Growing the economic pie

Seventh in an occasional series on important issues in the race for governor.

FLORAMO'S RESTAURANT in Chelsea used to be busiest in the evenings because that's when people who live nearby come in for dinner. But that pattern has changed, like a lot of other things in Chelsea. While public projects, including a new courthouse, have helped breathe life into the city, more noteworthy is a recent influx of private dollars.

Chelsea has had its troubles over the years, but it's also tantalizingly close to downtown Boston, Logan Airport, and the East Cambridge biotech industry. To exploit those advantages, city officials began simplifying their permit process, making the most of state tax-incentive programs, and touting Chelsea's potential to businesses. So Kayem Foods has expanded its operations. A tidy Wyndham Hotel now attracts airline employees. A major coup came in 2003, when the Cambridge-based pharmaceutical firm Alkermes Inc. opened a $40 million factory in the city.

All this activity has been good for Floramo's, where lunchtime has surpassed dinner as the restaurant's mainstay. Manager John Floramo had hoped the factory would bring new customers. ``We were just happy because we assumed we'd get business off it," he said. ``And we've seen people come."

Chelsea's experience holds some lessons for the candidates running for governor. Granted, efforts to recruit employers will only go so far if Massachusetts fails to deal with fundamental problems, such as high housing costs. But forward-looking policies toward business development and recruitment are crucial in making sure communities -- and states -- live up to their potential.

Time and again, economic-development officials talk about the difficulty of getting necessary permits in Massachusetts. The Legislature recently passed a bill that encourages communities to designate areas for expedited permitting. Lieutenant Governor Kerry Healey, a Republican, views the legislation as a good start, and wants to speed up the process more for renewable energy projects.

Meanwhile, Healey's Democratic rivals also promise to take on the issue. Attorney General Thomas Reilly would give local governments ``stronger incentives" to handle permits faster. Lawyer Deval Patrick vows that no state approval process will take longer than six months. Venture capitalist Christopher Gabrieli maintains that, while permitting issues affect companies that develop property, reexamining licensing rules for small businesses could have a greater effect on jobs.

While faster permitting may be the motherhood and apple pie of this campaign, the candidates' economic plans do contain some unique features.

Gabrieli's top priorities include issuing $1 billion in bonds over 10 years to make research and training grants in stem cell research and other fields; the money would be awarded by expert panels. He favors tax incentives to ``get more employers in the habit" of training their employees. Gabrieli also would try to get more state pension funds to invest money in ways that further research in Massachusetts.

For his part, Patrick talks about beefing up staffing so that regulatory agencies can handle permit applications faster and vows to offer tax advantages to companies that invest in renewable energy. He, too, touts his support for stem cell research. Patrick has said Governor Mitt Romney was right to portray the role of the governor as ``chief salesman," though he takes issue with Romney's performance, and he promises to ``personally engage" in efforts to market Massachusetts to business.

Meanwhile, Reilly calls for consolidating the many agencies that have authority over business development. He places heavy emphasis on reinvesting in the University of Massachusetts by recruiting top faculty and beefing up research and development spending. He also calls for aligning the community college system more closely with the needs of local businesses.

With the general election still more than two months away, Healey, independent Christy Mihos and Green-Rainbow Party candidate Grace Ross have not drawn as much attention. But Healey has vowed to reduce the cost to businesses of unemployment insurance, by reducing benefits from 30 weeks to 26 and requiring employees to work 20 weeks, not 15, before they become eligible. She would look for ways to encourage employees trained in Massachusetts to take jobs in the state. More generally, Healey wants to create a more business-friendly regulatory environment but hasn't called for eliminating specific rules.

In his campaign, Mihos has made a priority of increasing local aid, saying cities and towns could use the money on their own economic-development programs. Several candidates are touting efforts to stimulate business outside the Boston area, and Mihos supports a $300 million bond proposal to lure high-tech research to the Springfield area.

Ross opposes efforts to recruit large corporations by granting favors. She argues that a higher minimum wage and a state-run, single-payer health plan would help small businesses. She also would offer low-interest loans to help small businesses install solar panels and other energy-saving technologies.

In the past, governments across the country have made plenty of mistakes -- from subsidizing activities that would have happened anyway to giving huge tax breaks to companies that create only a smattering of jobs.

The news in Massachusetts is hardly bleak; the state added 4,000 jobs in July. But it still is 148,000 jobs short of 2001's level. The next governor will need to take direct steps to accelerate economic growth and reverse the outflow of residents. ``We need people to come to Chelsea," Floramo says. The same is true for all of Massachusetts.