The most cynical among us may have thought they had stumbled into a parallel universe earlier this month when Gov. Deval Patrick made two announcements that would have positive impacts on small businesses.
First, he announced plans to file legislation that would streamline or eliminate several licensing boards to make doing business simpler for business owners and professionals. Second, he wants to eliminate a cornerstone of the state's 2006 health care access law that penalizes employers who don't make a "fair share" contribution to their employees' health insurance premiums.
A refreshing move in a state where business often feels more hostility than hospitality from Beacon Hill.
Ahhh, but then reality arrived for the cynics last week when the governor's transportation secretary, Richard Davey, unveiled a $13-billion transportation and infrastructure spending plan that would require an extra $1 billion a year in state revenue to pay for it. In his annual State of the Commonwealth address Wednesday, Patrick proposed raising the state income tax from 5.25 percent to 6.25 percent while lowering the sales tax from 6.25 percent to 4.5 percent.
Patrick deserves credit for justifying revenue increases — such as investing in needed infrastructure — or offsetting them by seeking budget reforms or spending cuts. Aside from his latest plans to streamline or eliminate licensing boards, and to cut the "fair share" health care contribution for businesses, think back to 2009, when he wouldn't agree to a sales tax increase unless it was accompanied by state pension and ethics reforms.
With the transportation and infrastructure plan, the governor cited broad support.
"Improving our transportation system is key to meeting our economic potential," Patrick told public officials, journalists and advocates at UMass Boston last week. "This is not the view of just the transportation experts. It's the view of businesses and the employer community; it's the view of economists. Most of all and most important of all, it's the view of the general public."
There is data that would appear to back him up: In a 2009 report, the American Society of Civil Engineers said 56 percent of Bay State bridges are "structurally deficient or functionally obsolete" and 41 percent of the state's major roads are in poor or mediocre condition. The study said Massachusetts must come up with an extra $15 billion to $19 billion to maintain its transportation infrastructure.
The transportation and infrastructure plan is ambitious, and sounds even bolder with the struggles of the Great Recession looming quite close in the rear-view mirror. Since there are a little more than five months for the governor and Legislature to come together and agree on the outlay and revenue ends of the plan, an improving economy could remove some of that sting. But there's little appetite for a significant tax increase that the governor has thrown out in his opening salvo, and significant changes will need to be made to reduce the plan's size and net cost. That includes finding more efficient ways to implement the changes and upgrades to transportation and infrastructure. Also, the state should consider user fees that are more heavily weighted to Eastern Massachusetts, where most of the public transportation system is located.
Bold thinking has its place, and it's a positive that the transportation issue that has been kicked down the road for so long is now being confronted. However, the highest level of scrutiny needs to be brought to this plan, especially the revenue side. If there is to be any new spending, it must irrefutably lead to economic growth.