Business

Shirley Leung

Governor Deval Patrick’s hits and misses

On the Massachusetts economy, Governor Patrick can leave Beacon Hill with his head held high.
AP/File
On the Massachusetts economy, Governor Patrick can leave Beacon Hill with his head held high.

The year is 2020, and Mitt Romney is speaking at the Republican National Convention. This time, he’s not accepting the presidential nomination, but rather his job is to eviscerate Deval Patrick’s record as governor. Romney ticks off the Democrat’s management lapses: a malfunctioning health insurance website, dead children under state care, scandal at a state lab.

“In Massachusetts, we know Deval Patrick,” Romney says. “He is a fine fellow and great salesman. But as governor, he was a lot more interested in having the job than doing the job.”

Now let’s return to 2014. I am sitting with Patrick in his recently restored State House office, walls bathed in historically accurate Bulfinch green. As he finishes his two terms as governor and flirts with a White House run, I lay out the scenario detailed above. It’s not complete fantasy: Patrick did exactly this to Romney when he ran against Barack Obama in 2012.

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So what would Patrick say in his own defense? Plenty.

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“Look at the fact that as I leave office we have a 25-year high in employment. Look at the fact that we have nearly universal health care coverage, way ahead of every other state, and that we have bent the cost curve in health insurance premiums,” said Patrick, the words rolling out of him like a well-practiced stump speech. “Look at the fact that the structural deficit that existed when [Romney] left office is gone and we have achieved the highest bond rating in the history of the Commonwealth.”

Say what you will about Patrick’s lack of oversight when it comes to state agencies and the current budget deficit, but on the Massachusetts economy, he can leave Beacon Hill with his head held high. On his watch, the number of jobs increased by 4.1 percent in Massachusetts, compared with 1.7 percent nationally, according to an analysis by a Northeastern University economics professor, Alan Clayton-Matthews.

The record is even more remarkable when you consider the Great Recession came smack in the middle of his administration. Now, not everyone will give Patrick much credit — governors don’t have a whole of lot influence over the state economy. What Fed chair Janet Yellen does or what happens in China will affect Massachusetts businesses more.

But Patrick got us to remember just how special we are. This is not the cheapest or easiest place to do business, but we have a lot of brainpower in Massachusetts, and that’s why your company needs to be here. To get the world to our doorstep, he launched a $1 billion life sciences initiative in his first term. Before, people used to talk about the San Francisco Bay Area and Boston as the two biotech hubs competing to be number one. Today, Boston (including Cambridge) is the undisputed leader. Most major drug companies already have some kind of presence here, and the rest are on the way.

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Ask Patrick what he is most proud of when it comes to job creation, and he mentions our innovation economy. He’ll talk your ear off about the state’s clean tech and alternative energy sector — something few people knew even existed eight years ago — and how today there are 100,000 people working in this field.

“Any industry that depends on a concentration of brainpower, we can dominate,” Patrick said. “More and more, when we get this community of thinkers to be a part of our commercial life, the stronger our economic prospects are.”

Patrick took this message on the road, traveling the world on trade missions. The media and critics called them junkets — until we started to see some of the results, most visibly at Logan Airport. The outreach helped lead to the addition of 17 nonstop international flights during his two terms, with 42 operating today. This year alone, nonstop trips to Dubai, Istanbul, and Beijing began out of Boston. Those are game-changing routes for local businesses.

Closer to home, Patrick reined in health care costs by capping insurance rate increases and creating the Health Policy Commission to monitor expenses. While our prices remain among the highest in the country, we no longer face double-digit rate hikes on premiums. Instead, we’re able to live with average base rate increases of roughly 3 percent, according to the Massachusetts Association of Health Plans, the trade group for insurers.

Before this piece ends up in some future Patrick campaign propaganda, let’s talk about what the governor didn’t do for business. He likes to boast about how he cut corporate taxes — three times! — but Michael Widmer, president of the Massachusetts Taxpayers Foundation, says there is more to the story.

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Yes, Patrick lowered the corporate tax rate from 9.5 percent to 8 percent, but it was to offset other tax increases. When all is said and done, businesses collectively pay at least $150 million more annually in taxes, according to Widmer. By that measure, Patrick did no better than Romney in controlling corporate levies.

When all is said and done,under Deval Patrick, businesses collectively pay at least $150 million more annually in taxes, according to Michael Widmer, president of the Massachusetts Taxpayers Foundation.

Patrick also got low marks on economic competitiveness. When he started, Massachusetts ranked 12th in CNBC’s annual survey of America’s Top States for Business; this year we’re at 25.

The cost of doing business remains too high here. Take the price of electricity: We pay twice the national average. Our tax regulation is also too aggressive, according to CFO magazine, which ranks Massachusetts among the worst states for tax collection.

These are perennial complaints that have dogged many administrations. Patrick said he has streamlined state permitting, reducing the wait from an average of two years to less than six months. His administration also simplified or eliminated hundreds of business regulations.

“We are not where we need to be,” he acknowledged. On the tax front, businesses have a lot of trouble navigating our system.

“Should the next governor work on that? Yes,” Patrick said. “But here’s the ticklish thing: You certainly don’t want to appear to be engaging with the [Department of Revenue] in a way that favors any one or another business.”

While Widmer gives Patrick an “A minus” for pushing our innovation economy, he sticks the governor with a “C minus” on economic competitiveness. Widmer, in his two decades as head of the taxpayers foundation, has witnessed five governors, dating to Bill Weld, who have tried to untangle our bureaucracy.

“They all have made efforts trying to remove some regulatory barriers,” Widmer said, but “we remain a very heavily regulated state. Nobody is talking about repealing environment regulations. It’s having it done in a way that is less labyrinthian.”

Patrick needs to leave something for Governor-elect Charlie Baker to do, and for the business community, that seems as good a start as any.

Shirley Leung is a Globe
columnist. She can be reached at shirley.leung@globe.com. Follow her on Twitter @leung.