Natick-based Boston Scientific’s plan to cut up to 1,400 jobs underscores the need for better oversight of the tax breaks that businesses receive, state Sen. Jamie Eldridge said.
While the medical-device company hasn’t revealed if any of the jobs lost will be local, “If it’s determined Boston Scientific is laying off Massachusetts workers, I will be calling on Gov. Patrick to rescind all or some of its tax incentives,” Eldridge, an Acton Democrat, said yesterday.
Eldridge co-sponsored a bill filed in January to “promote transparency and efficiency in economic development spending” after Evergreen Solar announced its plans to close its Devens facility, for which it received more than $30 million in grants and tax incentives.
The problem is that Massachusetts has created various tax credits, Eldridge said, but the state and communities aren’t gathering enough information about how companies are following through.
“Even the Department of Revenue doesn’t know if they’re living up to their promises,” he said.
Boston Scientific does not have a tax increment financing agreement with Natick, but it has received breaks from Marlborough on the promise of bringing 1,000 jobs to that city.
In 2006, Boston Scientific received a 20-year tax break on new taxes on its Boston Scientific Way properties in exchange for promises to make $96 million worth of purchase and renovation investments in the area and to employ at least 1,000 workers by June 2010. In 2009 and 2010, Marlborough officials determined the company wasn’t meeting its goals and lowered the benefits.
The state’s agreement to allow Boston Scientific to count contract employees as full-time workers in Marlborough paved the way for the company to pursue a similar deal in December in Quincy, where an expansion project is planned.
“Companies play communities against one another” for local breaks, Eldridge said. “If you don’t have a clear, unified standard everybody abides by, you get these private deals.”
William Buckley, chairman of Milford’s Board of Selectmen, said that although companies have to go through the local process first, the real money is in the state opportunities. He raised concerns about the oversight of tax increment financing in his town in 2005 and says the state has done better watching the deals.
“Anything calling for oversight of the TIFs is worthwhile,” he said, but even without the passage of legislation sponsored by Eldridge and state Rep. Carl Sciortino, “the state has stepped up its oversight.”
Changes made in the past two years have led to the creation of 2,475 new jobs, the retention of 8,978 existing jobs and the leveraging of $1.4 billion in private investment, Secretary of Housing and Economic Development Gregory Bialecki told a state Senate oversight committee this spring.
“At the same time, we have stepped up monitoring and enforcement actions,” he said. “To date, the administration has decertified 176 companies that don’t meet the (Economic Development Incentive Program’s) standards.”
In June, the Economic Assistance Coordinating Council, the branch of Housing and Economic Development that oversees tax-incentive programs on the state level, approved agreements for 13 projects, including an enhanced investment tax credit for eClinicalWorks in Westborough totaling $1.5 million.
The Legislature sets budgets and general rules for tax credits, but there are several state agencies, including the Life Sciences Center created in 2006, that review and award them.
The legislation Eldridge co-sponsored would require uniform reporting requirements and documentation that each criteria, such as job creation or salary and benefit levels for workers, is being met. Businesses would have to report annually for the life of the subsidy.
“Massachusetts taxpayers deserve to know if the nearly $2 billion we spend on tax breaks for big businesses are actually worthwhile,” Robert Haynes, president of the Massachusetts AFL-CIO, said in support of the bill when it went before the Joint Committee on Revenue in April.
The House version of the bill is under consideration by the Joint Committee on Revenue. The identical Senate version was sent to the Joint Committee on Economic Development and Emerging Technologies.
The committees have until next March to make a recommendation, but Eldridge hopes Boston Scientific’s news, on top of high-profile tax incentive beneficiary Fidelity Investments’ plan to move more than 1,000 jobs out of state, will spur his colleagues to put the bill on a faster track.
“Massachusetts spends hundreds of millions of dollars each year on economic development subsidies, and yet legislators, the administration and the general public often don’t know where the money is going,” he said.