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STOP BAKER’S ‘MORE SCHOOL COPS AND SURVEILLANCE’ PLAN

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Why the Mass budget surplus is better spent on infrastructure needs

 

July 7, 2018

BY JASON PRAMAS @JASONPRAMAS

 

Having just been handed an estimated $1 billion budget surplus for the 2018 fiscal year, Gov. Charlie Baker was quick to make a proposal last week to divide up the unexpected spoils.

 

According to MassLive, “Around half of that will be placed in the state’s reserve account to be available in case of emergency. Gov. Charlie Baker on Friday laid out how he is proposing to spend the rest of that money, introducing a $583 million supplemental budget bill.”

 

And where does the surplus come from, readers might well ask? Well, the details are still a bit fuzzy, but the Trump administration’s drastic changes to the federal tax code months back seem to have resulted in what’s likely to be a very temporary state tax revenue increase.

 

Which explains why the Boston Globe paraphrased Noah Berger of the Mass Budget and Policy Center opining that “it would not be prudent for the state to spend the extra money from last fiscal year in the current one.” His preference being that “it should be spent on one-time capital expenses like roads or schools, or put away in the state’s savings account.”

 

But that’s not what Baker is proposing.

 

To be sure, there is money allotted for roads and the like. But only two items seem clearly earmarked for infrastructure expenditures: $50 million for cities and towns to fund local road and bridge maintenance and improvement projects, and $30 million for municipal clean water projects. Both worthy candidates for what is likely to be a one-time windfall.

 

The rest of the proposal is more problematic, however. Especially in its stated focus.

 

According to a July 13 press release from the governor’s office, “The administration is proposing a wide-ranging $72 million package to make school security upgrades in the Commonwealth’s schools and provide resources to students, staff, and first responders to better respond to threats within schools.”

 

Which is probably just red meat for Baker’s right-wing supporters. Massachusetts is definitely in dire need of more funding for K-12 and higher education. But it needs that funding on an ongoing basis.

 

What it doesn’t need is a supplemental budget better dubbed the “More School Cops and Surveillance Plan.”

 

Yet that’s exactly what Commonwealth students will get from the following proposed items that are part of the aforementioned $72 million section of the governor’s larger supplemental budget proposal:

 

  • $20 million in matching grants for security and communications upgrades in K-12 schools and at public colleges and universities

 

  • $4 million to provide training to school resource officers

 

  • $2.4 million to create a tip line to provide public safety and school personnel with timely information on potential risks

 

  • $2 million for a statewide “Say Something” campaign

 

It’s true that the proposed $40 million in additional aid to school districts in that same section to hire more social workers, mental health counselors, and psychologists is a good idea in general terms. But such an effort can’t amount to much if the funding evaporates next year. Something also true of most of the line items outside the ed-targeted package in the supplemental budget proposal that would provide funding for a variety of decent-sounding programs for K-12 and higher education, and “substance use prevention, education, and screening.” Plus a grab bag of other one-offs of varying importance like “$35.4 million for snow and ice removal costs in FY18” or wastefulness like “$8 million for multi-year municipal police training needs” (in a state that already spends vast sums on cops).

 

And, sure, we don’t want students (or school staff and faculty) to be vulnerable to killers with automatic weapons. But then we don’t want them to be vulnerable to asteroid strikes either, and most of what we could conceivably fund in the way of preparedness on that front would be about as useless as what the governor is proposing to fund for “school security.” Worse than useless, since the main result of such measures will inevitably be to increase official harassment of students of color and poor and immigrant students in their own schools. And the concomitant danger of their being shot for no reason. As the militarization of police proceeds apace. And their well-documented trigger-happiness is validated by the likes of Weymouth police Chief Richard Grimes in shockingly opportunist remarks at yesterday’s memorial for Weymouth Officer Michael Chesna—who was felled by a rock before being disarmed and executed by a random criminal over the weekend. Even as the K-12 school districts and the state colleges that serve those populations remain starved for funds with or without the FY18 surplus.

 

Regardless, there’s already a general decades-long trend toward stationing armed police on campuses nationwide, but that hasn’t stopped mass shooters from slaughtering students. There’s a veritable panopticon of surveillance measures from all levels of government on the population in general and on students in particular. Which also hasn’t prevented mass shooters from slaughtering students nationwide.

 

The things that might actually stop mass shooters from appearing in the Commonwealth—like stronger welfare and public jobs programs and more stringent gun control measures—are not in the cards in the current political climate. Even here in a supposedly left-leaning state that is unable to provide the first of those two needed reforms because it’s constitutionally prohibited from having a progressive income tax. The second, naturally, being blocked by a powerful and triumphalist gun lobby in this Age of Trump.

 

Fortunately, the legislature hasn’t weighed in on the FY18 supplemental budget yet—having failed to send the regular FY19 budget to the governor’s desk for his signature as of this writing either. So there’s still time for constituents to weigh in on how the surplus funds get spent.

 

And my suggestion would be to push your state reps and senators to fight for spending whatever part of the supplemental budget is not put into the “rainy day fund” on key capital projects. Like fixing public transportation infrastructure that stubbornly continues to disintegrate no matter how much Gov. Baker’s hand-picked MBTA flacks claim they don’t need any more money—as they had the temerity to do yesterday.

 

Once that’s done, then start agitating for the progressive tax system that would better fund state education, transportation, and social safety net programs for the foreseeable future. Because we badly need such reforms, and because—for those of you worried about a mass shooting at a Bay State school—families that have a stable income are less likely to produce violent misogynists and racists and nazis (oh my!), since they won’t need to find scapegoats for economic instability anymore.

 

Progressive taxation will be a very hard reform to win in the Commonwealth, as I’ve written many times in the past. But then so will better gun control legislation. Yet both are needed if we are going to have a more just, stable, and safer society.

 

We’ve got our work cut out for us. So let’s get cracking.

 

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 2018 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

GRAND SCHEME

workers protesting

 

Mass legislature helps, harms workers in “deal” with labor and business lobbies

 

June 26, 2018

BY JASON PRAMAS @JASONPRAMAS

 

No sooner did the Supreme Judicial Court shoot down the “millionaires’ tax” referendum question last week than the Mass legislature rammed a so-called grand bargain bill (H 4640) through both chambers. A move aimed at shoring up tax revenue threatened by the Retailers Association of Massachusetts referendum question that is virtually certain to lower the state sales tax from 6.25 percent to 5 percent if it should go before voters in November.

 

The house and senate did this by rapidly completing the brokering of a deal that had been in the works between pro-labor and pro-business forces on those issues for months. Giving each side something it wanted in exchange for encouraging the Raise Up Mass coalition to take its remaining two referendum questions—paid family and medical leave, and the $15 an hour minimum wage—off the table, and the retailers association to do the same with its sales tax cut question. Both organizations have not yet made the decision to do so.

 

If passed, the so-called grand bargain bill will give labor watered-down versions of its paid family and medical leave and $15 an hour minimum wage ballot questions, and give business something that’s explicitly anti-labor: the end of time-and-a-half wages for people working Sundays and holidays, and their ability to legally refuse to work Sunday and holiday shifts.

 

While Gov. Charlie Baker still has to sign the bill, as of this writing it’s looking like he will do so. Soon.

 

Which is a pity because it’s not such a great deal for working people as written. True, the grand bargain does ensure that the state minimum wage will raise to $15 an hour for many workers. But it moves up to that rate from the current $11 an hour over five years, instead of the four years it would take with the referendum version. Plus it betrays tipped employees, whose wage floor will only rise from a pathetic $3.75 an hour now to a still pathetic $6.75 an hour by 2023. Keeping all the cards in the bosses’ hands in the biggest tipped sector, the restaurant industry. Although it’s worth mentioning that even the referendum version of the $15 an hour wage plan would have only raised tipped employees to $9 an hour. When what’s needed is a single minimum wage for all workers.

 

It also makes Massachusetts one of the first states in the nation to institute paid family and medical leave for many workers. Which is truly a noteworthy advance. Yet again, the referendum version is better for workers than the grand bargain version.

 

But legislators gave away another noteworthy advance from 20 years ago in the process: time-and-a-half wages for many employees who work on Sundays and holidays. Which will hurt some of the same people who the new minimum wage and paid and family medical leave will help.

 

Thus far, the labor-led Raise Up Massachusetts coalition has had mostly positive things to say about the deal. However, the main union representing supermarket workers—many of whom currently take Sunday and holiday shifts—is already vowing to torpedo the grand bargain. Even though their union contracts also mandate time-and-a-half pay for working Sundays and holidays. And they’ve resolved to take down legislators who backed it over their protest.

 

Jeff Bollen, president of United Food and Commercial Workers Local 1445, minced no words on the subject in a recent video message to his members:

 

“I am really pissed off at our state legislature for stabbing retail workers in the back by taking away time and a half on Sundays and holidays for all retail workers in Massachusetts.


“Remember, it was this local union in 1994 with big business and the retail association wanting to get rid of the blue laws; so they could open up their supermarkets, their big box stores, and their liquor stores and make money on Sundays that we fought hard to get a law passed to protect you, the retail worker. And we did.”

 

The supermarket union leader went on to explain that state lawmakers “panicked” when the millionaires’ tax was derailed and pushed through the grand bargain to avoid losing any more revenue from the referendum question to lower the sales tax. He swore the union was “going to remove those individuals that voted against you. We’re going to get them removed and replaced with pro-labor legislators who are going to fight for the rights of working people.” And defiantly concluded: “We’re going to continue to fight. We’re going to continue to try to get this whole thing repealed.”

 

How much support the UFCW can expect to get from the rest of the labor movement remains to be seen. But the fact is that some Bay State working families are going to suffer nearly as much pain as gain from the grand bargain.

 

Worse still, there’s a deeper problem with the bill. It potentially stops the retailers’ referendum drive to lower the sales tax—which they’ve definitely put on the ballot to ensure that big businesses make more profits. But it must not be forgotten that the sales tax is a regressive tax that disproportionately harms working families. And even though the state desperately needs money for many programs that help the 99 percent, it remains a bad way to raise funds compared to a progressive tax system that would force the rich to pay higher tax rates than everyone else. Like the federal government has done for over a hundred years.

 

Yet since the rich and their corporations continue to rule the roost in state politics, and since a state constitutional amendment would be required to allow a progressive tax system in Massachusetts, there is no way that is going to happen anytime soon. As I wrote last week, the millionaires’ tax would have at least increased the amount of progressivity in the tax system had it been allowed on the ballot (where it was projected to win handily). But business lobbies got the SJC to stop that move.

 

Given that, the revenue lost from a sales tax cut would really hurt in a period when many major state social programs are already being starved for funds.

 

Nevertheless, many working families will take a big hit from the grand bargain bill as written: They’ll see the full introduction of the $15 minimum wage delayed by an extra year, they’ll get a worse version of paid family and medical leave, they’ll lose time-and-a-half wages on Sundays and holidays, they’ll see the sales tax remain at 6.25 percent… and if they’re tipped employees, they’ll still be made to accept a lower minimum wage than the relevant ballot question would get them and still have to rely on customers to tip them decently and their bosses to refrain from skimming those tips.

 

So, it would behoove Raise Up Massachusetts and its constituent labor, community, and religious organizations to stay the course with the paid family and medical leave and $15 an hour minimum wage referendum questions that are still slated to appear on the November ballot. And pro-labor forces should also be ready to lobby harder for a better deal should Gov. Baker refuse to sign the grand bargain bill.

 

Of course, it could very well be that the bill will be signed into law before this article hits the stands, and that labor and their allies will throw in the towel on their ballot questions. And that would be a shame.

 

Here’s hoping for a better outcome for Massachusetts workers. Even at this late date.

 

Note: Raise Up Massachusetts announced that it had accepted the “grand bargain” bill shortly before this article went to press on Tuesday evening (6.26), according to the Boston Business Journal.

 

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 2018 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

CAPITALIST VETO

Money tips the scales of justice image

 

Popular “millionaires’ tax” referendum question blocked by a pro-business SJC

 

June 19, 2018

BY JASON PRAMAS @JASONPRAMAS

 

The Fair Share Amendment—better known as the “millionaires’ tax”—that would have gone before voters this November as a statewide referendum question was shot down this week by the Massachusetts Supreme Judicial Court (SJC). So the effort to increase taxes on people making $1 million-plus a year and spend the resulting funds on social needs is over. For the moment.

 

Organized over the last three years by Raise Up Massachusetts, a major coalition of labor, community, and religious organizations, the initiative had the support of two-thirds of Bay State voters in recent polling and had a good shot at passing.

 

The campaign was spearheaded by the Commonwealth’s two largest unions, Service Employees International Union and Mass Teachers Association. And naturally, most Massachusetts rich people had no intention of letting anyone—let alone a bunch of union leaders, social workers, and priests—raise their taxes.

 

Flunkies and front groups were then unleashed. The Massachusetts High Technology Council put together a bloc of capitalist lobby groups—including the Massachusetts Taxpayers Foundation, Associated Industries of Massachusetts, and the Massachusetts Competitive Partnership—and challenged the amendment’s constitutionality.

 

They were aided in this push by the fact that Gov. Charlie Baker, a Republican, was able to appoint five of seven justices to the SJC since taking office in 2015. Including one that, in fairness, wrote the dissenting opinion on the Fair Share Amendment ruling.

 

Thus, it was no big surprise that the SJC shot the millionaires’ tax down on a legal technicality. Since the wealth lobby had no convincing political argument against the tax beyond “we don’t want to pay it.” But they had high-powered lawyers, plenty of money, and a court stacked in the right direction. Theirs. A capitalist veto in the making.

 

Professor Lawrence Friedman of New England Law | Boston explained the decision succinctly on a special edition of The Horse Race podcast—hosted by Lauren Dezenski of Politico Massachusetts and Steve Koczela of the MassINC Polling Group:

 

“What a majority of the court concluded was that this petition didn’t satisfy the requirements of article 48 [of the Mass constitution] for a valid petition that can go before the voters in November. Because it failed what’s called the ‘relatedness’ requirement—the various parts of the petition didn’t relate to each other sufficiently to pass constitutional muster.

 

“So the three parts of the petition involve the revenue raising measure, the so-called millionaire’s tax, and then two distinct dedications—one to education and one to transportation. And the court essentially said that, except at a very abstract level, those things are not sufficiently related to satisfy the relatedness requirement.”

 

The minority of the court, for their part, had a very different view. According to Justice Kimberly Budd (joined by Gov. Deval Patrick appointee Chief Justice Ralph Gants, and pardon the legalese here):

 

“Disregarding the plain text of art. 48, The Initiative, II, § 3, of the Amendments to the Massachusetts Constitution, as amended by art. 74 of the Amendments, which requires that an initiative petition contain ‘only subjects … which are related or which are mutually dependent,’ the court concludes that, in drafting this language the delegates to the Constitutional Convention of 1917-1918 inserted the words ‘or which are mutually dependent’ as superfluous text. … The court goes on to conclude that the people may not express their opinion on a one section, four-sentence petition because it contains subjects that are not related. … That analysis is flawed.”

 

In plain English, to rather brutally paraphrase further remarks by Friedman on The Horse Race, activists amended the state constitution a hundred years ago to allow the people of Massachusetts to make laws by referendum because even then the legislative process had been captured by corporations and the rich in ways perhaps unforeseen by John Adams when he drafted the document in 1780.

 

To block the Fair Share Amendment referendum from going on the ballot for a vote is therefore not in the spirit of the sentence at the core of the SJC majority’s case. The court’s pro-business majority focused on the “relatedness requirement.” Its pro-worker minority countered that referendum questions that contain “unrelated” items that are “mutually dependent” pass constitutional muster. But with five votes to two, the majority prevailed.

 

The result? The tiny percentage of Mass residents who make more than a cool million a year will not see their state taxes rise from 5.1 to 9.1 percent. And the estimated $2 billion that was expected to be raised from that levy annually will not be applied to the Commonwealth’s education and transportation budgets. Both areas that are ridiculously underfunded given our state’s wealth relative to much of the rest of the nation.

 

Worse still, the spurious myth that the Mass capitalists’ “coalition of the willing” flogged—and continues to flog in the case of the Boston Herald’s ever fact-light columnist Howie Carr—that rich people leave states that increase their taxes will continue to seem like reality to less careful onlookers of the local political scene. Despite the fact that a major study and a book entitled The Myth of Millionaire Tax Flight: How Place Still Matters for the Rich by Stanford University sociology professor Cristobal Young have used big data to dismiss the idea as mere scaremongering, according to Commonwealth magazine.

 

Now Raise Up Massachusetts has two options: 1) start the referendum process all over again with language that will pass muster with the narrowest and most conservative interpretation of the “relatedness’ requirement,” or 2) take the fight to the legislature.

 

With the chances of the legislature passing any kind of tax increase being approximately zero as long as Robert DeLeo is House speaker, starting the referendum process again from scratch is pretty much the only way to go.

 

Unless Raise Up leaders decide to make some kind of “deal” with the legislature. Which I sincerely hope is not the case. Because the whole Fair Share campaign is already a major compromise given that the real goal of any forward-thinking left-wing reformer in this arena has to be the repeal of article 44 of the state constitution that prohibits a graduated income tax system. Followed by the passage of such a system.

 

While I’m well aware that every attempt to do that has been defeated in the past, I’m also aware that if referendum questions aimed at the much broader goal of winning a fair tax system were on the table, then it would be possible to negotiate for something smaller like the “millionaires’ tax” if the effort ran into trouble.

 

As things stand, Raise Up Mass appears to have little room to maneuver. So, better to start preparing for a win in 2022 on an improved referendum strategy—preferably aiming for a graduated income tax to replace our anemic flat tax system—than to make a bad deal merely to be able to declare a false “victory” to its supporters and switch its public focus to the two other drives it still has in play: paid family and medical leave, and the fight for a $15-an-hour minimum wage.

 

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 2018 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

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)