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Wednesday, February 28, 2007
By David Beard and Lisa Wangsness, Globe Staff
Governor Deval Patrick defended his first budget this morning before a crowd of more than 500 business leaders, saying that despite his proposal to close corporate tax loopholes he had worked hard to give companies something in return.
Patrick was greeted at the Greater Boston Chamber of Commerce breakfast by a standing ovation, but the room at the Park Plaza Hotel quieted when he fielded questions about the tax loopholes.
A $1.2 billion deficit forced tough choices, Patrick said, but in return for eliminating some tax breaks he vowed to create a state sales force and streamline the permitting process for businesses. His $26.7 billion spending plan would take an "active collaboration" between business and government to be a success.
"The same old thing is not enough to move us forward," Patrick said.
Paul Guzzi, the chamber's executive director, asked Patrick to reconcile his promise for job growth and economic development when he is proposing to increase taxes on corporations.
Patrick responded that the tax code is not always the bottom line. Many companies also look for infrastructure, quality schools, and other amenities that help businesses grow. Patrick cited a recent study that found that Massachusetts had the 47th lowest corporate tax burden in the nation.
The speech was largely an encore of the televised address he gave Tuesday night in Melrose. Patrick has made several radio appearances this morning and plans to unveil the specifics of his spending plan at noon.
After the speech, Massachusetts Taxpayers Foundation President Michael Widmer said Patrick's corporate tax plan is more than a closing of loopholes.
"It's a major change in the tax code," he said, but cautioned that if businesses are scared away from Massachusetts by the new tax policy, the losses in jobs will offset the gains in revenue.
"This will discourage job creation and exacerbate our long-term problems," Widmer said.
Material from the Associated Press is included in this report.
Posted by the Boston Globe City & Region Desk at 09:46 AM
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