$1B Life Sciences Plan Now Law

By Jim O’Sullivan

STATE HOUSE NEWS SERVICE

BOSTON, JUNE 16, 2008…. Massachusetts has offered the life sciences industry $1 billion worth of incentives over the next decade, hoping that cutting-edge companies can offset losses in more traditional industries and develop innovative medical technology, as Gov. Deval Patrick on Monday signed into law his signature economic development priority.

The new law sets aside $500 million in borrowed capital spending, $250 million in research grants, and $250 million in tax incentives, subsidies state leaders say will allow the Commonwealth to retain its edge in the booming sector. The 84-page law applies to a variety of private sector efforts in areas like biopharmaceuticals, medical devices, marine technology, regenerative medicine, and veterinary science.

Standing at a world-leading diabetes treatment center with House Speaker Salvatore DiMasi, children being treated for diabetes, industry leaders and other lawmakers before skippering a large delegation to an international biotechnology convention in San Diego, Patrick said the initiative is “about Massachusetts advancing human healing.”

What officials hailed as a landmark achievement came after more than a year of political wrangling among government leaders, and heavy lobbying from outside industries.

At the Joslin Diabetes Center bill signing, Patrick said, “Sometimes in this business of ours, people keep score in purely political terms. … There are other measures beyond political ones, arguably more lasting ones.”

DiMasi was effusive in his praise of Patrick, saying, "Gov. Patrick deserves full credit for what he has done in this area, and it'll be an unbelievable legacy for you, Governor. I swear that this will be remembered and you will be remembered for all the good things that will come from this every single day after the signing of this bill."

Senate Republicans have knocked the plan as ripe for corruption, and a giveaway to one sector at the exclusion of other types of companies. Senate Minority Leader Richard Tisei said Monday, "The governor’s spent a lot of time looking to promote sexy industries, like the movie industry, the casino industry, the life sciences but at the same time we can’t lose sight that the broad-based industries in the state – communications, manufacturing, health care – are really the bread and butter of our state.”

Tisei (R-Wakefield) said, "When you have a situation where the state’s choosing winners and losers, and you can have two companies that do exactly the same thing, one applies for the tax credit and gets it and one applies for the tax credit that doesn’t get it, that’s obviously a policy that creates problems down the line, and people will always be questioning."

Asked about criticism that others sectors have suffered from the state's preoccupation with one industry, Patrick told reporters as he left the event, "First of all, we have to be about growing good jobs at good wages in every sector in every region of the Commonwealth, and that's what we're going to do. We're going to continue to focus on where our strengths lie, concentration of brain power and the presence of higher education institutions through whose work we can leverage job creation, and that's going to be true in the life sciences and high-tech, and a whole range of other fields."

Empowering the Mass. Life Sciences Center to administer the unearmarked funds, the law also directs the University of Massachusetts at Dartmouth to acquire a Fall River parcel from the Massachusetts Development Finance Agency, along with a parking lot owned by the agency, for as much as $11.4 million. The campus would then own and operate the Advanced Technology Manufacturing Center on that site.

The Genzyme Corporation would benefit from $12.9 million in water and wastewater infrastructure improvements in Framingham, and Wyeth Pharmaceuticals would enjoy a $12.6 million upgrade to connecting and arterial roads near the Interstate 93 interchange in Andover, Wilmington, and Tewksbury.

The new law also establishes five “regional technology and innovation centers,” and an 18-member advisory board appointed by the governor.

While the newly minted package is intended to serve as a launch pad to San Diego, where the state hopes to hook future investments, the biopharmaceutical industry has slammed a provision in Senate President Therese Murray's cost-control bill that would ban gift-giving from industry agents to health care workers, saying it would drain the $1 billion package of some of its punch.

Within the state, industries that missed out on the life sciences funding have fumed that certain sectors, including life sciences and film, have received tax benefits and subsidies, while others have been challenged by higher business taxes. Tisei told the News Service in a telephone interview that Senate Republicans would prefer a more "broad-based tax policy."

The lead Senate conferee, Sen. Jack Hart (D-South Boston), said, “We have an obligation and a responsibility to act, and that’s what we’ve done here, and we believe that through this act we will remain in the forefront of the life sciences industry for many years to come.”

Monday’s bill-signing capped a legislative journey that dragged on for more than a year, marked by trench political battles. On the day in May 2007 when Patrick, Murray, and DiMasi used last year’s BIO convention as a platform to highlight the bill, DiMasi was blindsided by a Patrick-Murray op-ed in the Boston Globe, an exclusion that angered him.

Lawmakers alternately ignored the bill publicly and knocked it as in need of heavy revision. The plan sat dormant for months, as the governor and aides pushed for action and insisted the state was hurting itself by forfeiting investments they said could have been sealed with the incentives.

In December, Housing and Economic Development Secretary Dan O'Connell said he expected a bill on Patrick's desk by Feb. 15. The same day last year, Bosley said the bill would emerge from committee by Feb. 15, several steps away from the governor's desk.

Both Murray and DiMasi signaled to Patrick publicly that they wanted to broaden the class of companies eligible for the state aid.

By April, both branches had made their own changes to the bill, leaving the bottom line untouched but tweaking the duties of the Life Sciences Center and adding their own earmarks or programmatic spending. The House and Senate appointed members to a conference committee. San Diego began looming as a hard-and-fast deadline, a setting for showy promotions of the new incentive package. Officials quietly laid plans for profile-elevating events at the convention, adding to the anxiety when compromise repeatedly proved elusive.

In May, Bosley announced that the conferees had reached a “tentative agreement” and were planning an afternoon press conference that day, angering Murray, who later told the News Service that she had been unaware of the agreement or the press event.

In recent weeks, the bill's delay stirred tensions both between the administration and the Legislature, and within the administration between Patrick's senior staff and O'Connell's office. Aides from both the executive and the Legislature joked repeatedly that Patrick would be forced to sign the bill at the airport.

Monday’s heavily stage-managed event saw Patrick enter to “Lean on Me,” the Bill Withers song that encourages cooperation and shared burdens. The mother of a daughter with diabetes and a young girl with the disease described the daily challenges posed by fluctuating blood sugars, including curtailed sports activities and nightly sleep interruptions to monitor blood levels.

The contingent headed to San Diego includes Housing and Economic Development Secretary Dan O'Connell and recently appointed Massachusetts Life Sciences Center President Dr. Susan Windham Bannister. Also from O'Connell's office are chief of staff Ted Carr, assistant secretary for policy and planning Stan McGee, business development undersecretary Gregory Bialecki, communications director Kofi Jones, Christine Williams, Martin A. Walsh II, Jon Mahoney, Julie Wetherbee, Michael Hunter, and Joseph Capuano. The Executive Branch costs are expected to total about $250,000

The Senate sends Hart, Murray chief of staff Rick Musiol, and her communications director, David Falcone. The other House members attending are Reps. Cory Atkins, Peter Koutoujian, Michael Rodrigues and Jeffrey Sanchez. A pair of DiMasi staffers, deputy chief of staff Jason Aluia and special assistant Katie Quinn, will also attend. Joint House-Senate costs are estimated at $12,000.