2023-05-30 00:00:00 - Joint Committee on Community Development and Small Businesses
2023-05-30 00:00:00 - Joint Committee on Community Development and Small Businesses
SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thennoon, everyone. Thank you for being here. I wanna first welcome you all to inaugural hearing the first of the joint committee on community development of small business. I'm I'm grateful for this opportunity to listen and learn. Really475 grateful for many of the advocates and the the individuals that are joining us today. In addition to my gratitude for those coming to test Ifai, I want to thank my colleagues in the house that have either been joining us remotely or here in person. In person, we have representative Adam Scanlon, representative Marcus Vaughn, and representative Matthew Murray. And appreciate it. Virtually, we have members of the house, representative Dorena Arosa, representative Margaret Skarsdale, representative Brandy Flooker Oakley, representative Samantha Montano, representative Raddy Mom, and519 representative Ted Phillips who I521 believe will be coming in and joining us in person as well.525 And for the record, my name is Paul McMurtry.527 I have the529 honor to a function of serving as the chair of the joint committee. And I am a small business owner myself I know firsthand the perspective that many of you will be speaking of, I will share, that as a matter of personal pride and and privilege that today marks my sixteenth anniversary. I sworn in 16 years ago today. So it's a very very meaningful day for me to be here. And to try to advocate and facilitate some positive change for small562 businesses across the commonwealth. So today's testimony and hearing is is unique in a way that we're not gonna be hearing any testimony on bills, but we wanna hear from you the stakeholders and and parties, both public and private that can share some issues and concerns of the purview. And introduce yourself to the committee, as we undertake a listening tour, we wanted to first begin here at the state house. To kick it off. We'll be taking a listening tour across the commonwealth, throughout the fall, the summer and fall. To mom. And it's my perspective that the purview of this committee is not just to hear the legislation that we have before us and focus on that, but to hear from others, involved in the small business and community development community so that we can perhaps morph and put out620 some good public policy that will benefit, you know, the tax base here in the commonwealth, but also our small businesses, you know, that629 such an important part and vital part of our communities across in our downtowns and our635 main streets but across the commonwealth as well.637 So we have host of issues, and your testimony today is certainly going to help us in our decision making. And as
the agenda builds as a session progresses. Also, pleased to be able to introduce my senate counterpart, senator Piano, who have had the opportunity to spend some personal time with. And I This is, although my sixteenth anniversary here, his first hearing. So, I'll tell you Comelwald is going to be in in good hands with having him, and chair the Senate, ask poacher. And I look forward to working with him as we continue and progress throughout the session. So with that said, I want to again say thank you. To everyone for being here. Look forward to listening to your testimony. And I want to now turn it over to senator. I am
SPEAKER2 - thank you, mister chair. Thank you so much. I've been extremely excited to be here to listening to today's remarks and to be part of this conversation. First, I I wanna make sure that I I recognize 1 of our vice chairs, senator Collins, who's here virtually as well. Thank you, senator Collins, for719 for being here. I you know, my background, you know, I've been working on with community development organizations and lawrence for for over a decade. I've seen how organizations like Lawrence Community works, Charles Lawrence, and Act Lawrence have been able to do a tremendous job. In our city and and move forward development in my community. I've seen how community development financial institutions have been able to collaborate with small businesses and ensure that small businesses are being supported and have access to capital. At the end of the day, I believe that small businesses are the backbone of of our commonwealth economy because they create jobs within within the community and they ensure that there's a a pathway for individuals to become entrepreneurs and become owners of their own destinies and and reach their version of the American dream. As the chair said, you know, I I'm I'm very grateful that we've been able to be so collaborative these past couple of months, and I'm I'm really excited to work with the chair and his his staff on ensuring that we come together to have these discussions, not just here, but across the state as well. I thank you again mister Chair, and thank you for all the stakeholders our our present here today. I think your your thoughts and opinions are are gonna be invaluable. And I eagerly anticipate sort of moving on moving forward with this discussion. So thank you.
SPEAKER1 - Thank you, Mr. Chip. Do any members of the committee that are present or joining us virtually? Do any does anyone have anything I'd like to say as far as an introduction?
Okay. Well Thank you. And the senator alluded to it. I do want to acknowledge also my staff for Again, the eagerness and the excitement for coming together, working with the center of the staff for us to try to be productive. Not just check off the boxes, but to produce something in some public policy that's going to be beneficial. And in our role that we have as legislators, Garrett Burns in my office is a legal counsel. Jack McKinnon is the researcher. We're also joined by Nate Bolen, who is calling off to Harvard next year, who has an interest in public policy. So I'm grateful to them. And AJ Morse is somewhere here. He's here as well in Jody in the office. So I'm grateful for them to help organize this, and we'll be organizing the tour along with the Senate of Piano staff through all the commonwealth. So we'll be issuing a schedule on that soon, working with, again, stakeholders in the regions and business organizations. So we want to hear from people to see if there can't be some opportunities for some effective and productive public policy. With that being said, I think it's time for us to begin to hear some comments remarks, and again introductory opportunities from organizations is 1 organization that we are close to working with, that we have worked with, the wealth. It's my time here in the legislature. The Matt Thrffron Association, so it gives me
pleasure to introduce Steve Clack, the presidency CEO, mass restaurant association, along932 with Jessica Meridian, the Director of Government Affairs. Thank you for being here this afternoon.
STEVE CLARK - MASSACHUSETTS RESTAURANT ASSOCIATION - Chair McMurtry and chair Payano. Thank you very much for convening this hearing today. Very important conversations to come in. Oftentimes, there are issues below the radar that we don't gen generally get a chance to come in and talk about. And having informational sessions is important. There may not be some specific legislative issues filed to address some of the issues that have come up today. But any opportunity we can967 have to talk about impacts to small business, etcetera, is important. So thank you for today and chair Payano. It's a privilege that we get to be the first people testifying before you in your first committee hearing. So, thank you very much.
I'll do a brief overview of the restaurant industry, kind of from a macro level of where things stand. And Jessica Muradian our director, governor Affairs, we'll get into some specific issues. The restaurant industry. You know, it's the lifeblood of every community. As we know, it employs almost 10% of the workforce in Massachusetts. And that's solely in the restaurants that hasn't that does not include the number of supporting industries that support the restaurants across this country across the state. In the country. We have about 16000 locations in1014 Massachusetts, and as you know, we1016 were one of the hardest hit in the pandemic. We continue to come back from the pandemic in terms of people coming out in guest count they continue to be higher.
The industry is, I think people realize how much they1029 have missed the restaurant industry all the years, but when they were restricted from being there. We've actually seen a bit of a change in restaurant dynamic. We have used to be 7% takeout in delivery. Now is probably 20% takeout and delivery. We taught people how to eat at home for three years, and they have not reneged on that. So there's a number of different issues that come with a restaurant.1053 You have to reinvent the kitchen. You have to change your workflow. You may have to change work for. So we're seeing more and more delivery. In terms of operations, cost of doing businesses continue to go up. Recent surveys that less than 6% of restaurants are more1069 profitable today than they were prior to the pandemic. And a number of those costs1073 come from you know, operating in Massachusetts.
We have a very high occupancy cost. We have very high labor costs. Out outside of our control, really in the state, but seeing across the country is that food costs continue to soar. So, you know, more and more costs go on to the restaurant and how they operate. Additionally, energy cost this past year soared. We had an extremely high energy cost to operate our operations. And healthcare continues to be a major challenge. At the NRA, we're an 111104 employee firm, and I think our health insurance went up 17000 dollars from 2022 to 2023. That's being felt across the industry for any restaurants. And the more you want to invest in your employees and the more you want to give them, the less that's there. So, that 6% less profitability number is really important. The other issue is, you know, in terms of a per location basis.
We're probably getting back to the same number of locations we were prior to the pandemic. But what we've noticed, especially in our membership, is a number of places continue to close. And they're closing with, you know, well, I'm sorry, a number of our cancellations as memberships are listed no longer in business. So we're starting to see legacy restaurants, clothes, and newer people, new opportunities coming into the market, but that that presents new challenges. It's, you know, it's not your established restaurateur. It's new restaurateurs coming into the business. So that's really where we are as a whole in terms of the restaurant industry. And I'll turn it over to Jeff for some specifics. And if anyone has any questions about the restaurant industry, I'm happy to answer them.
JESSICA MURADIAN - MASSACHUSETTS RESTAURANT ASSOCIATION - Good afternoon, Chairman McMurtry, chair Payano. That's nice to say. I just for those who I haven't had a chance to meet, my name is Jess Muradian and I serve as director of government affairs for the Mass Restaurant Association. So, again, we'd like to thank you for your continued partnership. It would be an understatement to say that the last few years, have not been trying times, but the legislature has shown their continued support to keep the restaurant industry alive and well. But1199 not everything has been bad, the emergence of outdoor dining has proven to be one of the few silver linings of the pandemic.
Communities have reimagined public spaces to accommodate outdoor dining. Restaurant operators, municipalities, and the commonwealth have all invested significant resources in making this opportunity widely available. We thank you for continuing to allow for outdoor dining until 04/01/2024. So municipalities have1230 the time they need to move forward. Additionally, we thank you. We would like to thank you for continuing to allow restaurants with liquor licenses to sell beer wine and mixed drinks. With takeout and delivery food as this practice has proven extremely popular with guests. They love the convenience of getting a restaurant quality mixed drink with their food orders, and it is and it has provided a much needed revenue boost to our businesses that choose to participate.
In a recent survey, approximately 40% of adults stated the option of including beer wine and mixed drinks with takeout would make them more likely to choose one restaurant over another. Furthermore, consumer polling shows that between 75 and 85% of cuss of consumers support the extension of making the provision permanent and 18 states that did not have alcohol to go at beginning of the pandemic have since legalized it. But restaurants continue a long journey to recovery, Steve has said. While consumer confidence remains strong, the industry is facing a number of issues outside of our control. Operational costs continue to skyrocket. Food costs, insurance, credit card fees, and1308 energy are among some of the costs that place outward pressure on our menu prices.
And restaurants are simply doing their best to survive as less than 6% of restaurants report being more profitable now than they were in 20 19. So I'd like to highlight a few ongoing issues a little bit more specifically. I reference credit card fees. So as Steve has1333 said,1333 we have pushed consumers to do takeout. Right? And with that, they use credit cards more and more. So businesses have seen their credit card fees soar. Many restaurants report credit card fees being the third highest cost only behind food and labor. Restaurant owners pay between two and 4% on every credit card transaction, which includes the tip amount and taxes. Yes. They are paying the fee on the tax. So while 2% on a customer only amounts to a few dollars, 2% on all credit card transactions in a year can cost a small business restaurant operator $20000 to $15000 a year.
As more and more credit card companies offer points and incentives, for restaurant purchases, the cost only gets further shifted to small business owners. Currently, Massachusetts vendors are permitted to offer a cash incentive. But may not add a fee for credit card usage. As disclosure of the surcharge would protect consumers we would1404 like Massachusetts to join the1406 48 other states that allow businesses to add a surcharge for using credit cards. Out of state licenses. We would like to thank you, chairman McMurtry, for filing house 364, an act relative to the acceptance of out of state identification in Massachusetts. This common sense measure would allow for someone selling alcohol to rely on an out of state license for purposes of criminal liability. They can rely on an out of country passport but not an out of state license. So we think that that's very important. Health insurance.
The cost of health insurance continues to rise for small businesses, while the HPC benchmark cost rose on average of 3.37% last year. The GIC rates increased by four%. Small businesses experienced1456 an average of 11.2% increase. The number of people on merge market plans have experienced a sharp decline over the last 10 years, and more than one third of people on these1468 plans have switched to another type of coverage. These costs continue to make running a small business in the commonwealth challenging. But we hope by working together, we can make Massachusetts a good place to build and grow a small business. We thank you for your time, we look forward to working with you during this legislation and during this legislative session, and we hope that Massachusetts is the nation's most fluorishing restaurant invite environment in years to come. Thank you very much.
CLARK - Add support for housing proposals. We do need workforce housing. There's a number of areas in Massachusetts that you don't have a house or a teacher and a cop that get married. Buy a house or a restaurant or restaurant employee. So we need more workforce I think a lot of times we talk about affordable housing, but we need workforce housing as well. Where our employees can continue to thrive and live where they're working. Thank you. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank there's any member of the committee have questions for our friends at the MRA?
REP MCMURTRY - Well, I really appreciate the opportunity for you to be here and heighten the concerns and priorities. Hopefully, this session we can undertake some of those and deliver back to your members. So but thanks for the good work you do on behalf of all the restaurants at commonwealth We know that they do enhance the quality of life in our communities and make a difference. So, appreciate you being here today to share with us. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER3 - Thank you very much. We look forward to working with the committee on issues of route.
SPEAKER1 - Thank you.
SPEAKER5 - Thank you.
SPEAKER1 - Okay. Next, we1568 have the honor to have our secretary from the executive office of economic development. Secretary How and her team. We welcome you, and we appreciate you coming in. So if you wanna come up and take the podium here. Appreciate it. one of the things that this committee, you know, we cited and look forward to working with the Haley Driscoll administration, and we know that there's some exciting opportunities. And we appreciate you1600 being here to lay out some of the1602 priorities and concerns that you have.
YVONNE HAO - EXECUTIVE OFFICE OF HOUSING AND ECONOMIC DEVELOPMENT - No, thank you so much, Chair McMurtry and thank you so much, chair, Payano for organizing this and1611 for this kind invitation. I was just heading back early this morning, and we had senator Rush and Rogers will go there. I mean, they're saying, governor are saying how important this partnership is with the legislature. And so many great things have come through that partnership. So it's always good to get a chance to chat. I had with me undersecretary Ashley Stolba.
Who was here in the previous administration, which you all know, and we're thrilled that she is staying on as part of this next chapter for our state. So This is a really important committee1641 that you all chair, obviously, because,1643 as you all know, small businesses are such a foundation for everything we do across the state. The majority of our businesses, they employ so many of our population across all of our regions. So super excited to chat about And what I thought I would do is maybe just give an overview a couple areas and then happy to take questions and dive in. Sounds? SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you.
SPEAKER5 - Awesome.
HAO - Okay. So if we go to the next page, so most importantly, official, as of today, we are two separate secretarians. So everyone knows I'm our first, the governor, and kind of governors submitted this Article 87. They've committed to it on the campaign trail, and it's made its way through the legislative process. Thank you all for your support. And I could not be more thrilled to be welcoming a new secretary at Agustus to the position. He's starting I think on Thursday. And if you can just see here, we will now have two separate groups. My team focused on Econ Development and really being able to prioritize that. And then on secretary Agustus, working with our talented, super talented housing, liveable communities team to focus1704 on all the complexities of housing. So these our two groups are going to still be hand in hand in a lot of ways.
But I think this won't give us the dedicated focus in resourcing that housing really deserves and needs. And also enable us to focus on economic growth. So, hopefully, everyone understands that. It's good? Okay. So, official this week, big news. Alright. If you go to the next slide. So and then in parallel, we've made some realignments on our internal economic development team. So there's three main pillars. I've just clicked the next one. So there's three main pillars here on our team. Just click one more time. Yeah. Perfect. So, we wanted to realign our economic development team, especially now with the housing split, so we can be much more focused and have clarity around ownership for different parts of the economy.
So, you know, everything is kind of, you know, economic development or everything is kind of a business, but they're very different types of businesses and very different types of economic developments. We wanted to have clear ownership. So, the first on the bottom is undersecretary Ashley Stolberg and her portfolio is really economic foundations. And that includes small businesses. So that is why she's here. And we've actually hired a dedicated person to focus on working with small micro, family owned, minority owned, and look at home1777 businesses, Nico. I'm right there. Right1779 here. We are thrilled. Deco started on May, 15th. Yes. And she is a key part of our team full time every day, and she comes from this world.
So she knows firsthand what it's like to be an entrepreneur and can be out there in the community working with all of the small businesses on their, you know, specific challenges and opportunities. So Ms. Stolba also has a lot of other foundational areas including Mass Works, our big portfolio, which we'll talk about in a minute. And that's administered through the one stop, broadband, Seaport, military, we also, after the first time ever, hired a dedicated person to focus on rural economic development and agriculture, which is also a very different type of business. And so your colleague, senator Gobi, we're thrilled. We'll be starting that role on June fifth. That's right. That's right. Yep.
So, another report of our part of our foundation. And then in her role, I'm sure she's still able to be partnering closely with our quasars. So mass growth, we have Larry Andrews here. Doing phenomenal job as a quasi working directly with small businesses, mass development on these big infrastructure projects, and then the CEC. Unsecured surplus, also our climate officer. That's the foundation of the economy. Then on top of that, we have new undersecretary, Sarah Stanton. She joined us about a month or so ago She comes from being the town manager of Bedford and she's also worked in Salem with lieutenant governor in the city of Cambridge. She knows firsthand about to get economic growth done in a city and in a process state. So, she's leading strategies that build on the foundations.
That includes1863 tourism, includes international trade, it includes workforce, which is a big focus with our workforce sales cabinet, as well as big federal initiatives like shifts in science. And She's partnering very closely with our quasies in mass tech, mass ventures, and mass licenses. She was just with me today this morning at Madonna. So that's economic strategies. That's our second pillar. And the third pillar, importantly, is everything around us. So, we promoted undersecretary, we've promoted Layla D'Emilia to be undersecretary, of consumer affairs and business regulation. Layla has been in the state government for a long time, actually dating back to the Patrick administration. And that function of consumer affairs has always been a little bit separate.
We want to pull that in because as we think about economic development, there's so many strategic synergies. So, for example, Layla’s group thinks about how you license certified electricians. So think about a green economy, making a transition. How do we, you know, how do we think about a whole generation of new green electricians? We want to be competitive. So one of the questions I've asked Layla is thinking through all of our different traits. How does our process in our cycle time compare to becoming a hairdresser in New Hampshire? Or becoming an you know, a plumber in New Hampshire. And so thinking through how can we do all the1936 right things to protect our consumers, but also make sure that we are being competitive and getting folks into the trades.
So, that is the third big pillar in our office. So, that's kind of our team that we've now had three big pillars aligned to different sectors economy, working closely together. And then we're super lucky that we've also been able to retain three other key top talents not on this page. one is Rory. Rory who's here, who's leading up our legislative affairs and policy and data, who's our deputy chief, our chief Emily MacCormack. And then our general counsel, John Coscomb. So we have a dream team here and excited to work together on economic development. Okay. I'll be able to go to the next page. Okay. So we've done a lot of work already, as mentioned the Article 87, but also in the meantime we've had the immediate needs bonds bill.
Huge thanks to all of you for your support in getting that through. That was1985 very necessarily immediate need,1987 especially around things like mass works. We probably would had you know, calamity if you have not gotten that fee up. So thank you so much for that. And then in March, along with the Article 7, we had the budget, which I know is now going to conference and again, huge thanks to everyone for your work and going through all that. There are some really2003 important pieces of that budget that we're hoping to see make it through conference. And then also the tax relief package. The tax relief package, I will say, is also hugely important. You I'm sure you've all read the globe. You talk to people in business.
You talk to companies. There is this narrative out there that is that is not helpful and it's not true. Around messages is not being competitive. This tax relief package is I think incredibly sensible. The largest portion of it is the childcare of, you know, tax credit, which is going to help us get more people back into the workforce. And so $600 per child, it's really important. And then the other pieces of it, I think, again, are we're not trying to go to the stream and, you know, if you kind of crazy on anything on taxes, we'll finally just send a signal that we understand and we want to be competitive on things like short term capital gains and estate tax. So we'd love your help and in support on the Can's package piece of it.2058 So those are all in process on the legislative front, as you all know.
Okay. Next page. So, now we get to the meat of a2066 lot of the work we're doing. So, this came out of the last economic development planning process, which as you know,2072 is once every four years. We have regional sessions as part of those, and it came up in this regional sessions that, wow, the state is really hard to work with. There's so many different programs, different application forms, different timelines. And so coming out of that undersecretary Stolba and the previous team pulled it all together in his community one stop. So the idea here is that rather than having, you know, towns municipalities have to figure out on their own, they come to us through one portal, one time of the year, one application formed with what their needs are.
And then we on the back end partner with them to figure out what are the right programs and resources we have to match that need. This has been wildly, wildly popular I've only been this job four and a half months. Everywhere I go people talk about how much they love the one stop program. And here you can see all the different programs behind the one stop that we use to kind of match needs with with resources and funds. Undersecretary Stolba and her team are busy reviewing applications. We have been wildly oversubscribed. Yes, so applications are due on Friday.2129
ASHLEY STOLBA - EXECUTIVE OFFICE OF HOUSING AND ECONOMIC DEVELOPMENT - And we also have Juan Vega here who I know many of you know who manages mass works and is building up on in of the community one up for growth. We are accepting applications now. We're tracking the applications that are in process. There's over 800. Last year, 523 were submitted. So We expect demand to be very, very high for these programs.
HAO - Super exciting. Okay. So very excited for that. I'm sure more will come in before Friday. So if you go to2155 the next slide, and then we have a lot of really informed programs around supporting small businesses to get to the purpose of the hearing today. A bunch of them fall under Mass Growth Capital and Larry and his team. Maybe two that we'd want to highlight. one is around small business technical assistance. This is a2174 really important program. Again, very, very popular, very appreciated. And we, in the budget process, submitted the highest ever levels of small business technical assistant at $7.5 million.
We're very much hoping that that will make it through the conference. This is going out to all kinds of small businesses across2194 the state working through nonprofits, do all kinds of training on how to2198 run their business, how to think about you know, their financials, how to think about, you know, navigating all the different ups and downs of scaling a small business. So, those are very, very important. And we try to focus especially on underrepresented communities. Larry, is there anything you want to add on that?
LARRY ANDREWS - MASS GROWTH CAPITAL CORPORATION - Yes. It's been very popular, especially through COVID. We've been able to use it as a way to get applicants into COVID, I believe, ones. So, not only does it talk, has started assisting, businesses, but also allows them to work with those businesses in order to access state policy.
HAO - Great. And then, similarly, on the capital front, we have one point in the $8 million that we requested for the budget. This is really to really in partnership with the CDFI's. So that they can actually do micro grants to all kinds of small businesses as well. So as you all know, some of these businesses have a hard time going through traditional banking channels. This is a way to help give them the capital they need to continue to grow and expand and employ folks. And you can also see here, historically, we've tried to really target and funnel these grants to small businesses that are, you know, underrepresented and also into foundations of the state. So these are very important programs. For this economic foundation. We'll go to the next slide.
And then we also have some exciting new2289 programs that we've launched recently. So, on the on the far left side, you have the Inclusive Recovery Grant Program. This was part of the COVID 19 piece. It's now closed, but Larry's team did an incredible job of getting these funds out throughout the state. I mean, really remarkable work. The volume of this was paid quite impressive, Larry. And then the two that are open right now, the middle one is the Movie Theater Grant Program. This is really for a small, you know, kind of small movie theaters that are part of so many towns. That is open until this Friday also and really important to keep those alive as part of our communities. And then the one on the right is the newest one. We have another couple weeks there. This is for Hotel And Motel Relief. And you all passed the legislation, and you're now administering that through a master of capital. Yeah. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER7 - Sergeant, Jared, just on
SPEAKER1 - --
SPEAKER7 - Yes, please.
ANDREWS - It's a grand program. All those fast growth programs. At when linguistic aid is really important, that they integrate or that everybody have the assets. So everything is is translated, but then also We have customer service support in all languages that are that are spoken in Massachusetts. So that really has to be a real focus, but small business is important about the state.
HAO - Yep. That's a great point. Thank you, Larry. Great. If we'll go to the next page, Okay. So now we're moving on to the economic development planning process. And I feel you can see the actual text from the general laws, which is really around the fact that every once every four years, we're required to do a formal state economic development plan. Importantly, that's not just a written plan but it's also the strategy for how to make it come to life. How are we actually going to implement it? And I love that the wording is very specific around This is long term goals. And making sure we have the right metrics and benchmarks and also really kicking off big economic development initiatives.
So, thinking through what's really going to move the2410 needle for our stake. And really, the goal at the bottom is what I highlight. The thing that we think about all the time in our team is how do we make sure that every human who lives here This is the best place for them, to start their career, have great opportunities, to grow a family, have great lives here in our state. And for every company, big or small, how do we make sure you want to start here, you want to stay here, you want to expand here, you want to thrive here and succeed here. So that's really the goal. How do we make sure we have plan that ensures this for every2437 human and for every company here.
So if you flip to the next page, you can see we have a whole timeline So we have kicked off, and we have a council that we put together.2448 It's about 25, 28 some people on the2452 council. A wide range of people from across different regions as well as from2456 different sectors of the economy. So large2458 public companies, small businesses, educational institutions, nonprofits, mayors. It's also a mix of different sectors. So from life sciences and from services and from, you know, all kinds of different sectors. So we've kicked off the council. We've now done three listening sessions in regions. We did one in Springfield one in Worcester and one in Bridgewater.
There are another six upcoming, and welcome any of your constituents to be at those sessions. I have been really so surprised we've had incredible turnout. We've had, I don't know, 130 people at each session. And these are during the day, we're asking people to come for two hours. And to be totally transparent. We didn't give people that much notice. So I've been really surprised and thrilled to have so many people come out. More than just the attendance so, the energy in the room and the commitment and the passion of ideas, I mean, it's been really quite impressive. We've broken up the sessions into different topics. So we have breakout sessions on things like workforce and communities and equity and technology.
And there's just been a ton of good ideas coming in. So, we will continue those sessions and then filter those ideas to figure out how we work those into our plan. We also have sector specific working groups. So, those are the regional sessions. And then separately, we have these sector teams that, again, are looking at sector by sector are their unique needs and opportunities. So we will come back to the legislature before the end of the year with the written plan and hopefully get signed off from all of you and from the governor. And then on the back of that figure out, how will we actually implement this to bring into life with an outcome development bill, the budget, and2552 other resources needed. So we're very excited Okay.
STOLBA - And those are the list of sessions that we've done in our upcoming. Yep. Of course, you're more than welcome to attend. Thank you thank you to those of you who've attended these so far, but would love me to come.
HAO - Awesome. Great. Go to the next slide. Okay. And then this is just some initial views, which you know, we may be proven wrong as we go to more2575 of these regional sessions and we talk to our sector groups and they give us their input. But there's really some high level hypotheses. one is that, in general, on the outside, we look like we're doing farming. So, in many ways, we're so lucky and we've had a lot of success for many years. However, if you start to dig into the data underneath that, you start to see that there are some real headwinds and trends that are concerning, and we have issues that we need to address. So and then really, we're in a great place to address them.
We have so many unique assets and such strengths that we're starting from, but this is not the time to rest on our laurels. We need to do the work now to ensure that we're going to successful for years to come. So I'm happy just to share a little bit of some of the data that we've been seeing. So on the first point, we have so many strengths. The governor highlighted them in her speech to aim in in January. So we are, you know, very, very lucky to have so many strengths around our educational systems, around our hospitals, around venture capital, around all of the innovation we've had here. So we are we have a lot of great things about Massachusetts.
And you can see here our GDP2642 per capita has done well. Unemployment2644 is generally better than the country. So, there's a lot of really great things, and we're a well governed state. I mean, compared to a lot of other states, we've had whether Republican or Democratic governors and with our state legislature, we have we're a very well respected and well governed state. So a lot of really good2659 things. Look to flip to the next page. However, there are some concerning headwinds and trends on the horizon. So with the fair shared passing, we are going to go from number 34th in terms of state competitiveness and friendliness and businesses to number 46th. That is being widely talked about. So that is We don't need to be number one.
We have so many other great things going for us, but 46 is tough. We are high cost did. We always have been. But again, I think with all these other trends, it's becoming more of an issue. Housing. We've talked about a lot. We know that we are a couple hundred thousand new and short on housing. This is not something that happened in the last couple months or the last couple years. It's been a build evolve our success. That's why it's so important to have a dedicated housing secretary and why I'm so excited to partner with secretary Ed. Augustus on really accelerating our housing production. You can see the result of that in migration.
Prior to the pandemic, we were always the beneficiary of population growth. Post pandemic that has changed. We now are one of the highest states for outmigration. We're not as bad as New York California, but we are losing people. In 2022, we lost 1100 people from our state per week. Part of it is driven by remote work and we're high-tech industry in a lot of ways and so that has made it eat susceptible to remote work. Part of it is people going to New Hampshire in Florida who stays with no So this is something we are very much focused on. How do we convince people to come here and to stay here? And then other friends, you can see we are on widely cited as being, you know, not great on transportation2758 with traffic and also the T.
We have, you know, high expensive,2764 high positive childcare. We have, there are some concerning headings. So, this is not the time again to just hang out and think that things are good. We need to address these issues. two shorts I'll point to on the bottom.2775 The one on the left highlights housing. This is the number of building permits per residence. You can see on the left hand side, all of the cities that are growing in the country are building a lot of housing. You can2787 see where we are on that chart. And then on the right hand side on the bottom, you can see migrations. So, you can see, we typically have always fared well across New England in terms of gaining population. And we are now losing population within our new room of states.
So if you look to the next page, having said all that, I am not at all of Debbie Downer, I'm hugely optimistic and confident about our future for we have work to do. So be prepared to the next slide. We have such a strong foundation to build on. We are the leader in education. This is where it starts. Everywhere I go, we talk about how we have the best talent here. It is strong k through 12 system. We need to shore that up and continue to invest there. We also bring the entire best brains around the world to all of our colleges and universities. And now we need to see if we can stay here. So we're starting from a great place on education.
Tap. On healthcare, we have the best hospital systems in the world. And this is a unique thing. I was just on the phone this morning with Kevin Tabb the CEO of Beth Israel. And I had lunch last week with Anne Klibanski and Lloyd, I'm sure at Mass General and at Dana Harbor. Any state would be lucky to have one of those hospitals. We have so many of them. And we have children's, and we have Tufts, we have this incredible collection of hospital systems that do so much great work in terms of caring for patients and also in terms of research. And all the NIH funding, all that is starting here. They're also our largest employer. On financial services, and we don't talk about this very much. But we're not a huge state.
And I think when people think about financial2876 services, think about New York a lot. But2878 per capita here in our state, the fact that we have Fidelity and Wellington and State Street, and Platinum and Mass Mutual and Bain Capital and Cadvent and Charles. I mean, we have an incredible collection of financial services leaders that are global leaders you're in our state. And they are important because they and2894 we have so many great, strong regional banks here in our state. All of these folks are important2898 in our ecosystem because they fund so much of our innovation. So that's a really important sector for us. And then you think about combining our education and our talent with our hospital systems and healthcare with Investments from financial services, we made a big bet on life sciences.
And that that has really paid off. We are now the world leader in life sciences. Next week we're going to be hosting the World Bio Conference here in Boston. It's going to be a huge chance for us to showcase everything we've done. And this morning we're at Madonna and during the pandemic, we showed the world what we2928 can do here in Massachusetts. And so that is an incredible gift that we're starting off with, and we just need to make sure that we continue to2934 invest. And lengthen our feet there. And the other thing we don't talk about as much, but I think we really need to get out there and make sure we tell people about is we have all of these great businesses and all this great innovation.
We're also just an amazing place to live. Right? And you saw this weekend. You hit perfect weather earlier. Whether you're in the mountains or by the beach, and we have incredible culture, we have incredible history. Want to be celebrating the 250 anniversary of the country in a couple of years, that all started here in Massachusetts. And we're not only an innovative economy that has such strong businesses we also a place that really cares about each other. We are we are incredibly dedicated to, you know, thinking through the climate, thinking through preserving, you know, civil rights, thinking through reproductive rights. We really care about our communities and about each other. So there are so many great things2978 about our state that are unique.
That we need to make sure that we continue to double down on. So if you flip to the next page, so here are some of the not the answer, but these are some of these we're thinking about as a team as we work on the economic development plan, and these are coming2992 up a lot in the regional sessions and the2994 sector such. So I think there's a lot of, this is resonating folks. But one is, we need to lengthen the lead. So all those great things we talked about if we don't continue to invest in those areas, other people will catch up. So how do we make sure we double down in the places that we're already leaders and lengthen that lead? So that's really a big focus of this.
There are probably some new areas that are emerging that where we have a right to win that we should be investing in. two of the areas that we're thinking a lot about one is around climate tech, which is a big priority for our state anyways. And along with doing the right thing for climate, should be a lot of economic opportunities. So how do we actually, you know, become a leader from a business perspective there as well. Another area’s around advanced manufacturing and robotics,3033 again, the federal government is spending a lot of a time on this3037 chips in science, you know, initiative. It's $250 billion3041 available3041 at the federal level.
3043 If3043 we can win some of that, do we make sure you become a leader in advanced manufacturing robotics, you know, in the same way we are dealers in other places? So there might be some new areas where we have a right to We need to think about the whole state. We need Boston and Cambridge to be successful. It's very hard for our state to be successful if they are not. But we can't only have Boston and Cambridge be successful. We need every week to be successful. We need this poll, all of this all of the week’s just to rise with the rising tide. And we need all humans to be successful. So, of course, we love our PhDs and our highly educated folks.
But we have so much talent here in every shape and form. So that includes all of our high school grads, our community college grads, our vocational school grads. And so that's something that we're thinking a lot about as we think about our economic plan. And then, and then the environment we talked about, it's not3089 an either or, it's got to be an and or and both. And then, this is3093 a team support we're in, collaborating with all of you in the legislature, but really also across the cabinet. So, we really can't, we can come up with a pretty PowerPoint in the economic development but we really can't bring this to light unless we partner closely with Secretary Fiandaca on transportation.
Secretary Augustus and housing, secretary Walsh, and health and human services, Secretary Tepper on Energy, the chief and climate. And every other secretary needs to be all in secretary Jones and Labor and Secretary Tutwiler in Education. This is a full team sport to bring this to life. And so Many of my cabinet colleagues are on the economic development planning council, and all of them are very much closely involved as we think about bringing this to life. So, I think that's all I have. That's all I have. Awesome. So happy to answer any questions and really, undersecreatry Stolba and Larry and Juan and Dico and our team. And, Rory, are much better equipped also to address the issues you have on your minds.
MCMURTRY - Well, thank you, madam Secretary. Really3142 a incredible overview And for me, sitting here, not only as a legislator but a small business person. I'm super excited and to, again, partner with governor Healey with Lieutenant governor Driscoll, and you and the secretary, it's3156 to enact and bring some change. But to have this overview for us, certainly important. I want to also comment on your dream team.3167 Mom, we've had the pleasure and was recently with undersecretary Stolba, certainly at the mass capital growth corp and the direction of Larry Andrews, and it's been incredible. I know of work in the past cross paths with the others is well Juan. And I have to say from Rory, who has been a mainstay here in this building, super lucky to have him on your team and the commonwealth super lucky to have this great cast of incredible, dedicated people under our governor and China well. And
HAO - So we just promoted Adam wrapping to help take on legislative affairs with Rory. So hope you always know
MCMURTRY - We will probably be hearing more from him in the future. I appreciate that. But again, one of the things emphasized is the public private partnership working, the legislature, working with the administration. So there's so many opportunities super excited that you're streamlining some of these things, excited that there's just many sectors that we could touch upon. And really grateful that you've taken time out of your schedule to be here to stop this initial conversation with everyone. SHOW NON-ESSENTIAL DIALOGUE
There may be some questions from some of our colleagues. Representative stocks to your left. Go ahead. Yeah. That's true.
REP MURATORE - It's some comments that I want to get out. I want to thank you mister chair, McMurtry and chair Payano when for having such a great relationship in in bringing the secretary and all of these folks to the table, I think our constituents definitely appreciate the work that we do together in this collaborative sense. You know, we're all here to do the people's work and I really appreciate your cooperation. And I want to thank you, madam Secretary, for being here. And I want to thank you for lifting up the competitiveness issue when it comes to tax relief. It's something that's very important and I'm very grateful that the house let on this and we'll continue to work towards it.
The biggest concern that that I've always had is how we're growing and diversifying our workforce. My big passion in the legislature has been around expanding access to vocational opportunities through vocational schools. And I know and I appreciate the fact that you mentioned that economic development is really an all team sport. But we have six to 11000 kids on a wait list for vocational programs in the commonwealth right now. My dad is it was a graduate of Tri County and he developed a small business from then. And that's the American dream right there, and that's what we need to be promoting. And there was just a recent article in the globe about how expensive it has been to expand upon school construction in the commonwealth right now.
And I hope that, you know, you can bring those you know, two needs in of importance, investing in vocational education, but also expanding access to school building construction class would really be appreciated. And I appreciate also your mission to really lift up every segment of our of our commonwealth. Rep Mom and I live near Gillette's stadium. They just had a concert there that might have heard about it. That's good to know. Thank you. And the businesses in North Attleboro, when I walk down South Washington Street and North Washington Street, they need workers. You know, the money, the grants and stuff is great, but They need somebody behind the grill to flip burgers and make steaks, you know, that's what I'm carrying and I hope you'd shake those two things back to the governor.
HAO - Yeah. I mean, those are First of all, thank you so much for your comments. This is very much a team effort, and I'm also very grateful for our chairs. And happy to spend time anything. This is very important, this partnership that we have. The World Force topic is hugely, you know, hugely pressing. You know we were just looking at the latest unemployment rates. So the good news is that unemployment rates low. Which is good. The bad news is we have so many thousands and thousands and thousands of open jobs right now. And we're not able to fill them. Is actually constraining our economic growth. It's giving companies pause on whether they want to stay here.
Every CEO I talk to is saying, Well, I'd love to expand in Massachusetts, it's hard to get workers. And this is CEOs of Freshfarms, my favorite pizza shop in my college town, which closed because they had such a hard time sleeping workers. As CEOs are companies like Moderna. I mean, this is the wide gamut where and as CEOs of hospitals, we have thousands of jobs open. And yet we get students graduating who want to get into these careers. So we have a workforce skills cabinet that started under governor Baker, which is a brilliant idea. We are continuing that and moving in accelerating it even more under this new administration. So secretary Tutwiler and Education I'm Secretary Jones, and myself, are big phone members. And we've just added secretary Walsh in HHS.
And we're talking a lot with secretary Tepper and chief offer as well employment. The vocational school topic is squarely undersecretary Tutwiler. I know he's all over that already. And I'm sure school instruction class also under his in his priorities, and so I'm sure he's focused on that. What I will say though is that as we think about the economic development plan, we are thinking a lot about how do we create all kinds of jobs and career pathways? And so many of these jobs are in high growth places around our innovation that don't require college degrees. So for example, if you look at life sciences, we have had this incredible success. We are the world epicenter.
For, you know, cutting edge, r and d, and intellectual property, and all these patents and these, you know, groundbreaking drugs. When it comes to manufacturing those drugs, a lot of that manufacturing has gone to other states, like in North Carolina. And they North Carolina has been very aggressive at putting together, you know, a whole package of workforce training programs for biomanufacturing. We need to we need to catch up. And so we have today a lot of good workforce programs. Some of them are eight weeks, some of them are six weeks, some of them are eight months, A lot of them are very inexpensive, some of them aren't at night. When you graduate from those, you're able to get a really good job in biomanufacturing that could earn you $60,000, $70,000 $80,000 and path to $100, 000 plus a year.
These are really great jobs. Don't require a college degree. The thing that we are working on now, which I think the governor's going to talk to more in the coming weeks is how do we, you know, organize all Because today, they're all throughout the state. They're not enzymes. How do we actually pull all this together and have one plus one plus one plus one equal like a thousand? And how do we also make it easier for employers? Employers instead of saying, wait, I don't know how to fill these jobs. How do we make it easy to say, tell us what jobs we need, tell us what you need them, and here's, you know, a collection of all different programs that can funnel you graduates. And so is something that we're very excited about and that in the government we'll be talking more about soon. And we'd love your help on as well.
MURATORE - Yes. Thank you.
HAO - So definitely a huge priority.
MURATORE - Okay. Thank you, representative. And I just want to make a comment, it's because of colleagues like you to beat that are engaged in the process and concerned not only for your constituents, but a better quality3596 life across the commonwealth that really will make a difference. So I applaud your intentions, and you appreciate you your thoughts.
SHOW NON-ESSENTIAL DIALOGUE
senator. Thank you,
SEN PAYANO - mister Chair. So thank you, secretary Hao for3613 being with us here today and undersecretary3615 Stolba I feel like we've gotten to know each other pretty well. I thank you for attending our sort of this session in Lawrence I mean, not in Lawrence with Lawrence stakeholders here at the stake at the state house. Around, you know, how do we help support small businesses? I'm really grateful for all of you being here3637 today in part of the discussion that we've been having about the technical assistance program and micro lending. This is something that I I've been talking about or for months since I've come into office, I saw firsthand businesses close and Lawrence. You know, we were hit with a gas crisis. Many business were able to survive that. So they struggled through. Then they got hit with COVID and I saw businesses have been around for 15, 20 years, just God.
Now, you know, we're seeing new businesses take their place but I in particular, I've seen individuals that might be great. They might be great chefs. They might be great at sales. But there are certain aspects of the of a business that they learn on the job and I think that having that technical assistance to get the support So instead of struggling for several years and learning something, they're able to pick it up and make sure that their business remains strong is important. And also access to capital is huge. And I've seen, first hand, mill cities are MCDI. MCCI. Yeah. How they've been able to work with small businesses and to be able to provide funds, loans that they wouldn't have gotten from banks and how those businesses have been successful. I think, you know, the one thing that I would ask is I think, you know, as government some you know.
We provide these opportunities, but sometimes those opportunities don't get to the individuals that need it the most. So as you are reviewing those applications and there's deadlines coming up. I think it'd be important to do, you know, a review of what's coming in to make sure that gateway cities, these urban communities that there are partners within there that have a proven record that will be able to connect to these individuals. And if there aren't, to be able to reach out to us and other partners to make sure that we find these types of partners and individuals that would benefit from these before a deadline closes. So I'll end with I'm really excited not just about what you presented, but what the next year or next two years could look like. I think Massachusetts is an excellent place to live3785 and.
HAO - Want to be the best, mate.3787
PAYANO - You know, I think are super competitive and we also want that as well. So I think working together, we'll be we'll be able to make some really great things.
HAO - Go back and clear a comment. But one of the things I think is important is that's changed, and I can't think any privately pinned. Is going from a transactional passive approach to a lot of this to a proactive ongoing conversation. one of the benefits I think of, the one stop is, you know, rather than just kind of sending out things that's turned out. And this is an ongoing conversation where they're you know, I'm sure you're still like a team are actively in conversation with applicants over the course of many years and giving them a lot of consulting and advice, etcetera. And the same thing as to why I know of Larry and his team with small business but I'll let you both comment on this excellent point. You
STOLBA - You know, the only thing I would add is not to put Dico on this spot, but I'm going to put Dico on this spot. This is one of the key reasons that we hired her. It's because we want to be sure that we everybody knows a lot of grant programs, and that is something that, as secretary mentioned, we've done, it was a cute priority of the one stop, is to make it easier for people to apply and to make sure that we're getting the word out. So we're really excited to have Dico on board, but we totally agree with you. And this is something that we've heard loud and clear at the round a couple of weeks ago is that we need to do a better job of getting the word out and helping applicants when we're doing that.
ANDREWS -Regarding bonds. Very groupable, and I think one of the things I shared you know, the members is it it's a positive thing to keep on the gas. Right? It's supposed to parent businesses be more than the practice. In that, you put top of the technical systems. Again, it is really incumbent upon all of us to support. So the fees that have difficulty together to focus on both our men and truly have a place to stay and be successful. Wasn't created or anything like that. That would be cool support but also, hopefully, confident support as well. Because just because it means meeting languages.
May not be the best place to provide technical assistance if you don't understand the voucher. So that's the other place which we really3925 try on a small business technical system spread and relies involved as many opportunities for the municipalities to get obesity. That we work with. And also with COVID grants, gateway students, minorities targeting population those were really the targets of them. The problem is that if you don't have a business, that does not have some of their act together financially, then they're not going to be able to get some of the states that's where we have to work better to make sure that that
UNIDENTIFIED SPEAKER - Understood. I'm sorry about that. We are excited about This is Outreach. I didn't want today is my third week. I have many concerns by the thermostat and Lawrence. We've taken a small visit I think they're more business versus minority loans. So as small as it's each other, but whether to check and reshmael to do apply, you know, the grand family and say that Charles will take your take home. It's hurt. So I'm out there connected with small businesses I know you know, we don't wait for them to come to us. We want to leave it with data. I came from City across the mayor so smart, you know, where I want tons of everybody on this list is on So I want to continue that work throughout the economy. And I'm going to Lawrence on those. SHOW NON-ESSENTIAL DIALOGUE
I'm
SPEAKER6 - Okay.
SPEAKER1 - Okay, thank you. And we have representative Luca Oakley, who is joining us virtually who has a question representative. Thank you4023
SPEAKER8 - so much. Yes.
REP OAKLEY - Thank you so much, Mr. Chair, and thank you the chairs for this convening, madam Secretary and your team for being here today. Firstly, I just want to echo the workforce development comments and equity analysis of grants that my colleagues from the committee referenced. And I have one comment in four questions, but prompts there quick and one is logistical. The first is as a small business owner myself, one of the things that I have noticed particularly in filling out the quarterly reporting for unemployment is that the state's website only allows people to file that from 9:00 to 5:00, 9:00AM to 5:00PM.
And when you think about small business is and the hours that smaller owners might be trying to do their paperwork and stay on top of their housekeeping. I'm wondering if that's something that the executive committee can look into to provide greater flexibility for folks who might not have the time during the day to do that paperwork because they're trying to run their business. So that's just a consideration for your team. The other questions are, one, is it possible to get a copy of this deck for the members of the committee? That's the logistical question.
And then the more substantive questions are we've heard a lot about competitiveness, and I had the good fortune of participating a eight week civic action project fellowship with members of the private and public sector. And I think we walked away thinking together we could change the world and make the kind of a better place. And I think I heard you say that some of the rhetoric, particularly in the media, is unhelpful and untrue. And I'm just curious to know what we can do to change area or how we can improve that public perception. Secondly, you mentioned workforce housing, which I think is critically important.
I remember being a public school teacher in Baltimore City, and the city actually provided housing for teachers so that way they could be in the community at affordable rates. And I'm just wondering if you've seen any models across the country where they've done workforce housing in a variety of sectors that we might be able to look to. And then my third question and I hope I don't get in trouble for this one is if you had a magic wand and you could waive it, what are the top three policy changes you would want the legislature to enact? To better help further the goals in the vision of the governor and the team.
HAO - Wow, I love it. Let's go with the easiest one first. I think we can get you a copy of the day. So Roy will follow-up on that. So that's easy. On the narrative question, you know, I do think we are such an amazing state in so many ways. In my and I'm new to state governments. So I've only been here for four and a half months. My entire life prior to that's been in business. What I found in business is that when you have noise and kind of stories out there. If you don't change the narrative, the narrative becomes reality. So we are in that moment in time right now, which is why it's very important to me that we get out there and change an error. Because this noise is not true.
But if we don't do anything, it will become true. We become itself a belly prophecy. And so the couple things I think that would be incredibly helpful for all of us to do. Number one is, let’s tell a good story about why we're all here and why we're so proud to be hearing all the good things that are happening. Now that doesn't mean we don't have issues. I just went through a whole bunch of data. We had issues. So does everyone. But instead of just dwelling only on the issues, let's talk about how we're going to fix those issues. And I mean, about all the reasons why we're so excited to be part of this state now and forever. The second thing is we are wicked smart.
We love following in how bad the tea is and how we have this issue and that issue. Instead of just following and admiring the issue, let's figure out what concrete things can we do together to solve. So when we have our vehicle sessions and our sector sessions for the economic development plan, we push people to say, okay, we get we have a housing issue. We have transportation. We have shop. What are your ideas? What do you think we should do about it? And how can we work together public and private partnerships? So those are the two things I'd ask everyone to do. one is be part of the positive storytelling, which is true. And let's, you know, kind of drown out the other negative, unhelpful noise.
And the second is if you have ideas4260 of things we should be doing, let's talk about those, and let's figure out how we can do that. So, so that's the topic on narrative. On the other topic around workforce housing, we need housing of every time. We need housing to rent, housing to buy, affordable housing, workforce housing, single family housing, is across the board. And on the workforce housing in particular, this is a This came up this morning, actually. It has become a big issue. So not only do we have a shortage of labor with the right skill set, but even4291 when we do find that labor and try to get them to move4293 here, folks are having a hard time buying house and finding places to live.
So this is, I know, a priority for new secretary Augustus and the lieutenant governor, set a lot of success personally and Salem on this topic, so she's very passionate about figuring out. As a, you know, as a state, other things we can move on quickly because we have public plans to public build So the that workforce housing is a big priority. On the last question on the magic wand, I mean, I've learned already in my four and a half months, we don't have a magic wand. So I thought we could or do, you know, do some, you know, just to make some things happen quickly. You know, I don't know the answer to that. I have to think about it more, but I definitely think it will be very important to get the budget pass.
Especially with the tax package pieces of it. It it's going to be very far. To not pass that. So, I'm really very hope, very much hoping that in conference, you all can help us get that done. That's really really important. Just to send a signal and to start putting some points on the more. Other magic wand things that probably are not in your control, but we are fighting far for some big federal programs. We're finding a list everyone we can, including our federal delegation, to help us win things like art relationships and science. That would be huge for us. Not only is it a lot of funding for the federal government, but it's only available now in the short window. And so this is our chance to get it.
And I'll focus on the big signal4373 about what we stand for and how we're leading in these areas. I don't know. There I mean, we're going to need help on the account about plan. We're going to have some big ideas there. You're going to get them before the end of the year. We're going to need support, but are, you know, resources behind it to make it come to life. So, I don't know exactly what they're going to be yet. But I can just tell you, it's not going to be a boring point. We're going to think big about how we need you to help our state lengthen and lead on all these areas. I don't know if our team has other magic wands that you weren't.
STOLBA - No, I think we'll learn more during the economic development planning process, and then we'll have some4405 more specific ideas at that time.4407 That's why we're doing it. Very excited to
HAO - Be in partnership with all of you as well. So great question. We answer all your questions with or more.
OAKLEY - No, I think all my questions were answered, and I didn't get last of the timing of when you can actually pay the state unemployment online, but if you check it out4424
HAO - That one that one that one is not, and that is way beyond my technical capabilities. So I saw almost like my soul will write that down I think.
OAKLEY - Thank you. SHOW NON-ESSENTIAL DIALOGUE
4435 Thank4435 you
SPEAKER7 - so much
SPEAKER5 - for calling tonight.
SPEAKER8 - No worries. Thank you, Adam Secretary, and thank you again to your team.
SPEAKER5 - No, thank you4441 so much.
SPEAKER1 - Thank you. Representative. Next, we have representative Arena Derosa who has joined us who also has a question.
REP ARENA-DEROSA - Yes. Well, first of all, thank you to the chairs. Thank you, madam secretary. I really enjoyed your presentation because you spot I've spent a fair amount of time in government and sometimes we silo issues and I like that you talked about how everything's connected and I love the one stop concept. So I wish you well in that planning and do want to be partners with you in the future. I do have a specific question. And the chairs will probably hear me ask this because I I'm not exactly sure the purview for it, but I wanted to put it out to you just to see what you thought. During COVID, you might recall that the Commonwealth unfortunately, issued multi billion dollar payments inappropriately for unemployment. Right? They were wrong. Setting aside the people who are fraudulent.
I'm really glad that the state decided to hold harmless those individuals because it was our mistake as a commonwealth. However and I know we need to rebuild the fund. That's separate issue. However, I was really surprised to hear that the state decided to go after the small business community business community to pay back the gap that was created by the state for that mistake. And I know there were some efforts to get $300 million covered. At the end, it was a hundred million. I'm just curious what you think4513 about that. I've heard it from several members4515 of the business community. Was there any sense or or talk about what exempt the first 25 employees, so it doesn't hit small business the hardest. It's just something I'd like to look more at in in the in the coming months, and I just would be curious what your take is on
HAO - This was all before my time and also probably falling more for more under Secretary Jones in labor and workforce development. So I don't know if anyone in the team wants to comment, but what I will say is that I, wholeheartedly, agree with you that we should try to protect our small business wherever we can. I am not an expert on the details of this situation. So if, you know, respectfully, it is probably better for you to follow secretary Jones or others on the details. No. Unfortunately.
ARENA-DEROSA - That's okay. I will do that. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER12 - Thank you.
SPEAKER1 - Thank you, representative. Again, appreciate your interest in supporting small businesses. Any of the people joining us virtually or present?
MCMURTRY - Again, madam secretary, and madam undersecretary of your team. I just want to reiterate. I really appreciate you taking the time to be here today. Look forward to the partnership. The fact that we can together working with lieutenant governor Driscoll and governor Healey, really you know, set the tone for small businesses on so many different sectors. I mean, you pointed out about our life sciences, and that was investment. This legislature made some 10 years ago. And it's come to reality. It's a true, you know, and fruition that we're seeing how successful is and how Massachusetts is now a world leader.
We have that opportunity working in partnership with the administration and my colleagues on the legislature so that we can deliver continue to deliver and have messages continue to be4616 a leader. And as you said, it's not4618 perfect. There's a perception out4620 there, but I think with the leadership of the team that you have, working with the care and concern of my colleagues and the legislature that would be able to make a difference and move the needle forward. So really appreciate it. Look forward to continuing and working with you. Thanks for being here today to share some of the priorities and issues that affect so many people across the commonwealth. Okay? SHOW NON-ESSENTIAL DIALOGUE
SPEAKER5 - So grateful.
SPEAKER6 - So grateful.
SPEAKER1 - Take care, great job.
SPEAKER10 - Thanks.
SPEAKER2 - Thank you.
SPEAKER1 - Okay, some real important topics and conversation. I4655 appreciate that. We're going to move on and to next invite The retailer's Association of Massachusetts, Mr. John Hurst, the president, Bill Renny, and Ryan Kearney to join us. Again, appreciate you, gentlemen being here. Look forward to your testimony.
SPEAKER13 - Thank you, mister chairman.
It's just me today, before you. Okay.
BILL RENNIE - RETAILERS ASSOCIATION OF MASSACHUSETTS - Chairman McMurtry Chairman Payano, Members of the committee. My name is Bill Renee. I'm the vice president of the Retail Association of Massachusetts. For over a hundred years, RAM has been the voice of the retail industry here in the Commonwealth. Today, we have 4000 members statewide, and our members operate in the general retail restaurant, you know, customer service facing. Factors of the industry. We have, you know, owner operators, lot, small, medium sized businesses, all the way up to4720 the larger chains. Again, stay wide. Just about 4000 members. Naturally, retail supports 52 million American jobs. Almost a million here in Massachusetts.
And also nationally, I wanted to make the point that,4737 you know, one in four working teenagers works in retail. And those are some statistics from the National Retail Federation who we partner with. Our members are in Main Street's downtowns in malls and online. Today, our members tell us that to be successful, they have to be multichannel, brick and mortar, online in store4762 experiences, curbside pickup and delivery all need to be included. Customers are4768 looking for increasingly convenience also price, but a convenience and a smooth shopping experience of what our members are striving to provide them at a competitive price point. Because retail is the most competitive industry on the planet. Today's customer has all the information available to them right in their hand.
Right in their smartphone. So it's important that we recognize that, you know, it's not our members are no longer just competing with you know, the store across the street. The store is in the next town over in New Hampshire, Connecticut, Rhode Island. Now we're competing, you know, with sellers all across the country and often, you know, on across borders internationally. So that's the lens we tend to look at. Look through when we look at the work before you hear at the state house. When you look at different various public policy issues in the proposals that you'll see this session. How does that proposed policy4832 or how does that propose bill overall regulation? How is it going4836 to impact our members' ability to be competitive?
On a national, international scale. What changes can we make to ease compliance with our existing laws and regulations and can we lower the cost of compliance and the cost of doing business? You know, all those are very important as you, you know, embark on a road show to go here directly from businesses across the kernel. Right an important part of our economy right now, having just gone through the pandemic. And trying to figure out what's next. Sales rebounded strongly for our members and in in 2020 and 2021, which we all saw. And then, you know, more recently, we've seen we sell the in interruptions in the supply chain, and then that morphed into concerns more so about inflation. But today, our members report.
You know, steady sales numbers,4893 but decreasing4895 profitability due to rising costs from inflation. And also the inability to get the number of employees4903 that they need, which,4905 of course, we've heard earlier today, and we're here across all industries in the state. one 1 last point that I want to be sure to make before I get4915 into some specifics would be. In May of 2022, we surveyed our members on, you know, sort of the state of retail. In the state of their business. And one surprising stat that we found was that 70% of them reported that they plan to retire or sell their business within the next 10 years. And the question that we found ourselves asking was, well, who's going to take their place? And what kind of what kind of economic environment.
Are we going to set up that will make the Our future entrepreneurs of tomorrow, be competitive. So, again, I wanted to just mention a few specific issues that that we see. But, also, I think the point the point that you had mister Chair, above the technical assistance necessary. I think is a very good one that, you know, we see a lot of our members looking for technical on web design, website. But even more importantly, the ability to have a mobile friendly website. It's something that small business small businesses today certainly need and rely on because that's4991 where everyone finds them. Is on your phone. This has4996 been some discussion today earlier about health insurance.
And I think when you5000 go on the roadshow, that will be one of the top issues that you hear about. you know, small businesses are in the merge market group with individuals. And, you know, there was a time back in 2006 just with the passage of Chapter 58 with the small group marketplace had, you know, close to 850,000 lives in it. Today, there's, you know, under 400,000 lives. So we've seen, you know, 51% drop in small group lives in the health insurance market since 2006. But a better point to look at is 2014 with the implementation of the ACA, and it's been a 39% drop since then. And I think that kind of ties into you know, our survey stat with an older, the small business community is getting older and aging out.
And they looking to sell and, you know, the health insurance market, new new folks are not coming into the health insurance market because it is too expensive to get health insurance through your through a small business. We can't compete with the off belt the price point and the offerings that you find at a larger employer or with, you know, a city in town or with the state with the DIC. It's just it's small the cost of small business health insurance today is probably the number one issue that we do hear about, and it has been for quite some time. I imagine you'll hear about that, and, you5098 know, from your from your trips across the state, I'll echo what Jessica Meridian said earlier about credit card5106 fees.
It's also, you know, one of the top costs that5110 a lot of our members see today and increasingly, you know, we're hearing more and more about, you know, why mass why is Massachusetts? It's one of only two states that prohibit surcharging. I think if you go around your districts, now you'll see you might see a sign up that says, you know, an extra charge added for a credit card, if you use a credit card,5132 or you might see5134 on the receipt, you know, cash, non cash service charge.5138 There's a real question today as to whether or not any of those are allowed. There's a gray area in the law. Yes. We do see, you know, you can offer a cash discount, which you do with gasoline, cash price, credit price, pretty simple. There's only there's only two prices there because you're only selling one item.
Very difficult to do that in, say, a small gift shop or a small restaurant. And5166 I think we have5168 we have to get to a point where we recognize, look, we all love our rewards cards and, you know, miles and points and everything that that we're putting on these credit cards. But it comes at a cost. And the merchant is bearing that cost. So I think that's something that you may hear about as well. And, you know, I'll also mention the cost of energy. You know, the cost of energy has been sky high. one thing that, you know, I've talked about with a few folks in the building, and with your staff, chair, McMurtry, is the state does have a, what's called, a small business exemption. So small businesses get a sales tax exemption when they purchase electricity, the eligibility for that program.
Is was last tweaked in 2004. The cost of electricity has increased dramatically since then. And the eligibility for that small business exemption is gross revenues of a million dollars or less and five or fewer full time employees. So I would like to talk to the committee, and we're looking to speak with the department of revenue to find a little bit more information about what that current exemption mean? What does it mean in terms of revenue? What could we do to look to expand it to recognize at least for Now, small businesses, they're not just, they're not just less than five, and gross revenues are less than a million. It depends on what you sell. You know, you could you could sell a lot of high ticket items and be well above that.
But I'll close with this that, you know, I think one of the one of the things that we need to we need to look at is just how can we give5281 small businesses a greater voice, greater seat at the table. And excuse me. I applaud the committee for, you know, going out across the state5291 and taking on a road show because I think that by going out to them, we'll at least give them a chance to come up before you and speak up and be heard. I think we hear we've heard from a number of members recently about they feel as though their concerns and their voices are not being heard. We hear5312 that a lot around transportation issues, whether it be at the state or city in town. You know, the loss of parking, the changing downtowns. There's a lot of you know, road diets and additional bike and bus lanes.
Are impacting or taking away parking in our downtown on our main streets. You know, years from now, you know, will there what will those look like? You know, I think if you go back in time and see What was the what was the transition that pushed retail out into, you know, created the strip mall? Was that was that need for parking? And I think downtowns and main streets share that same need for parking. So as we make changes to the roads, we put in bike lanes, we need to be mindful of the value of that parking right there in downtown in front of the store. So, again, thank you for the opportunity to address you today. I think we'll try and get our members out to speak to you all a number of the road shows that you go out and I applaud you for doing that, so thank you. Happy to take any5382 questions.
MCMURTRY - Thank you, mister Rennie I appreciate you being here today and certainly will keep you informed of the listening tour when we set those dates and locations and certainly encourage your members to come and testify. Appreciate that you highlighted some top three concerns of your members and certainly something that we can look into in addressing throughout our legislative process. And the role we will be taking on this session. SHOW NON-ESSENTIAL DIALOGUE
Senator Piano, I believe that's a question.
PAYANO - Thank you, mister chair. Mister Renee, so you brought up an interesting point. And I think it's one of the first times that I'm hearing it. You were talking about parking and the5427 need for parking in the downtowns. And main streets. I feel like every time I go to an economic development conversation seminar where I hear from a lot of municipal leaders is that this is sort of like this built in understanding that parking isn't really needed in the in the down towns. And not I wouldn't say that it's not needed, but it's not necessarily our priority. That not having parking might not be a bad thing.
So I'm interested in kind of that that always sort of ran counter to sort of like my like my common sense and, you know, sort of like my own thoughts when it came to that but it also sounded like a lot of experts sort of believed that sentiment. And even on a local level, our member as a city council, that was one of the conversations I had with a lot of our local leaders and they also sort of, you know, would say that parking is not necessarily needed. So I'm interested in hearing from you sort of why you thought that that was important and maybe that would give us some more knowledge on the topic.
RENNIE - True. Thank you for the question. It's really been sort of post5501 pandemic that we've started to hear you know, and it's all anecdotal and hearing from different members about the impact on parking that in particular, the installation of new bike and5518 bus lanes is having. You know? And it could be it we referred from folks5522 in North Hampton with her heard from folks in Boston that they feel like they don't have a voice in the process that they to propose changes to the road of being made. And, you know, there's no real there's no real recourse. I think that in5542 a parking Look, they they're going from a position where they had customers be able to pull up right in front of the store and park. You can come right to downtown and park and visit all5555 the different shops.
It's so it is a relatively new topic for us, but it's something that it's something that we're hearing more and more about. Now, I would be surprised if you did not hear about it at the roadshow. When I was at a recent economic planning session, the one they had down in Bridgewater. And I just raised the point, and there were a number of folks nodding their heads and agreeing that they'd heard the same. It's I all get oh, I'll agree. It's very You know, how I want to say it. It depends on where you are. And, you know, not every city and town is the same. But I think the important point to make there is that we need to try and give small businesses an important voice at that table when those discussions are going on and not just sort of transportation and planning advocates.
PAYANO - Thank you. SHOW NON-ESSENTIAL DIALOGUE
Well, Seth. Alright. Thank you, senator, and thank you. Bill, we have a question from Senator Collins before I actually -- who's joined us virtually. Senator Collins, can you hear us?
SEN COLLINS - Yes. Thank you very much. Thank you, Bill, and to the Retail Association for coming. And I thought that was a very important point you made. We've been hearing about this and others in the city. You know, when decisions are being made about you know, how to restructure roads, particularly in main streets and in business districts. We're definitely feeling like at the local level that, you know, where there's a drive to have more access for bike lanes. And then those business districts that the voices of the small business owners are not taken as seriously about the impacts and I'm wondering if maybe there's a way for us to include that in legislation that there is I know that dialogue takes place, usually because they're banging the table.
And so these meetings are being had. Almost as if some of the decisions are already made because, you know, we've made some decisions at the legislative level to, you know, encourage that where it can be, but maybe there's a way to add some language that requires, you know, buy in from the small business community. Otherwise, you know, we're taking a part of the street for a bike lane that people are going to use in New England for, you know, a series of months. And the statistics aren't great how many people commuting via bicycle to work. But it could have a major impact on people's ability to access their local businesses. And there's got to be a way to, you know, to come to some compromise the coexist. So I think that, you know, while mister Palatins is where those decisions largely made.
When we make decisions up here and have about encouraging those expansions that we shouldn't find a place for the small businesses to really be mandated and have a seat at the table and that, you know, I'm not saying giving anybody veto power or anything, but I think it's going to be sort of a guarantee from the jump. They're going to be at the forefront. Otherwise, you know, we're making decisions for a very, very small fraction to take, you know, public property for different use, which dismantled peoples typical comings and5779 goings to small businesses and how they make their purchases. We're already finding a major impact on online sales with our retailers though. I just want to emphasize that point. Thank you. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you, senator. Thanks for joining us and thanks for your question. No other further questions, Bill, thank you. Thank to you and the members of the Retail Association for being here today to enlighten us on some of the concerns.
SPEAKER13 - Great. Thank you.
SPEAKER1 - Next we're going to ask, invite mister Christopher Colosi, the mass state director of the National Federation of Independent Businesses. Mister Colosi, thank you for your patience, and thank you for being here today.
CHRISTOPHER CARLOZZI - NATIONAL FEDERATION OF INDEPENDENT BUSINESS - Thank you for having me. I appreciate the invitation to be here and to make some remarks. Thank you, chairman McMurtry. Thank you, chairman Payano, members of the committee. My name's Christopher Carlozzi I'm the state director for the National Federation of Independent Business We are a small business advocacy group, and we're a5839 little bit different than the restaurants and the retailers. We have a little bit of a wider range of businesses that we represent so try not to leave any out, but we are manufacturing, retail, wholesale service, and agriculture as well.
So we're kind of a catch all group and we have business owners in every part of the state.We're also a national organization, so we have a national presence as well. The average NFIB member has about five to 10 employees and annual gross revenue is about $450,000. We are the really small main street type business owners from across the state. And on behalf of those employers, I'm here to present some of the concerns and challenges they face right now. But first, I did want to thank the chairman for coming to our small business day event last week and participating in that providing opening remarks as well as representative Arena-Derosa for coming and stopping by and attending that.
Thought it was an excellent opportunity because kicking off that event. You were able to provide business owners a5896 little bit of perspective on what you do as a5898 committee and the types of bills and5900 proposals and things that you look at. But also staying, listening, and hearing5905 what small business owners' concerns were at this moment. And also representative Muratore back and I want to say it was 2019. We did a panel discussion at one of them and you served on that panel back then. I've it's pre COVID, so it's hard to remember, but on health care costs, one of the issues that has come up I think in everyone's presentation today.
So I thank you for coming there and listening to those concerns and challenges facing those mainstream employers. I just want to give a little bit of a brief summation. NFIB has a small business optimism index. It's a monthly report that surveys small business owners nationwide on their top issues. And in Rep Scanlon, know he had left but he brought it up and secretary Hao did as well, but the number one5949 issue right now and concern for5951 employers nationwide in fact, 24% that responded to our survey, their top challenge is finding qualified workers. And I'm sure you've all experienced longer lines at stores because there aren't enough registers open.
Or you're waiting a little longer at a restaurant for your food because that server may be covering more tables than they usually do, but it doesn't end there. I mean, that's things you can see, things you can experience when you're out. But we hear from a lot of industries that require specific skill set such as construction, manufacturing, that they are finding it particularly difficult to fill positions right now. Our most recent jobs report similar to our optimism index where we survey our own membership found that 45% of small business owners surveyed have open positions they can't fill. For those employers with open positions.
A whopping 92% report few or no qualified applicants and despite the struggles6005 to hire workers for currently open positions, 17% of business6009 owners still plan to create more jobs6011 to fully staff their operations as to where they need to be right now. It's also important to note that 40% and this number has fluctuated throughout the pandemic and after 40% have raised compensation to attract workers into the workforce. So they have these open positions and they're now paying more to try to bring workers in. In an additional 21% plan to further raise compensation over the next three months. So aside from workforce6039 concerns, the second prevalent concern for employers was inflation.
And that one's kind of obvious 23% of business owners reported inflation as their top concern, now beginning to drop slightly, so that's how workforce issues kind of took the top spot now. Stock is no longer too low, but in many instances too high. The number of business owners stating they have to raise prices has also dropped over the last few reports. So small businesses are very much like residents across a commonwealth, and they have a budget. They have to adhere to that budget. They have so much money, a finite amount of money, a lot of it goes to labor costs, a lot of it goes to overhead expenses here in Massachusetts because it is an expensive state to do business.
So we have to think about that when we think about small businesses. All these things that impact your constituents6088 are also impacting6090 small business owners, energy costs, health care costs, the cost of6094 products. They don't have the same buying power as the larger employers. So while these business owners are being surveyed nationally, Massachusetts employers share very similar concerns. Many of the state policies before the legislature could either benefit or negatively impact job creation and economic growth in the state. Whether6113 waiting for tax relief, fretting over the potential for further labor increases, coping with ever increasing health insurance premiums.
Observing a large COVID 19 assessment in their UI bills. Reeling from the impact of the winter's energy bills, set all against the backdrop of surf searching for workers in an already high cost state. Small business owners have a lot in their minds. And Representative Arena-Derosa brought it up earlier on the UI issue. That is a major concern for a lot of employers. We borrowed a lot of money to keep the UI trust fund solvent back in 2020. If you remember we had a 17% unemployment rate by the summer, we were the highest in the nation. That UI fund dipped into the red, we needed to borrow and then we needed to pay it back.
So we bonded for it. And a lot of people think it ended there. We bonded. The state was allowed to bond, I think two point what was it? 2.2 billion I think it ended up with once that 500000 went into it. But that's all money in a COVID 19 assessment that's built into everyone's UI bills. And then adding as more specifically to what the rep was talking about earlier, there's an additional waiver for overpayments, which no one seems to have any problem with waiving overpayments. What happens is if beneficiaries are paid too much. They have to pay a portion back. And they weren't expected to pay that back.
So the state said we should waive that and in certain cases they were. The6198 Baker administration estimated that to be about $300 million. I'll keep the long story short, but $100 million was provided for that. But we don't feel business owners should have to shoulder that burden on top of the money that they were already paying back. So that's just a little clarification on what was referred to earlier. But as Bill Rennie was saying and others, health care costs have been rising consistently. Every time we talk to our members Over the last few years, we've surveyed our members. We found that between 10 and 13% premium increases every year for these small businesses, that's added money.
As Steve was talking about for his small operation, that's significant money when it starts to add up. Energy bills, we need to be able compete here in Massachusetts. That was a large focus of our small business day event. A lot of these business owners require especially when you start talking precision manufacturing, we had a business owner at small business day who talked about a type of cutting machine that he uses with really, you know, with water that cuts metal. And I think from a previous story he told, it costs about $30,000 to run this machinery in Massachusetts. His competitor in the Midwest costs about $10,000. So there's a significant difference in those types of costs.
I talked about UI a little bit. But the reason, a few weeks ago, we saw that there was a targeted attack with a huge number. Actually, so much so that it skewed d national DOL numbers for unemployment claims, and it was skewed so much because there was this attack on Massachusetts with fraudulent claims. And those claims weren't paid out, but the problem was they targeted us because our benefit we're so high. We have the highest benefits in the nation. So that's why fraudsters were targeting Massachusetts. But all these things start to add up for small employers, small business owners. And every little thing that happens here in the state house, every piece of legislation that passes that impacts those small business owners.
We have to think about it in terms of job creations and can those businesses survive. We want to see thriving downtowns. We want to see main streets that are vibrant because we did talk about I think everyone here is referred to seeing businesses close, seeing shops and shuttered storefronts, and that's not what we need to see. So I look forward to working with you as a committee as well as individual legislators who have all you have small business businesses that make up your districts and people that work for those. Small businesses, so I thank you for the opportunity to share those concerns and certainly open it up to any questions you may have. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you, Chris. Appreciate your testimony and the information we brought to your attention. So representative, Serena Rosa.
ARENA-DEROSA - Just a quick one if no one else does. Chris, can you just explain we've heard about health insurance several times today. What's the remedy from small business? I would I would think there's with half a million people working in small business way to pool it, not a lot under the rules. I just or still in the works. I just would be curious what the community is saying at what could be done?
CARLOZZI - Yeah, there are there are rules that kind of work against small businesses and one of the, I guess, historical if you want to go back to it. The merged market is where a lot of this begins that we merged our market where we're unique. I think Vermont is the only other state that has something similar, Maine might follow suit. But that's really led to a lot of the challenges where it's almost like a business owner say they have 25 workers. It's almost like they're buying 25 individual plans. There's no real cost savings for them there. So I think we need to further investigate what happens within our merged market, where there's some cross subsidizing within that.
I remember testifying several years ago at a health policy commission meeting when we're doing the cost benchmark setting. And they were talking about how individuals within the connector had the lowest cost or the second lowest cost in the nation as individuals. But in the next breath small businesses were experienced in the second highest cost in the nation.6430 So there's a real disparate disparity there that needs to be addressed. And there are certain things within the market that we can do. You talked about things like association health plans and businesses being able to pull together and finding ways to allow for that to happen, but I do think we do need to as well look at the merge market here in Massachusetts which sets us up with a whole bunch of unique challenges.
ARENA-DEROSA - Thank you. SHOW NON-ESSENTIAL DIALOGUE
Thank you, representative. Any other questions from any committee members?
Chris, thank you again. Thank you, Billy. Appreciate it. Look forward to working with you. Up next, And, again, thank you for your patience. Christina Stincare from MACDC. Appreciate you being here and Appreciate your again, your patience.
SPEAKER15 - Good afternoon. Thanks for having me today. As a resident or former resident of Deddam, I have very fond memories of going to PM production on Friday and Saturday. So definitely appreciate that.
KRISTINA ST CYR - MASSACHUSETTS ASSOCIATION OF COMMUNITY DEVELOPMENT CORPORATIONS - And just thank you to the members for allowing me to be here today. My name is Kristina St. Cyr I'm the Director of Policy and Civic Engagement for the Mass Association of Community Development Corporation or MACDC. MACDC advocates on behalf of our members and the communities they serve to create the public and private sector policy that will promote equitable community development throughout state. We have over 100 members, 64 of whom are state certified CDC's. And I just want to give you a little glimpse into the impact that our members have across this state.
I'll share a few stats. Over the past four years alone, CDC's have created or preserved over 5,700 homes, created or preserved nearly 21,000 jobs, assisted more than 9,000 small business entrepreneurs? Assisted more than 300,000 families with housing, jobs, or other services, and catalyze investment in their communities of more than $4.8 billion. So as a statewide association, we have three major areas of focus for this legislative session. one, of course, is to support community development across the common law. Specifically, we are looking to do this through expanding and extending the6569 Community Investment Tax Credit or CITC. We had a very successful lobby day on Thursday.
So if you check your mailboxes, you should have a folder with lots of wonderful information about all our priorities and CIT seeking one of them, and thank you to many of you for meeting with our members. They really appreciated that. Second is to promote housing equity.6588 And then third is to ensure equitable economic investment and empowerment. So housing affordability and availability are among the greatest challenges we face in Massachusetts are members do a lot of work in this space, and I think that housing is a key piece of community development, but I'd what I'd like to focus more of my time today on is around economic investments and empowerment.
And so there's three specific areas6612 I would love to partner with committee members6614 on. And I'm going to just Breeze through some of these because they've already been spoken about a lot today, which I was very pleased to hear. So the first is growing the Small Business Technical Assistance Program or SBTA. So MACDC in partnership with the coalition for an equitable economy has been really leading the charge on SBTA over the last few years. Many of our members benefit from this program and provide those critical services to entrepreneurs and small businesses all across the state. This program has grown, or as you heard over the last several years.
And we're really pushing for an increase in funding this year. Thank you, to senator Payano, he filed an amendment in the Senate. To increase that and then know chairman you supported this in the house as well. So I really appreciate that. You know, this program supports entrepreneurs as through throughout the process of whether they're starting out, whether they're trying to stabilize their business, or whether they're growing their business, and it really has a deep focus on BIPAC and other underserved businesses. So just a really critical program and you heard, you know, from others today, there's just a wide array of TA that's needed for businesses to be successful.
Especially in this sort of ever changing environment as we move into the post COVID. So we'd love to see support from this committee and trying to get an increase. You know, in this year, the budget, we would love to see the $7.5. We were looking for $10 million. So we'd love to think about how we can look at other funding sources throughout the year, sub budgets, or looking at next year's operating budget for that program. The second area is leveraging Community Development Financial Institutions or CDFI's, so we also heard a little bit about this today. CDFI's offer a really critical source of capital for businesses that are not yet able to attract investments from your traditional sources.
The model that they have, you know, is really able to reach communities where they're at, their community based organizations and lenders and They also offer technical assistance as part of just the way that they operate. They can provide flexible financing packages putting together both grants and loans, which I think are really critical for small businesses or micro businesses that are just starting out and can't handle all of that debt capital. And then they also leverage, you know, a lot of federal and private investment into the community. So it's a really terrific model.6755 We would really just love to partner with the legislature and with this committee.
Specifically, and looking to for ways to expand investments in these nonprofit financing institutions. A so they can continue to provide the capital that's really needed. And that is otherwise often unavailable to a lot of these smaller businesses. And then finally, I think one thing that maybe hasn't been talked about today we would love to see a dedication of grant funding for affordable small business real estate acquisition. So, you know, you hear a lot about closing the racial wealth gap and also around wealth building. We think that this is a really you know, innovative and critical tool for being able to address that. You know, we talked about the hike operating costs.
And the rent for small businesses needing to pay that constantly if small businesses are able to have a little bit of assistance in purchasing the property in which they reside, that's a whole another potential business opportunity for them, you know, we can lock in a set mortgage rate and then their payments are not going to increase over time, and they're also going to get that money back eventually. Depending on, you know, the size of the building that they're operating, they might be able to rent out some of that area, whether it's for residents, or for another business to come in, right, a good model? And so, you6834 know, in the past couple of years.
Our members were able to work with a bigger administration in trying to create this type of program where we would have a grant program for small businesses. And we were not successful. So I think this is a real area of opportunity and partnering with this committee and both investing in those small businesses but also thinking about the long term sustainable investment in these communities and making that commitment and allowing them to continue to grow and thrive. So that's all I wanted to focus on today. Really thank you for the opportunity. I'm happy to answer any questions, and I really look forward to working with you all over the course of the rest of the session.
MCMURTRY - Kristina, thank you so much for being here, and thank you for sharing the concerns and your leadership with the MACDC. I have to slide your efforts is prioritizing the grant funding for small businesses for, if it not for the opportunity that I've been given, I probably would, my,6889 the kind of small business I have probably would not6891 exist today, as an operator being6895 a tenant. Again, appreciate you being here. I also appreciate that you supported my small business many years ago for that support is what I think directly and indirectly. Let me to this seat here and being on the side of the table. So, I look forward to working with you to be able to bring some change. Share some important concerns, and it's grateful for it. SHOW NON-ESSENTIAL DIALOGUE
Not sure if anyone has any questions, any members of the committee virtually have any questions?
No? Again, thanks so much for6924 being here.
SPEAKER10 - Thanks so much.
SPEAKER1 - Is there anyone that has handing the hearing here in person or online that perhaps did not
register that, like, to offer some comments before we close out today's hearing? No. I also want to acknowledge, I know earlier, representative Ted Phillips, joined us. Appreciate that. Again, anyone online have anything before we offer closing comments? Senator, do you wanna offer any remarks before we close out? Just real quick.
PAYANO - Thank you, Mr. Chair. So I wanna thank everyone that participated today, I think this was an incredible conversation. I want to thank. My there are part of this committee. I look forward in the upcoming months to bring this conversation to our districts, to our area. So we can engage directly with whom we're trying to represent and the the lot you know, ensuring with the laws that we are creating are affecting for the better our our community. So thank you, mister chair, for your leadership and I look forward to further collaborations. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - And thank you, senator. Again, I want to echo those sentiments. Really appreciate the important conversation, the topics that were discussed here today, and grateful and thankful to the advocates and the stakeholders, as well as administration for being here. Want to thank the members of the committee, who present, as well as those who joined us virtually. We know that there's some work to be done. We look forward. We're excited about those opportunities. I want to thank the staff of both the House and Senate for enabling us this opportunity.
And look forward to working with them as we gather this information and facilitate some legislative opportunities. In the months ahead. one also acknowledged LIS who, again, without them, we would not be able to have this opportunity to be virtual, so we're grateful to the team at LIS for allowing this to be broadcast. But again, in closing, thank you to those who took the opportunity here to enlighten us, inspire us, and inform and educate us. We know there's some work to be done, and we look forward to working with each of you. Throughout this session. Thanks to my colleagues.
And that includes today's listening hearing.
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