rents and little office space available in Boston to begin with, makes it increasingly difficult to set up shop here.
Six of the 12 mayoral candidates spoke with us about their plans to help change that and make Boston more attractive to local and national startup talent.
John Connolly, City Councilor
Connolly called the tech tax a flat-out mistake in a meeting with over 50 business owners at MassChallenge headquarters on Aug. 6.
He was unavailable for comment but said in a press release that the need for lower cost housing and office space outside of the Innovation District and longer-running public transportation service were major topics of discussion at the forum.
“As mayor, I want to make sure that government and the private sector are working together to address the challenges we face as a city, like creating jobs and transforming our schools,” he said in the statement.
On his campaign website, Connolly highlighted the need to provide Bostonians with access to at least two years of higher education and create better connections between small business and schools.
“We must help entrepreneurs access local talent by linking them to our high schools and colleges through internship programs and career fairs,” the website reads. Connolly’s plan to establish a clearinghouse that would help businesses navigate city services would also assist with these connections.
Connolly also said on his website that he would promote the use of local suppliers in a “Buy Boston” campaign to further support startups.
“Though we are proud of being the birthplace of innovation, we must also become its lifelong home,” he wrote on the site.
Bill Walczak, Vice President of Shawmut Design and Construction
“I supported both the governor’s recommendation for funding transportation and the business community,” Walczak said in an interview. “But I think that the legislature made a wrong decision.”
Walczak said that there were other alternatives available to fund both transportation and small businesses, and that it’s time to go back to the legislature to find them.
“I have an interest in more than one innovation district in Boston,” he said, and recommended Allston, Roxbury, and Suffolk Downs, the proposed site of a casino, as possible locations.
“It’s on the road to the airport, so it makes sense,” Walczak said of the Suffolk Downs location. He outlined an extensive East Boston innovation district plan on his website as a casino alternative that would produce jobs in an area that already boasts affordable rents and plenty of space.
The housing crisis is also one that can be solved regionally, he said.
“I’m a regionalist,” he said. “I believe the city of Boston should be working closely with cities all the way up to the 495.”
Walczak also said that the whole Boston region should be focused on building 17,000 housing units, not just the city itself, as is currently outlined in Mayor Thomas M. Menino’s plan.
By working with Cambridge’s concentration of biotech startups and even New York’s economic backing, Walczak said, Boston could become the innovation hub of the East Coast.
“My goal is to make sure that the Boston area is working,” he said.
Dan Conley, Suffolk County District Attorney
“I find [startup owners] to be extraordinarily public minded, socially focused, dedicated to the city,” Dan Conley said in an interview.
So they’re fine with paying taxes, he said, but those taxes need to be fair.
“Pyramiding taxation of business to business transactions is the most perplexing part,” he said of the tech tax, which he fears may tax unfairly businesses multiple times. “It goes too far.”
Conley said that if elected mayor, he would support the coalition of business owners that are fighting for a ballot initiative to repeal the tax.
“We have great colleges and universities, and we need to make sure we maintain a strong climate,” he said.
Conley’s plan to make Boston a more startup-friendly city also includes a strong, city-wide WiFi connection.
“We need to focus on giving them professional opportunities here,” he said. “For me, that means making the entire city of Boston a hotspot.”
Creating a reliable Internet connection throughout the city would mean that companies could feel more confident in establishing themselves in areas outside of the Innovation District, such as Dorchester, Hyde Park, and East Boston—areas with significantly cheaper rents.
“We need to utilize the commuter rail and create more transit-oriented housing,” Conley said.
And as long as we’re expanding, why not branch out to Cambridge as well?
Conley said that while it would be ideal to have more businesses in Boston, one cannot ignore the fact that Cambridge, too, has a lot to offer.
“We need to do that because these boundary lines in some sense are unofficial,” he said. “Business development, retention, housing, and purchasing can all cross city limits.”
Felix Arroyo, City Councilor
Arroyo, who does not support the tech tax, said in a statement that he was concerned it could negatively impact small businesses but left no indication that he would try to repeal it.
“The state at a minimum should make clear the rules around the software tax so that small businesses are not harmed,” the statement said.
Arroyo encouraged the creation of mixed-use developments that include market rate housing and housing of different sizes, from single family to micro-apartments, to better meet the needs of young professionals.
“We can do that implementing my ‘Invest in Boston’ plan, that will leverage the billion dollars we have deposited of city money in banks to encourage lending to development projects, small businesses, and qualified home buyers,” Arroyo said in the statement.
Housing is, of course, not the only issue, and Arroyo said that in order to retain talent the city needs to work with the surrounding community in order to help undergraduates develop their talents.
“Areas of our city have the potential to develop in a way that is attractive to our young population,” the statement reads. Arroyo plans to institute at 24-hour T service and encourage restaurants, gyms, and entertainment venues to stay open later.
Rob Consalvo, City Councilor
Kevin Franck, a spokesman for Rob Consalvo’s campaign, said in an email interview that Consalvo opposes the tech tax. “It’s a tax on all businesses that will have unintended consequences on the city’s economy,” he said.
Franck did not provide specifics on how Consalvo would fight the tax, but pointed to the $2 billion budget that Consalvo created as chair of the Ways and Means Committee as evidence that he could continue to make smart financial decisions.
Consalvo has already done extensive work to ensure affordable real estate. As City Councilor, he sponsored a law that held banks accountable for maintaining foreclosed properties they owned in the city so that neighborhood property values wouldn’t decrease, Franck said.
“As Mayor, Rob would focus on not only increasing the amount of housing production, but also the types and locations that will respond to our city’s demand through a series of initiatives,” Franck said.
These initiatives include making changes to zoning laws to encourage the construction of smaller, more densely constructed units and continuing to hold banks accountable for foreclosed properties. Consalvo would make sure to provide banks with a list of necessary improvements for properties and, if they failed to make those, to bill the banks for improvements made by the city.
Franck said that Consalvo would also collaborate with employers from financial services, higher education, health care, and other sectors to establish low-interest loans for housing.
This kind of collaboration extends beyond city lines as well.
“There are certain challenges that we can only address as a region,” Franck said. “For example, improving the infrastructure to build an urban ring and a modern public transportation system are too expensive for any one city to pursue.”
Mike Ross, City Councilor
“The tech tax is a giant neon sign to the rest of the world that Massachusetts isn’t invested in its innovation economy,” Ross said in an interview. He said that Boston is currently at a point where it could be “fully empowered as a startup destination,” but only as long as its politicians give it that room to grow.
Ross proposed forming an urban caucus that would include Cambridge and other nearby cities to work together on solving economic issues. “We’re part of the same economic cluster,” Ross said. “We should be partnering wit heach other to travel to Silicon Valley to bring this opportunity back to our region.”
The proposed caucus would also work together to improve public transit and the number of cities to which nonstop flights could be provided, Ross said.
Ross also emphasized the need for both affordable housing and reliable, late-night public transit. “We need public transit to be an experience more positive than the one it is now,” he said. “It’s too hard to find a place to live and it’s too hard to get there and back from work.”
Another way to attract startup talent, Ross said, would be to improve the permitting process. “It should take 30 days for your business to open, and if you can’t, you should get your money back,” Ross said. “Adding a more permissive regulatory environment that embraces more activity and innovation is something that we need to work on.”
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