Competing Massachusetts Bills Have Similar Goals: Consolidating TBED, Econ. Dev.

Two bills aiming to consolidate state agencies and establish incentives for job creation were introduced last week by Gov. Deval Patrick and Senate President Therese Murray. Gov. Patrick's bill would merge the Massachusetts Technology Development Corporation with the Massachusetts Community Development Finance Corporation and the Economic Stabilization Trust to form a new Massachusetts Growth Capital Corporation funded by a $25 million capital bond authorization and $15 million from the Emerging Technology Fund.

Under the Senate president's proposal, more than 30 state agencies, including the Massachusetts Department of Business Development, would be eliminated or merged under one economic development umbrella.

Both the governor and Senate President say the goal is to streamline state programs and services and promote economic development. The impact most likely would be broader than that, however.

The governor's bill, "An Act Providing for Job Creation by Small Businesses," consists of three main proposals. The proposed Massachusetts Growth Capital Corporation would provide financing and technical assistance to small businesses by capturing a portion of funding ($15 million) from the Emerging Technology Fund, which was established to assist technology-based companies build new facilities, expand operations, or purchase new equipment. The corporation would consist of 11 directors, chaired by the Secretary of Housing and Economic Development. Seven directors would be appointed by the governor.

Gov. Patrick's plan also includes a $50 million tax credit for small businesses, awarding $2,500 for each new job created, a proposal to lower health care costs for small businesses, and a plan to freeze the unemployment insurance rate increase for 2010.

Senate President Murray's bill (S2770) targets at least 31 public, quasi-public and private agencies under the economic development banner, charging overlapping and counterproductive efforts, reports the Daily News Tribune. The legislation calls for a commission to study the formation of a state-owned bank and would require each new governor to submit an economic development blueprint with measurable and verifiable performance goals during the first year of a new term, according to the article. The Senate bill also would create regional one-stop centers for business formation.

Gov. Patrick also recently unveiled the FY11 executive budget, which includes $10 million for the Massachusetts Life Sciences Center (the same as last year) to provide grants and loans to researchers, institutions and companies to commercialize discovery and expand job growth. Funding for this initiative is contingent upon a consolidated net surplus for FY10, which is consistent with the bill's structure. The $25 million in tax credits associated with the legislation would be reduced to $20 million in FY11 under the Governor's plan, however.

The governor's budget also includes $500 million for Science, Technology, Engineering, and Mathematics (STEM) grants, supported by a contribution from the Massachusetts Technology Collaborative.