Economy

Mass. Tax Revenue Will Grow -- But Not Enough

By Sarah Birnbaum   |   Wednesday, December 15, 2010
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Dec. 15, 2010

BOSTON -- Economists are predicting Massachusetts revenue will grow by as much as $700 million next year, a 5 percent gain over 2010.

At a Wednesday hearing on the state's revenue predictions, Jay Gonzalez, the governor’s budget chief, said that's is a sign that Massachusetts is moving in the right direction. “These tax collections are consistent with all the other economic indicators we’re seeing that Mass. is coming out of this recession faster and stronger than the rest of the country,” Gonzalez said.

But fiscal watchdogs said the growth in revenue won’t be enough to cover the estimated $2 billion dollar budget gap. One time fixes like the state’s rainy day fund– which is nearly depleted and federal stimulus dollars – which are almost exhausted. 
 
Mike Widmer, of the Massachusetts Taxpayers Foundation, says that without these revenue sources to fall back on, the state will  need to cut jobs and services for the fourth straight year. 
 
Governor Patrick will release his recommended budget next month.
 

Counting Down The 10 Favorite Financial Stupidities Of 2010

By Sheryl Marshall   |   Tuesday, December 14, 2010
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The economy has dominated the news in 2010, and for good reason. Everyone from Congress to the Fed, multi-national corporations to small businesses, have had some serious financial decisions to make. Not all of those decisions have been… shall we say…. wise. Here is my year-end list of “Ten favorite financial stupidities of 2010.”

10. In a year that saw Apple release the new iPad, the iPhone 4, and the new MacBook Air, not buying Apple in January was one of the year's biggest missteps. In January, their stock was at 190. On Dec 4, it closed at 320.

9. Despite overwhelming public opposition, the plan in Congress was to halt unemployment benefits right before Christmas. This would have affected an estimated 1.6 million people. The bill to extend benefits is currently being battled over in Washington.

8. Not getting in on the gold rush. The price of gold on Jan 1, 2010 was $1100/oz, and analysts predicted it would go to $1200 by year’s end. Fueled by unease over the value of paper money, investors turned in mass to gold. In early Dec, It was at $1417/oz.

7. In May, Eurozone members and the IMF agreed to a bail-out package to rescue Greece's embattled economy, at a cost of an estimated 45 billion Euros.

6. And in Ireland, a bailout package cost an additional 85 billion.

5. The story of LocatePLUS: On Dec 5, two former executives of a Beverly technology company were indicted on securities fraud and other charges. Prosecutors allege the former chief executive of LocatePLUS Holdings Corp., Jon Latorella, and its former CFO, James Fields, falsified documents to inflate the company's revenue and create a bogus $1 million pending windfall. The company provides online access to real estate and other public records for investigative searches. As part of their deception, authorities said, Latorella and Fields stole the identity of a young man who drowned in Marblehead Harbor 25 years ago to create a fictional executive whom they used in the scheme.

4. In the Citizens United v Federal Election Commission ruling, the United States Supreme Court decided that corporate funding of independent political broadcasts in candidate elections cannot be limited under the First Amendment. This ruling opened the door to piles of toxic, anonymous money pouring into our elections.

3. The Flash Crash of May 6, when the Dow dropped almost 1000 points, only to recover those losses within minutes. This was all due to algorithms and electronic trading gone wild. It was the second largest point swing, and the biggest one-day point decline on an intraday basis in Dow Jones Industrial Average history.

2. Bad paperwork from the banks that led to all foreclosures being halted in October, 2010.

1. BP Oil Spill. The cost was an estimated $45 billion dollars! You could almost bailout a small European country for that kind of money.

Food Trucks May Be Rolling Toward Boston

By Jess Bidgood   |   Wednesday, December 8, 2010
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Dec. 8, 2010

Food trucks line up in the Washington, DC neighborhood of Columbia Heights. (Mr. T in DC/ Flickr)


BOSTON — Food trucks may be coming ever-closer to Boston.

An ordinance proposed at Wednesday's City Council meeting by City Council President Mike Ross and Councilor Salvatore LaMattina would license up to 25 be-wheeled gourmet vendors to roll around the city.

Earlier this year, Ross and LaMattina traveled to Los Angeles to research the growth and regulation of the city's food truck industry, which has virtually exploded over the past several years.

"LA represents the good, the bad and the ugly with food trucks," Ross said, adding that he made that trip using his money rather than the city's. "The city didn't regulate the industry and then it kind of grew unruly."

LA has seen lawsuits and even fistfights as its food truck industry has grown. That's precisely what Ross thinks his proposal will help avoid.

"I determined a reasonable first-year start would be 25 food trucks," Ross said, "that will allow us to grow the industry in a manageable way."

Under the ordinance, certain zones would be off-limits to trucks based on traffic considerations or the proximity of similar businesses. Ross also wants to keep the trucks as environmentally friendly as possible. "Sustainability practices are very important, especially given that these trucks are trucks," Ross said. "We did allow preference to be given for environmentally progressive initiatives, as well as those businesses that would support charitable processes."

Trucks would be required to be linked to a brick-and-mortar food commissary — and all trucks would have to have some kind of restroom plan for employees.

Ross is also hoping the trucks will partner up with developers, so smart phones can tell hungry customers which trucks could be rolling their way.

The ordinance must be reviewed at a public hearing and will be subject to a City Council vote. "I hope we'll be biting into grilled cheese sandwiches by next summer," Ross said.
Boston City Council Food Trucks Report

Capuano: 'Where Is The Compromise?'

Wednesday, December 8, 2010
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Dec. 8, 2010

BOSTON -- Rep. Michael Capuano is criticizing President Obama for what he says was the failure to play hardball with Congressional Republicans on a tax deal announced Tuesday.

In the deal, the White House agreed to temporarily extend all Bush-era tax cuts -- even those for the wealthiest Americans -- in exchange for an extension of unemployment benefits. But Capuano says the package just gave too much away.

"When I go in to buy a car, I don't just give them the sticker price," Capuano told WGBH's Emily Rooney before the president's Tuesday address. "It may end up being what I have to pay, but at least I try to negotiate. Most of us do not feel as though the president really tried to negotiate."

On top of the tax cut extensions, which the president said was necessary to prevent taxes rising for all Americans, the deal also included Democratic concessions on the estate tax and a payroll tax cut. "Why do you have to throw these things on top of an already costly program?" asked Capuano.

"This was worthy of a massive, bloody fight," Capuano added.

Capuano said he's still deciding whether or not he'll vote to support the package.

Defense Spending In Mass. Rockets Upward

By Sarah Birnbaum   |   Tuesday, December 7, 2010
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Dec. 7, 2010

BOSTON — Defense spending in Massachusetts has tripled since 2001, bringing 115,000 jobs to the Bay State.

So says new research from the University of Massachusetts’ Donahue Institute, funded by Raytheon Corporation. According to the study, the Department of Defense spent over $15 billion dollars in the Commonwealth last year – six times as much as all other federal contract spending in the Bay State.

A still from the report. (Courtesy)

Massachusetts Secretary of Labor Greg Bialecki says the state’s strength in technology and education is a big draw for the military.

“It’s our cluster of universities – MIT really takes the lead – goes back to a long history of helping to invent radar back in WWII and then a cluster of great technology companies,” Bialecki said.

According to the study, the defense sector generated $26 billion dollars in economic activity and 115,000 local jobs, making defense one of the leading industries in Massachusetts.

But President Obama’s commission to reduce the deficit is calling for big cuts in military spending to help pay off the nation’s debt.

 Bialecki says those defense cuts could have broad repercussions in this state.

“We have to pay very close attention to how much is going to be spent on purchasing equipment and weaponry.  Everything from Patriot missiles to jet engines are produced here,” Bialecki said.

Universities and scientific research could also suffer.  According to the study, MIT alone received nearly $2 billion in research grants from the Departments of Defense and Homeland security .

The Defense Industry in Massachusetts

Mass. May Return To Pre-Recession Job Levels By 2013

By Sarah Birnbaum   |   Thursday, November 18, 2010
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Nov. 18, 2010

BOSTON -- The economic outlook is precarious – but New England is weathering the tepid economy better than the rest of the country.

That’s the word from the New England Economic Partnership (NEEP), which released new forecasts for the nation and for the region on Wednesday at the Boston Federal Reserve Bank.
 
Overall, the report said the national economy is still recovering, but it’s losing steam.  Economic growth is slowing because the impact of the fiscal stimulus is fading, and because the European debt crisis has rattled the stock market. 
 
Mark Zandi, chief economist at Moody’s Analytics, was the keynote speaker at Wednesday’s conference.  He said the road ahead will be bumpy.

“The next six, nine, perhaps twelve months will be uncomfortable,” Zandi said – but said he doesn’t think the economy is headed back into recessions.
“We’re not going to double dip.  But the odds of a double dip are high.  I subjectively put them at 1 in 3.  1 in 3.  That’s too high,” Zandi said,  “Uncomfortably high.”
 
Things aren’t quite as bad in New England according to Ross Gittell, an economist at the University of New Hampshire and vice president of NEEP.

“It’s going to be slightly less uncomfortable for the New England region.  But it will still be uncomfortable,” Gittell said.
 
Out of all the states in the region, Massachusetts is expected to have one of the strongest economies.  At the peak of the recession, the Bay State lost about 170,000 jobs.  NEEP says the state is on track to recover those jobs by the beginning of 2013. 
 
But NEEP acknowledges its projections are optimistic. The forecasts are based on the assumption that the national economy will pick up in about a year -- and that it will fully recover in five years.  But that’s not the consensus view.  Many economists believe that unemployment will remain quite high for another decade.  If that’s the case, Massachusetts would have to wait much longer to get back to pre-recession job levels.
 

About the Authors
Sarah Birnbaum
Sarah Birnbaum is WGBH News' State House reporter. Send her a news tip.
Jess Bidgood Jess Bidgood
Jess Bidgood is WGBH.org's news editor and producer.

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