Prepared remarks of House Speaker DeLeo

The Federal Reserve is expected to report that output at the nation's factories, mines and utilities rose 0.6 percent in August, according to Thomson Reuters. This follows a similar increase in July, after 9 months of decreases, and appears to have cut across industries, a sign of a broad recovery.

And while unemployment continues to be a major concern – the unemployment rate is now at its highest point since the 1983 recession -- Massachusetts’ rate continues to beat the national rate by more than half a percentage point.

But amid the doom and gloom, it’s important to make a few important points. First, our state’s situation is far from unique. Local, state and national governments around the world are hurting. Some states, such as New York and California, are in much worse shape than Massachusetts.

In California, for example, serious cuts were made in K-12 education and the state had to issue about 210,000 IOUs worth approximately $1 billion to pay vendors and state contractors. We all heard about the troubles that New York experienced in a producing a budget that provided much less than expected to local schools and cut funding for hospitals and nursing homes. Meanwhile, Pennsylvania still does not have a budget for the new fiscal year while Connecticut’s legislature just passed its state budget two weeks ago.

Second, unlike many other states, in Massachusetts we have put a premium on working together to get things done. Governor Patrick signed the budget in time for the start of the fiscal year.
And, third, there is the character of the state itself – a fundamental reason companies and individuals want to work and do business in Massachusetts. Since its founding, Massachusetts has been a center of innovation and reinvention. In that sense, I find it very fitting that I speak to you today in this hotel overlooking Route 128. In the midst of the Great Depression as businesses and employers around Massachusetts closed their doors, if someone had said that in less than a generation a whole new prosperous economic region would spring up on a road circling Boston built on state-of-the-art technology, they would have received looks of disbelief, to say the least.

Yet, it did happen. In less than two decades, a whole technology sector of the Massachusetts economy arose, which led our state into a new era.

Also, since its inception Massachusetts has seen its share of boom and bust cycles. Through them all, we have persevered and prospered.

Today, we no longer see the economy as being based on just one sector. The strength of the Massachusetts economy is our diversity – combining traditional industries with new areas of growth.

Unlike other states, which are captive to a single industry, our state is blessed to have vibrant sectors in healthcare, education, biotech, travel and tourism and manufacturing. It’s important to note that manufacturing is not a footnote to the state’s history – as some would have us believe. I look out in this audience, in which manufacturers are such an important presence and see representatives of not only big corporations, such as General Electric, but smaller entities as well, such as the Mason Box Company.

Before I became Speaker, while serving as the chairman of the House Committee on Ways & Means, I looked for ways to bolster those areas. Now, with people like the head of the White House’s National Economic Council, Larry Summers, saying that some of the jobs lost in this recession may never come back, it’s more important to build on these growth engines.

Just this week, New York Times columnist Thomas Friedman identified a nationwide problem where our companies discover things here and manufacture them abroad. Friedman devised a new motto for a clean energy company based in California with factories in Germany, China, Spain and India: “Invented here, sold there.” My goal with economic development in Massachusetts is that we capture and capitalize upon the innovation that has always sparked here in Massachusetts. I want our new business motto to be “Invented here, manufactured here.”

To that end, in recent years we have passed important growth measures in clean energy, life sciences and the film industry.

In 2008, the Green Communities Act, which attempts to highlight the growth of the renewable energy sector, went into effect. In 2008, the House passed the Clean Energy Biofuels Act. This law helped set the stage for our state to capitalize on clean alternatives to fossil fuels. We also passed the Life Sciences Legislation. Last night, out in Worcester, the state broke ground on the historic Albert Sherman Center, a research facility which will bring together different disciplines to keep Massachusetts on the cutting edge of this area. The law aims to enhance the partnership between universities, research hospitals and business – enabling these important sectors of our economy to grow.

We have passed other important economic stimulus legislation and sparked our state’s creative economy with the film tax credit.

Given the current economic climate, I don’t expect any new spending measures soon. Nor do I see much appetite for industry-wide tax credits. But I am very interested in those measures which would have no impact on our budget.

That is one additional reason I am interested in gaming in Massachusetts. It’s been very well reported by now that I have always been a supporter of slots at race tracks – given the importance of the racing industry in my district. Gaming could mean jobs in this district.

But I also view gaming as an additional industry that could help support our statewide economy and build on the travel and tourism sector. It’s important to make the point that I don’t see gaming as a panacea to all of our economic and fiscal problems in the state. I do view it as one more tool that can help our state prosper. I am confident that we will site gaming facilities in a way that reflects the geographic diversity of our state. To maximize our investment, we will explore the idea of using gaming proceeds to invest in other industries. Given the importance of economic development as well as the vital need for revenue, I have expanded my thinking. In addition to my backing of slots, I now support resort casinos.

We are currently studying the proposals that are out there in anticipation of developing a plan of our own. I will weigh all the economic factors and studies about what the introduction of gaming means during this difficult fiscal time. I will look to the hearing that will take place on gaming in October. This will provide additional information to assist me in my decision making.

Another area I am looking at as Speaker is comprehensive regulatory reform. Too often the intent of laws passed by legislators gets lost amid a sea of regulation.

Last year, Governor Patrick signed a law reforming our corporate tax code. The object of this legislation was to promote fairness in the tax code. We have heard that as implemented this new provision – particularly the definition of “waters edge” – has raised some concerns for you and others. We will seek to work in partnership with you to make sure the changes that were made get done for the common good. My hope would be to balance the tax code to best reflect our economic development goals.

I am committed to building on our system of higher education. Our state has long been fortunate to have some of the finest colleges and universities in the entire world. But not everyone is going to go to receive a graduate research degree from Harvard or MIT. My goal is to assist our community colleges as they seek improvement. One idea well worth exploring might be to partner specific community colleges with industry areas. This could assist employers and help bring the community colleges to the next stage of growth and development.

As we seek to build and strengthen those areas which will be the foundations of our future economy, we try to minimize those obstacles to retaining and bringing businesses to our state. These include housing and healthcare. Even with the hit that real estate prices have taken in the short term in the Greater Boston area, prices still hover at far higher levels than elsewhere in the country. I am interested in exploring the possibilities of transportation systems which can open the housing stock of Worcester, Springfield, Southeastern Massachusetts and other regions to those who currently live and work around RT 128.

While Massachusetts is still leading the nation in healthcare coverage, and serving as the model for reform at the national level, we are still seeing double-digit insurance premium increases. It is widely accepted that these rates of increase are not sustainable by the business community. The Boston Globe spotlighted these increases and forecasted that small businesses and individuals are expected to be hit the hardest this year in regards to rate increases; although it’s important to point out that, according to a recent Kaiser Family Foundation survey, these increases reflect national trends apart from our health care program in Massachusetts.

Having said that, I’m sure many of you are aware that the Health Payment Reform Commission released its report to the legislature this past July. We are now taking the fall to take a much closer look at their proposals and to answer some of the bigger and more difficult questions that they were not able to answer. Reforming the payment system is undoubtedly going to be a highly contentious issue. For me, the end goals are to get these costs under control so that we don’t continue to feel the strain on the states’ budget, to alleviate the coverage costs that are hitting individuals and small businesses so that we remain a healthy and competitive workforce, and to balance these goals with the needs of providers and respect the obstacles that our current healthcare infrastructure is facing.

As we move through this process, we are going to need the business community to remain an active voice, just as you were during the 2006 health care reform debate. I am looking forward to, and counting on, your input and guidance as we move forward.

As I conclude, I want to reiterate my commitment to economic growth and development in Massachusetts. Even as we fight to put the worst of the recession behind us, I believe that the future of our state promises to be far brighter than our present. I hope to work with you as we navigate these waters together. Thank you.