BOSTON At a public cost of more than $22,000 per job, tax incentives authorized under a 2008 law to grow the Massachusetts life sciences sector created more than 2,500 jobs through June 2012, according to a report released Tuesday.
The report (PDF), released by The Boston Foundation, which played a role in developing the July 2008 law, estimated the jobs created through more than $56 million in tax incentives pay an average salary of more than $105,000 per year, with those salaries likely to spin off more than $93 million in income and sales tax payments over the next five years.
Based on those projections, each dollar in tax incentives awarded under the law will generate $1.66 in added tax revenue, according to the report, written by economists Barry Bluestone and Alan Clayton-Matthews of the Kitty and Michael Dukakis Center for Urban and Regional Policy at Northeastern University and released at a foundation forum on Tuesday morning.
Between June 2008 and June 2012, the Massachusetts Life Sciences Center, which was created by the 2008 law, made $301 million in investments, including more than $186 million for capital projects and $56.6 million in tax incentives to companies, $23.3 million in academic research grants, $22.9 million in company grants and accelerator loans for early-stage companies, $6.9 million to fund internships at smaller Massachusetts life sciences firms, and nearly $5 million in equipment and supply grants for schools and to fund other grants and competitions.
The 10-year law authorizes $1 billion in investments and the report recommends forging ahead with those.
“All of our research suggests that the state will benefit from fully funding the remaining five years of the initiative in order to maintain the lead the life sciences have established in the Commonwealth,” the report concluded. “This is particularly important as other states ramp up their investments in hopes of creating their own life-sciences ecosystems to entice the small and large firms Massachusetts has successfully attracted. California, Maryland, New Jersey, New York, Minnesota, and Florida are not resting on their laurels, but continue to spend state funds on their own life-sciences industries.”