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Baker, Coakley weigh in on the Mass. economy

Barry Chin/Globe Staff

By Jay Fitzgerald Globe Correspondent 

With the Massachusetts gubernatorial election just over a week away, the contest has developed into a tight race between Democrat Martha Coakley and Republican Charlie Baker.

And the outcome of the election, which will determine who succeeds Governor Deval Patrick, may hinge on how Massachusetts voters view the economic recovery. The state not only has recovered all the jobs lost in the Great Recession, but also surpassed its previous all-time employment peak, reached in February 2001. But the recovery has proven uneven, and many communities beyond Greater Boston are still struggling.

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In addition, the state remains plagued by high housing, health care, and energy costs, burdening businesses and consumers alike.

Three independent candidates — liberal reformer Evan Falchuk, venture capitalist Jeffrey McCormick, and conservative minister Scott Lively — also are running, but trail far behind in the polls.

State government’s role in the economy

Both Coakley, the state attorney general, and Baker, former head of Harvard Pilgrim Health Care and a cabinet member in the Weld and Cellucci administrations, emphasize the state needs to partner with business leaders and owners.

But the two differ in how those partnerships should be approached and forged.

Coakley said it’s important that businesses see the state spending on worker training and improvements to the transportation infrastructure, while striving to lower health care and energy costs. She also said the state needs to simplify regulations and permitting for developments.

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Baker emphasized his experience under former governors William Weld and A. Paul Cellucci, both Republicans. Those administrations, he said, reduced taxes, streamlined regulations, and made jobs growth a top priority.

Top economic challenge

The response of both candidates: Jobs. But again, their views diverged on how to create them.

Coakley stressed the role of better education and workforce training to get people into the right jobs. The state needs to do more to expand access to early education and computer science courses, as well as increase spending on vocational schools, she said.

Coakley is also calling for $500 million over 10 years to be spent on transportation and economic development projects in each region of the state.

Baker said he also plans to focus on parts of the state that have not prospered during the recovery. In addition, he vowed to streamline the permitting process for development, phase out the inventory tax, reduce regulatory barriers, and spend more on vocational training.

Casino gambling

Question 3 on this year’s ballot would repeal the state’s casino law that’s already led to approvals of gambling facilities in Everett, Plainville, and Springfield.

Both Coakley and Baker say they’ll vote against repeal, but still expressed reservations about the law. “Casinos are not the first place I would have turned for economic development in Massachusetts,” Coakley said.

Baker said, “I felt the most responsible plan for gaming in Massachusetts was to start with one casino to gauge the impact of the new industry here.”

Coakley, however, noted the law was passed overwhelming by the Legislature and by the communities hosting the casinos. “Our focus should be on how to implement casino gambling in order to maximize the benefits and minimize the negative impacts,” Coakley said.

Baker said he believes the casino will benefit Springfield, which, with one of the state’s highest unemployment rates, desperately needs jobs and investment. The MGM Springfield “will become an effective partner with the city to transform a community that has been left behind.”

Energy

The issue of new or expanded natural gas pipelines recently jumped to the forefront after National Grid announced it would raise winter electric rates by 37 percent, largely due to pipeline constraints driving up the costs of natural gas used by power plants to generate electricity.

Coakley said she opposes a proposal by Texas energy company Kinder Morgan to build a new pipeline stretching from Richmond in western Massachusetts to Dracut, near Lowell. She said she’s concerned about its cost, environmental impact, and opposition from homeowners.

She said natural gas “represents a critical piece” of the state’s current energy mix, but should be considered just a bridge to cleaner technologies.

Baker did not take a specific position on the Kinder Morgan proposal, but said he will pursue a diverse energy strategy that includes expanding existing pipelines while promoting wind, solar, and other renewable sources. “Massachusetts ratepayers were dealt a bad hand by current officials, and the massive spike in electricity bills should have been avoided,” he said.

Baker said he also supports new transmission projects to bring more hydroelectricity from Canada. “It is an effective strategy to reduce our carbon footprint and make Massachusetts more competitive by reducing energy costs,” he said.

Coakley did not take a position on the new transmission, but said the state should expand the amount of hydroelectricity in its energy mix.

Housing

Both candidates agree more affordable housing is critical to the state’s economic future. But, again, their approaches differ.

“We must begin with preservation, because preserving a unit is cheaper, faster, and greener,” said Coakley.

She added she supports the state’s 40T program, which seeks to preserve publicly assisted affordable housing, and the state’s 40B program, which promotes construction of affordable housing in communities. She also said the state needs to encourage so-called smart growth policies of building new housing near transit and business centers as a way to limit sprawl and save energy.

Baker said he supports tax credits for affordable housing developments and intends to work with communities on zoning reforms to make it easier to build housing. The state should also push for new housing built on unused, state-owned land near transit stops, he said.

Economic incentives

Under Patrick, the state committed $1 billion in incentives to help the biotechnology industry. Should taxpayer money be used to support private businesses promising investment and jobs?

Coakley said she supports incentives for biotechnology and other industries. But, she said, she would review all tax-credit programs and other incentives the state hands out to corporations each year to ensure they are leading to increased economic activity. She added that the state should include so-called claw-back provisions with incentives so the state can recover its costs if companies fail to add the promised number of jobs.

Baker said he backs the existing biotech incentives “because in this case, the investment can be linked directly to job creation and economic benefits” tied to the state’s booming biotech industry.

And, yet, while backing various industry incentives, Baker sounded a contradictory note: “I believe state government should avoid trying to pick winners and losers in certain industries.”

Film tax credit

One of the most controversial — and generous — incentives supports film production in the state. The Department of Revenue estimated that only $1 of every $3 generated by film production in the state stayed in Massachusetts in 2012.

The credit, which cost the state $78.9 million in 2012, helped create about 2,000 jobs, but only about 700 went to Massachusetts residents, according to the revenue department. That’s about $110,000 per local job.

Coakley was blunt. “I support the film tax credit,” Coakley said, “because I believe it has led to more movies being filmed in Massachusetts, which has helped generate economic activity and jobs for people in the state.”

Baker was more equivocal and did not specifically address the film credit.

“I see a role for targeted tax credits,” he said, “but only when we can link them directly to job creation and economic benefits for the Commonwealth.”

He said he would review all existing credits offered by the state.


Jay Fitzgerald can be reached at jayfitzmedia@gmail.com.