In Massachusetts, we know that small businesses must be part of our long-term growth solution. I’m proud of the many investments we have made to support small businesses in Massachusetts, and we are committed to continuing to support our small business community.
In 2010, I authored economic development legislation to create better opportunities for our businesses to grow and to attract new businesses to Massachusetts. This legislation also created the Massachusetts Growth Capital Corporation (MGCC) to provide capital to small businesses when they are having trouble securing financing through banks.
Funded by a one-time $20 million bond authorization along with the assets of its predecessors, the Community Development Finance Corporation and the Economic Stabilization Trust, the MGCC makes direct loans to business, but can also assist banks in making their loans more feasible.
In addition to financing, the MGCC provides the equally important service of technical advice to help small business owners make the most of the financial assistance they receive. This requirement helps the businesses succeed, which in turn helps to secure the MGCC’s investment.
Our goal was to create a robust program of financial and managerial consulting assistance for companies. Since its inception, the MGCC has loaned $32.8 million to businesses across the commonwealth, saved or created 5,180 jobs, and leveraged more than $150 million in private sector investments.
Controlling Costs
For the last three years we have frozen unemployment insurance rate increases in Massachusetts, saving businesses more than $1 billion. Over the last three years, we have also reduced the corporate tax rate from 9.5 percent to the current level of 8 percent.
And, in 2010, we passed significant legislation to provide relief to small businesses’ health care costs that created standardized measurements for the quality and cost of health care providers. As a result of this bill, average small business premium increases are now at 0.7 percent, down from 16.3 percent just two years ago.
We also passed legislation in July that will save the commonwealth $200 billion over the next 15 years; a majority of those savings will accrue to businesses. This will mean a greater ability to hire workers, keep good employee benefit packages and compete in a national and international marketplace. These savings will accumulate over time, but the bill also includes a number of provisions that will help businesses right away.
One is a significant reform of the current Fair Share Assessment. The Fair Share Assessment was authorized in the original health care reform law and requires businesses with 11 or more employees to either offer good health care coverage to employees or pay a modest annual fee.
The administration of this assessment became a burden on small businesses, so we removed the regulation that punishes businesses if employees obtain health care coverage through another source, such as a spouse or veteran’s health care.
In addition, the bill increases the minimum threshold of small businesses from 11 employees to 21 employees. This change will remove a barrier for those very small businesses and allow them to grow and add jobs.
The Senate has also led an ongoing effort to reconsider and streamline our regulatory process and make it more sensitive to business concerns. The economic development bill passed in 2010 that created the MGCC also included a requirement that within four years, all state agencies are required to review their regulations to identify and amend or eliminate regulations to minimize the economic impact of those rules and regulations on your small businesses.
Our commonwealth is moving forward because of the strength of our communities, our businesses and our leaders. In March, Massachusetts regained the top spot on the 11th Annual Beacon Hill Institute’s State Competitiveness Report. And, in September 2011, Massachusetts received an upgrade from Standard and Poor’s from AA to AA+. With ratings of Aa1 from Moody’s and AA+ from Fitch, this set of ratings gives Massachusetts its highest credit standing in history.
Our businesses are the backbone of our local and state economies. I am very proud of our record in Massachusetts, and I look forward to continuing to work to make smart investments and effective reforms that will promote job growth and a healthy, productive business environment in Massachusetts.
Therese Murray is president of the
Massachusetts Senate.
