Two connections are missing

By Jim Stergios
February 18th, 2008

In a number of articles in the Boston press on the Governor’s plan to pump $40+ million into biotech firm Shire (The Globe’s Todd Wallack and AP) and on the forward movement of the $1 billion biotech plan (The Globe’s Matt Viser and the Herald’s Christine McConville), two connections are missing.

Sure, the “picking winners and losers” trope is being heard, though not with the seriousness it requires. It should be noted that during a recent Joint Committee on Long-Term Debt hearing on the biotech bill, the Secretary of Housing and Economic Development Dan O’Connell noted that the state might even consider investing in certain companies if the state could hold a stake in the company… Guys, if you want to get into that line of work, go work for Bain. They are better at it than you could ever dream of being.

But, now, for the two connections reporters are not making: It’s not just that the Governor is looking to pump a billion dollars into a single industry, but that in order to do it, he is looking to increase business taxes by $300 million. Raise taxes on many, and give out goodies to one. Doesn’t that strike anyone as worth writing about?

Second, the payback on the Shire deal, even if all goes very, very well, is probably something on the order of 10 years. That is truly a visionary way of dealing with the $1.3 billion structural deficit in the Governor’s budget. Key question: Has any reporter asked for the payback numbers from Shire or from the administration?

It is worth noting that if the Shire numbers are our guide to understand the level of corporate welfare needed to create the state’s goal of 250,000 jobs, then we are talking about $17.5 billion.

That’s a big supplemental.