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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.

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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MEDICINE FOR A MENDICANT MEDIA: Government support can revive American journalism

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July 25, 2016

BY JASON PRAMAS @JASONPRAMAS

[Note: This is the full version of this article. A shorter version ran in the print edition of DigBoston— also dated July 25, 2016.]

Journalism is in a tough spot. There are tens of thousands of trained journalists in the United States, but a dearth of funding and the rolling collapse of major news outlets prevents many of us from making a living plying our trade. Even as journalism schools continue pumping out thousands of new journalists every year. According to the annual newsroom census by the American Society of News Editors, we’ve dropped from a high of 56,900 jobs in journalism in 1990 to a low of 32,900 jobs in 2015–3,800 jobs lost in the last year counted alone. That’s just in print journalism. The picture for broadcast journalism is somewhat better, but no broadcast news sector is adding lots of new jobs. And there have actually been layoffs at large digital news companies that are supposed to represent the “future of news.” All this as the population served rose from 249 million to 321 million over the quarter century in question. Meaning that more and more Americans live in “news deserts.” Ignored and abandoned by the dwindling number of robust professional news operations. A very dangerous state of affairs for a democracy that requires an informed citizenry to function properly.

New entrants struggle to replace the old news industry

Two developments helped cause the sharp contraction of the news media over the last few decades. First, the absorption of many news outlets by multinational corporations — which then squeezed them mercilessly for profit. Second, the Internet’s near destruction of the old, flawed, advertising-based commercial model that used to fund the production of the majority of American reporting.

Fortunately, there is another significant media sector that produces news. Government-backed public media. Although woefully underfunded by Congress, it has done a good job of staying afloat for almost 50 years. However, its outlook is far from certain, and its commitment to news is mixed. PBS has never produced much news — especially local news — although it is justifiably famous for its documentaries. NPR and its affiliate stations, on the other hand, are now producing more than ever and are fairly stable economically due in part to popular local news shows and the donations they attract. But they have an aging audience — and only small numbers of young people, urban dwellers using public transit, Blacks, and Latinos tune in. Which doesn’t bode well for the future, despite the inroads the network has made with podcasts and other online content.

Neither service is sizable enough to keep enough journalists in the field to make up for ongoing news industry losses. So, neither can produce the amount of solid coverage that our society requires to remain democratic. And that’s unlikely to change with the federal government providing less than 20 percent of PBS and NPR revenue through the Corporation for Public Broadcasting and other sources. Which annually amounts to only a few dollars per capita while countries like Denmark spend over 100 dollars per capita on public media. Another 20 percent more comes from state and local governments. A figure that has been dropping due to budget cuts since the Great Recession. The rest comes from corporations, foundations, and individual donors that tend to over represent the white, college-educated, suburban, middle and upper classes. Groups that expect certain kinds of programming: garden shows, light opera, and folksy commentary from white guys in overalls. And don’t expect other kinds of programming. Like journalism focusing on the needs of younger, working-class, urban populations of color that live in news deserts.

As the situation has worsened, these factors have led to a wave of new journalism outfits that are attempting to fill the growing holes in local, state and national news coverage. Some are nonprofit, some are for profit, and most are having a hard time making ends meet … let alone flourishing.

Much of my career as a journalist has been spent running such projects. Last year, I co-founded the Boston Institute for Nonprofit Journalism (BINJ) with Chris Faraone and John Loftus — merging my seven year old, community newspaper-sized, online nonprofit Open Media Boston into the new regional investigative reporting incubator. It’s done quite well so far, producing 20 features and over 100 columns, running several community events, and paying good money for work by a couple of dozen area reporters.

But compared to the surviving corporate news outlets — or even alternative metro news publications like the late lamented Boston Phoenix — we’re operating on a shoestring budget. We raised and spent $70,000 in our first year, and just brought in another $25,000 as we enter our second year. Ironically making us incredibly efficient by the standards of the industry. Legions of news startups have tried to make a go of it — mainly online — on even smaller budgets in recent years. Very few of the new entrants started with stable funding. And even fewer have survived to grow into substantial organizations that come anywhere near replacing lost news organizations in their communities.

A study by veteran news executive Alan Mutter said that of 141 digital journalism startups listed by Columbia Journalism Review in 2010 one-quarter had gone under within five years (and he just missed counting Open Media Boston, which I shut down right after his report was released). These were the more established of a universe of hundreds of such startups, but many were still one and two-person operations. I helped launch a network for those online news organizations that same year — now called Local Independent Online News (LION) Publishers. Some of those startups have thrived since then by dint of much hard work, experimentation, and willingness to share ideas with other outlets. Of the success stories, both inside and outside LION, only a fraction of the new online publications have been able to build up a larger staff and become forces in their regional news markets.

The largest of those successes — which are nowhere near the size of traditional newsrooms, but are at least moving in the right direction — have usually managed to find some kind of major donor to bankroll their operations. Often a wealthy person or small group of them.

And that’s a problem. There’s no perfect funding system for news production out there. All have their good and bad points. All affect news content. It’s just a question of degree. Ultimately, it’s always up to ethical journalists to resist pressure from any funding source to censor ourselves. Yet the essentially feudal funding system that’s becoming “The Dream” for many American news organizations, large and small, nonprofit and for profit, is seriously problematic.

When journalists go begging, journalism suffers

Going hat-in-hand to get a rich person to dump money on your news outlet — be it the Boston Globe, the Intercept, or the Texas Tribune — means that one more vital institution in our democratic society, the free press, increasingly exists at the sufferance of private wealth. The caprices of the rich can then more closely dictate what kind of news coverage the various American publics will see. Or not see (as we were just reminded when PayPal billionaire Peter Thiel took down Gawker). With no meaningful public oversight.

There are a number of alternatives to that model. BINJ, like many other news organizations, is trying most of them. Memberships and subscriptions (never an easy option in an era when people expect to get their news for free), crowdfunding, benefits, merchandise sales, sponsorships, and newer forms of (mostly digital) advertising are all in play. Foundation grants are also in the mix. However, fortunately or unfortunately, very few foundations give money for news production. And as BINJ’s Chris Faraone has pointed out, the foundations that fund journalism-related projects prefer to give their money to what they consider to be safe bets like university institutes (or the money pit that is the Newseum). Plus, grant funding is often just another form of feudal giving. If, to paraphrase Balzac, “behind every great fortune there is a great crime,” then the same may undoubtedly be said of the many foundations built on such fortunes.

Will BINJ join other news outlets in seeking money from rich people and foundations? Absolutely. We have to. Even though we aspire to pull in most of our budget from smaller donations by large numbers of people to avoid having to deal with editorial pressure from any one funding source, we would have a very hard time getting to that point without dedicated specialist staff that we can only pay if we can get larger chunks of startup money. As a nonprofit, we can’t go for venture capital, and wouldn’t get much if we could — since we’re an investigative reporting group that is frequently critical of giant corporations. So we do our best to find the coolest funders we can, and to pull in enough money to grow strong enough to chart a more independent growth course.

Even if we succeed and manage to hire 10, 20, or even 50 full-time journalists, and even if 100 other newer entrants to the news market — nonprofit and for profit alike — do the same nationwide, we’re still not going to replace the news ecology that once existed. And most jobs in the industry will remain low-paid, short-term, contract gigs — forcing talented journalists to scrape by as freelancers for a few months or years until inevitably throwing in the towel. So, begging rich people and foundations for our proverbial supper is clearly not a viable economic long-term economic strategy for the news industry. The much-vaunted “citizen journalists” are not going to fill the gap either — winking in and out of existence like so many untrained, unpaid, unaccountable fireflies as they do.

The alternative to mendicant journalism

Is there a better alternative to today’s busted model of mendicant journalism? I think so. The one least discussed in this country in this era, but perhaps the most important. Public funding. Real public funding. Not the anemic version conservatives have stuck us with thanks to ceaseless attacks against PBS and NPR since their formation in 1969 and 1970 respectively. This is the road mostly not travelled in the US. We need a big public fund like the National Endowment for the Arts or National Endowment for the Humanities — a National Endowment for Journalism, as has been periodically proposed — that would dole out grants to organizations like BINJ to produce a broad array of news in the public interest. And allow us to build the large grassroots member base that would make us truly independent. Given the long experience that many democratic nations (including our own) have with such arrangements, there’s every reason to believe that more public support would spark a flowering of journalism akin to the one that resulted from the postal subsidies granted to newspapers at the dawn of the republic. Not create the kind of a censorious Soviet-style news regime invoked by the hard right every time the issue of public funding for news production is brought up.

One key to avoiding such a regime will be running any public funding institution for news production as democratically as possible. Diverse regional boards that are elected by the public-at-large for limited terms could be put in charge of disbursing grants on a regular cycle. Staff could be hired to support the boards and housed in existing public facilities. To qualify for funding, news organizations would have to meet certain professional standards, demonstrate some ability to raise money, and produce content for a reasonable period of time (say, a year). Priority could be given to news organizations set up to cover underserved communities and run by journalists from those communities.

That’s just one possible public approach. There are many others worth considering. Foremost among them, fully funding PBS and NPR — after cutting the ties that bind them to oligarchs like the Koch brothers — and opening their doors to the diverse range of views called for in the Public Broadcasting Act of 1967. Which will allow them to significantly increase the size, reach, and relevance of their news operations.

Where will the money come from for such innovations? A wealthy society like ours can figure it out. Eliminate funding for nuclear weapons. Tax the rich and corporations. And we’ll have a whole new journalism ballgame.

 

 

Looking for a good book on the idea of government funding for journalism? Check out “The Death and Life of American Journalism” by John Nichols and Robert McChesney.

 

 

This article replaces the July 21, 2016 Apparent Horizon column.

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.

KILL SHOT 2: MASS PUBLIC HIGHER ED STILL ON THE CHOPPING BLOCK

UMass President’s Office at One Beacon Street in Boston Overlooking the Massachusetts State House

UMass President’s Office at One Beacon Street in Boston Overlooking the Massachusetts State House

July 12, 2016

BY JASON PRAMAS @JASONPRAMAS

Will campus advocates spark a rebellion for proper funding or cling to failed politics as usual?

Hot on the heels of the UMass Boston administration issuing pink slips to 400 Boston non-tenure track faculty last month comes this month’s announcement that the entire UMass system will almost certainly face tuition hikes for the second year in a row. Capping a quarter-century of relentless increases in tuition and fees at state colleges and universities that have made the Massachusetts public higher education system the ninth most expensive in the nation.

Locally, according to the Daily Hampshire Gazette, UMass Boston students “will likely see the biggest increase because that campus projects a $22.3 million shortfall in the coming fiscal year.”

The UMass Board of Trustees will vote on the matter on July 14. But given the Commonwealth’s worsening financial position in the wake of the Brexit crisis, and an expected additional deficit of up to $950 million for FY 2017, there will be significant budget shortfalls that UMass leadership plans to deal with by jacking up tuition on already overburdened students.

My basic response to the looming layoff of one-third of the UMass Boston faculty was to call for a rebellion by students, faculty, staff, alumni and parents at that school. So it should come as no surprise that my response to news of this latest tuition hike is to call for a systemwide rebellion at UMass. And at the state universities and community colleges of the Commonwealth’s three-tiered public higher ed system as well.

As to the specific form of the necessary uprising, I cannot say for sure what will be most effective. But something like the campus walkouts that Boston Public School students pulled off this spring, plus a general descent upon the State House and the establishment of an Occupy-style encampment as a base of operations would be an excellent start. Because if the politicians don’t feel major pressure very soon, public higher education will begin to disintegrate in the Bay State as regular budget cuts get worse and worse.

To those who might suggest that a typical lobbying strategy will be more effective than an extra-parliamentary strategy at this moment in history, I would say that the burden of proof is on them to demonstrate how playing nice in a state political arena dominated by monied interests is getting public higher education advocates — or advocates for any public good — anywhere of late.

As it happens, campus activist groups and labor unions have tried that approach for over a decade but no major positive changes have occurred in state higher ed policy. The general political trajectory has been for the legislature to continue decreasing state support for public colleges and universities causing administrators to raise tuition and fees to fill the budgetary gap. Gradually transferring costs from government to individuals — changing higher ed from a right for the many back to a privilege for the few moving forward. A reversal of nearly two centuries of democratic education reforms.

Power accedes to nothing without a demand. But such a demand needs to fit the circumstances. If the problem involves savage budget cuts, big tuition hikes— 5 to 8 percent at each UMass campus and similar amounts at the state universities being currently projected for FY 2017 alone according to UMass President Marty Meehan — and an existential threat to public higher ed then one can’t improve the situation by proposing good but relatively minor reforms that barely begin to touch the crisis at hand.* Including the “fair share” constitutional amendment that may be on the ballot in November 2018 — which will raise taxes on individuals making more than $1 million a year and target some of the estimated $2 billion in resulting funds annually to higher ed.

A lot of damage can be done to state colleges and universities in the minimum of three fiscal years that it will take to see such a millionaires’ tax operationalized — assuming it’s not defeated by the usual business-led coalition of anti-tax voters. And it’s still no substitution for the progressive tax regime that is needed to end the Commonwealth’s financial woes.

So Mass public higher ed activists face a crucial decision. Will they play an inside game that has not worked before and is therefore highly unlikely to work now without the mass support they have been unable to generate with carefully scripted rallies and lobby days? Or will they try something new? Something bold that might generate the required popular support. Something that will inspire all the tens of thousands of students and alumni being sentenced to a lifetime of debt bondage by short-sighted politicians that refuse to raise taxes on corporations and the rich — even when the very things that have traditionally made Massachusetts a great state, like our public higher ed system, are in danger of being destroyed. All while emboldening faculty and staff to fight for their jobs with the fury a deteriorating political economic situation demands.

That remains to be seen.

*On July 11, the Boston Globe reported that community college tuition would be increasing as much as 10 percent in FY 2017.

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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 Journalismand 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)

GE BOSTON DEAL: THE MISSING MANUAL, PART 8

 Photo by Jason Pramas. Copyright 2016 Jason Pramas.

Photo by Jason Pramas. Copyright 2016 Jason Pramas.

June 21, 2016

BY JASON PRAMAS @JASONPRAMAS

Problems with GE Fort Point arrangement show need for democratic economic development planning

A new wrinkle surfaced earlier this month in the plan to use a big chunk of the $270 million in public aid and tax breaks being shoveled at General Electric to buy two of the three buildings that are slated to make up its new headquarters in Boston’s Fort Point neighborhood.

In part 5 of this ongoing series of columns on the GE Boston deal, I mentioned that said scheme called for the Boston Redevelopment Authority (BRA) to purchase the two former Necco company buildings from Procter & Gamble—along with part of the big parking lot outside its Gillette plant—and lease the buildings back to General Electric. Soon after, it emerged that while GE would pay up to an estimated $100 million to refurbish the buildings and build a new third structure on the site, it would not be paying rent. At all. For the entire 20 years of the lease. And that the terms of the agreement struck with the City of Boston and the Commonwealth of Massachusetts only put the vast multinational on the hook for “annual operating expenses, property taxes not abated or subject to a PILOT [Payment In Lieu of Taxes] agreement, and interior renovations costs.”

John Barros, Boston’s chief of economic development, subsequently insisted that despite the agreement making no mention of rent payments for the former Necco buildings, by gum there would be some kind of payments! Yet there has been no further news on what those payments might look like. Or if the company will, in fact, ever be asked to make any payments in exchange for using the buildings at all.

Key to the plan was BRA ownership of the buildings—because that allowed GE, a corporate behemoth infamous for making huge profits and paying very little in taxes, to use the part of the promised $120 million in state grants that wasn’t used by the BRA to purchase the buildings to rehab them and make other site improvements. Since the state money in question cannot be used on private property.

Now it turns out that the BRA won’t be involved in the deal at all. Instead, according to the Boston Business Journal (BBJ), the state’s economic development arm MassDevelopment will own the Necco buildings and the $120 million in state funds “would be used in [its] acquisition of the Necco buildings as well as to improve utilities at the site, create a public park and improve the existing Harborwalk.”

As regards the lack of rent, a rather uncritical April 1 BBJ piece, “Of course GE won’t pay rent in Boston, so stop bellyaching,” noted that “the revitalized site could generate roughly $1.75 million in annual gross tax revenues to the city.” An estimated $35 million over 20 years. The next day, the Boston Globe quoted a higher estimate using “City Hall” figures indicating that a “comparably sized office property in that part of the city” would pay $48 million in taxes over 20 years—which a later Boston.com piece interpreted as the city pocketing $23 million over its $25 million in tax abatements to GE.

But when WGBH’s Jim Braude had interviewed Boston Mayor Marty Walsh a few days prior, hizzoner agreed there had been no discussion of GE paying taxes to the city to that point. After first putting it as an evasive double negative, “There’s been no discussion of not paying taxes.”

All that said, it comes down to this: The City of Boston and the Commonwealth of Massachusetts are giving millions of public dollars to a mind-blowingly wealthy conglomerate that doesn’t need it. To engineer the public purchase of two out of three headquarters buildings on which it will likely not pay much, if any, rent. Nor will GE likely pay significant taxes on the parts of the complex it is to own outright—if its past record as one of the biggest tax scofflaws in history is any guide.

The terms of the essentially secret deal that led to this situation—brokered by high public officials and GE leadership with no public oversight whatsoever—are already being violated. The place of the BRA in the complicated and highly questionable real estate transaction at the heart of the accord has now been taken by MassDevelopment. Once again with no opportunity for public comment or oversight.

Things just happen. Politicians and CEOs cut backroom deals. Much of the press lays down on the job. And the public gets shafted.

But what if the public didn’t have to bow down to private interests? What if we didn’t have to get shafted on deals like this? Imagine a Boston and a Massachusetts in which the public good—rather than short term gain for a few privileged actors—was the guiding political economic motivation.

Let’s say that the same city and state money being lavished on General Electric was put into something that many people have said was important—like strengthening and expanding the arts sector in Fort Point in ways that go much further than anything proposed in the city’s new arts plan. A sector that, after all, was largely responsible for making what the BRA likes to call the “Seaport District” attractive to big developers and corporate interests to begin with.

In that alternate Boston, the city and state would pull out of the GE deal. The state would buy the Necco buildings directly from P&G. Perhaps it would pick up the adjacent 253 Summer Street building as well. And it could even buy some of the available P&G parking lot and build desperately needed public housing—following the mixed-use zoning ideas for the area in the 2006 BRA “100 Acres Plan” a good deal more closely than that agency is at the moment. City and state money would refurbish the space as a creative industries incubator with an emphasis on new businesses run as worker-owned co-operatives. The focus of the project would be twofold. Create good arts jobs, and help Fort Point remain a major arts hub. That would be a much better use of public money than dumping it on GE. Especially because the entire development process would be transparent and subject to democratic oversight.

A robust popular movement will be required to make this kind of vision a reality. And such movements rarely appear on cue. But it sure would be nice if one did this time around.

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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.

 

KILL SHOT: YEARS OF STATE AUSTERITY BUDGETS PUT UMASS BOSTON IN JEOPARDY

UMASS TOP

June 10, 2016

BY JASON PRAMAS @JASONPRAMAS 

Community needs to join Faculty Staff Union movement for a return to full funding

There is only one appropriate response to the looming layoff of 400 unionized non-tenure track faculty at UMass Boston. Rebellion.

We are well past the era of shots across the budgetary bow of public higher education in the Commonwealth. We are now in the era of kill shots. It is not possible to eliminate roughly one-third of the faculty of a major research university without destroying that university. One cannot run a school without teachers, after all. Teachers who are already denied the possibility of secure, properly-paid, full-time, tenure track faculty jobs—as has become the dominant practice at colleges across America.

So, the threatened faculty, the remaining faculty, the staff, their Faculty Staff Union (Mass Teachers Association), the other campus unions, the alumni, and—most importantly—the students and their families have to essentially declare war on state government. Now. The entire UMass Boston community needs to demand proper funding for the school. Or risk losing everything that generations of Bostonians have fought for. A public university of our own with an “urban mission” to provide a top flight education to its residents with as little expense to them as possible.

The proximate cause of the crisis is a combined $22.3 million deficit that the UMass Boston administration recently announced for this fiscal year and next. Their unfortunate response is to propose: increasing class sizes, raising tuition (yet again), and savagely cutting faculty jobs.

But the ultimate cause is the long term starvation of the public higher education budget by the Mass legislature. According to the Mass Budget and Policy Center, state funding for public higher education has fallen from $1,339,713,711 in FY 2001 to $1,187,476,006 in FY 2016 (numbers adjusted for inflation)—an 11.4 percent drop. Yet it’s worse than that statistic makes it seem since the budget was well below the FY 2001 figure every year between then and now. Meaning that the system has lost more than a billion dollars over the last decade and a half.

Put another way, the ultimate cause is ideological. And that ideology has a name: neoliberalism. Its central precepts of fiscal austerity, privatization, deregulation, and union busting in the service of making the rich richer have been followed with near-religious intensity for decades by both major political parties in state governments and in the federal government alike.

In the present context, neoliberalism translates to refusing to fairly tax corporations and the rich—which would allow our public higher education system to be funded to a tolerable standard—trying to run colleges like for-profit businesses instead of nonprofit services, and transferring once-public costs to individual families. Forcing students to take out increasingly burdensome loans to stay in school. A recipe for disaster, if ever there was one.

Writ large over the entire state government, the neoliberal ideology has led to one crisis after another—in the public health system, in public K-12 education, in the public transportation systems, etc., etc. And will continue to do so until the disastrous course its political partisans have put us on is reversed by popular political action.

All signs point to a small increase (1-1.5 percent) in state spending on public higher ed in the final FY 2017 budget, but nowhere near enough to make up for the years of cuts. Or even to keep up with inflation, let alone forestall the crisis at UMass Boston.

Saving UMass Boston—and the Mass public higher ed system—is going to take a real struggle. The Faculty Staff Union and its allies are doing a fine job of protesting the cuts. But they need solidarity. Lots of it. The kind of movement required has to be statewide and systemwide. And even that probably won’t be enough. A reform of the necessary scale will need help from outside the public higher ed community. It will need the newly emboldened radicals from the Bernie Sanders campaign, #BlackLivesMatter and other rising social movements to join the fight.

That’s a tall order to be sure. But every journey starts with a first step. Here’s how you can help:

  1. Sign the UMass Boston Faculty Staff Union petition.
  2. Get on the “Stop the Hikes and Cuts” bus at UMass Boston on June 15 and join the UMB community in protesting the upcoming UMass Board of Trustees meeting.
  3. Drop an email to FSU@umb.edu to get more involved.

Pressure on the UMass Boston administration is already mounting. That might explain why UMB Chancellor Keith Motley told the Boston Herald this week that “he has not approved any cuts on campus and that most staff who received pink slips would be called back for the fall.” Cold comfort for the 400 faculty members currently in limbo, unsure of whether they should start preparing for classes as usual—or continue looking for new gigs in a tight academic job market. And with UMass President Marty Meehan guaranteeing that budget cuts are coming to the entire UMass system by July, it doesn’t seem like Motley will be able to avoid finalizing the faculty layoffs for very long.

Unless he proposes cutting the often-outrageous administration salaries across the board to help balance the budget as public higher ed advocates have long suggested. Wouldn’t hold your breath on that one.

For a community perspective on the crisis at UMass Boston, check out the testimonial from recent graduate Cady Vishniac.

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.

AUSTERITY BUDGET, PART 4

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June 6, 2016

BY JASON PRAMAS @JASONPRAMAS

The Worst of the Senate FY 2017 State Budget Proposal

Continuing to track the worst proposed cuts at different stages of the vicious and dispiriting annual Massachusetts state budget process, it’s time for a look at the full Senate budget proposal.

As with my overviews of the worst cuts in the governor’s,  House Ways and Means Committee’s, House’s, and Senate Ways and Means Committee’s FY 2017 budget proposals, the numbers in this column are based on the analytical reports that the Mass Budget and Policy Center (MBPC) releases on an ongoing basis. In this case, the “Conference Preview: Differences Between the Senate and House Budgets for FY 2017.” For all the details, check out massbudget.org.

Nothing really new to see here. To quote the current MPBC report, “In the end, the House and Senate budgets are very similar. Not only are the budget totals within 0.1 percent of each other (which makes sense since they had essentially the same amount of revenue to work with), but the two proposals are also within half of one percent of each other in every major category.”

And so it goes. There is no protection from the budget ax for programs that benefit huge numbers of Bay State residents. Especially with a $311 million budget deficit looming before the end of the current fiscal year – due to spring tax receipts that are significantly lower than the Baker administration’s rosy increased projections of January. We live in an era when politicians are reduced to spending their days wrangling over which group will get screwed more. With two exceptions: the rich and the corporations they control. The very groups that can no longer be taxed in a political system they have bought and paid for.

Environment & Recreation

The FY 2017 Senate budget proposal would cut $11.4 million (5.36 percent) from current FY 2016 levels. Leaving $201.4 million. A .14 percent smaller cut than the House proposal, after the Senate added back $5.1 million to this line during its full budget debate. Still a horrendous and ill-timed proposed reduction. And this far along in the budget process, one that is unlikely to be reversed.

Public Health

A minor bright spot. The FY 2017 Senate budget proposal would add $2.5 million (.43 percent) to current FY 2016 levels for a total $582.9 million. By adding $5.9 million back to this line during its full budget debate – mostly for substance abuse prevention and treatment – the Senate has now joined the House and Governor in essentially level funding public health spending in the Commonwealth.

Housing (funds for affordable housing, and shelter and services to homeless people)

The FY 2017 Senate budget proposal would cut $38.8 million (7.94 percent) from current FY 2016 levels, after adding back $3.5 million during its full budget debate. Leaving $450.0 million. $3.8 million more than the House proposal. As the MBPC report points out, “the Senate’s budget, like the House budget, is about $40 million lower than FY 2016 current spending for the Emergency Assistance (EA) program that provides shelter to low-income, homeless families. If this lower funding level is included in the final FY 2017 budget, it is likely that the Legislature will be required to provide supplemental funding for the program because the cost of providing shelter for those who are homeless and eligible for shelter will probably exceed the amount appropriated.”

Transitional Assistance (aka welfare, funds for short-term help for poor individuals and families)

The FY 2017 Senate budget proposal would cut $26.7 million (3.84 percent) from current FY 2016 levels. Leaving $667.1 million. Although the MBPC report doesn’t say it, this represents a $5.5 million cut from the Senate Ways and Means Committee budget proposal. So unlike the other lines reviewed here, the full Senate debate actually took more money away from its original proposal rather than adding any back. The poorest of the poor have few defenders in the legislature. And it shows.

Economic Development (funds for programs that, among other things, help unemployed people find work)

The FY 2017 Senate budget proposal would cut $14.1 million (9.2 percent) from current FY 2016 levels, after adding back $8.8 million during its full budget debate. Leaving $139.1 million.

CORRECTION
In his Apparent Horizon column of June 6, entitled “Austerity Budget, Part 4,” Jason Pramas did not properly reflect some changes in numbers used by the Mass Senate between their Senate Ways and Means and full Senate budgets that were analyzed by the Mass Budget and Policy Center in their “Conference Preview: Differences Between the Senate and House Budgets for FY 2017” report. As a result, the numbers used in the Public Health and Economic Development sections of the column were incorrect. And while Pramas did identify an MBPC typographical error in the Transitional Assistance section of their report, the numbers in that section of his column based on that error were also incorrect. For the correct numbers, please check the updated MBPC report at
www.massbudget.org. The Boston Institute for Nonprofit Journalism regrets the errors — which do not, we hasten to add, change the fact of the savage cuts to the budget areas in question in any significant way.

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.