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A legislative committee spent much of Tuesday examining tax breaks given to corporations and certain sectors as a way to create and maintain jobs in Massachusetts.
The hearing comes after two companies that benefit from tax breaks, Evergreen Solar and Fidelity Investments, announced a reduction in jobs here in Massachusetts. Executives from both those companies appeared before the committee.
As the chairman of the Senate Post Audit and Oversight Committee sees it, the hearing was not intended to be an "inquisition." Sen. Mark Montigny says the purpose was to hold government and those who benefit from taxpayer resources accountable, and to learn how to move forward crafting tax policy that will not only retain jobs, but create new ones.
The first executive to appear before the committee was Evergreen CEO Michael El-Hillow. Evergreen, which has been given about $20 million in state corporate incentives, is closing its manufacturing plant in Devens. All of its solar panel manufacturing will be done in China because solar panels built in the United States are too expensive to be competitive.
"It is terribly sad to us we had to close Devens," El-Hillow said. "But we're still maintaining our corporate headquarters here. Our technology is here. We have about 125 employees in Massachusetts. This is where the company was founded and we'd like to stay here."
El-Hillow disagreed with Montigny's assertion that Evergreen should pay back some of the incentives, especially as it tries to sell its building in Devens. El-Hillow says Evergreen has created 85 percent of the promised jobs in three years, out of an eight-year deal. He is hopeful the firm will be able to create the remainder of the jobs in the next five years, as stipulated in the agreement.
Next up was Fidelity President Ron O'Hanley. Fidelity announced this month it is moving more than 1,000 jobs out of Massachusetts, mostly to neighboring Rhode Island and New Hampshire. Fidelity is still benefiting from a tax break created in the 1990s that initially required jobs be kept in Massachusetts. O'Hanley told the committee had that tax break not been adopted, there's no doubt jobs created during those years would have gone to other states. Still, he says Massachusetts is important to Fidelity.
"Fidelity remains a tremendous source of opportunity for Massachusetts residents," O'Hanley said. "Even after the closure of Marlborough, Fidelity will continue to be one of the state's largest private employers. Fidelity's headquarters, and much of its senior leadership, continue to be located in Massachusetts."
Chair Montigny says the state must constantly monitor whether firms that are given tax incentives to create jobs, are in fact, doing just that. He says lawmakers have to make sure the state establishes a more rational, stable tax policy in which all businesses are competing for the benefits.
This program aired on March 29, 2011.
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