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TOWNIE: TAX DELINQUENT, TAX GIVEAWAY

 

Crutchfield sues Mass over online taxes, unions protest Siemens

 

Online retailer tries to duck sales taxes

For a long time, the internet was like the Wild West for online sales. Companies sold products to consumers all over the US, and the feds and many states were slow to tax those transactions. You know, because “innovation goooood” and all that. On Oct 1, Massachusetts finally started collecting its standard 6.25 percent sales tax on internet sales from out-of-state companies with 100 or more online transactions last year. And last week, according to the Salem News, “online car stereo and electronics retailer, Crutchfield Corp., says Massachusetts’ policy violates interstate commerce laws and is therefore unenforceable.”

 

Why? In its legal challenge the company is basically saying: You collect taxes on us, but not on other companies who might do the same business by other means. Virginia-based Crutchfield also says it’s covered by a Virginia law designed to protect businesses in that state from having to pay taxes in other states where the business has no brick-and-mortar presence. Yet the Commonwealth has already argued that under a 1992 Supreme Court decision, having “cookies” stored on consumer’s computers from companies like Crutchfield counts as a physical presence in the Bay State. The Salem News also notes that NetChoice—a group representing online retailers like eBay and PayPal—is arguing “that the Baker administration doesn’t have the authority to tax businesses with no actual presence in Massachusetts.”

 

What’s most fascinating about these developments is the lengths big online retailers will go to avoid paying very standard state taxes (and, of course, federal taxes) in places where they do a significant amount of business. Any corporate victory on this front translates to millions of dollars being effectively stolen from the public that could be used to pay for social goods like education, housing, environmental, and welfare programs. Just what we don’t need.

 

German multinational faces protests over job promises, tax breaks

Walpole is a town with a population of 24,000 at the 2010 Census, but it’s punching above its weight in lavishing tax breaks on the huge German conglomerate Siemens. And area labor unions—led by the Building and Construction Trades Council of the Metropolitan District (Metro BTC)—are not happy. According to Wicked Local Walpole, hundreds of residents and area union members turned out for an Oct 19 protest on Walpole Common to demand that Siemens Healthineers, the goofily renamed healthcare division of the company (formerly Siemens Healthcare Diagnostics Inc.), follow through on its 2016 promises to the community.

 

In March of that year, the Walpole town meeting representatives voted 76-51 in favor of giving tax breaks worth millions between 2018 and 2037 to Siemens—an average savings of 75 percent on its property tax for the 20 years, according to the Brockton Enterprise—in support of the $300 million expansion of its existing plant there. The company said it would add 400-700 “permanent jobs” to its existing workforce of about 700 by 2026.

 

But at the recent rally, Walpole Selectman David Salvatore told the crowd that Siemens has “only hired 32 Walpole residents” to date out of the 170 jobs the company says it has created since the deal was cut. In an earlier Boston Globe article—released just after the town meeting vote on the agreement—he had provided more background: “The benefits of this project are regional, and the burden is local. Of the 620 current employees at the Siemens plant, a mere 33 are Walpole residents; most are not even from Norfolk County, and 83 are from Rhode Island.” So, Walpole is putting a bunch of money on the table for a big company that has thus far only created about 60 jobs for town residents.

 

Union leaders, according to an Oct 16 press release, are angry that Siemens has not committed to using union labor to build the 300,000-square-foot expansion of the factory or to hiring more local workers—especially since it’s getting such a large tax break. Their pressure campaign is calling for “slowing down the slated expansion for further community input and review.” One would think that a company with a market capitalization of $109.8 billion in May, according to Forbes, can afford to work things out with its critics. But it will be interesting to see how the situation plays out, regardless.

 

Townie (a worm’s eye view of the Mass power structure) is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director, and executive editor and associate publisher of DigBoston. Copyright 2017 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

THE VERTEX SHELL GAME

Vertex Headquarters. Photo ©2015 Derek Kouyoumjian

Vertex Headquarters. Photo ©2015 Derek Kouyoumjian

Pharma’s Donation to Boston, Other Cities Converts Public Funds to PR Gold

October 24, 2017

BY JASON PRAMAS @JASONPRAMAS

 

Vertex Pharmaceuticals made a big PR splash last week with an announcement of a significant donation to Boston and other cities where it does business. The Boston-based company, best known for its cystic fibrosis meds, has pledged to “spend $500 million on charitable efforts, including workforce training, over the next 10 years,” according to the Boston Globe, and “much of the money will go toward boosting education in science and math fields as well as the arts.” The company “also wants to set aside money for grants to help young scientists and researchers.”

Well isn’t that nice. Over 10 years, $500 million works out to about $50 million a year. Sounds quite generous, yes? John Barros, Mayor Marty Walsh’s chief of economic development, certainly thinks so: “The establishment of a Vertex foundation is a long-term investment in the people of Boston and the neighborhoods of Boston … That’s ultimately what we hope for when corporations move their headquarters to the city.”

But sharp-eyed locals would disagree. We’ve seen this gambit many times before in the Bay State—most recently when General Electric played it last year: A big business that has gotten bad press for various kinds of questionable behavior and/or outright malfeasance decides it needs to improve its image. And it does so by the simple device of expanding its advertising budget in the form of “charity.”

The important thing to remember with such “donations” is that the corporations in question often get far more money from government at all levels than they ever give back to society. So it’s not really charity at all. It’s just public relations by other means. Aimed at being able to continue to dip from the great public money river largely unnoticed by everyone but the few investigative reporters managing to ply their trade in this age of corporate clickbait.

To that point, let’s look at four ways that Vertex has benefitted from public support. Then reconsider its most excellent announcement in that light.

1) Tax breaks and direct aid

Readers might remember Vertex as the company that got $10 million in state life science tax incentives between 2010 and 2014 and $12 million in tax breaks from the city of Boston—both in exchange for adding 500 local jobs to their existing staff of 1,350 by 2015 and, quixotically, for moving their headquarters from Cambridge to Boston. According to the Globe, the Commonwealth also took out a $50 million loan to pay for “new roads and other improvements” to the new HQ’s Fan Pier site.

Why? As is often the case in the wonderful world of corporate finance, Vertex told then-Gov. Patrick that it might leave the state if it didn’t get the appropriate… um… “incentives.” So that apparently played a role in getting state and local government in gear. The deal was based on the expected performance of Vertex’s blockbuster new hepatitis C drug, Incivek. But things didn’t go as planned. According to MassLive, when the company pulled the plug on Incivek in 2013 after being outgunned by another company’s hep C med, it agreed to pay back $4.4 million of the state money. In 2015, according to the Boston Business Journal, after Vertex failed to meet its job creation target, the city reduced its tax breaks to $9 million—but didn’t ask the company to pay anything back and will keep its deal in place until 2018. Leaving Vertex reaping a windfall of almost $17 million in state and local tax breaks. Oh, and that sweet loan, too.

2) Gouging public health programs

With the release of two major successful cystic fibrosis meds and more new related meds set to breeze through the FDA drug approval process, the company is starting to expand. And how could it not? In July 2017 it raised the price of its newer med, Orkambi, by 5 percent to $273,000 per patient per year, according to the Boston Business Journal. A product that did $980 million in sales in 2016 before the price increase. In 2013, the company had already raised the price of its first major med, Kalydeco, from $294,000 to $307,000 per patient per year. With some patients paying as much as $373,000 per year, according to an October 2013 Milwaukee Journal Sentinel/MedPage Today article. Cystic fibrosis doctors and researchers have strongly protested, but to no avail.

It’s true that most patients don’t pay anywhere near that amount of money for the meds—because public and private insurance eat the lion’s share of the still-outrageous cost. But the final sticker price remains tremendously high. And the company doesn’t say much about who does pay a big chunk of the bill: the government, and therefore the public at large. Stick a pin in that. Vertex, like virtually every other drug company, has a business model based on gouging the public with ridiculously high prices that various government insurance programs are mandated to pay.

Programs like, in this case, federal Children’s Health Insurance Program (CHIP). As an Oct 4 letter from the Cystic Fibrosis Foundation (whose eminently questionable role in the funding and development of Vertex’s cystic fibrosis meds will likely be the subject of a future column) to the Senate Finance Committee explained, about half of all cystic fibrosis patients—who used to die young before the new treatments came online—are under 18 years old. So they’re generally covered by CHIP. That program, sadly, was defunded on Sept 27 by our psychotic Congress as part of the Republican Party’s crusade against Obamacare. Most states will run out of their 2017 CHIP money early next year, and unless they find money in their own budget to replace it or Congress manages to do the right thing, over 4 million kids—including thousands of cystic fibrosis patients—are in danger of losing their health coverage.

Vertex is not directly to blame for that crisis, but the situation does make its promise that some of its $500 million donation “will be spent helping cystic fibrosis patients get access to Vertex drugs that help them breathe easier and live a more normal life” look even more ridiculous than it otherwise would. Because Vertex and other pharmas certainly have no plans to lower the outrageous prices of their top meds for any reason. They’ll give some destitute patients “access” to their drugs. But everyone else pays—primarily through government insurance, often in tandem with private insurance. After what the pharma industry terms “discounts”… that still result in usurious prices. So even if one takes whatever portion of the donation actually goes to helping patients get cheaper meds as an inadvertent giveback of some of the lucre they’ve leeched off the government, it’s going to be even less helpful than it otherwise would have been if half the patients on those meds lose their insurance next year.

But Vertex isn’t content with just draining funds out of the US federal and state governments. According to Forbesit’s pioneering ways to suck public funds out of countries with national health services. “Vertex seems to have finally cracked a long-festering problem: selling its expensive drugs in European markets, which are tougher at negotiating prices. Ireland recently agreed to give Vertex a flat, undisclosed annual payment; in return, all patients who need the drug will get access … other countries outside the U.S. will make similar deals … new CF drugs, including discounts, will cost $164,000 per patient in the U.S., where a fragmented health care system allows for less tough negotiation, and $133,000 in other countries. With almost all of the 75,000 CF patients in those countries treated, that would be an $8.5 billion market.”

3) Government-backed monopolies

Moving on, there’s another key way that Vertex makes bucketloads of money with government help: gaming the Orphan Drug Act. Passed in 1983, it was meant to create a strong incentive for pharmas to research drugs that treated conditions suffered by less than 200,000 patients. In practice, it’s become a standard way for pharmas to get a seven-year monopoly on many of their meds. And while it’s certainly true that cystic fibrosis afflicts about 30,000 people in the US—well below the 200,000 patient threshold—it’s also true that it’s no accident that Vertex chose to focus on the disease. Because, according to its 2016 10-K annual report filing to the Securities and Exchange Commission, the company has won orphan drug status for both Kalydeco and Orkambi. Guaranteeing it seven years of monopoly production and distribution of both of the desperately needed and wildly overpriced meds. And 10 years in the European Union, under similar laws.

As Johns Hopkins University School of Medicine researchers commented in the American Journal of Clinical Oncology in November 2015, such monopolies make “it’s hardly surprising that the median cost for orphan drugs is more than $98,000 per patient per year, compared with a median cost of just over $5,000 per patient per year for non-orphan status drugs.” The same study demonstrated that “44 percent of drugs approved by the FDA [in 2012] qualified as orphan drugs.” So winning orphan drug status is one structural mechanism that makes it possible for pharmas like Vertex to charge crazy high prices for many meds.

A recent article by Harvard Business Review adds that pharmas enjoy monopolies on many other meds thanks to the 1984 Drug Price Competition and Patent Term Restoration Act—which allows them to enjoy “patent protection to effectively monopolize the market” for new meds. Once that protection expires, the field is then supposed to be open to other pharmas to produce far cheaper generic versions. Which is doubtless what Vertex CEO Jeffrey Leiden was referring to in a June Globe piece when he defended the company’s sky-high drug prices, saying “‘This is a system that actually works. It rewards innovation and stimulates it. And then after the period of [market] exclusivity is over, it actually makes these innovations free’ for future patients.”

What he doesn’t mention, however, is that pharmas routinely lobby and litigate to extend their monopolies on meds, and actually pay off potential generic producers to not manufacture generics. Delaying the cheaper meds’ arrival on the market and costing public insurance programs like Medicare, Medicaid, the VA system, and CHIP huge amounts of extra money. Which then flows into corporate coffers. All the more so because the Affordable Care Act (“Obamacare”) did not finally give the government the power to negotiate with pharmas to rein in drug prices, according to Morning Consult. The HBR story also notes that generic companies themselves often obtain exclusive monopolies for shorter periods of time and that their products are sometimes substandard—resulting in recalls. All these delays can keep cheaper meds off the market for years.

4) Public science, private profit

Finally, there’s the fact that much of the basic research that allows pharmas to exist is done by the federal government through the National Institutes of Health. In the case of Vertex, a direct connection has already been demonstrated. A May 2013 article by Milwaukee Journal Sentinel/MedPage Today explains that the company’s first cystic fibrosis med, Kalydeco, was only possible thanks to “a hefty investment from taxpayers through grants from the National Institutes of Health, which underwrote the cost of early research, which identified the gene that the drug targets.”

If one were to put a price tag on all the basic science Vertex uses to develop its cystic fibrosis meds—and other meds—that comes straight from the NIH, what would it be worth? Tens of millions? Hundreds of millions? It would be a great research project to estimate the total, but suffice to say that it would be a great deal of money. Money that Vertex could never have leveraged on its own back in 1989 when it was a startup.

Conclusion: the racket and the damage done

Add it all up: tax breaks, direct aid, profits from price gouging CHIP and other public insurance programs, profits from orphan drug status, and profits based on research directly attributable to NIH research. How much money will Vertex ultimately get from government at all levels? A hell of a lot more than that $500 million it proposes to give back to communities like Boston—mostly in ways that either benefit the company directly by providing it with a new generation of trained researchers or indirectly by gilding its public image. Assuming that it ever actually gives that much money away. Which the public has no way of knowing at this juncture.

Any more than we can know how much Vertex spends on lobbying annually to guarantee a constant flow of fat stacks of public cash. Since its shareholders at its most recent annual meeting in June thoughtfully shot down an initiative by a small number of religious shareholders to force the company to report its actual lobbying budget going forward, according to the Boston Business Journal. Not long after Vertex successfully colluded with 10 other pharmas to get the SEC to allow them to quash shareholder resolutions from the same religious groups that would have made the company’s drug pricing formula public, according to the Wall Street Journal.

Then, taking all the above into consideration, check out Vertex’s annual advertising and promotions budget for the last three years: $16.2 million in 2014, $24.5 million in 2015, and $31.4 million in 2016, according to its latest annual report. Going up, right? So tack $50 million a year onto that last figure and we get an $80+ million ad budget. Totally doable for a company with cash, cash equivalents, and marketable securities worth $1.67 billion on hand on June 30, 2017. A company that’s now becoming profitable after years of running in debt—all of which has only been possible with massive public support.

Now come back to Vertex’s “donation.” Doesn’t look so generous anymore, does it?

Reforming the twisted wreckage of our drug research and distribution systems in this country will take a massive grassroots effort lasting years. But there’s one way that local advocates can get going on that project fast: demand that municipal and state officials stop giving public money to pharmas like Vertex, or participating in pharma PR stunts like promising to recycle some of that money to educate local kids—more of whom would have a fine education already if our elected officials stopped throwing money at giant corporations that should be going to social goods like public schools.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director, and executive editor and associate publisher of DigBoston. Copyright 2017 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

TOWNIE: A WORM’S EYE VIEW OF THE MASS POWER STRUCTURE

Students at rally at Boston City Hall by NewtonCourt (Own work) [CC BY-SA 4.0], via Wikimedia Commons

Students at rally at Boston City Hall by NewtonCourt (Own work) [CC BY-SA 4.0], via Wikimedia Commons

From the guy that brings you Apparent Horizon

October 18, 2017

BY JASON PRAMAS @JASONPRAMAS

 

The rich and powerful interests that control Massachusetts politics and the state economy have their fingers in every conceivable pie. So numerous are their projects that it’s difficult for most news outlets to keep track of them, let alone cover them all. Yet it’s critical for our democracy that they be covered. Which is why I’m launching Townie—a regular news column that will provide short takes on all the elite wheeling and dealing that most people never hear about.

 

Business Organizations Sue to Down “Millionaire’s Tax” Referendum

In an era when taxes continue to be slashed for wealthy people and corporations as government social programs are starved for funds, one would think that the Fair Share Amendment (a.k.a. “millionaire’s tax”) proposed by the Raise Up Massachusetts coalition of religious, labor, and community organizations would be a no-brainer. The idea is slated to be put in front of Massachusetts voters as a binding referendum question in November 2018. If passed, it would amend the state constitution to add a 4 percent tax on top of the Bay State’s infamously inadequate 5.1 percent flat income tax for all households earning $1 million or more. The money collected will be mandated to fund public schools, transportation, and road maintenance. All sectors that really need the money. And best of all, only 19,500 families would have to pay in 2019 if the tax goes into effect—0.5 percent of all filers.

Well apparently any tax is a bad tax in the eyes of the Commonwealth’s “business community.” No matter how many people it would help, and how painless it would be for the tiny number of 0.5 percenters. So, according to an Associated Industries of Massachusetts (AIM) press release,  the leaders of five pro-corporate organizations are trying to torpedo the referendum before it can be voted on by filing a lawsuit against it at the Supreme Judicial Court. The plaintiffs are: Christopher Anderson, president of the Massachusetts High Technology Council, Inc. (MHTC); Christopher Carlozzi, Massachusetts state director of the National Federation of Independent Business (NFIB); Richard Lord, president and chief executive officer of AIM; Eileen McAnneny, president of the Massachusetts Taxpayers Foundation (MTF); and, Daniel O’Connell, president and chief executive officer of the Massachusetts Competitive Partnership (MACP).

They claim that the referendum language is “riddled with constitutional flaws,” with the MTHC’s Anderson remarking that “Amending the Constitution to achieve taxing and spending by popular vote is just a terrible idea, and could undo much of the good work that Massachusetts has done in terms of creating a successful economic climate.” But no matter what kinds of arguments they try to make, it seems like what they’re most afraid of is democracy. Let’s see how far they get with the SJC.

 

About That Opioid Epidemic…

More proof that the rising number of deaths from opioid abuse has more to do with corporate greed than any personal failings of individuals suckered into addiction by pliant doctors colluding with pharma sales reps. And also that those few drug companies that pay any penalty at all for their role in destroying communities across the state, get little more than a slap on the wrist. According to a press release by the office of Mass Attorney General Maura Healey, “An opioid manufacturer will pay $500,000 to resolve allegations that it engaged in a widespread scheme to unlawfully market its fentanyl spray and paid kickbacks to providers to persuade them to prescribe the product…  Insys Therapeutics, Inc. misleadingly marketed Subsys, a narcotic fentanyl product that is sprayed under a patient’s tongue.” The money will be used to “help fund the AG’s prevention, education and treatment efforts.”

Fentanyl is a synthetic opioid that is 30-50 times more powerful than heroin. The company claimed its spray version of the drug was useful for treating “minor” pain in non-cancer patients—despite the fact that the FDC had only approved the drug for use in more severe pain in cancer patients. It then pushed its sales staff to give kickbacks to doctors in the form of “fees paid to speak to other health care providers about the product.”

 

Boondoggle in Progress?

When a public college gets involved in land deals, it’s definitely worth keeping an eye on. Especially when that college is UMass—a troubled multi-campus institution whose leadership would rather engage in property speculation than fight the legislature for more money for public higher education.

In 2010, the school’s independent development wing, the UMass Building Authority (UMBA), bought the former Bayside Expo Center property after its owners went into foreclosure. According to the Dorchester Reporter, in August, the UMBA issued “a Request for Information (RFI) as it seeks out ideas for the ‘highest and best use’ of the former Bayside Expo Center site on Columbia Point in Dorchester with an eye toward transforming the 20-acre site into a ‘modern-day Harvard Square.’”

Last week, the newspaper reported that 16 developers have responded to the university’s request, including: Accordia Partners; American Campus Communities; Beacon Capital Partners; Bracken Development; Capstone Development Partners LLC & Samuels & Associates; Corcoran Jennison & BTUHWF Building Corp; Core Investment Inc.; Hunt Development Group, LLC & Drew Company Inc.; The HYM Investment Group, LLC; LendLease; Lincoln Property Company; Lupoli Companies; Rhino Capital & Ad Meliora; SKANSKA; University Student Living; and Waterstone Properties Group Inc. The Reporter says the UMass Building Authority “hopes to leverage public-private partnerships toward the massive mixed-use project.” Which usually means big public giveaways to corporations. One way or the other. Stay tuned.

Townie is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director, and executive editor and associate publisher of DigBoston. Copyright 2017 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

GENERAL STRIKE: IS THE TRUMP VICTORY SPARKING THE RETURN OF LABOR’S MOST POWERFUL TACTIC?

NYC (1970)

February 22, 2017

BY JASON PRAMAS @JASONPRAMAS

You know we live in interesting times when general strikes get discussed matter-of-factly in an American big city newspaper. A subject which would have only been raised in a publication like the Boston Globe in recent decades to attack it.

But to give the Globe’s Shirley Leung—an occasional target of my ire—credit where it’s due, she did just that in her recent column about three calls for general strikes against the policies of the Trump administration. One fairly small, hastily organized “Day Without Immigrants” strike last Thursday, and two upcoming one-day strike calls: “A Day Without a Woman” on March 8 (International Women’s Day), and a second “Day Without Immigrants” on May 1 (May Day, the international workers’ holiday) that are likely to be much larger affairs.

It’s fairly obvious why Leung is suddenly interested in the strongest tactic in labor’s arsenal. She’s a bit of a feminist and was supportive of Hillary Clinton, and like many people fitting that description is now considering political action that would have been unthinkable for her only three months agone. That’s fine. She gets some things wrong, but interviews some experts that know their stuff, and does her audience a service by discussing the concept of a general strike at all.

To review, a strike occurs when working people withhold their labor for any reason. A general strike occurs when massive numbers of workers from more than one industrial sector withhold their labor in a city, state, region, or nation. The difference is that a strike is typically called to demand redress in a single workplace or industry. A general strike is called to cause serious economic disruption aimed at bringing corporations and the government to their knees on a single issue, a group of issues, or even to overthrow the current political economic system itself. US strikes are usually called by labor unions, general strikes by coalitions of labor unions and left-wing political groups.

The problem for organizers considering the tactic is that general strikes are basically illegal. At least for labor unions. Leung briefly mentions that the Oakland General Strike of 1946 was the “last” general strike. But she didn’t say why. Turns out that the main reason there have been no “official” general strikes since then is because the Oakland action was part of the massive five-million worker national strike wave of 1945-46—in total, the largest sustained protest of any kind in American history.  The strike wave won some victories. Then triggered a political backlash by a coalition of major corporations and right-wing legislators, leading directly to the passage of the anti-labor federal Taft-Hartley Act of 1947. The law specified a number of political economic tactics unions were henceforth banned from using, including: jurisdictional strikes, wildcat strikes, solidarity or political strikes, secondary boycotts, secondary and mass picketing. Long story short, those types of strikes, boycotts, and pickets translate to a general strike. Not that the many general strikes prior to 1947 were treated as legal either, but after 1947 there was little ambiguity as to their legality.

Does that mean that the American labor movement just rolled over? No. It took decades for corporations and their political allies to crush it down to the diminished state it languishes in today—when only 10.7 percent of the US workforce is unionized (down from a high of almost 35 percent in 1954). And does that mean that there have been no actions like a general strike since 1946? Again, no. There have been subsequent general strikes if you include the major wildcat strikes of the 1970s and accept that the 2006 immigrant boycott (that Leung does mention) was essentially a general strike in some cities.

Wildcats are strikes organized by union workers against their employers … and two forces that often collude with bosses: the government and their own union leadership. The most recent major wave of wildcat strikes occurred in the 1970s. Some of them were large enough in some locales to be considered general strikes—especially where strikers drew support from other unions. Particularly the 1970 National US Postal Workers Wildcat Strike (200,000 workers in 15 states), the 1970 Teamsters Wildcat Strike (500,000 workers, mostly east of the Mississippi River), and the 1974 Wildcat Miners Strike (26,000 workers in West Virginia and Virginia). Some of the wildcats dragged on for weeks. For comparison, the Oakland General Strike involved 100,000 workers over a couple of days (although it wasn’t called as a traditional strike, and had elements of a wildcat).

As for the 2006 May Day immigrant action, “The Great American Boycott,” its title in Spanish was “El Gran Paro Estadounidense”—meaning “The Great American Strike.” In practice, as it involved multi-industry boycotts and strike actions, the 2006 mass walkout for immigrant rights can be viewed as a general strike. Over 1.5 million people participated. But since they were mostly immigrants, many American citizens, Leung included, don’t think of it as a strike at all. Certainly it wasn’t as strong as the 1945-46 strike wave, or the 1970s wildcat strikes. But in immigrant cities like LA and Chicago it definitely had significant political and economic impact. If it had gone on longer than a few days, many citizens would likely have felt those effects nationwide.

So the question is: Will the upcoming one-day strike calls have as powerful a political economic effect as a classic general strike? Probably not. In that case, will they be as powerful as a major wildcat strike? Not just yet. How about the 2006 Great American Boycott by immigrants? Will they be that big? That’s probably the sweet spot. The recent Women’s Marches were able to pull an estimated minimum of 3.3 million people out on a weekend when many participants weren’t working. Do a third of those numbers on a workday, and you’ve reached the lower estimate for the 2006 immigrant strike.

Frankly, both the March 8 and May 1 strike calls could be big. Both are aimed at constituencies that have demonstrated ability to turn out in large numbers. And neither call is led by labor unions that can’t easily call general strikes; so there is an opening to do so. But they will only be powerful to the extent that they threaten the established political order. And there the differences between the two events become clear. The March 8 Day Without a Woman strike is being called by some of the same forces that organized the Women’s Marches in January. Forces that, as I’ve previously written, are directly connected to the neoliberal Clintonite wing of the Democratic Party. Folks who just lost an election because they refused to put working people’s needs over corporate profits.

But the May 1 Day Without Immigrants strike call is being organized by Movimiento Cosecha—a fast-growing coalition of militant young left-wing immigrant organizers. They are potentially limited by their focus on immigrant communities. However, they were recently screwed by the Democratic Party and the Obama administration—which both failed to respond to their demand that all 11 million undocumented immigrants be granted legal status before Trump came into office. So they are less likely to heed the siren call of Democratic leaders to tone down their protests when they become inconvenient for the Dems’ corporate backers, and therefore far more likely to actually build their May Day effort into something approaching a general strike than the March 8 organizers are.

Their call to action makes that intent quite clear:

One day is just the beginning of a season of strikes and boycotts. We know that each time we strike for a day, we will build power. And the more days we strike, the stronger we will feel. The more desperate those in power become. The more the elite will want business to return to normal. They will be forced to figure out a way to give us permanent protection. And in the process, we will win the dignity and respect that we deserve and demand.

Ultimately, debates over whether major work stoppages are “real” general strikes aren’t the point. What matters is “boots on the ground,” and the ability of organizers to translate their numbers into political and economic gains. Any coalition that can pull millions out of work and into the streets against the Trump administration will write a new chapter in both American political and labor history. Which could be just the game changer our incipient movements for democracy need. But if there turns out to be more than one such coalition, so much the better.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director and senior editor of DigBoston.

Copyright 2017 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

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HARD DRUG TRUTHS: END MANDATORY MINIMUM DRUG SENTENCES

January 10, 2017

BY JASON PRAMAS @JASONPRAMAS

The opioid crisis is dire enough without adding insult to injury. With almost 12,000 deaths from overdoses in Massachusetts since the year 2000—increasing sharply in recent years with fentanyl-laced heroin hitting the streets—the human cost to users, their families, and our communities is already tremendous. But thanks to mandatory minimum sentencing for drug-related criminal offenses that cost is far higher than it needs to be.

A bit of history is in order. Decades back, sentencing decisions for such offenses were generally made by individual judges—who could then lower or remove jail time, or order an alternative sentence to a drug treatment facility, for non-violent offenders convicted of simple possession and the like.  

The passage of the Controlled Substances Penalties Amendments Act by Congress in 1984—followed by a number of related laws on the federal and state level—took that power away from the courts and set mandatory minimum sentences that could not be modified by judges. Prisons around the country began to fill with drug offenders. And many nonviolent offenders ended up doing more time than violent offenders like members of major drug cartels.

Worse still, racism was baked into the new system, with drugs like the crack form of cocaine sold in poorer communities of color drawing far longer sentences than drugs like the powder cocaine sold in wealthier white communities. The arrest rate for people of color has remained consistently higher as well. According to the state Sentencing Commission, Massachusetts imprisons Black defendants eight times more than white defendants. Latino defendants are sent up almost five times more.

Then, in 1996, OxyContin—a synthetic opiate pain medication—came on the market in 80 mg pill form. It was developed by a small Connecticut pharmaceutical company called Purdue Pharma—an early pioneer … not in synthesizing oxycodone, the active ingredient in OxyContin which had originally been developed in Germany in 1916, but in something more insidious: the direct marketing of drugs to doctors. According to Pacific Standard, Purdue doubled its sales staff in the first four years of the OxyContin rollout. That staff developed a database that identified doctors who prescribed pain medication more heavily than others. They focused their sales effort on those doctors—encouraging them to overprescribe the medication for a wide variety of conditions. In 2000, the company released a 160 mg pill specifically aimed at users that had developed tolerance to opioids—which became the wildly popular street drug we know today. Crushed and sniffed by tens of thousands of users in the Bay State alone. And so, by 2010, OxyContin accounted for over one-third of American painkiller sales.

Most of you know the rest of the story. The legions of newly addicted Oxy users eventually ran out of prescriptions, and turned to whatever they could get to replace it—inevitably leading many of them to heroin. A sane government would’ve stepped in early on in this process, shut a company like Purdue down, and significantly expanded public funding for solid treatment and recovery facilities for the drug’s many casualties. But that’s not what happened. Instead, Purdue was making over $3 billion a year on OxyContin by 2010, and had a lock on legal sales of the drug until its patent expired in 2013. Even as public funding for treatment got cut.

Meanwhile, street sales of Oxy and the resulting spike in heroin sales led to a whole new wave of nonviolent offenders sent to prison for years with mandatory minimum sentences.

Unfortunately, action to reform such strict sentencing laws has been slow to come at the federal level and here in the Commonwealth. With a new session of the state legislature just beginning, there are no new reform bills to recommend. But it’s reasonable to expect the main reform bill of the last session, An Act to Repeal Mandatory Minimum Sentencing Laws for Drug Offenses, will be reintroduced this time around. The bill would repeal all mandatory minimums for drug offenses and let courts impose sentences that fit the crimes.

It’s ironic that, according to WBUR, “several other states, including conservative states, have overhauled their sentencing laws” while ostensibly progressive Massachusetts lags behind. But thanks to the work of grassroots organizations like Jobs Not Jails and the Mass Organization for Addiction Recovery, high level officials like Mass Senate President Stanley Rosenberg and Chief Justice Ralph Gants of the Mass Supreme Judicial Court have recently gone on record in support of mandatory minimum reform.

That’s great, but without voters across Mass putting pressure on state legislators it could still be years before the needed reform passes. So, the best thing that readers can do to help stop this devastating outgrowth of the already tragic opioid crisis is to watch for the new mandatory minimum reform bill and join advocates to demand that your state reps and senators do the right thing and pass it.

This column was originally written for the Beyond Boston regional news digest showco-produced by the Boston Institute for Nonprofit Journalism and several area public access television stations.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director.

Copyright 2017 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

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PLAY TO WIN: UK LABOUR PARTY LEADER SHOWS THE AMERICAN LEFT HOW TO MOVE BEYOND SYMBOLIC POLITICS

jeremy-corbyn-labour-can-win-a-snap-general-election-video-interview-politics-the-guardian

September 29, 2016

BY JASON PRAMAS @JASONPRAMAS

Last week—as is the case many weeks every fall and spring in Boston—notices of small scripted protests by an array of area progressive nonprofits, unions, and student groups got me thinking about the rut the anti-corporate American left has been stuck in for decades. Most especially about the damage done by the habit of ineffectual symbolic political action on a host of important issues. Combined with tailing after a corporate-dominated Democratic Party establishment. Which, time and time again, ignores or actively betrays its base on key issues like jobs, education, healthcare, global warming, and military spending. As it’s done during the current presidential race.

But what if there was a way to change the whole political game for the oppositional left? After all, we almost saw such a tectonic shift happen this year with the Bernie Sanders campaign. There have also been glimpses of a more vibrant, creative, and successful progressive politics from the Occupy and Black Lives Matter movements over the last five years. What if left activists could get back to a mass politics that can really win solid victories for working families?

The way forward, it seems, is not yet to be found on our shores. However, it might be on view in the United Kingdom … where Jeremy Corbyn just won yet another vote to remain the leader of the Labour Party.

Who is Jeremy Corbyn?  Think of him as the Bernie Sanders of the UK. But one who has gotten a good deal farther politically than the original Sanders has to date. In his context, being the leader of the Labour Party is kind of like being the head of the Democratic National Committee. Except that the levers of actual power are more built into the Labour Party structure than the Democratic Party structure. And the party sits within a parliamentary political system where its leaders have a lot more control over what their elected officials do than their American counterparts. At the same time, Labour members get to vote directly for their party leaders—unlike Democrats. So when a socialist like Corbyn wins leadership elections twice in under a year and a half, it means that he has the power to help spark changes in his party of the type that Sanders can only dream of presently.

Since Corbyn first ran for Labour Party leader last year—on a platform well to the left of Sanders that calls for an end to austerity policies that hurt working people, renationalizing the once-public UK rail system, unilateral nuclear disarmament, and refusal to support Clinton-style “bomb diplomacy” (sorry, “humanitarian intervention”) in the Syrian war—he has increased the number of voting party members and supporters from 200,000 to over 600,000. Even while fighting a running battle with the corporate-backed acolytes of the neoliberal warmonger Tony Blair for full control of the party. Many of those new members are disenfranchised young voters of the same type that supported Sanders.

What Corbyn is doing with those young folks is fascinating. Upon winning his second leadership election by 61 percent last week, he didn’t talk about beating the ruling Conservative Party in the next general election. Instead he’s planning to deploy the growing militant grassroots of his party to win political victories in advance of the next election. Which looks like a completely different strategy than the one Sanders is taking post-primary—so far focusing his new Our Revolution organization on electing more progressive Democrats to office. Even as that party remains in full control of its Clintonite corporate wing. [Although in recent days, Our Revolution is starting to sound more like Corbyn’s similar Momentum organization—which is all to the good, and perhaps unsurprising given that the two insurgencies have long been in touch.]

And what issue is Corbyn focusing on? Public education. Namely stopping the Conservatives from increasing the fairly small number of UK public exam high schools known as “grammar schools.” He is calling for the large socialist camp coalescing around Labour to defend the egalitarian tradition of quality public education for all in Britain. Rather than allow the grammar schools to continue cherry-picking middle and upper class students, and helping them get into elite universities over the heads of working class students. Thus attempting to perpetuate the ancient British system of class privilege in education long after it was formally constrained. The Labour left is also likely to push to end the charter school-like “academy” (or “free school”) system that is allowing corporations to run many public secondary schools in Britain. Lining their pockets, threatening unionized teachers, and further limiting opportunity for working class students in the process. The Conservatives, for their part, plan to expand the academy system to 100 percent of secondary schools and many primary schools besides. If allowed to proceed unchallenged.

Street protests are absolutely part of what the reviving Labour Party and its allies are doing to challenge the corporate wing of their own party and the Conservative Party. Plus, Corbyn supporters have the possibility of leading their party to victory in a future general election, and starting to implement significant democratic socialist reforms thereafter. Echoing their predecessors in Labour leadership at the conclusion of World War II. Reforms like massive public jobs programs, building lots of good public housing, expanding government-funded lifelong educational opportunities for all, deprivatizing the still-impressive UK national health system, rolling back the assault on unions—while cutting the military budget and raising taxes on the rich and the corporations to pay for it all.

So their protest campaigns against conservative policy initiatives are not limited to small numbers of people waving signs and chanting slogans at the wealthy and their minions in business and government like latter-day Don Quixotes. Corbyn and his supporters are taking control of the Labour Party away from its discredited neoliberal leadership and using it to build a democratic socialist movement in the UK. That very project has been attempted in the Democratic Party before by movements like the Rainbow Coalition – and has been crushed every time. Based on that kind of experience, some American leftists feel that the structure of the party precludes such maneuvers from succeeding. A position potentially strengthened by Sanders’ dispiriting loss in the primary—after what was arguably the strongest attempt to take over the Democrats from the left in history.

Positioning the left—the actual left—for political victory in the US will therefore be extremely difficult. No two ways about it. And it’s not clear whether trying to commandeer the Democrats like Corbyn’s movement is doing with the UK Labour Party or building up small left-wing formations like the Green Party into a national powerhouse or some combination of the two strategies will lead to the desired outcome.

But one thing’s for sure. Corbyn’s success is built on grassroots activism. If we’re going to see similar successes for the American left at the national level, progressive nonprofits, unions, and student groups in cities like Boston will have to do better than calling sporadic underattended rallies, marches, and teach-ins—coupled with desultory lobby days where their peonage to the Democratic establishment is generally on display to their detriment. And start winning real political battles instead of scoring points on phantom targets.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director.

Copyright 2016 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

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AUTONOMOUS PROFITEERING: CORPORATE NETWORKS ENLIST BOSTON TO HELP THEM SELL SELF-DRIVING CARS … AND ELIMINATE JOBS

self-car-top

September 18, 2016

BY JASON PRAMAS @JASONPRAMAS

When seemingly random things happen in city government, they’re always worth a second look. Which was certainly the case last week when Mayor Marty Walsh announced a new partnership between the City of Boston, the World Economic Forum, and the Boston Consulting Group to test self-driving cars—aka autonomous vehicles—on city streets.

The stated goal is “a year-long engagement focused on creating policy recommendations and supporting on-street testing of autonomous vehicles … to advance the safety, access and sustainability goals identified by the public during the Go Boston 2030 transportation planning process.”

The rationale—“building on prior World Economic Forum research into Personal Mobility and Self-Driving Vehicles, conducted in partnership with The Boston Consulting Group, and the Future of Cities”—is framed primarily in terms of ending urban traffic congestion, reducing carbon emissions linked to global warming, and reducing poverty.

Sounds like a worthy endeavor, right? Perhaps in a better world. But not the way this technology is being rolled out. Or, more precisely, the way it’s being shoved down the public’s throat. Despite being one of the least-mentioned transit options by residents participating in the aforementioned Go Boston 2030 process—appearing with similar frequency to waggish questions like, “When can I fly around the city like the Jetsons?”—it’s suddenly a policy priority.

Put bluntly, this plan has all the makings of yet another corporate boondoggle. This time on an international scale with profound implications at the local level. Think Boston 2024 on steroids. A passing glance at the players tells the tale.

The World Economic Forum is an extremely powerful network of the global capitalist elite. They work hand-in-glove with the leaders of every major industry to ensure that the rich and powerful get ever more rich and powerful—and democracy be damned. The Boston Consulting Group is a multinational “management consulting firm” that is one of the architects of the “race to the bottom.” Where companies are encouraged to move jobs to countries with the cheapest labor costs and worst human rights standards in the quest for ever larger profits. Its recent accomplishments include flacking for charter schools and the privatization of public education worldwide. Then there’s the junior partner, the City of Boston, that takes virtually all of its major policy cues from corporate think tanks and foundations. A pattern established by a series of mayors since the 1950s. Most notably, the late Tom Menino.

Such corporate networks and organizations have the money and connections to turn their priorities into the priorities of hapless government officials like Mayor Walsh—who always seems to be chasing after bragging rights for Boston being a “global city,” or a “city of innovators” or whatever—even when the resulting policy prescriptions directly attack his core grassroots constituencies. As we’ve seen with the GE Boston Deal debacle.

For example, Walsh is known as a labor mayor. Someone who was put into power by local unions. Yet when considering this particular policy issue—self-driving cars—in that light, a number of serious potential problems for Boston area workers immediately present themselves.

To focus on the most obvious one, switching over from our existing fleet of cars and trucks to self-driving cars and trucks—in the service of expected mega profits to the auto, energy, and technology industries—will likely result in massive job loss to a huge number of professional drivers. Many of whom are taxi drivers and limo drivers whose jobs are already under threat of destruction by mostly unregulated “online transportation network companies” like Uber and Lyft. And many people who hold those professional driving jobs—like truck drivers or MBTA bus and train drivers—are members of labor unions like the Teamsters and the Boston Carmen’s Union that are already threatened by technologies being developed for private interests. Not for the public good.

What are the plans to help workers displaced by self-driving cars? Apparently the usual corporate non-plans. A September 2015 report by the Boston Consulting Group put it this way: “Rather than wage a doomed battle against progress, affected incumbents might be better advised to use the current ‘calm before the storm’ to adapt their business models to this new technology and position their businesses to profit from a new era of mobility. That is the key message that [vehicle manufacturers], dealers, and suppliers must convey while they work with governments on good-faith efforts to mitigate the impacts on those most negatively affected.”

The report’s most specific suggestion is that governments should provide: “job-retraining and placement services and compensation for income losses from unemployment.”

Anyone who has ever seen what actually happens in instances of mass layoff knows exactly what will follow in practice. In the best possible scenario, some affected workers—not all—will qualify for extended unemployment, and receive some training for job markets that don’t have enough openings to make up for the jobs being destroyed. After unemployment runs out—and even extended unemployment typically runs out in one-to-two years depending on the program—the displaced workers who have not managed to find new jobs are screwed.

And as shown above, the industries and “consultants” doing the damage to the affected workers will not have to pay a cent for any of the havoc they wreak. The burden of such “externalities” as the immiseration and dislocation of thousands of professional drivers in Boston alone is to be borne by already overwhelmed and underfunded public programs—where they have not already been eliminated by the ongoing corporate onslaught against the public sector led by those same industries and consultants.

On those grounds, the city should pull out of this incipient arrangement and pursue only those future transit options purpose-built to help working people rather than harm them. Self-driving vehicles could be of great benefit to humanity depending on how they’re produced and deployed. But shadowy corporate networks like the World Economic Forum and the Boston Consulting Group—given their long history of looting public goods for private profit—are absolutely the wrong institutions for municipal governments to be partnering with on such a critical project as the introduction of a major new technology.

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Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director.

Copyright 2016 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

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STREET FIGHT: STUDENTS DISSATISFIED WITH POLITICS AS USUAL WILL FIND PLENTY OF GRASSROOTS ACTION IN BOSTON

18.36 AH TOP (1)

September 6, 2016

BY JASON PRAMAS @JASONPRAMAS

Are you a student? New to Boston? Want to fight for social justice, but not sure where to plug in? Well, this will hardly be a comprehensive list, but here are some local activist organizations and campaigns that are worthy of your consideration. I’m only including groups that I’ve written about (and that I agree with in broad strokes) for the sake of brevity. But, rest assured, there are activist organizations for people of every political disposition hereabouts.

A few tips are in order for people new to grassroots political activism. Seek organizations that are open and welcoming, have a democratic internal process, play well with other groups, and treat students as equals regardless of age or experience. Avoid organizations that look at students as free labor, seem focused on hitting people up for money, don’t work with other groups, and have a very undemocratic internal process run by a small ruling clique. Also avoid outright cults masquerading as political activist groups. They exist. You’ll know you’ve run into one when you meet people whose entire lives seem to be directly controlled by their organization and who will not stop trying to recruit you even after you say “no.” In general, listen to your gut instinct when checking out an activist organization, and you’ll be fine.

Here’s the list.

Black Lives Matter

One of the most important and vibrant American political movements today. Leading the biggest fight against entrenched structural racism in decades. In the wake of an ongoing series of police shootings of Black people around the country. Different local nodes of the activist network have varying membership requirements. But if you can’t be a core member, BLM periodically calls for allies to join them in the streets. That will be your cue to step up. Just remember to check your privilege. Chapters in Boston and Cambridge.

http://www.facebook.com/BlackLivesMatterBOS/

http://www.blmcambridge.org/

350 Mass for a Better Future

If you’re down to stop global warming, this group has got you covered. It’s organized on the state, national, and international levels and doesn’t shy away from civil disobedience or legislative action. Its current big campaign is the Clean Money for Climate Pledge, asking “candidates running for state, federal and municipal office in Massachusetts [to] commit not to accept campaign contributions from executives, in-house lobbyists and others employed by the top ten climate-disrupting corporations.” Including BP, Chevron, ExxonMobil, and Shell.

http://www.betterfutureaction.org/

Save Our Public Schools

Do you believe education is a right—not a privilege—in a democracy? Do you think that charter schools are a total scam designed to siphon public money into a variety of private pockets, and destroy public schools in the process? Well there’s an active fight against Question 2, an upcoming state ballot measure backed by very well-funded supporters determined to expand the number of charter schools in the Commonwealth. It’s called Save Our Public Schools (a.k.a. the “No on 2” campaign) and it’s spearheaded, as ever, by teachers unions—in this case, the Mass Teachers Association.

http://saveourpublicschoolsma.com/

Make GE Pay

Since the City of Boston and Commonwealth of Massachusetts announced their plans to dump at least $270 million on General Electric—one of the largest and nastiest multinational corporations in the world—in exchange for moving its world headquarters to the Hub, there’s been been a good deal of discontent brewing in communities around the state. Largely in opposition to local and state government handing huge wads of public cash to a tremendously wealthy company with plenty of skeletons in local closets—in a period of savage budget cuts to critical social programs. The Make GE Pay coalition formed last spring to try to stop the deal, and is looking to get in gear this fall after some early public actions.

http://www.facebook.com/makegepay/

encuentro 5

Can’t decide which campaign excites you the most? Why choose? This movement building space right off the Park Street T stop has a mission to get social justice activists “better networked, better resourced, and better organized.” Home to several important nonprofits, and a regular meeting place for dozens of activist groups, if you can’t find a campaign that interests you here then you may wish to reconsider your aspiration to be politically active.

http://www.encuentro5.org/

That’s enough to get you started. Have fun. Fight the power. And be careful out there.

Full Disclosure: 350 Mass is a member of my organization’s Community Advisory Board, and encuentro 5 was launched by colleagues at my former nonprofit, Mass Global Action.

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Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director. Copyright 2016 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

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CABLE JEOPARDY

BEYOND BOSTON COLLAGE

August 22, 2016

BY JASON PRAMAS @JASONPRAMAS

Now that broadband internet is a public utility, both cable companies and telephone companies need to pay for public access television — not try to defund it

Last week, the Boston Institute for Nonprofit Journalism (BINJ) was pleased to welcome the Alliance for Community Media (ACM) 2016 Annual Conference to our mini metropolis. Staff, board members, and volunteers from public access television stations from the around the nation were camped at the Westin Boston Waterfront Hotel — sharing skills, networking, and, unfortunately, discussing the best way to survive in a hostile political climate. Because despite being one of America’s greatest remaining democratic communications resources, public access TV is perennially fighting to preserve its funding. In honor of the ACM conference, I wrote the following commentary for the pilot episode of Beyond Boston — a video news digest that BINJ just launched this month in partnership with several area public access TV stations, including: Brookline Interactive Group (BIG), Cambridge Community Television (CCTV), Malden Access TV (MATV), and Somerville Community Access Television (SCAT). Our aim is to feature news produced at local public access TV stations and link it to news we produce at BINJ. Expanding the reach of all our work by effectively merging our audiences. Check out the show on participating stations and on the new Beyond Boston YouTube channel. And read on to get some perspective on the crisis facing a vital community media resource.

Public access television is one of greatest innovations of the grassroots movement for media democracy in the last half century. Also known as community television,  it has helped cities and towns nationwide to have their very own cable TV channels. Allowing residents to keep up with local news and views while enjoying a wide variety of arts and entertainment programming — most of which is produced by their family, friends and neighbors. Filling the gap in local nonprofit media options left by PBS and NPR.

One of the best things about public access television is the way it’s funded. Community media pioneers like noted filmmaker George Stoney helped craft regulations back in the late 1960s that made everything go. They were based on the principle that cable companies should pay an annual franchise fee to cities and towns in exchange for being able to build out their systems on municipal rights-of-way. In other words, companies like Comcast have to pay local governments for stringing their cables along public streets. That money can then be used to equip and sometimes staff public access stations. And those stations get used by the local population to celebrate their culture. Expanding free speech in the process.

That funding mechanism worked pretty well — despite a bunch of political speed bumps there’s no time to discuss today — until the telephone companies joined cable companies in offering broadband internet service about a decade back. Soon people in many places were getting all the content carried over the old cable systems and much much more from both telephone companies like Verizon and cable companies like Comcast. This created a problem for funding public access stations because cable companies offering broadband still had to pay the franchise fee to local governments that is used to finance those stations. But telephone companies that now also provide broadband don’t have to pay that franchise fee.

This has potentially provided the cable companies an opening to get rid of the franchise fee by stating that it’s unfair that they have to pay when the telephone companies don’t. Putting public access funding in extreme jeopardy. However, last year, the Federal Communications Commission ruled that broadband internet service is a public utility. Raising the possibility that both cable companies and telephone companies could be mandated to pay a franchise fee to cities and towns in exchange for stringing their broadband wires on public land.

The FCC is still figuring out how to proceed on that front, and they are under intense pressure from cable companies and telephone companies to free them from all responsibility for funding public access stations. So it is critical that everyone who supports public access media gets together with other interested folks in your community and starts building a new grassroots movement to demand the FCC apply the franchise fee to both cable companies and telephone companies. A win on this issue will keep public access stations funded for decades to come. And that’s a big win for democracy.

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Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director.

Copyright 2016 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

WELFARE KINGS: BAKER MOVES TO MAKE CORPORATE GIVEAWAYS EVEN SWEETER

1826 APPARENT HORIZON

June 28, 2016

BY JASON PRAMAS @JASONPRAMAS

If you think that the Commonwealth of Massachusetts and the City of Boston lavishing $270 million in tax breaks and direct aid on General Electric in exchange for moving their world headquarters to the Hubis unconscionable, you should realize that the deal is only a more extreme example of the existing government gravy train for corporations hereabouts. In fact, to focus on but one of several programs that give public money away to businesses for dubious reasons, the state government is already able to dole out a total of $30 million in Economic Development Incentive Program (EDIP) tax credits each year to all approved corporate applicants.

But that’s apparently not enough for Charlie Baker. The governor sponsored an economic development bill in January (H.4413, formerly H.3983) that will allow the EDIP cap to be boosted to $50 million a year whenever another big GE-style deal is in the offing. And with the House expected to vote on it this week and the Senate next week, the proposed legislation is well on its way to passage.

The tax credits in question are approved by the Economic Assistance Coordinating Council (EACC)—a14-member board consisting of seven gubernatorial appointees (representing six regions of the Commonwealth and one institution of higher education) and seven high-level state government officials (one of those seats being currently vacant). The EACC meets quarterly to approve EDIP credits, and local Tax Increment Financing (TIF) credits proposed by qualified municipalities.

Interestingly, as reported in the Boston Business Journal, General Electric did not go for EDIP tax credits to help finance its new world headquarters in Boston. “It’s not necessarily that GE did not want EDIP credits or that the state felt infrastructure grants alone were the most attractive package, according to [Mass Secretary of Housing and Economic Development Jay] Ash. It’s that the state’s options for GE under the current incarnation of EDIP were limited.”

Baker’s economic development bill would make things significantly less limited for companies like GE —or, as the press buzz would have it, for the “next General Electric.” Because the already undemocratic EDIP process, overseen as it is by unelected staffers and appointees on the EACC, would be made even more undemocratic in the case of what the bill calls an “extraordinary economic development opportunity.” In a manner that CEOs on the make will find most advantageous.

And what exactly is an extraordinary economic development opportunity? It’s the situation that arises when a giant corporation like GE wants extraordinary amounts of state money to site facilities in the Commonwealth. To paraphrase the bill, if the secretary of the Executive Office of Housing and Economic Development and the secretary of the Executive Office for Administration and Finance agree that a corporation is going to build or rehabilitate a significant facility in Massachusetts, or relocate a business to Mass from a facility outside the Commonwealth—and either create at least 400 new jobs, or create at least 200 new jobs in a “gateway municipality” (state government speak for an economically depressed city) or in an adjacent city or town that is accessible by public transportation to residents of a gateway municipality—then it can be declared an extraordinary economic development opportunity and become eligible for much bigger EDIP tax credits than have been allowed heretofore. So large that the EEAC will be allowed to extend the total amount of EDIP credits it’s allowed to hand out in a single year from $30 million to as much as $50 million.

To clarify, let’s say that there are 29 companies each getting $1 million in EDIP tax credits in a particular year. Then a big company like GE comes along, and also qualifies for $1 million—which means that the EEAC has given out the $30 million in tax credits it’s allowed to disburse annually. Under H.4413, the big company can then be declared an extraordinary economic development opportunity and qualify for up to another $20 million. Reaching the special new cap of $50 million in EDIP credits for that year.

Two points to consider here:

  • First, the above bill language is clearly aimed at enticing large companies like GE to move major facilities here from another state. And perhaps GE is planning to go back to the public trough and apply for the newly expanded EDIP tax credits if the bill passes. One might even surmise that this language was written just for GE.
  • Second, such a move cannot be stopped by normal means. According to the bill, the “decision by the secretaries to designate or not to designate a proposed project as an extraordinary economic development opportunity shall be a decision that is within the sole discretion of each of the secretaries, and may include such conditions as the secretaries shall in their discretion impose.  Such decisions shall be final and shall not be subject to administrative appeal or judicial review under chapter 30A or give rise to any other cause of action or legal or equitable claim or remedy.”

Thus vast sums can be given away to big business by the Baker administration and its successors to favored corporations with no easy possibility of reversal.

Shocked? Outraged? Good. There’s still time to stop H.4413. Make GE Pay, the grassroots coalition that’s working to stop the GE Boston deal, has announced that they are working with Sen. Jamie Eldridge (D – Acton) and other legislators to remove—or at least improve—the EDIP cap section of the bill. Contact coalition coordinator Eli Gerzon (eligerzon@gmail.com) for details. And follow Make GE Pay on Twitter (@makeGEpay) and on their Facebook page (facebook.com/makeGEpay) to keep up with all the latest.

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Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director.

Copyright 2016 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

 

ADDENDUM

Since the list of current Economic Assistance Coordinating Council members is not on the Economic Development Incentive Program website, EDIP staff was kind enough to provide a copy upon request:

CY 2016 EACC Board Members

Director of the Office of Business Development (or Designee) – Co-Chair
Ms. Carolyn Kirk (Ex Officio)

Director of Department of Housing and Community Development (Designee) – Co-Chair
Mr. Louis A. Martin (designee) (Ex Officio)

Director of Career Services (or Designee)
Mr. Ken Messina (designee) (Ex Officio)

Secretary of Labor and Workforce Development (or Designee)
VACANT (designee) (Ex Officio)

Representative of MOBD designated by the Director of Office of Business Development
Mr. Nam Pham (Ex Officio)

Representative of MOBD designated by the Director of Office of Business Development
Ms. Annamarie Kersten (Ex Officio)

Director, Commonwealth Corp. (or Designee)
Ms. Rebekah Lashman (designee) (Ex Officio)

WESTERN REGION REP.
Ms. Kathleen Anderson (Governor)

CENTRAL REGION REP.
Mr. Paul F. Matthews (Governor)

EASTERN REGION REP.
Mr. Drake Behrakis (Governor)

SOUTHEASTERN REGION REP.
Ms. Jennifer Menard (Governor)

CAPE & ISLANDS REGION REP.
Mr. David Keator (Governor)

MERRIMACK VALLEY REP.
Mr. Joseph J. Bevilacqua (Governor)

Representative of Higher Educational Institute
Dr. Michael D. Goodman Ph.D. (Governor)