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Boston's Morning Newsletter
Silicon Valley Bank crash leaves lingering worries in Mass.
Editor's Note: This is an excerpt from WBUR's daily morning newsletter, WBUR Today. If you like what you read and want it in your inbox, sign up here.
The amount of snow shoveling you’re waking up to looks very different depending on where you live. In the Boston area, there’s hardly a coating. From my window, the streets and sidewalks look almost bare.
But it’s a different story in parts of central and western Massachusetts. The National Weather Service reports that many areas got well over 18 inches of snow. Fitchburg got 21 inches; Ashby got nearly 30. And according to the NWS, a few tiny northern Berkshires towns (Colrain and Rowe) got 3 feet! See how much your town got here.
Meanwhile, back in the Boston area, we’re digging out from a different kind of storm:
Silicon Valley Bank customers in Massachusetts have been lining up at local branches to withdraw their money this week, but there’s concern that the reverberations of the bank’s collapse could linger much longer. WBUR’s Yasmin Amer reports that experts worry it could have a chilling effect on the Boston area’s prolific startup scene.
- As Babson College finance professor Michael Goldstein explained, that’s not good for entrepreneurs. “It has nothing to do with whether my drug works or [if] my idea’s good. It’s are the people who are willing to fund me willing to send me money when they’re worried about the banking system,” Goldstein said.
- Nicole Obi, the head of the Black Economic Council of Massachusetts, also worried about the disproportionate impact belt-tightening may have on local entrepreneurs of color in the early stages of business. “The momentum around VC players investing in Black and Latino firms has just slowly started to tick up,” Obi said, adding her concern that those businesses will “be the first to be dropped” if there’s a pullback.
- Zoom out: Even after a big drop from historic highs in 2021, Massachusetts remained one of the top three U.S. states for venture startup funding last year, according to Crunchbase.
- Some entrepreneurs remain optimistic that — especially when it comes to the biotech startup scene — investors will continue to take the long view. John Keane, the CEO of the Boston-based medtech company MindRhythm, predicted a smaller shift instead, suggesting more companies will spread out their money across multiple banks to avoid the chaos that ensued after SVB’s failure.
- What’s next: WBUR’s Beth Healy reports that Secretary of State Bill Galvin opened an investigation to see if there’s evidence that SVB’s executives took profits when they knew the bank was in trouble. (Regulatory filings show SVB’s CEO sold $3.6 million in company stock last month.) NPR reports that federal prosecutors are also ramping up a probe and plan to announce details soon.
Did you know that while the federal government normally insures bank deposits up to $250,00, there’s a special backstop for customers of smaller banks in Massachusetts? The Boston Business Journal reports the state’s Depositors Insurance Fund — which was set up 90 years ago during the Great Depression — protects all deposits beyond the federal limit at Bay State savings and co-operative banks.
- You can see if your bank is on the list here.
The results are in — and they’re mixed. In yesterday’s three-part vote, Newton residents rejected a proposed $9 million property tax hike to raise money for the city’s schools and other programs, while approving nearly $6 million in bonding to rebuild two elementary schools. That means Newton homeowners will see a smaller increase on their property taxes than the city’s suggested full hike. (The increase is also temporary, until the bonds are paid off.)
- Despite yesterday’s storm, Newton officials say the vote saw a 34% turnout, including early and mail-in voting.
As federal and state officials wind down special pandemic rules, Boston is officially dropping its COVID-19 vaccine mandate for firefighters and higher-ranking police officers. The move is part of a new legal settlement with two unions, following a year-plus battle in court.
- The city says no employees were ever disciplined for violating the policy, which, for now, remains in effect for all other city workers.
- The agreement comes as two Boston police officers were separately fired by the department this week for protesting the mandate outside Mayor Michelle Wu’s house and making pro-insurrection statements.
P.S.— For the first time since taking office, Massachusetts Auditor Diana DiZoglio will be on Radio Boston today. Tune in live at 11 a.m!
