Governor Deval L. Patrick
Business Speech in Danvers
February 26, 2008
As Delivered

And I thank you Dr. Burton for the very warm introduction and for reminding me as Bill Tinti did that when he introduced me here two years ago, is it today? There were chairs then. I feel badly, I thought everyone stood out of respect when I came in, he pointed out that you have no place to sit, so I feel badly. I will try to keep this very, very brief. And if there's time for a question or two, I'd be happy to respond.

I want to acknowledge Bob Bradford, the President of this wonderful organization, thank you, and also President Meservey, so pleased with your service in supporting education here in the Commonwealth. And to the elected officials, in particular my partner Mary Grant in the Legislature, so glad that you are here.

I wanted to just tell you a story some of you have heard, I know Mary has, about a milestone in our family last year to kind of set the table for the remarks I want to make.

Our youngest daughter Katherine graduated from high school last spring. And my wife and I went to her graduation, and I couldn't help but think about the difference between her path to that milestone, and my own to a similar milestone 35 or so years before.

A lot of you here know my story. I grew up mostly in poverty, not mostly, entirely in poverty, sometime on welfare, on the south side of Chicago. I shared a room and a set of bunk beds with my mother and my sister, so you'd go from the top bunk to the bottom bunk to the floor, every third night on the floor. I went to big and broken and over-crowded and under-resourced public schools. I've always loved to read, but I don't actually remember ever owning a book before I got my break in 1970 through a program called A Better Chance to go to Milton Academy. And going there for me was like landing on a different planet. It was so different. Now I compare that to Katherine, who has always had her own room. She grew up in a house in the leafy neighborhood in Milton where I used to deliver newspapers when I was a student at Milton Academy. By the time she got to high school, she had already traveled on three continents, she knew how to use and pronounce a "concierge," and she had shaken hands in the White House with the President of the United States. Think about that.

When Katherine was five years old they were studying the changes of the seasons in kindergarten and she was told to go home and describe to mom and dad, as her homework, the four seasons. And so she said "Mom, I'm ready", and she proceeded to describe in excruciating detail, her several visits to the Four Seasons hotel in Washington, D.C. She said first you drive up and the doorman takes your car. It's one generation, you understand? One generation, and the circumstances of my family were completely transformed. Now that story doesn't get told as often as we'd like, but it gets told more often in this country than any other place on earth. That is the American story. That's your story. And for a lot of you, like for me, that story is made possible by, you know, great education, teachers who cared about and made you feel like you'd been touched by fire, by an opportunity to work and develop and demonstrate your skills, and by adults who involve themselves.

That's our agenda, ladies and gentlemen. Schools, jobs and civic engagement. That is the agenda we are trying to drive in this Commonwealth, so that we can make that American story possible for the next generation, and the generation after that. And we're making some good progress. In education, we have distributed more money in Chapter 70 and public education support than any administration in the history of the Commonwealth.

We have by multiples increased investments in targeted areas where we know there is high impact. Early education and all-day kindergarten, and extended learning time, what I used to describe as a longer school day until I was nearly run out of a middle school classroom in Marlborough. And because I truly believe that we have to have a more comprehensive education strategy that starts before kindergarten and goes right up in a seamless way, as Wayne said, into public higher ed, and on into the workforce.

We've launched something called the Readiness Project, which is an initiative bringing together business people and educators and teachers and parents and others who are involved in education and in an education thinking, to develop an implementation strategy for this new way of brining education to public school kids. And we are making progress. I'm expecting their recommendations later this spring.

We filed a higher ed bond bill as well, so that we can begin to invest in every university and college campus in this Commonwealth. Why is that important? Because the graduates of public higher ed stay in Massachusetts after they graduate. That's where our workforce comes from, that's where our future comes from. And we deserve, we deserve, all of us deserve, the kinds of resources for those young people worthy of the preparation we are demanding of them. When it comes to job creation, you know like I do, you make the jobs, not me. Business, not government. But government can and should create conditions that encourage business investment.

So what have we done? We have cut the time it takes you to get permits at the state level for new projects from an average of 2-3 years to six months, in most cases. Two months if you, well you laugh. You tell me, you tell me if there's a new project that has had more than six months, and I want to know about it. We have an ombudsman now whose job it is to serve as a one-stop shop for any new project that's trying to wind its way through state permitting process. We have not yet made the progress we'd like at the local level, but we understand that there is work that we must partner with local authorities to create, to get that kind of efficiency at the local level as well, so that people can get into and stay in business with predictability and speed.

We have proposed, as Dr. Burton said, a cut in the corporate tax rate, from nine-and-a-half percent to 8.3 percent over three years time. We have proposed, and I expect to sign soon, a freeze in the unemployment insurance contribution rate at last year's level. We have, because we keep hearing from employers all over the Commonwealth about the need to address the affordable housing crisis, or at least the stresses in many parts of the Commonwealth, put some $40 million into the affordable housing trust fund and doubled the soft-second program. Two proven strategies to make home ownership within reach of low- and moderate-income families.

Healthcare is an important dimension of making a more successful, competitive environment, and the health reform initiatives are working. There are 300,000 adults and children who were uninsured last year who are insured today because of those health reforms, and total system costs are coming down. With fewer people using the uncompensated care pool and rates for subsidized programs coming in now at about five percent average increases, which is less than half of what the rates have been in the general market, and we know we have more work to do there. What have the results been?

The Massachusetts economy created over 20,000 new, good jobs last year, We moved from 48 th in job creation to 15 th in the last year, That is very good news. We have been rated first on one national survey and second in another in general national economic competitiveness. We grew even in the fourth quarter of last year, when the general economic ease was beginning to stir, at four times the GDP growth rate of the national average. That is all good news, and we want to keep it going.

That's what the Life Sciences Initiative is about. We have an unusual cluster, in fact it's described as a supercluster here, around the life sciences in Massachusetts, with research institutions and teaching hospitals and great universities and an entrepreneurial tradition that goes back hundreds of years. And so we've proposed a 10-year, $1 billion initiative to shore up that strength and extend that lead because, frankly, the whole world wants what we have. And by most studies, one most recently out of Northeastern, for every new job created in the life sciences, five others are created in related industries and support services. So we are very pleased to see that that initiative is passing out of the House, we expect it fully out of the House in the next few days, I think. Is that right? Did you do it today? You're not in yet, alright. In the next few days, and then over to the Senate.

In the clean energy area we have focused, and by the way I have just come back, just came from the airport now from Washington where the National Governor's Association had its annual meeting. The focus of the Governor's meeting was clean energy, both for environmental reasons, for reasons of strategy and strategic placement in the world, and also for reasons of environmental stewardship. At the president's briefing yesterday in the White House, it's one of the things that he focused on. The importance of having a broad portfolio of energy alternatives and what the economic upside is of focusing on trying to create new jobs in this sector.

What have we been doing? We work with a company called Evergreen Solar. Just one example. Company founded here in Massachusetts that makes solar panels, that has done all of its expansion until now overseas in Europe, we encouraged them to make their expansion strategies here in Massachusetts. They've agreed to do so with some 500 jobs and hundreds of millions of dollars of investment to follow.

We introduced Dominion, some of you know Dominion, who operate, among others, the Salem plant. We introduced Dominion to a company in Massachusetts called GreatPoint Energy, which has a whole new breakthrough strategy on coal gasification, a clean and efficient new technology for taking dirty-burning coal and turning it efficiently into clean-burning gas. They've done all of their pilot programs outside of Massachusetts until we introduced them to each other. And their new pilot program is down in Bretton Point in Somerset, Massachusetts, where they will take dirty coal used in that power plant and turn it into clean burning gas.

We worked with the Legislature on new biofuels standards and on new clean energy and green technology in building standards. That industry is currently poised at 10 th largest in the Commonwealth and is about to become the fastest growing. And with the help of the Legislature, we expect to see an energy bill out very soon, I think its in conference now, between the Senate and the House. That is all good news.

We have proposed bills to invest in transportation, in housing, in broadband, a particular concern in the central and western part of the Commonwealth, and higher ed as well. And frankly the resort casinos proposal is also a jobs proposal. I know it is complicated for a lot of you. It's a controversial proposal in many, many eyes. I do think there is a right way and a wrong way to expand gaming in Massachusetts. And the right way to do it, I believe, is with three destination-style resorts that include, but are not limited to casinos, that also have entertainment and meeting and hotel and recreational facilities. Done this way, by conservative estimates, we're looking at some 20,000 new jobs in the $45,000-50,000 range, 30,000 construction jobs, and a $2 billion boost to our tourism industry here in Massachusetts. That is a serious proposal, and we expect it to be taken seriously in the legislature. Now these are tight times, you know that, and there is a considerable amount of economic unease, I have to acknowledge that. But now is not the time to compromise on our vision or to lose our nerve, because the cost of inaction is too high.

Consider early education. We can choose not to make the kinds of investments we have proposed in early education, but we must consider that for every $1, for every poor kid, excuse me, who has access to early education, all the studies indicate that that kid is 40 % less likely to repeat a grade or to need special education services; 30% more likely to graduate from high school; twice as likely to graduate from college. There are costs of choosing not to make those kinds of investments. There are 125,000 people in Massachusetts looking for work right now, and 90,000 vacancies. 90,000 jobs that go wanting because the people who need the work don't have the skills to do the work that's available. If we don't make investments in closing that skills gap, in workforce development, it costs us with companies who choose to be elsewhere because of a readier supply of talent, or an unemployment and other kinds of benefits related to people who are unable to make a way from themselves.

In the life sciences, think about it. The bioconference that was hosted in Boston in the spring drew some 40,000 people from all over the world. I think Singapore sent a delegation of 400 people. And they came here because they want what we have. China is building a university the size and scale of UCLA every year for the next 10 years. Why? Because they see the upside of intellectual power. They want to have the concentration of brainpower that we have right here. So when we talk about how every life sciences job, by the Northeastern study, creates up to five other jobs, I ask you to consider the fact that for every life sciences job lost, we jeopardize five jobs. There's a cost of inaction.

Healthcare. It's an idea you've heard over and over again. If we don't get primary care out of emergency rooms and into primary care physician offices and pediatricians offices, we will never get a handle on the constant upward pressure in our healthcare system. Energy costs. I was in what we call the oil business when I worked at Texaco. There are reasons why oil is at over $100 a barrel, and there are lots of reasons why it will stay there. Now you tell me, are you satisfied in your business and in your homes to continue to deal with $100 a barrel oil? Can you just wait this out, whatever this is? Or do you think it's important for us to find alternatives now that start to get your power costs down, and show you strategies that make sense for you, practically, to conserve. There are costs, it seems to me, to inaction.

Now there are things that we must do and have to do at the government level to be responsible about trying to make these investments. We have cut spending two years in a row now, half a billion last year, a half a billion again this year. We've asked state workers to share in this burden as well, by taking a larger share of their health insurances costs. We're asking business to share, especially larger businesses, by closing a handful of outdated loopholes, and I mean outdated loopholes. How many of you in this room pay more than $460 a year in property taxes? A few of you? How many of you pay more than $460 in personal income tax? A few of you. How many of your businesses pay more than $460 in business excise tax? A few of you. There are more than a thousand billion-dollar companies in Massachusetts today who pay $460 a year in corporate excise tax. Now that doesn't make them evil, but this is the only state in the nation that has this remaining combination of gaps in our tax code, and not one of those businesses has said to us that they are in Massachusetts because of those gaps in their tax code.

It is time to modernize our tax code, and I'm delighted that we have the support of the Speaker and the Senate President to do that. We're looking forward to that vote, and the corollary, which I think is also timely, is to roll back the excise tax to at least 8.3% for the 30,000 small and medium-sized businesses who would benefit from that. And the bond bills I mentioned, I'll just say that we developed the first ever capital plan, five-year capital plan for the Commonwealth, a very transparent initiative to try to figure out how we would deploy our capital assets over the next five years. We took that plan and showed it to the rating agencies to get through our own affordability analysis, to get their feedback on whether they thought this was prudent, and they received it very warmly. Every one of the bond bill we have proposed is based on that affordability analysis so the very folks who decide what our debt rating will be have said that we can afford what we have proposed.

What is my point? We have to get on with it. We have to invest in ourselves, and we have a prudent plan by which to do so. Now I am sometimes described as an impatient governor, and I admit to that. I'm looking at Mary 'cause she's one of the people who describes me that way, lovingly. But I will tell you, I do not think it's for some of the reasons I have been told I'm impatient. It's not because I come from the business world and am accustomed to decisions being carried out faster, or because I'm not familiar with the ways of Beacon Hill. It's because I've see up close the cost of inaction. I know that for every one of us who's had the opportunity to experience that American story, that one generation transformation, countless other wait. Countless others in every community in this Commonwealth are waiting for their chance to move in one generation beyond their current circumstances and reach for something just outside their grasp. And so when people ask me why I am impatient, I ask, why aren't you? I'm looking forward to working with all of you. Thank you very much for having me.