Work in progress
MITT ROMNEY campaigned for governor on a promise to be the best salesman Massachusetts ever had, so it's a good thing he has opened a new sample box of job creation products. Since he took office more than two years ago, employment in the state has lagged, recording a net loss of 19,800 jobs, even as the state is losing population. The situation is grave. The Legislature ought to put aside partisan nitpicking and work with Romney to find real solutions to the job doldrums in Massachusetts.
At a Chamber of Commerce breakfast this week, Romney proposed a package of business incentives, including $185 million over five years in cash payments for companies that create at least 100 new jobs; $200 million in capital improvements; $246 million in unemployment insurance rate relief; and $100 million for research and technology centers at the University of Massachusetts. The state needs to be smart about how it doles out such largesse. Tax expenditures should be targeted to the industries whose behavior can be tipped by a $10,000-per-job credit; otherwise they might become a subsidy for actions that would have been taken anyway.
The price of a new highway ramp or sewer system and the environmental impact of development in sensitive areas all need to be weighed against the number and quality of the promised jobs.
In his presentation, Romney underlined the need to market Massachusetts and remain competitive with other states. Happily, he seemed to dismiss some hoary stereotypes about the business climate in Massachusetts. The state's tax-and-fee burden as a percentage of personal income now ranks 46th of the 50 states. Massachusetts will never be a low-cost state. But it can and should emphasize its advantages: a highly skilled, highly educated workforce and business incubators in the form of universities and hospitals that are among the best in the world.
As he was listing disincentives to business expansion, Romney barely brushed by the state's excessively high housing costs. The Chamber of Commerce has recognized the housing crisis as a priority issue precisely because it undermines the state's ability to attract and hold workers. Housing is also an area where a governor can actually get something done. Yet housing production under Romney has not been strong enough to have much effect on prices.
Economists are skeptical about how much any governor can do to create private-sector jobs, since much depends on larger national trends. But if they are well targeted geographically and by sector, even a few hundred jobs can boost the state's revenues and generate other economic activity. Creating them requires commitment to a long-term strategy, not just a new sales pitch.