Grossman Highlights Entrepreneurial Treasury at Boston Chamber
Treasurer Details Major Accomplishments During Past Year in Office
Treasurer Steven Grossman this morning detailed a host of new entrepreneurial and taxpayer-oriented initiatives he has implemented in his first year in office at a speech before the Government Affairs Forum of the Greater Boston Chamber of Commerce.
“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. “I’m pleased to report that our aggressive and far-reaching agenda has paid substantial dividends in terms of protecting the taxpayer’s money, creating jobs, boosting small businesses and making government more responsive to the taxpayers that it serves.”
In his remarks, Grossman highlighted the job-creating benefits of the Small Business Banking Partnership, which makes individual deposits of up to $10 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 increase loans to small credit-worthy Massachusetts businesses.
Presently, 43 community banks across the Commonwealth have received money under the program, with nearly $217 million on deposit. These banks have made 892 separate loans totaling $132.8 million as of the latest reporting period at the end of last year, many of which are directly attributable to the Partnership. In attendance at the Chamber breakfast were Kimberly and David Abare, President and Vice-President of New England Die Cutting in Haverhill, who have expanded their business through a loan from Pentucket Bank leveraged by the Treasury program.
“New England Die Cutting is one example among many of a Massachusetts business that needed capital to enhance its competitiveness and expand its job-creating potential,” said Grossman. “I’ve seen the tremendous benefits of this program at businesses across the Commonwealth. It’s a great example of a public-private partnership that comes at no cost to the taxpayer, and it works.”
Grossman also showcased the benefits of his efforts to put over 80 contracts at the Treasury out to competitive bid, citing the 33 percent savings, or $2.7 million over three years, his office realized when it bid its core banking services. Building on the fiscal stewardship theme, the Treasurer noted that his efforts last year to convene a meeting between bond rating agencies and state and municipal officials played a significant part in Standard and Poor’s decision to improve the Commonwealth’s bond rating to AA+ from AA. Massachusetts now has the its highest credit standing in history, saving taxpayers millions of dollars in interest charges on bond sales.
Treasurer Grossman emphasized the benefits of having a more entrepreneurial Treasury, citing his 36-years of experience leading his family’s 102-year-old small business. Under Grossman’s leadership, improved management and marketing at the state Lottery has resulted in the projected net profit for fiscal year 2012 being adjusted to $916 million, up from a projected $870 million in December of 2010. The Treasurer has also enhanced customer service and outreach at his office’s Unclaimed Property Division, returning more than $76 million to rightful owners last fiscal year, a 28 percent increase over the prior fiscal year’s amount of $59 million.
Grossman also noted the importance of taking proactive managerial actions in order to protect taxpayer money. Last year, at the Treasurer’s direction, the Pension Reserves Investment Management (PRIM) Board conducted an audit of its foreign exchange transactions conducted by BNY Mellon, an audit that revealed overcharges of approximately $30 million. PRIM and the Treasurer’s office are presently fighting these overcharges. Grossman has also worked to implement a transition from investment in fund-of-funds to direct hedge fund investment at PRIM, a move that could save an estimated $36 million.
A list of banks participating in the Small Business Banking Partnership is attached, along with a Treasury Scorecard related to recent initiatives.