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MWDN: Murray, Spilka Shake Up Bureaucracy

February 9, 2010

By Jim O’Sullivan, State House News Service
With Contributions from Richard Lodge, MetroWest Daily News

A bill expected to be filed by the Senate President Therese Murray and Sen. Karen Spilka would trim the number of agencies in the state’s economic development bureaucracy and establish a MetroWest travel and tourism bureau to keep the region’s hotel taxes closer to home and out of the general fund. 

The bill, which Spilka, D-Ashland, said would be filed either yesterday or today also would empower the governor’s economic development chief with enhanced oversight of several quasi-public agencies and open the door to a state-owned bank. 

Under legislation developed over the last year with Murray’s supervision, the state housing and economic development secretary would chair all boards that handle economic development work, including MassPort, the agency that largely escaped consolidation measures in last year’s sweeping reorganization of the transportation bureaucracy, and Mass. Convention Center Authority. MassDevelopment, the state’s finance and development authority, would lose its ability to support tax-exempt bonds floated by non profits, leaving the Housing and Education Facilities Authority to enable that borrowing. 

Six existing authorities-dealing with travel and tourism, trade and marketing- would be collapsed into offices within the newly created Mass. Marketing Partnership, overseen by a nine person board. Spilka said the MetroWest travel and tourism bureau would be an offshoot of that move, allowing the region to benefit from hotel taxes generated within MetroWest. 

“All our hotel taxes go into Boston,” she said. With this bill, “we’re coordinating the travel and tourism with economic development, so we would keep out hotel taxes” in the MetroWest. 

The Senate plan comes as the Patrick administration dangles its own job-creation incentives for small businesses, and as the state’s unemployment rate has surged to 9.4 percent. 

Spilka said the bill also would increase the small claims court limit from $2,000 to $7,000, which, she said, would make it more likely small businesses could collect bad debts. 

“A lot of small businesses, if they are owed $5,000, it’s not worth it to them to hire an attorney,” she said. By raising the small court claims limits to $7,000 “if they could go after the (person who owes the) debt themselves, they will.” 

Pointing to at least 31 public, quasi-public and private agencies bearing the “economic development” banner, and charging that the disorganization has led to overlapping and counterproductive efforts, Senate leaders said they would require all private or quasi-public agencies to publish annual reports with financial statements overseen by the state auditor. Public authorities would be banned from hiring lobbyists. The Executive Branch would have to report annually on public lending activities. 

Staffers had checked out complaints from businesses looking to relocate or expand here over the last year that emails and phone calls were going unreturned. 

“There was a test of a number of them- e-mails, calls, and not even a call back or a follow through,”  Murray said Sunday, declining to name the unresponsive agencies. 

In addition, each new governor would have to submit an economic development blueprint with “measureable and verifiable performance goals” during the first year of a new term, according to a summary of the bill. The legislation also calls for a commission “to study the formation of a state owned bank.” 

Nationally, only North Dakota has a state-owned bank. State aides said the North Dakota bank has allowed the state to control more directly lending to support its economy, lessening the impact of constricted credit markets. 

Murray said she heard of idea of a state bank while speaking to a Cape Cod cultural council. 

“It’s just something to look at in terms of credit. It wouldn’t be in competition with our small community banks,” she said, adding, “We’ve got the free up some credit, and mortgage companies and banks have got to do a better job of allowing people to redo their mortgages.” 

The bill would also freeze unemployment insurance rates for a 2010, a coast saving measure for businesses that the House approved Thursday in separate legislation. The current rate is $584 per year per employee, slated to raise to $852. Halting the increase would save employers more than $300 million, House Democrats said.

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