Grossman Delivers First Report to Investors at Boston Chamber
Treasurer Highlights Major Accomplishments During First Hundred-Plus Days
"On day one, our team began to implement a core group of policies and reforms aimed at improving the efficiency, transparency and cost-effectiveness of the Treasurer's Office and state government," said Treasurer Grossman. "These initiatives are in line with our over-arching goal of protecting the public's money, promoting growth, creating jobs, and enhancing the Commonwealth's competitiveness."
One of the top accomplishments cited by Grossman is the creation and implementation of the Small Business Banking Partnership, a $100 million initiative that makes individual deposits of up to $5 million into Massachusetts-based community banks. The reserve funds, otherwise held in large national or international financial institutions, are fully insured and are deposited with the understanding that the banks will expand their loan portfolio to small Massachusetts businesses. Presently, 11 community banks across the Commonwealth have received $5 million deposits apiece under the Small Business Banking Partnership, and another 35 are in the queue to participate in the program. Grossman said that response to the Partnership has been so robust that the initially envisioned $100 million in deposits will likely be expanded substantially.
"The concept of the Small Business Banking Partnership is simple. We invest Massachusetts taxpayer funds in Massachusetts community banks for them to lend to Massachusetts small businesses to help create Massachusetts jobs," said Grossman.
Grossman also pointed to recently implemented guidelines he championed at the Pension Reserves Investment Management (PRIM) Board as an example of a new way of thinking at the Treasury. The guidelines give more latitude for the stock holdings of the Commonwealth's pension fund to be voted in a way that not only enhances shareholder value, but also takes into consideration priorities such as diversity of boards of directors, sustainability or environmental concerns, and concerns over inflated executive compensation or "golden parachutes."
Giving more citizens the tools they need to invest their money wisely has also been a hallmark at the Treasury under Grossman. The Treasurer recently worked with the Governor and Legislature to enact legislation that creates a privately funded Financial Literacy Trust Fund, which provides targeted populations with key strategies on how to better manage and save their money. In addition, Grossman testified last month before the Joint Committee on Public Service to advocate House Bill 2411, legislation the Treasurer's Office crafted that would offer deferred compensation savings plans to more employees in the non-profit sector at no cost to the taxpayer.
Along with Governor Patrick, Grossman has been an outspoken advocate about the need for pension reform, particularly as it impacts the current positive perception that Wall Street has about the Commonwealth's fiscal management. Massachusetts is one of only two states since 2007 to receive a positive outlook in its credit rating from Standard and Poor's, and state officials are optimistic that continued prudent fiscal management may lead to a rating upgrade soon from that agency. Grossman said that this news, along with an existing AA+ rating from Moody's and Fitch, bodes well financially for the state when it goes to market with a major $518 million bond offering later this month.
Grossman also gave an update on his promise to post the Commonwealth's checkbook online, citing "the fundamental right of the Massachusetts taxpayer to know how every dime of their hard-earned money is spent." The Treasurer anticipates that the online checkbook will be available this fall.
Summary of Remarks
Treasurer Steven Grossman
Speech to the Greater Boston Chamber of Commerce
- As we work our way out of the worst recession in our lifetime, I am committed to being a Treasurer who uses the full potential of the office to do four fundamental things:
- Protect the public's money
- Promote growth
- Create jobs
- Enhance our competitiveness.
- The Treasurer's Office needs to focus on all parts of the state and all constituencies.
- Gateway cities
- Small businesses-the BACKBONE of our economy and our future
- Women and minority-owned businesses
- Immigrant entrepreneurship
- 114 days into my term as Treasurer, time for a Report to Investors, the 6.5 million people who live and work in the Commonwealth:
Small Business Banking Partnership.
- 11 banks have received deposits of $5 million, and another 35 are in the queue for participation.
- We invest Massachusetts funds in Massachusetts community banks for them to lend to Massachusetts small businesses to help create Massachusetts jobs.
- Pension reform and its relationship to bond rating.
- Massachusetts is one of only two states since 2007 to receive a positive outlook in its credit rating.
- Live within our means, show fiscal discipline, and put any surpluses into the Rainy Day Fund.
- $518-million bond issue.
- The message is clear from investment bankers - because of our fiscal record, the market wants our bonds.
- Pension Reserves Investment Management (PRIM) Board.
- Primary goal is to enhance shareholder value, but this can be done in a way that also promotes our values.
- Checkbook online.
- Restore credibility for government through increased transparency.
- Giving people the financial tools they need to save for the long-term.
- Financial Literacy Trust Fund provides fiscal education opportunities needed by key segments of society (seniors, veterans, single moms, kids).
- We're working to offer deferred compensation savings plans to more employees in the not-for-profit sector.