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Tax relief is just one piece of the competitive puzzle

Massachusetts Senate President Karen Spilka presided at inauguration ceremonies in the House Chamber at the State House in Boston at the start of January 2019.Michael Dwyer/Associated Press

Word came down on Thursday evening that after months of haggling, legislative leaders had reached a compromise on a tax relief bill aimed at making Massachusetts “more affordable, equitable, and competitive.”

House and Senate leaders didn’t release details, so it remains to be seen whether the bill will be enough to make a difference for families struggling with the high costs of housing and child care, and for businesses and high earners who argue the state is losing people and jobs to lower-cost states.

But this much is obvious: more needs to be done.

Three years into the post-COVID economic recovery, Boston confronts a host of challenges, as do cities including Chicago, New York, Philadelphia, San Francisco, and Washington, D.C.


The problems include sharp declines in downtown pedestrian traffic and transit ridership; rising office vacancy rates and falling commercial property values; high housing costs and long commute times; and shrinking populations as residents move to cheaper locales.

A related and revealing statistic: Economic output in the Northeast and Mid-Atlantic states fell below that of six big southern states (Florida, Georgia, North Carolina, South Carolina, Tennessee, and Texas) in 2021, and the gap is only getting wider. Not coincidentally, the population in those southern states is expanding.

The Massachusetts Taxpayers Foundation has highlighted all this in a new presentation called “Urban Economies on the Precipice: A Tale of Six Cities.”

If the title sounds ominous, that’s the point. Even before Thursday’s news from Beacon Hill, the business-backed group was arguing that taxes aren’t the only issue the state needs to tackle.

The cities compared by MTF are “different in many ways, but there is a trendline,” the group’s president, Doug Howgate, told me. “We are not all predestined to have a 40 percent decline in foot traffic. We can absolutely thrive by setting ourselves apart.”


How can Massachusetts set itself apart?

“First and foremost, we need to retain our lead in life sciences,” Howgate said.

Funding for the Massachusetts Life Sciences Initiative — created by Governor Deval Patrick and extended by Governor Charlie Baker — runs out next year. The state has committed $1.6 billion to the initiative since 2008, an investment that is credited with helping to make the Boston region the nation’s leading biotech hub.

Governor Maura Healey has said she plans to extend the program, but hasn’t detailed her timetable or how much money she’ll seek.

Second, the state needs to prepare to compete for the billions of dollars committed by the Biden administration for infrastructure, semiconductor manufacturing, and clean technology. MTF estimates that Massachusetts could be in line for $17 billion, which could require $2.7 billion in matching state money.

And third, Massachusetts desperately needs to build more housing. With the tax bill apparently wrapped up, the Legislature may be able to turn its attention to proposals to speed housing development. Healey is expected to file a housing bond bill soon.

The road ahead for the Massachusetts economy is daunting, but we know what needs to be done.

Larry Edelman can be reached at Follow him @GlobeNewsEd.