Small businesses chafe at call for $1B life sciences investment

DATELINE: BOSTON

House lawmakers debated their version of Gov. Deval Patrick's $1 billion, 10-year life sciences bill on Wednesday but not everyone was cheering.

Many of the state's long-standing, smaller businesses say they're feeling jilted. They say putting money into the state's existing businesses would be a surer, road-tested use of limited state resources rather than investing in an uncertain, cutting edge technology.

"To focus so much of our resources on this particular industry doesn't seem to give us the bang for the buck," said Bill Vernon, state director for the National Federation of Independent Business.

Vernon said the state should instead focus on smaller businesses, the true powerhouse of job creation. Small businesses in Massachusetts employ about 1.5 million workers nearly half the state's workforce and create two-thirds of new jobs, he said.

He said the state should spend the money cutting unemployment insurance, business taxes, health insurance, energy, wages, and development costs.

"It's not the role of state government to be picking winners and losers," he added. "That's up to the venture capitalists."

House lawmakers gave the bill initial approval on a 134-13 vote. They were scheduled to return on Thursday to continue debate.

Supporters of the initiative including Gov. Deval Patrick and House Speaker Salvatore DiMasi say that without the investment in life sciences, Massachusetts could lose its research and development edge to competitors from California to Singapore.

One of the bill's chief supporters is Rep. Daniel Bosley, a North Adams Democrat and co-chairman of the Economic Development Committee.

Bosley says life sciences is the state's future, and the latest in a long list of innovative industries that have sprung up in Massachusetts. He said life sciences is not just about creating good jobs, but coming up with therapies for some of the world's toughest diseases.

"We have the largest life science cluster in the United States," Bosley said. "This is an industry on the move in Massachusetts and it's an industry that can only grow."

Others support the initiative.

The public policy and economic development consulting firm Mass Insight Corp. issued a report Monday urging lawmakers to set aside $50 million in the bill to help build a $200 million center designed to boost Massachusetts' stake in the development of individualized, gene-based medicine, dubbed "new medicine."

The center would help strengthen links between researchers, major teaching hospitals in Boston and the University of Massachusetts Medical School in Worcester to enhance what the report called the "bench to bed" delivery of new medicines, from researcher to patient.

But business advocates say that with all the focus on new technologies, lawmakers shouldn't forget about the bread and butter industries that employ the bulk of Massachusetts workers.

"It's too narrowly focused," Brian Gilmore, executive vice president of the Associated Industries of Massachusetts, said of the bill. "We don't believe it will create the number of jobs or have the impact on the economy in the future that's projected."

Gilmore said the state should instead focus on improving the general business climate. He said he supports DiMasi's plan to reduce the current business tax rate of 9.5 percent to 7 percent by 2011. Patrick proposed a reduction to 8.3 percent by 2012.

Gilmore's group has also recommended making the proposed tax incentives to certified life sciences projects in the bill available uniformly across all industries.

"If we have an attractive business climate based on our fiscal policies and the research coming out of our educational institutions and our venture capital we should be well situated," he added.

The multi-faceted bill is designed to make targeted investments in education, research and business to spark a long-term development of the life sciences in Massachusetts.

The bill would help fund an Advanced Therapeutics Center at the University of Massachusetts in Worcester ($90 million) and create a life sciences center at the University of Massachusetts in Amherst ($95 million).

It would also establish grant funds to encourage post-doctoral and graduate students studying the life sciences.

The bill would also:

Establish pediatric stem cell research training grants ($30 million);

Offer annual tax credits to life sciences companies ($25 million);

Establish a loan fund to help life science companies jump-start research ($45 million);

Create regional technology and innovation centers to help scientists bridge the gap between basic research and industrial applications.