ONE COMMONWEALTH AGENDA
Building a One Commonwealth Economy
Imagine a world where our Governor has a proven ability to bridge between the business community, civil society, public sector actors, and community leaders — and bring our diverse assets to bear to create solutions that benefit all of us. Where our approach to the economy is deeply rooted in a practical, well researched, experience-based, and profoundly ethical vision for our Commonwealth — captured by the simple phrase, One Commonwealth. Where a dynamic economy and inclusive society can co-exist and reinforce each other in narrowing the gulf between the “two commonwealths” that divide our state.
Currently, the Massachusetts economy is like a split-screen reality. We have a vibrant, growing, and prosperous urban core in the Boston Metro area but our Gateway cities have significant poverty and rural and coastal communities are locked out of opportunity and security. The average income of the top 1% in Massachusetts is more than 30 times higher than the average income of the other 99%, making us the state with the 6th highest rate of income inequality in the country. In Boston, the median wealth for a white family is $250,000, and the median wealth for an African American family is $8. Though many of our communities are already facing the effects of climate change, only 5.7% of our energy consumption is renewable, putting us 37th among states — and those who will be most impacted by rising temperatures are those who are also worst off economically.
As I’ve traveled across Massachusetts, I’ve heard stories from Western Massachusetts to the Cape of business owners who can’t grow their business because infrastructure of housing and transportation isn’t in place to support their hiring. I’ve heard from young people leaving their communities for lack of access to the trifecta of opportunity: good jobs, good homes, and good rides. They leave behind shrinking communities and older residents. One gentleman in the Hill Towns explained the sense of vulnerability that has kicked in because he can no longer find anyone to shovel snow for him in the winter. The 2020 census confirms the stories. Our population has fallen in Western Massachusetts and part of the Cape, even as it is booming in the Boston area. In Abington, I saw a billboard advertising the state of Ohio with the slogan, “Lower cost of living. Greater opportunities.”
A healthy economy would mean growth everywhere, healthy communities supported by infrastrucutre and services throughout the Commonwealth, a lower cost of living, higher quality of life, and greater opportunity. Let’s not move to Ohio. Let’s get the job done here at home.
For too long we’ve been told that a dynamic, growing economy and an inclusive economy are mutually exclusive and that the best path is for those at the bottom to depend on handouts from those at the top.
It doesn’t have to be this way. That is why my agenda will prioritize:
investing in infrastructure to support inclusive growth; building a good jobs economy for everyone; closing the racial wealth and income gap; diversifying our economy to increase inclusion and resilience; taxation for investment in shared prosperity and paths to opportunity.
An Allen administration will invest in the foundations of a One Commonwealth economy that both spurs business formation and recruitment and builds a good jobs foundation that offers stability and broad participation in our state’s economic growth, especially for members of minority groups, women, and low to middle income people.
The agenda below is the outcome of community collaboration at every level. It was developed in discussion with union and business leaders, employees and employers, and policy experts across the state. Most importantly, we listened to so many of our fellow citizens who were working tirelessly while still struggling to make ends meet. Thanks to their wisdom and insight, we have an economy agenda that will significantly improve the lives of millions of Bay Staters. But work to refine this agenda remains: we’ll continue to engage with communities across Massachusetts so that all voices are heard in our efforts to knit the Commonwealth together.
This agenda is just the beginning of the process. As we seek stakeholder engagement across the Commonwealth in the months ahead, the next critical ingredient we need is YOU. Together, we can ensure the growth of our economy and the shared, inclusive benefits of that prosperity.
INVEST IN INFRASTRUCTURE TO SUPPORT INCLUSIVE GROWTH
Strong infrastructure is essential to building an inclusive, dynamic economy. It’s not enough just to expand good jobs. People need to be able to connect to, and persist in, those good jobs. But on the CNBC rankings of the top states for business, Massachusetts ranks 29th for infrastructure. Our current broken infrastructure keeps too many people disconnected from opportunity, whether it be a lack of reliable internet that keeps people from pursuing new remote work prospects, the lack of reliable public transportation that keeps people from getting to work on time each day, or the lack of affordable housing that allows people to move to areas of high opportunity. Even when residents can connect with training or employment, we often fail to provide the supports people need to persist in those opportunities, causing, for example, women to drop out of the workforce because of the lack of reliable childcare. These barriers also slow business and job formation, as employers find it hard to maintain a workforce when workers can’t piece together the foundation of a sustainable existence.
We need investments in good homes, rides, schools, and health to give everyone access to the motors of growth and to support quality of life options that make it possible for people to prosper and for businesses to build and retain a vibrant workforce. The job-supportive policies in our building-block agendas include:
- Investments in housing to ensure all residents have safe, healthy, and secure places to live. Our Housing Agenda prioritizes increasing affordable housing development; supporting tenants’ rights, including rights to counsel, eviction record sealing, and right of first refusal; supporting first-time homeownership; and ending housing insecurity through increased rental vouchers and rental arrearage assistance.
- Affordable regional and Commonwealth-wide transportation networks through investments in high speed, high performance, decarbonized and renewable energy transportation systems. Our Transportation Agenda does this by moving forward with the Rail Vision Full Transformation to electrify commuter rail, completing the North-South Rail Link and high-speed East-West rail; coordinating with other northeast governors to build support for the North Atlantic Rail Initiative; and expanding our electric vehicle infrastructure — leveraging federal funds when possible.
- Educational opportunities that set every learner up for success, starting from universal high quality early education for ages 0-5. This is the best path to universally accessible childcare, and will support women in the workforce — and their ability to retain good jobs at all stages of life. Our Education Agenda further includes increased funding for higher education so that students can graduate debt free and be able to make job decisions based on what they want, not what they owe.
GOOD JOBS, GOOD FIRMS, AND A DYNAMIC ECONOMY
For the last thirty years, economic policy has focused on increasing productivity without paying much attention to how our approaches to productivity have affected the health and well-being of workers. But no economy can be healthier than the people who power it. The productivity of our economy depends on workers being able to participate in production in ways that keep them, their families, and their communities healthy.
It’s time to start thinking about economic productivity and labor prosperity as united – rather than competing – goals. We can, and must, build pathways that connect people to the good-paying jobs of today and tomorrow while also fueling the Commonwealth’s economic strength and resiliency. We do this by building a good jobs economy. This requires: setting the terms of a good jobs economy; protecting worker rights, wages and voices; and growing and diversifying our state’s economy to increase the availability of good jobs. The policies include:
- Development of metrics for measuring the Commonwealth’s success at creating “good jobs,” rather than just chasing after higher GDP or growth indicators.
- Ending wage-theft, staying on track toward the $15/hr minimum wage.
- Ensuring all drivers — regardless of immigration status — have access to licenses so they can connect with job opportunities by passing the Work & Family Mobility Act.
- Mandatory paid family leave and vacation and predictable scheduling.
- Encouragement of growth of employee-owned businesses, which outperform traditional businesses in job creation, profits, and benefits for workers and communities.
- Support for small businesses, and especially business owners of color for access to capital through connecting these business owners with state contracts and support, when possible. Additionally, lower barriers to entry by revisiting licensing requirements and ensuring antitrust laws are being enforced.
- Promotion of small business formation by reducing LLC filing and annual fees. Massachusetts currently leads the nation in its filing fee cost and charges more than nearly every state in annual fees. We will reduce both fees to $100, to align with other states in New England. This will encourage small businesses to grow and prosper in the Commonwealth.
- Achieving commitments from anchor institutions in the Commonwealth, including universities and hospitals, to diversify the vendors with which they contract.
- Broadening the mandates of MassHire, MassTech, and MassDevelopment to achieve strategic coordination for workforce development Commonwealth-wide through linking employers, vocational technical high schools, community colleges, public universities, apprenticeship programs, ESL, financial planning, and entrepreneurship programs; strategic focus on developing technologies, including AI, that positively affect the creation of good jobs; and strategic focus on provision of services and inputs to local firms to support their development of good jobs. Further, we will ensure these programs are led by labor voices rather than corporate ones.
CLOSING THE RACIAL INCOME AND WEALTH GAP
In Massachusetts, the average income of the top 1% is more than 30 times higher than the average income of the other 99%, making Massachusetts the state with the 6th highest rate of income inequality in the country. Our racial wealth gaps are also extreme. In Boston, the median wealth for a white family is $250,000 and the median wealth for an African American family is $8, for Puerto Rican families about $3000, for Dominican families $0, and for other Hispanic families about $2000. Racial disparities in educational outcomes, health outcomes, and life expectancy are all directly linked to the underlying racial wealth gap.
It’s time for us to pull all of the communities in our Commonwealth into our prosperity. We must be purposeful and persistent in closing the racial wealth gap, which is why all of our agendas work toward this goal, including, specifically:
- Support for first time homeownership which will include a targeted focus on homeownership for first generation homeowners.
- Good jobs, linked to access to affordable housing and good, affordable rides, which will restore the capacity of working people to save.
- Support for small business owners of color and women small business owners, through anchor institution commitments to contractor diversity, access to capital, and capacity building.
- Study, and consideration, of the creation of a public bank, including study of postal banking, to spur access to capital for under-resourced communities and of innovative matching fund strategies to support mutual aid and community infrastructure organizations.
DIVERSIFYING OUR ECONOMY TO INCREASE INCLUSION AND RESILIENCE
In two weeks in March 2020, as the COVID-19 pandemic hit, Massachusetts went from having one of the lowest unemployment rates in the country to having one of the highest. We are the only state that made that dramatic swing from one end of the rankings to the other. This reflects the bi-modal or dumbbell nature of our economy with a strong knowledge sector and a services economy supporting it, but a missing middle.
The long-term health and resilience of our economy require diversification. Our policies support diversification through:
- Continued investment in life sciences, biotech, e-health, and human-complementing AI, including support for these industries to diversify their workforces and intentional investment in de-siloing and bridging connections across communities and businesses.
- Investment in wind and solar energy, battery storage, green jobs, and the broader renewable energy sector.
- Investment in advanced manufacturing and buy local initiatives, to support high wage, high attachment career building jobs, again with a focus on workforce diversification.
- Investment in the cannabis industry, with a focus on equity of access to these business opportunities.
- Completion of broadband infrastructure throughout the Commonwealth to encourage moving the location of high-tech work further out from the Boston core.
- Encouragement of companies to spread where they build facilities through increased access to good transportation across the Commonwealth, among other initiatives.
- Creation of an office for rural policy in the governor’s office and a rural renewal strategic plan.
- Inclusion of all communities in the Commonwealth, especially those historically excluded from opportunity, in next generation opportunities.
- Partner with flagship education institutions, public private partnerships, and tax incentives when appropriate to accomplish these goals.
TAXATION FOR INVESTMENT IN SHARED PROSPERITY AND PATHS TO OPPORTUNITY
We have underinvested in Massachusetts families and communities for the last decade and more. Community leaders and organizations have consistently sounded the alarm on this issue. As Progressive Mass has noted, in the four decades from 1977 to 2016, our state cut state taxes by more than all but two other states. And in the four years from 1998 to 2002, Massachusetts enacted income tax cuts that are shorting our Commonwealth of more than $4 billion in tax revenue every year. That means Massachusetts communities are missing out on major, needed investments in our roads, bridges, parks, and key services. We’re shortchanging ourselves on investments in the things that have helped make our state such a great place to live in the past. Yet on top of those cuts to the state income tax, we’ve also got low corporate income taxes compared to other states — so that more and more, we’re relying on fees and on sales, gas, and property taxes to power our Commonwealth. We need to end these regressive tax approaches and stop putting the burden on low- and middle-income families. And we need to intervene in the interstate race to the bottom that has driven falling corporate tax rates and moved that burden off of corporations and onto residents.
Building the economy of the future for Massachusetts will take investment in social infrastructure, physical infrastructure — like housing and transportation — and human capital — like early childhood education and workforce development. Some of the needed resources should come through state-federal partnerships, for instance for transportation infrastructure. But we also need to increase state revenue for purposes of investment in shared prosperity and paths to opportunity. But we cannot go it alone if we want to retain and grow jobs. For this to succeed, we will have to drive national reform of state tax models.
To this end, we support:
- The Fair Share Amendment — a surcharge on income that exceeds $20,000/week with revenue to be used in support of education, transportation, and workforce development.
- A state-level property transfer tax for high value properties and/or second homes, with exemptions for seniors, with revenue to be used in support of affordable housing;
- Property valuations that are fairly calculated and do not worsen inequities in the Commonwealth by overvaluing lower cost properties relative to higher cost ones;
- A revised structure for corporate property tax payments so that some portion of new and increasing tax revenues flows to Commonwealth-wide endeavors; the decision of any given corporation to locate in a particular municipality depends on Commonwealth-wide infrastructure and flows of tax revenue should recognize that.
- An approach to corporate tax reform that gives other states an incentive in joining us in raising the floor on corporate tax rates; this requires an effort to work with the National Governors Association (as President Biden did with the G20 countries) to convene a group to agree to a minimum state corporate tax rate. Even ahead of this meeting, an Allen administration would set up an index of the corporate tax rates of other states based on a mixture of national averages and averages among states that most heavily compete for corporate locations with Massachusetts and peg our corporate tax rate to this index. Furthermore, we would base this on average realized rates rather than statutory tax rates, so that if other states offer tax breaks this would lower their effective tax rate. With this policy in place, other states would lose the incentive to compete with Massachusetts on taxes. This would raise revenues and jobs simultaneously in the long-term, rather than putting us at a competitive disadvantage.
- Review and enforcement of the payment-in-lieu of taxes program to ensure that towns and cities have functional and equitable funding models in contexts where they have limited access to a residential property tax base;
- Congestion pricing with revenue to be used in support of free and/or low-fare public transportation;
- Continuation of the current approach to estate taxes, rather than an increase in the estate tax threshold.
Housing, health, transportation, schools, jobs, justice, community, empowerment, and a healthy climate. These are the building blocks of a livable life, and they have to fit together for life to be livable. What’s more, every person in Massachusetts deserves not just a livable life but an opportunity to build their best life. These building blocks are what every single one of us needs in order to have a foundation to stand on and live a healthy life. These are also the building blocks of an inclusive and dynamic economy that will support growth throughout the whole of the Commonwealth, transition to sustainability, and increased prosperity for all.