Biotech Aid Falls Flat
Biotech Aid Falls Flat [Boston Herald]
From Boston Herald (MA) (November 9, 2010)
Nov. 09--The state’s $6 million handout to biotech giants Genzyme Corp. and Biogen Idec didn’t prevent those firms from issuing 270 pink slips in the Bay State last week -- raising doubts about Gov. Deval Patrick’s ambitious plan to create 250,000 life sciences jobs in 10 years.
This year, Weston-based Biogen committed to creating 50 jobs in exchange for its $1.5 million tax break, but it is unclear whether the firm can meet that goal after last week’s announcement of 86 layoffs in the Bay State.
Genzyme similarly promised to create 200 Bay State jobs for its $6 million tax credit, but the firm claims it can still meet that goal even as it laid off 127 workers in the Bay State, with plans to leave open another 58 positions.
The state Republican Party has raised questions about the politically convenient timing of the layoffs, which came exactly one day after Patrick’s Nov. 2 election win.
"These are not political decisions in any way, shape or form," said Naomi Aoki, spokeswoman for Biogen. "They’re decisions we made in order to make our company stronger."
Nonetheless, an eyebrow-raising proclamation that Patrick made in 2008 -- that the $1 billion biotech initiative would create 250,000 jobs in the next decade -- now seems even more far-fetched. At the time, one administration official suggested the initiative could meet that goal by 2015.
Despite Patrick’s highly celebrated announcement and signing of the life sciences act in June 2008, the state did not begin handing out its tax incentives until this year, according to a program audit.
The Patrick administration referred questions to life sciences center spokesman Angus G. McQuilken, who noted that the state can force companies to return the tax incentives if their job-creation goals are not met and maintained for five years.
Damon Barglow of Eastern Investment Advisors called Patrick’s job creation claims "political hyperbole," though he praised the investment in biotech.
"This is the correct industry to be targeting," Barglow said. "It’s a key source for jobs."
Steve Poftak of the Pioneer Institute, a conservative think tank, said the recent layoffs prove his long-held belief that the state should not cherry-pick certain industries to invest in over others.
"I don’t think the state is smart enough to know which specific industries are going to succeed," he said. "We’ve always supported a more broad-based approach."
State GOP chairwoman Jennifer Nassour agreed.
"State government should not be picking winners and losers, and incentives should be broad-based across all industries," she said.
Patrick’s life sciences act authorizes up to $25 million in tax incentives each year for Bay State firms, which went to 26 firms this year.
"With the kind of pressure that’s on Genzyme and Biogen to cut costs, there are gonna be layoffs," said Michael Widmer, president of the Massachusetts Taxpayers Foundation. "I don’t think that changes the reality that they’re part of a sector that’s important for the future of the economy."
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Posted: November 2010