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The AIM Top 10 Massachusetts Business Stories of 2010

Posted by Christopher Geehern on Dec 16, 2010 11:09:00 AM

2010 shifted the always unpredictable alchemy of business and politics in the Bay State.

Top 10A year that began with a political earthquake when Republican Scott Brown won the Senate seat formerly occupied by Edward M. Kennedy ended amid hopeful signs that the halting economic recovery was here to stay. Massachusetts employers spent 2010 trying to put the economic crisis behind them while dealing with developing crises surrounding the cost of health care and electricity.

What were the top 10 stories that affected Massachusetts employers during 2010?

  1. Massachusetts economy recovers fitfully, but faster than the nation as a whole.

    The unique mix of knowledge-based, high-value companies that drive the Massachusetts economy helped the commonwealth end 2010 with an unemployment rate of 8.1 percent, well under the national rate of 9.3 percent. The AIM Business Confidence Index rose throughout the spring, and then returned to positive territory late in the year after turning bearish in the third quarter.

  2. AIM challenges expensive National Grid/Cape Wind power agreement.

    Associated Industries of Massachusetts (AIM) asked the Massachusetts Supreme Judicial Court in December to set aside the commonwealth’s approval of a power-purchase agreement between National Grid and Cape Wind that will increase electric bills for thousands of Massachusetts employers. AIM said the agreement sets a dangerous precedent for allowing utilities to negotiate expensive power agreements outside of the competitive bidding process and to allocate the costs of those contracts unfairly to commercial and industrial customers.

  3. Rising cost of health care reaches crisis stage in Massachusetts; Governor Patrick and Legislature respond.

    The cost of providing health insurance to workers reached the tipping point for employers as rates rose up to 40 percent and virtually everyone agreed that the Massachusetts health care market is unsustainable without fundamental changes to the way companies and consumers purchase medical services. Governor Patrick rejected scores of proposed rate increases by insurance plans, then signed a cost-containment law requiring insurers to offer low-cost, limited or tiered network plans, and setting the stage for broad changes in the way insurance companies pay for medical care.

  4. Political scramble - Scott Brown elected to the Senate and Governor Patrick re-elected despite national Republican landslide.

    Republican Scott Brown of Wrentham shook the political world in January when he won a special election to fill the Senate seat held for decades by the Kennedy family. The election made Brown a superstar in Washington and unleashed a tidal wave that returned Republican control to the House of Representatives in the November elections. Ironically, one of the only states the tidal wave missed was Massachusetts, where Governor Patrick won re-election and every Democratic representative was returned to office.  

  5.  Corporate acquisitions are back.

    Two years after the global financial crisis, New England companies with strong balance sheets pulled out their wallets and began to make strategic acquisitions. Connecticut-based Northeast Utilities agreed in October to buy NStar for $4.17 billion in a deal that will create the largest New England utility company. German drug giant Merck KGaA bought life sciences company Millipore of Billerica for $6 billion in March. Massachusetts companies were also buyers: Thermo Fisher Scientific announced in December that it would purchase Dionex Corporation of California for $2.1 billion.

  6. Congress passes federal health care reform; judge later declares portions of the law unconstitutional.

    President Barack Obama in March signed landmark national health reform legislation that bore a striking resemblance to the Massachusetts health care reform law of 2006.  The federal law requires individuals to carry health insurance, changes underwriting rules and imposes a fee if an employer does not offer coverage. The fact that Massachusetts was the only state in the nation with its own health reform initiative was a mixed blessing for employers – the concepts were familiar, but there are significant differences between the state and federal laws that must be reconciled. In December, a U.S. District Court judge in Virginia ruled that the individual mandate is unconstitutional.

  7. Defense industry emerges as the untold success story of the Massachusetts economy.

    A report by AIM and the University of Massachusetts in December showed that as the overall economy has struggled in the face of two recessions and fundamental industry shifts, Massachusetts defense contractors quietly tripled the value of their contracts to $15.6 billion. They doubled their employment rolls to 115,563 people and increased their overall economic output by 146.2 percent. The report also found that innovation-rich Massachusetts defense contractors are well positioned to offset overall defense cutbacks by addressing technology needs at the Departments of Defense and Homeland Security.

  8. Business blocks organized labor priorities; Obama appointments to labor board create challenge for employers.

    Furious lobbying by AIM and business interests around the country prevented passage in Congress of the so-called Employee Free Choice Act, which would have deprived workers of the right to a private ballot in union elections. Congress also declined to pass another labor priority, the Paycheck Fairness Act. But President Obama’s appointment of union lawyers Craig Becker and Mark Pearce to the National Labor Relations Board shifted the labor relations playing field steeply away from employers.

  9. Massachusetts approves wide-ranging economic development measure.

    The Legislature approved and the governor signed an economic development bill that limits the scope of combined tax reporting, creates a 3 percent capital gains tax rate for individual investors in start-up companies, and provides most industries with the ability to extend a net operating-loss (NOL) carryforward from five to 20 years. The bill also places an automatic sunset provision on state regulations and requires proposed new regulations to include a business impact statement. The state will undertake a study of the factors driving the high price of electricity for Massachusetts employers.

  10. State lifts charter school cap, adopts national standards and wins Race to the Top dollars for education reform.

    A controversial decision to endorse national education standards paid off for Massachusetts in August when the commonwealth won some $250 million in federal education money through the Race to the Top (RTTT) competitive grant program for school improvement. The money will support reform efforts in four areas: standards and assessments; statewide data systems; effective educators; and turning around low-performing schools. These priorities were supported by employers, who recognize the importance of educated citizens to fuel economic growth.

What is your opinion about the most important business developments of 2010? We welcome your comments.

Topics: Employers, Associated Industries of Massachusetts, Health Care Reform, AIM, Health Care Costs, Education, Cape Wind, Health Insurance, Govenor Patrick, Charter Schools, Business Costs, Senator Scott Brown

Governor: Generational Responsibility Drives Education Policy

Posted by Christopher Geehern on Sep 29, 2010 12:18:00 PM

Governor Deval Patrick said today that his administration’s approach to public education reflects a “generational responsibility” to create economic and social opportunity for young people.

Deval Patrick“The whole idea that we in our time are supposed to do something better for those who come behind us is something that has leaked out of our commerce and leaked out of our governing, frankly, for a long time. And it seems to me that now is the time to bring that back,” Patrick said at a forum in Boston sponsored by Associated Industries of Massachusetts (AIM) and the Massachusetts Business Alliance for Education (MBAE).

“Generational responsibility - that’s why we’ve invested in education at highest level in history of the commonwealth, even with this extraordinary budget stress ... We’ve got to start thinking again about what kind of service we owe not just to the here and now, as important as that is, but to those who come behind us.”

Patrick maintained that the news about education in Massachusetts is good, with Bay State students leading the nation in achievement for the past four years and the Legislature having passed an education reform bill this year designed to close the achievement gap between young people in wealthy school districts and those in struggling systems.

The achievement gap is an educational, economic and moral issue, according to Patrick. “The children stuck in that gap are poor children, children with special needs or who speak English as a second language, more often than not children of color,” he said.

The governor’s comments came at the last of three forums sponsored by AIM and MBAE at which the candidates for governor outlined their views on education and the economy. Independent candidate Timothy Cahill and Republican challenger Charles Baker spoke at earlier sessions dominated by discussion of the administration’s recent decision to adopt federal educational standards.

Patrick referenced the move to national “common core” standards and thanked the business community for supporting a decision he said “is a lot about the rest of the country trying to become us.”  The national standards will help the Massachusetts economy, Patrick said, because of their emphasis on practical application of science and math concepts.

The governor said his goal for a second term would be to use new policy tools such as $250 million in federal Race to the Top funds and education reform to improve student performance. His agenda includes:

  • Close the achievement gap. “Signing the bill is not enough. We need to really get at the problem,” Patrick said.
  • Support “innovation schools,” experimental institutions that make changes according to plans approved and supervised by local school districts.
  • Ensure that charter schools address children at the short end of the achievement gap.
  • Support teachers through strong recruitment, training, mentoring.
  • Examine merit pay for teachers. The governor said there is a “right way and wrong way” to implement pay for performance but that “we shouldn’t just say it’s out of bounds because it has been in the past.”
  • Refresh the state’s approach to early childhood education to push services to children from birth to age three.
  • Review the mission of community colleges.

Patrick defended the role of government in improving education. He also said citizens must leave behind their often nostalgic impressions of what a school should be.

“We must think about the way the world is becoming and what schools must have in order to prepare young people for that,” he said.

Topics: Associated Industries of Massachusetts, AIM, Education, Deval Patrick, Charter Schools

MATCH School Offers Roadmap for Educational Progress

Posted by Rick Lord on Jul 27, 2010 1:57:00 PM

MATCHSometimes you find the answers to intractable problems in the faces of motivated 14-year-olds.

I had the opportunity yesterday to visit the MATCH Charter Public School in Boston, a 10-year-old educational institution dedicated to preparing inner-city students to succeed in college and beyond. Unseen amid the political debate over the future of education, MATCH and other schools are writing extraordinary stories about the ability of results-based schools to provide opportunity and hope for young people who most need it.

We toured the high school with three of the people writing that story – Founder Michael Goldstein, Teacher Training Program Director Orin Gutlerner, and Trustee Robert Manning.

Ninth graders were already in class at the Commonwealth Avenue high school campus yesterday as the mid-summer temperature reached into the mid-80s.   Half a dozen students in an English class were in the middle of an animated discussion about the Khmer Rouge in Cambodia. Summer classes are a regular part of the curriculum for incoming high school students.

MATCH High School opened its doors in 2000 and MATCH Middle School opened in Jamaica Plain in 2008. Sixty-three percent of the students are African-American, 30 percent are Hispanic, 3 percent are Asian and 4 percent are White. Three quarters live in poverty, and many come from single-parent or no-parent homes with no history of college attendance. They are, in short, the kind of high-risk students who normally show up in dropout statistics as shorthand for the failures of the education system.

Here’s the record at MATCH:

  • Ninety-nine percent of the first seven graduating classes - 2004 through 2010 - were accepted into four-year colleges. Together they received approximately $2.75 million in four-year need-based grants and $800,000 in four-year loan commitments. Their selections included Boston College, Brown, Dartmouth, Duke, Georgetown, Notre Dame, Smith and Spelman College.

  • Every MATCH tenth grader scored advanced or proficient on the 2009 MCAS math exam, the best performance among the 341 school districts in Massachusetts.

  • The school ranked fourth statewide on both the MCAS English and MCAS biology exams.

  • Newsweek magazine recently named MATCH 49th on its list of the top high schools in the nation.

Perhaps more impressive is the fact that MATCH has built an infrastructure to develop top-quality teaching talent. The school runs an Urban Education Fellowship called MATCH Corps that brings recent graduates of elite college and universities to spend a year tutoring and providing academic support to the students at MATCH. Alumni of the MATCH Corps go on to teach not only at MATCH, but at charter schools throughout Massachusetts and the nation.

“Every day, we do what many consider impossible - we bring together idealistic, dedicated college graduates and hard-working, disciplined urban teenagers. We have created a program that allows MATCH students to achieve what so many consider impossible: success in college and beyond for low-income, urban youth,” the school says.

The success of MATCH Charter Public School should encourage employers who have supported charter schools as well as the broader idea that all educational institutions must respond to the same measures of success or failure that drive businesses. The stakes are enormous, both for the young people and for the economic future of the commonwealth.

MATCH and other schools hold the key to bridging the chasm between the knowledge economy and the bright, young people we must prepare to drive that economy. I certainly feel better about that challenge than I did two days ago.

Topics: Associated Industries of Massachusetts, AIM, Education, Charter Schools

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