On July 3, 2008, Governor Patrick signed a corporate tax bill that couples changes in tax policy with a corporate tax rate cut.

Despite unified support among state government leaders to advance such a package, agreement on how these policy changes and rate cuts would be crafted was far from certain.  Several key provisions advocated by the Chamber have been included in the final package - including a clear definition of policy changes and phased-in corporate tax relief that, when fully implemented, will move this package closer to revenue-neutrality. 

It is true that changes in long-standing corporate tax policies have an impact on economic competitiveness - both in perception and reality.  However, the impact of such tax code changes can be mitigated when crafted in a clear, transparent, and discretion-limiting manner, while providing much-needed tax rate relief to businesses currently paying some of the highest rates in the nation.  A quick summary of the bill is included below. 

Tax Rate Cuts - Lowers the current rate for C-corporations of 9.5% (fourth-highest in the nation) to 8.75% in 2010, and makes further reductions to 8.0% by 2012.  The bill also cuts the rate paid by financial services institutions from 10.5% to 9.0% during that same timeframe and provides similar phased-in rate relief to S-corporations.  None of these tax cuts would be predicated on economic triggers, as had previously been considered by the legislature.

Policy Changes - Implements mandatory unitary combined reporting with a water's-edge election and the following provisions: adoption of a 10-year binding federal consolidated return election; inclusion of Federal Accounting Standards (FAS) 109 relief - a deduction designed to mitigate the financial reporting impact on net deferred tax liabilities or assets; and sharing of credits and net operating losses within a combined group.  The bill also establishes conformity to federal "check-the-box" provisions for entity classification.  The bill includes strict limitations on Dept. of Revenue discretionary powers in administering changes to the corporate tax code.

Studies - Establishes special municipal relief commission to study options for new and expanded local taxes, directs the Dept. of Revenue to prepare a feasibility study regarding conformity to the Streamlined Sales and Use Tax Agreement, and establishes a special legislative commission to further review state corporate tax laws (modernization and simplification of the current business tax laws, including the rate structure; reporting mechanisms of corporations; and the use and effectiveness of the single-sales factor apportionment formula).

The Chamber will continue to monitor this legislation as it is implemented.

The Chamber's May 2008 Monthly Jobs Update, released today, shows that Massachusetts added 1,400 jobs last month.

Other key findings include:

• Massachusetts posted 0.4% job growth over the last 12 months, which ranks the state 25th nationally
• Four of 12 regions added jobs over the last 12 months
• Greater Boston and Metro West regions grew fastest
• State remains 92,100 jobs below previous peak
• State manufacturing jobs down 1.3% last 12 months; only Berkshire Country and Metro West regions added manufacturing jobs

Compare this month against previous jobs reports here.

For more information on the Chamber's Job Creation Policy Agenda and ongoing advocacy, please visit the Chamber's Policy & Research page.

The Chamber is pleased to announce that the 10-year, $1 billion Massachusetts Life Sciences Initiative was overwhelmingly passed by the Legislature last week and signed into law by the Governor on Monday. Click here to access the Chamber's latest Life Sciences Policy Update.

With the passage of this bill, Massachusetts can grow its leadership in this critical industry cluster, drive advancements in cutting-edge fields of research, and retain more of the bright young researchers graduating from our colleges and universities.

As you may know, the Chamber had testified in support of and worked to advance the goals of this initiative, which seeks to secure Massachusetts’ global leadership in the life sciences industry through a series of tax incentives, capital expenditures, training initiatives, research grants and other targeted life sciences investments. Included in this law is a Chamber-filed tax reform that extends the net operating loss (NOL) carry-forward period for life sciences companies in Massachusetts. 

Greater Boston’s life science cluster is vital to the regional economy and global community – improving healthcare delivery and outcomes, producing life-saving therapies and vaccines, and supporting thousands of high-quality jobs. The Chamber applauds the enactment of this landmark law and looks forward to engaging member companies in the life sciences industry and working with state government leaders and the Massachusetts Life Sciences Center during the critical implementation phase of this legislation.

For more information on the Chamber’s focus in the life sciences industry, click here. And don't miss the Chamber's Life Sciences Forum on June 26 at the the Boston Harbor Hotel with featured speaker Dr. Joshua Boger, Ph.D., president & CEO of Vertex Pharmaceuticals. Click here to register.

• Nine of 12 regions added jobs in the last 12 months; Metro South and Metro West are growing the fastest.

• State remains 91,400 jobs below previous peak.

• State financial services jobs down 0.7% in the last 12 months; only two of 12 regions added jobs in the last 12 months.

• 7 of 12 regions added jobs
• Greater Boston and Metro West regions grow fastest
• State remains 95,700 jobs below previous peak
• State transportation & utilities jobs down 0.5% last 12 months
• Merrimack valley region grows fastest

Compare this month against previous jobs reports here.

The Chamber's January 2008 Monthly Jobs Update reveals that Massachusetts has added 16,900 jobs since January 2007, a year-to-year job growth rate of 0.5%.

Other highlights of this month's update include:

• All but three regions add jobs year-to-year; Metro West and Greater Boston grow fastest.
• State remains 95,100 jobs below previous peak.
• State educational and health services jobs up 2.3% last twelve months; all regions level or positive job growth.

To view all the Chamber's previous job reports, click here.

Yesterday's Boston Globe editorial on the success of the new health care reform law was right on point, thoughtfully addressing criticisms of the measure and using facts & data to call out the law's many achievements.

As the piece articulates in detail, the new health care law has brought health insurance access to hundreds of thousands of individuals who previously went without.  It has been a model for the nation, and will continue to be examined closely in the face of November's presidential election.

Now the same coalition of government, civic, and business leaders that worked to expand health care access must come together to address the vital issue of rising costs.  The Chamber and the employer community remain committed to improving our economic competitiveness by reducing business costs - including health care - and will work with government leaders to address this issue in the weeks and months ahead.

The Chamber's Monthly Jobs Update for December illustrates a troubling trend in the Massachusetts job growth rate.

• The state added just 24,100 jobs in 2007, for a 0.7% job growth rate;
• Massachusetts remains more than 100,000 jobs below our 2001 peak; and
• The state's job growth rate was below the national average and ranked 33rd overall.

To read the December Jobs Update click here.

The Chamber's November Jobs Update, released today, showed that Massachusetts posted 0.9% year-to-year job growth, adding, 29,300 jobs in the last twelve months.

Nearly all regions of the state added jobs year-to-year, with Greater Boston & Metro South growing fastest.

State manufacturing jobs were down 0.7% in last twelve months, as only Worcester, Metro West, and Cape Cod regions added year-to-year manufacturing jobs.

Download the jobs update here.

Earlier today, the Massachusetts Division of Health Care Finance and Policy announced the preliminary data on the Employer Fair Share component of the new Massachusetts health insurance law.

The Chamber is pleased with the data, which indicates very strong participation by employers required to provide employee health contributions under the new law. 

To date, 97% of companies that have filed appropriate documentation with the state – nearly 20,000 firms - are complying with the law’s fair share assessment provision, which requires employers with 11 or more full time equivalent employees to make a fair and reasonable contribution to employee health insurance or face a $295 per employee assessment. 

The large number of complying employers also means that fewer employees are utilizing free care services, thereby improving overall health outcomes and reducing burdens on state finances – a key provision of the health reform effort. 

Massachusetts has long been a leader in the high percentage of employers providing employee health insurance coverage, and this data confirms that the vast majority of employers are committed to their employees and the success of health care reform in Massachusetts.

The Chamber's October Jobs Update, released today, showed a loss of jobs for the second straight month, leaving us more than 100,000 jobs away from our 2001 peak. Findings include:

• State posts 1% year-to-year job growth, but loses 3,000 jobs from Sept. to Oct. 2007; 2nd straight month of job loss
• Nearly all regions add jobs year-to-year; Greater Boston & Metro South grow fastest
• State leisure & hospitality services jobs up 1.7% last 12 months; Greater Boston & Merrimack Valley grow fastest

Yesterday, the legislature held a hearing on Governor Patrick’s Massachusetts Life Sciences Initiative. 

We support the goals of this initiative.  We believe that by enacting a package of capital and investment funds, tax incentives, and workforce training initiatives, Massachusetts can grow its leadership in this critical industry cluster, drive advancements in cutting-edge fields of research, and retain more of the bright young researchers graduating from our colleges and universities.

Greater Boston’s economic engine and job market is driven by the traditional leading industries of financial services, higher education and the visitor industry, and cutting-edge industries of high technology and life sciences.  We must continue to implement comprehensive strategies and reforms in order to leverage our strength in each of these core industries, lower barriers to hiring and expansion, and place Massachusetts on the path to meeting and surpassing its historical jobs peak. 

In recent years, the state demonstrated the foresight and sound judgment to enact targeted initiatives and reforms designed to build upon our region’s core strengths, including the life sciences.  From streamlined regulations governing commercial permitting and stem cell research to enhanced industry tax credits and STEM training, our elected officials have shown a clear understanding of the need for state action in the face of growing domestic and global competition for life sciences jobs, facilities and investment dollars.

Despite this progress, it has become clear that a comprehensive, long-term commitment from the state will be necessary in order to realize the full potential of our burgeoning life sciences cluster.  We think the following areas are worth focusing on:

• Promoting collaboration and advancements in cutting-edge research fields;
• Enacting tax incentives and capital funding programs that encourage life science job growth and site expansion in the state;
• Expanding gap financing from discovery to commercialization; and
• Strengthening the state’s world-class talent pool.  

Enactment of these, and other proposals to come, will send an important signal that Massachusetts is prepared to aggressively compete to sustain and grow this cluster for years to come.

Greater Boston remains home to a life sciences cluster that is the envy of much of the world due to its concentration of intellectual and venture capital, medical and higher educational institutions, and existing research infrastructure.  This cluster continues to be a vitally important economic engine, providing thousands of high-paying jobs and offering the promise of thousands more to come as new companies emerge and existing companies mature.  However, we know that past performance does not assure future success.  Massachusetts has a unique opportunity enact a plan that will foster the growth of this world-renowned cluster and directly counter the actions by states and countries seeking to entice our cutting-edge companies and talented researchers to relocate. 

We look forward to working with legislative leadership in the coming weeks and months to achieve a public-private roadmap for the success and growth of this and other leading industries essential to our economic future.

Earlier today, the Chamber submitted testimony on proposed changes to Chapter 40B at a hearing of the Joint Committee on Housing. 

The Chamber opposes any legislative measure aimed at diminishing the intent of the statute or its ability to impact our state’s affordable housing stock. 

Despite the recent “softening” of real estate market, Massachusetts continues to experience an unprecedented affordability crisis leading many of our best and brightest to relocate to other regions of the country.  Viable housing options will continue to elude many of our residents- especially recent graduates and young families – unless we address the fundamental supply-demand imbalance that persists in the marketplace.

Chapter 40B remains one of the most valuable tools this state has to encourage more communities to do their share with respect to affordable housing production.   Since its enactment in 1969, Chapter 40B has responsible for the development of tens of thousands of housing units and remains an essential ingredient for promoting development of workforce housing sufficient to sustain and grow our economy.  

By preserving this powerful tool that continues to boost housing production across the Commonwealth, we can begin to address our region’s greatest competitive disadvantage while enhancing our ability to attract & retain talented workers and improving the quality of life of those who live and work here.

The Chamber's September Jobs Update, released today, showed a loss of 2,100 jobs in September. This loss drops us to 99,400 jobs below our historical peak.

Other highlights include:

• Nearly all regions of the state have added jobs year-to-year; Greater Boston & South Coast grow fastest
• State professional & business services jobs are up 2.3% over the last twelve months; all regions show level or positive job growth.

View the full jobs update at bostonchamber.com.

The State House News service is reporting on a presentation to the Legislature’s Biotechnology Caucus by a group of academics studying the Massachusetts life science industry. Early reports from the study indicate that, “visa obstacles facing foreign workers are posing challenges to life sciences companies.”

This diagnosis mirrors one that the Chamber made several years ago in our report, “Sustaining Greater Boston’s Life Science Leadership.”  Our analyses identified the same problems with a lack of foreign visas for highly skilled workers that today’s presentation illustrates.

Since 2005, the Chamber has been lobbying Congress to raise the cap on these H-1B visas, in order to address critical labor shortages that exist in the life science industry.

The H-1B visa program currently allows 65,000 skilled foreign workers to enter the U.S. annually to work in a "specialty occupation" for up to six years. This spring, the cap for H-1B visa petitions for FY 2008 was reached on the very first day of filing, continuing a trend of exhausting the availability of these visas before the start of the fiscal year.

The presence of a robust H-1B visa program is critical to the long-term global competitiveness of our region and country, as the majority of students earning advanced mathematics, computer science, and engineering degrees at U.S. schools are foreign-born. Highly-educated workers are the lifeblood of Greater Boston’s dynamic and knowledge-based economy, and we as a region have much to lose if our companies are unable to recruit these talented students graduating from our world-class colleges and universities.

In addition, current immigration policy is jeopardizing the future competitiveness of the regional and national innovation economies. Foreign-born professionals significantly contribute to economic growth and job creation – starting one-quarter of the venture-backed U.S. public companies over the past 15 years. By blocking these would-be entrepreneurs from joining the U.S. workforce, we are squandering an opportunity to capture the next generation of visionaries, and hindering innovation in a variety of fields.

In light of the similar findings presented to the Biotech Caucus today, the Chamber will continue to work with our Congressional delegation and chamber executives from across the country in order to enact meaningful skilled worker visa reform.

Implementation of the new health care law reached another important milestone today.

As of today, all employers with 11 or more employees are required to establish Section 125 plans that enable their employees to buy health insurance on a pre-tax basis.  These plans result in significant cost-savings for individuals, and also reduce federal payroll tax obligations for employers.  Employers that fail to adopt and maintain a Section 125 Plan may be responsible for the medical bills accumulated by employees or their dependents who receive care from the state’s free care pool under the law’s Free Rider Surcharge provision.

Employers are also required to file Health Insurance Responsibility Disclosure (HIRD) forms with the state, indicating that the company maintains a Section 125 plan and whether or not it contributes to the premium costs of a group health plan for its employees or offers an employer sponsored group health plan.

Those employees that have declined to enroll in employer sponsored group health plan or to participate in the employer’s Section 125 Plan must also file a HIRD form.

For more information on employer requirements of the health care reform law, click here.

A recent issue of The Economist has drawn attention to a report on the financial services industry released by the Chamber and Mass Insight, with the assistance of McKinsey & Co., in March 2007.

The report, “Securing Massachusetts’s Leadership Position in Financial Services,” outlines Massachusetts's continued strength in the financial services industry, but warns that the lack of a coordinated state strategy and fierce global competition threaten the industry’s 180,000 job base.

The Economist’s September 13^th “Special Report on Financial Services,” discusses many of the concerns raised by the Chamber’s report, and emphasizes the growing competition from financial centers in the developing world.

Following the release of our report in March, the Chamber formed a working group with Mass Insight and McKinsey to create an implementation framework for advancing its recommendations and proposed initiatives.

Throughout the summer the working group met with government leaders – including Housing and Economic Development Secretary Dan O’Connell, his senior leadership team, and top aides to Attorney General Martha Coakley – to build support for the recommendations.

We will continue working to advance these issues in the fall, and have expanded our programming targeted at the financial services sector to better connect the industry with key government officials.

This afternoon the Greater Boston Chamber testified in favor of legislation lifting the cap on charter public schools in under performing school districts in Massachusetts.

Our greatest natural resources in the Commonwealth are talent and innovation.  The preparation that our future entrepreneurs and skilled workers receive begins in grade-school.  Therefore, we can’t afford to risk the quality of that education in any way; we must commit to protecting it.

That is why the business community in Greater Boston and throughout Massachusetts sees supporting and improving all of our public schools, including charter public schools, as a critical component to maintaining the Commonwealth’s long-term economic success and leveraging our biggest competitive advantage: a skilled, talented, and well-educated workforce.

Massachusetts charter public schools are clearly meeting the challenges laid down over a decade ago in the 1993 Education Reform Act. Their success reveals a few things:

• Despite criticism, charter public schools have made significant advances over the years;
• They have come to represent an important component in the state’s educational landscape; and
• The competitive environment generated by their success has lead to significant improvements to the state’s overall quality of public education.

Yet challenges remain, and in order to meet those challenges and capitalize on the momentum created by charter school success, more work needs to be done by a diverse group of stakeholders.

Legislative support is crucial. Amending the current law – which prevents charter public school expansion in communities across Massachusetts – is a good first step. The Chamber supports the proposal – outlined in the legislation filed by Representative O’Flaherty and Senator Hart – that would raise the cap on charter schools for districts that have scored in the bottom 10 percent statewide on MCAS for two consecutive years.

Passage of this legislation is critical, as it will expand opportunities for educators and students in districts with limited resources, while continuing to ensure that the Massachusetts economy leverages the educated workforce that has become the state’s most important competitive resource.

Today the Chamber officially launched its Massachusetts Jobs Update, an economic snapshot highlighting statewide and regional job trends and benchmarking our progress toward closing the jobs gap that persists in the Commonwealth.

Headlines from this month’s update include:

o       Massachusetts adds 2,800 jobs in Aug; highest total jobs since Nov. ’01 but 97,200 jobs short of historical jobs peak.

o       Nearly all regions add jobs year-to-year; Greater Boston grows fastest, Merrimack Valley level.

o       State financial service jobs up 0.7% last twelve months.

The full report can be found at bostonchamber.com