FY 2014 Budget Recommendation:
Issues in Brief
Deval L. Patrick, Governor
Timothy P. Murray, Lt. Governor
In the wake of the global economic recession, the nation experienced a dramatic increase in unemployment. However, the Patrick-Murray Administration’s commitment to job creation resulted in the adding of 93,600 jobs since August 2009, keeping the Massachusetts unemployment rate below the national rate. In November 2012, the state unemployment rate dropped to 6.6 percent, 1.2 percent below the national rate of 7.8 percent. While the unemployment rate has improved since the recession, the Administration continues a concerted effort in the FY 2014 budget to get Massachusetts residents back to work.
The Governor’s FY 2014 budget includes significant new investments in education and transportation, highlighted in other Issues in Briefs in this section. These investments will increase employment opportunities, link job seekers with expanding industries, and continue our record of success in leveraging education, innovation, and infrastructure to grow jobs.
In addition, the Governor is proposing targeted investments to improve the Commonwealth’s competitive business climate, especially in innovative fields, including: completing the “Last Mile” of the MassBroadband 123 project to extend affordable broadband access in western and north central Massachusetts; advancing innovation economies such as the life sciences and advanced manufacturing through research grants and accelerator loans; and funding an infusion of new MassWorks local infrastructure grants.
Patrick-Murray Job Creation Strategy
The Patrick-Murray Administration continues to advance its three-pronged strategy for economic growth, centering on education, innovation, and infrastructure. The Economic Development Planning Council, in their report mandated by the Economic Development Act of 2010, defined five sub-strategies that have led Massachusetts out of the global economic recession faster than the rest of the nation. The sub strategies are:
1. Advancing education and workforce development for middle-skill jobs through coordination of education;
2. Investing in economic development and workforce development programs;
3. Supporting innovation and entrepreneurship;
4. Promoting regional development through infrastructure investments and local empowerment; and
5. Increasing the ease of doing business and addressing the Commonwealth’s cost competiveness.
These sub-strategies describe ways in which government, business, and academia can work collaboratively to make Massachusetts more competitive and successful. The Administration embraces effective economic development and job creation initiatives for Massachusetts that will continue to give first priority to helping our businesses and entrepreneurs continue to create and retain jobs. The budget will include the following targeted investments and resources in FY 2014 to put Massachusetts residents to work in critical competitive sectors.
Our 21st Century economy hinges on access to critical technological infrastructure. Therefore, the Governor is announcing a new commitment to bring Massachusetts’ broadband network infrastructure to the “Last Mile.” The Last Mile represents the completion of broadband infrastructure expansion closest to the end-users: the residents, businesses, and community facilities that rely on this technology to continue to grow our economy. This investment will complete the Massachusetts Broadband Institute’s (MBI) MassBroadband 123 project, a 1,100 mile fiber-optic network that will expand broadband access in more than 120 communities in western and north-central Massachusetts and provide direct connections to more than 1,300 schools, hospitals, libraries, and public safety facilities that currently lack reliable, affordable internet service. The Patrick-Murray Administration has already leveraged over $40 M in state funds to receive over $83 M in additional federal funds for broadband expansion throughout the state.
Life Sciences Initiative
The Patrick-Murray Administration created the Massachusetts Life Sciences Center (MLSC) in recognition of the state’s leading position in the biotechnology industry. This budget invests $25 M in the MLSC, an increase of $10 M above FY 2013, and further assumes that $25 M in tax incentives will be distributed to companies expanding their life sciences activities and creating jobs within the Commonwealth. This funding will enable MLSC to provide research grants and accelerator loans to researchers and early-state companies, a direct investment in business expansion and job growth in this critical sector.
To date, MLSC has invested and committed a combined $312 M across all programs throughout the Commonwealth, leveraged approximately $1 B through matching private sector investments, and created 4,136 jobs to date with an additional 4,618 jobs projected through current investments and commitments. Across all programs, the Patrick-Murray Administration’s investments through the Life Sciences Initiative will provide a total of 8,754 jobs created by the end of 2014.
MassDevelopment’s Advanced Manufacturing Futures Program was created in the 2012 Jobs Bill to engage in small-to-medium-enterprise lending, drive workforce development, and provide competitive grants and contracts to facilitate growth and competitiveness in the field of manufacturing. The FY 2014 budget will invest $18.75 M from gaming license revenue in this new program to begin this crucial work. The Administration estimates that a total of 1,856 jobs will be created or retained through this investment over the next five years.
In addition, the Administration will invest in the following programs to grow our manufacturing industry:
The MassWorks Infrastructure Program is a one-stop shop for municipalities seeking public infrastructure funding that supports economic development and job creation. This budget will expand the program and allow for new competitive projects over a minimum of two years with an investment of $19.25 M from gaming license revenue. With this expansion, local cities and towns will see up to $88.1 M in infrastructure-related public construction activity during the 2013 construction season through the MassWorks Infrastructure Program. The Administration estimates this program would create or retain an estimated 2,927 jobs over the next two years.
State Capital Investments
A large portion of the state’s efforts to promote job creation and expand employment opportunities are funded through capital projects, paid for by state bond issuance. The state’s annual capital budget provides funding for substantial job-creating projects across the state, including construction in the life sciences industry, higher education, and transportation. The capital budget will invest more than $3.4 B in public infrastructure in FY 2014, more than double the level of state capital investments when Governor Patrick took office six years ago. While many of these investments create construction jobs and otherwise support economic growth, $188 M is specifically targeted to economic development programs, which will prioritize projects that invest in state infrastructure that supports private development and job growth.
In 2011, the Infrastructure Development Fund (IDF) was established to create jobs and stimulate long-term economic development through infrastructure-related investments made by the Executive Office for Housing and Economic Development (EOHED) in consultation with the Department of Transportation (DOT). There are currently 26 IDF projects ongoing with $14.8 M remaining to be spent in FY 2013 construction season.
Improve Online Resources for Job Seekers
JobQuest, the state online job placement portal, is being modernized to fit the needs of the 21st century workforce. Enhancements include expanded resources for job seekers through an increased number of job postings; skills matching in the job search function to not only match job seekers to positions by title, but also by their previous experience and skill sets; an enhanced search engine; an improved career planning tool integrated into the job search function; smartphone capability; industry-specific Micro-Sites for Green Jobs, Veteran’s Jobs, and others; and the ability to receive notifications of job openings through your choice of SMS messaging or email.
Health Care Workforce Transformation Trust Fund
The Health Care Workforce Transformation Fund was first capitalized with $20 M in FY 2013. It is administered by the Secretary of the Executive Office of Labor and Workforce Development (EOLWD) in consultation with a board comprised of key stakeholders, including health care providers, health care payers, labor organizations, consumer representatives, and educational institutions. EOLWD is working with stakeholders to develop an effective strategy for the implementation of this vital resource.
Last year, the Administration increased investment in the tourism and marketing industries to capitalize on Massachusetts’s historic culture and diverse population. Visitors to Massachusetts spend nearly $17 B annually, generating $1.1 B in state and local taxes, while Massachusetts’ tourism sector employs 124,700 people. The $5 M increase in FY 2013 is the basis for successful marketing campaigns promoting Massachusetts to individuals worldwide.
To build on that momentum, the Patrick-Murray Administration will increase by $2.5 M funding for the Massachusetts Office of Travel and Tourism (MOTT) to expand their domestic and international marketing campaigns to $7.5 M total. This investment will provide for marketing campaigns in neighboring states and emerging markets, including China, India and Brazil, that have shown an increase in the number of visitors to Massachusetts over the last few years.
Governor’s Priorities in the Program Budget
For more information on the Governor’s job creation priority in program format, please visit www.mass.gov/budget/governor , the online version of the FY 2014 Governor’s Budget. Click on the Administration Priorities tab in the FY 2014 Program Budget Recommendations Quick Link. The tab will open to show a list of the four Governor’s priorities and the core set of programs that are critical in supporting the goals of each priority.
Prepared by the Executive Office for Administration and Finance ·
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