FY2012 House 1 Budget Recommendation:
Issues in Brief
Deval L. Patrick, Governor
Timothy P. Murray, Lt. Governor
The fiscal year 2012 budget continues to support the Patrick-Murray Administration’s commitment to creating jobs and putting Massachusetts residents back to work.
A large portion of the state’s efforts to promote job creation and expand employment is funded through the capital budget. The state’s annual capital budget provides funding for substantial job-creating projects located across the state, including construction projects in the life sciences industry, higher education and transportation.
The fiscal year 2012 capital budget will invest more than $3.6 billion in capital investment projects; more than double the level of state capital investments since the beginning of the Patrick-Murray Administration. While many of these planned investments create construction jobs and otherwise support economic growth, $194 million of planned fiscal year 2012 capital investments are specifically targeted to economic development programs, which will prioritize projects that invest in state infrastructure that supports private development and job growth.
$51 million is planned for the MassWorks Infrastructure Program, which is the newly created one-stop shop for municipalities seeking public infrastructure to support economic development and job creation in their communities. The Program represents an administrative consolidation of six grant programs:
In addition to the capital program, funding for job creation comes from the state’s quasi-public partners, such as the Life Sciences Center, the Clean Energy Center, MassDevelopment, and Mass Tech Collaborative. These entities are continuing to advance the Patrick-Murray Administration objectives to create high-technology jobs that will be needed in the future, particularly in the life sciences and clean energy sectors.
The state’s quasi-public agencies are also helping to continue to support a number of state-operated economic development and job promoting activities. These include:
The fiscal year 2012 budget proposal reflects the first full year of operation for the newly-created Mass Marketing Partnership, established in the Economic Development Reorganization Bill signed in August 2010. The long-term goal of the new agency is to execute a more consolidated and coordinated marketing effort within the Commonwealth for both attracting and retaining tourists and businesses to the state. The new Growth Capital Corporation, resulting from the recent merger of the Economic Stabilization Trust and Community Development Finance Corporation, will also support funding to make loans to small businesses.
The mission of the Operational Services Division (OSD) is to “administer the procurement process by establishing Statewide Contracts for goods and services that ensure best value”. Executive branch agencies and eligible public entities in the Commonwealth are able to purchase goods and services from vendors on approved statewide contracts through the Commonwealth Procurement and Solicitation (Comm-PASS) Quick Quote on-line system. Comm-PASS promotes transparent and competitive public procurements. Vendors pay an annual $275 subscription fee to access Smart Bid functionality, which allows them to bid on solicitation for a statewide contract. In fiscal year 2012, Governor Patrick’s House 1 proposal requests that OSD eliminate all vendor subscription fees to Comm-PASS. This re-enforces the administrations commitment to promoting business and job creation by eliminating potential barriers and creating accesses to opportunities that will help businesses succeed.
The H.1 budget recommendation will reform the funding structure for the Workforce Training Fund (WTF) by placing the full $21 million appropriation in an “off-budget” trust fund. This change will be responsive to private employers concerns that annual WTF contributions have been diverted in the past from job training initiatives and used for other purposes.
The Executive Office of Labor and Workforce Development (ELWD) will also reform the way in which the WTF is administered so that it will provide funding to a broader range of employers, in terms of size, business and location. Furthermore, ELWD is seeking to increase participation of small businesses by allowing them to partner with community colleges, vocational education schools and community based organizations to apply for grants. Future grants will be administered by the Commonwealth Corporation to help insure that these goals are met and that we can better monitor the grant implementation.
The fiscal year 2012 budget assumes that there will be no changes to the phase down of the corporate tax rate, from 8.75 percent in tax year 2010 to 8.25 percent in 2011. In fiscal year 2012, the Department of Revenue estimates this will save approximately $185.1 million for 35,000 businesses statewide from this change. Even in the midst of unprecedented fiscal challenges, the Patrick-Murray Administration is following through with corporate tax reform and reducing costs for businesses.
Prepared by Sarah Glassman, Executive Office for Administration and Finance ·
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