That would seem to be the case. Governor Patrick has rightly promoted CNBC’s rating of Massachusetts as the fifth best state in the nation for business. The ranking would seem to deny right-wing dinosaurs a favorite rub on our so-called ‘leftie paradise’.
What wasn’t really reported much however, (besides a Dave Wedge blurb in the Herald) was why were we rated so highly? I decided to check it out a little deeper.
The strengths that took us so high up the charts (we only cracked the top ten once before and before that never came in above 15th) were noteworthy because three of our four best categories are highly dependent on government investment and management to make happen. So on education we were #1 in the nation, technology and innovation #3, and quality of life (which included health care and crime rates) #6. Government at all levels has a vital role in these areas so when small government zealots preach about cutbacks, business should join with progressives to defend investments we can’t afford not to make.
The fourth clear strength noted in the report was access to capital (#2), which may be harder to attribute directly to government but obviously has grown here because of the culture of innovation our world-class education, research and health sectors (all spurred by government investment) have created.
But of course, even as we champion our strengths, the CNBC rankings also cited a number of weaknesses. We should give some thought to how we can improve in these areas as well. Our two worst categories were cost of living #40 and cost of doing business #39. Housing and energy are expensive here and that may be hard to change in the short-run. But doing more to expand housing supply and affordability and promoting energy efficiency (building off the Governor’s efforts in these areas already) would be a start.
We should also think about the tax burden on small businesses and whether it can be further simplified or improved through better targeted incentives. Governor Patrick has already begun tackling high health costs for small businesses which should help business creation.
Another sore spot was transportation and infrastructure #39. So after the $15bn spent on the Big Dig we’re still considered to have inadequate infrastructure? This is because we have neglected the rest of the system for so long. Governor Patrick has begun to correct this: rebuilding defective bridges; pushing forward the South Coast rail; making commuter rail improvements to Worcester; expanding the Green Line; streamlining the transport bureaucracy etc.. But his gutsy but not well sold proposal to raise the gas tax deserves another look in his second term to finance needed improvements (even if it pushes up the cost of living). Clearly, transportation is an issue where Massachusetts has been let down and its holding us back.
All in all, its a story of progress in recent years. It suggests that government is a vital partner of business in our state’s long-term interest; and that another four years of good government under a Governor who has focused more attention on our economic future than any in recent memory is what we need. Building on our strengths by defending needed investments and doing more to address high costs for business is the job ahead. #1 here we come. Massachusetts, a ‘business paradise’ – who’d have thunk it?
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Kind of makes all that complaining from the Baker camp about our ranking seem even more ludicrous.
It’s further proof that Massachusetts is a great place to work and live, though improvements certainly can still be made. Of the weaknesses, I’d probably put “cost of living” at the top. It isn’t taxes or even weather that contributes to younger people moving out of the state; it’s the lack of affordable housing.
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p>I’d be concerned, however, with any blanket attempts to “expand housing supply.” Housing starts are already pretty heavily subsidized by the federal government (especially through the tax code), and states that have encouraged massive, sprawling residential growth in the past few years (like Nevada) are feeling the pain now.
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p>The problem has less to do with lack of housing supply in general than it is the lack of affordable housing. This is where reform of Massachusetts’s local zoning rules comes into play — rather than encouraging housing starts in general, we have to encourage denser growth, smaller houses, and so forth. The sort of single-family multi-acre zoning regulations we see in so many of the Commonwealth’s communities is, I think, responsible for a lot of the problems with the cost of living here.
Why do we want to INCREASE housing ‘supply’ when so many houses are vacant NOW? Been on the market for YEARS, empty, and nobody to buy? Because cost of living and taxes are such that nobody can AFFORD to buy?
That’s indeed the problem. There are a lot of vacant houses available, but it would seem that too high a percentage of available houses are the mini-mansions that people shouldn’t have bought in the first place (because they weren’t financially ready).
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p>The problem with taxes is not so much that the various property tax rates themselves are extremely high, as much as it is that the assessed value of residential property is so high. That’s what happens when even reasonably-sized single family houses assess at well over $300K in many areas of the state.
The class envy McMansion story is a tired meme.
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p>A local story here was on WBZ the other night. $200k condos in Hyannis have been foreclosed on, and the bank is getting $57,000 for them.
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p>So WHY are properties like this being bought by developers instead of Housing Authorities?
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p>Even RE ads for homes feature many for under $100k that are not IN foreclosure.
There was a good story recently on this (not specific to Massachusetts), I believe in the NY Times. Something about people “downsizing” homes now from the many McMansions built during the housing boom.
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p>But in any case, I’m not sure where I was “stereotyping.” Don’t you agree that too many McMansions were built in Massachusetts, and sold to too many middle-class families who couldn’t afford them? It’s certainly not the only problem, but it’s a big one. My underlying point is that too many towns encouraged that type of growth during the overheated housing boom of the past decade.
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p>And I’m not denying that you’ve seen ads for houses under $100K that aren’t in foreclosure, but I’m skeptical. Most of the ads I’ve seen feature houses that are still outside of the price range of your typical, young middle-class family. Even with the slowdown in the housing market, the median housing prices are still inflated in MA, in large part to localities encouraging the wrong type of residential growth through regulatory zoning restrictions.
Because THEY are the vast majority of houses on the market, even in an evil zoning area like Cape cod.
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p>Condos. $57,000. Hyannis. No acre zoning there. Again, where are the Housing authorities?
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p>Because we aren’t discussing new construction, which is where zoning applies. We’re talking about glut of existing stock.
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p>Truthfully, the McMansion phenomenon was overhyped. The are noticeable, and big and ugly, but the vast majority of construction continued to be…2 BR ranches and condos. And since people tend to allow their second homes to be repo’d before the homestead, we have a glut on empty real estate.
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p>I refinanced my house this week to take advantage of the rate drop, and talked a while with the mortgage officer at the bank. She’s never seen it so bad in 30 years.
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p>Condos. $57,000. Hyannis.
Why Massachusetts led by Governor Patrick just agreed to adopt the national common core standards for education over our own standards that have served us so well. We have seen the stories on the testing results of MA students on both a national and international level and how well they do. Now we have this insightful post on how important our educational infrastructure and system is for our business climate. This includes both the college and university level as well as the local level system. We appear to have not only been doing things right, but at such a level that it had become a competitive advantage. MA deserves to pat itself on the back for the achievement.
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p>However, we have now agreed to give up on our own standards in return for $250 million in “Race to the Top” awards. Since we are already at the top it is unclear how adopting these new standards will help us reach the top. I am afraid that we have given up some of our competitive advantage with these forthcoming changes. For this we deserve a dope slap.
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p>Governor Patrick should be proud of the achievement in our schools, it is top of the charts. He should also be called to answer how this change will make us even better. Yes, we got $250 million over 4 years, but is the cost worth it?
I’ve been thinking a bit as to why all these comparatives hold so little political traction. Tell people Massachusetts’ tax burden is not comparatively high and you get disbelief.
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p>One side of that is that comparatives like these are ineffable. It’s hard to see them or experience them except through numbers in tables and bars on graphs.
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p>Maybe the other side of this is New Hampshire. I doubt New Hampshire would be quite so prosperous without so much Massachusetts for its residents to commute to. I wonder whether there’s an ill-founded belief that New Hampshire is getting away with comparable prosperity and standard of living with less taxation.
If we are number one in the country with respect to education I pity the other 49 states.
Do you have a problem with the ratings? Do you think they’ve missed something? Or are you just bummed that they help Patrick’s reelection campaign?
Probably more the latter than the former.