Yesterday, Thursday, April 5, I attended a breakfast meeting of the Greater Boston Chamber of Commerce where Senate President Therese Murray spoke.
She focused her remarks on economic growth:
- Noting Massachusetts’ relatively good economic position, but calling for further progress
- Noting recent accomplishments
- reform of economic development programs
- regulatory streamlining
- small business lending program
- small business health insurance cost control through group purchasing
- gaming legislation
- legislation in conference to strengthen performance management in state government
- freezing of unemployment rates
- Committing to further business climate improvements in this legislative session
- Balanced energy cost control legislation — “We want neither to continue importing fossil fuels from outside the region to satisfy our demand, nor to condemn our residents and businesses to a future of steadily increasing prices for electricity in pursuit of our renewable energy goals.”
- General health care cost control legislation, again balancing considerations — “it’s critical that we carefully balance the need to aggressively transform the healthcare industry without causing harm to the number one employment sector in Massachusetts or to patient care.”
- Better linking the work force development capacity of the community colleges to the opportunities being created by employers
In the area of work force development, the Senate President was rolling out early thoughts for discussion. She underlined that the proposal is a “work in progress”. The business community has been asking for a proposal like this and the Governor made a community college proposal in his budget. The Senate President noted the need for additional resources for the effort, a difficult challenge in a tight budget. She mentioned the rainy day fund and gaming revenues.
Senate President Murray closed with a challenge to the Chamber to move more women into positions of leadership noting of that of the top 100 largest public companies in Boston, 41 still have all-male boards of directors and only 6 have female CEO’s.
The new ground is the workforce training initiative and there is a lot to think about there. Some argue that there is a need now for specialized kinds of education — including, for example, The Boston Foundation. There are, on the other hand, some who argue that the primary problem in the economy is a cyclical lack of demand and that there are hundreds of thousands of people in the work force who have more education than their jobs require. See for example this paper from Andrew Sum at Northeastern’s Center for Labor Market Studies.
Both statements can be true to some extent and the conversation is an important one. I am glad that the Senate President is leading us into it.
I wouldn’t choose the rainy day fund among the options that might be identified for funding a work force training initiative. This is an important new initiative, but it is hard to say it is more tangibly urgent than other current needs for which we we have refused to tap the rainy day fund. The rainy day fund, at $1.6 billion, is still well below its pre-recession level. State revenues are highly volatile and there is nothing more damaging to the efficiency and effectiveness of state agencies than boom and bust cycles of layoffs and rehiring. To avoid future instability, we should be building the rainy day fund up to at least 10% and preferably 15% of annual expenditures — in other words $3 to $5 billion — and then we shouldn’t draw on it during times of expansion, but rather keep it in place for the next contraction.