Gov. Charlie Baker has asked the Massachusetts legislature to provide up to $500 million over five years for strategic spending on life sciences.
Baker promoted his initiative Wednesday at the 2017 BIO International Convention in San Diego. Boston will host the biotech conference next year.
The proposal calls for spending on public infrastructure, research and development, and workforce training, including a five-year, $295 million bond authorization and up to $150 million in job-creating tax incentives.
Baker said the move would extend the commonwealth’s commitment to biotech. Massachusetts has built up its presence in recent years and made national headlines last year when it lured Fortune 500 behemoth General Electric Co. from Fairfield, Conn., to Boston.
The Massachusetts Life Sciences Center, whose co-chairs are Kristen Lepore, the Baker administration's secretary of the executive office for administration and finance, and Housing and Economic Development Secretary Jay Ash, will continue to administer the funding. Since its creation in 2008, the center has invested more than $650 million statewide.
“We are committed to supporting the public-private partnerships and strategic investments that have made Massachusetts a global leader in the life sciences, research, development and medical advancements,” said Baker.
The initiative comes amid concerns in the capital markets about state budget reserves and high debt.
S&P Global Ratings on June 9 downgraded the commonwealth’s general obligation bonds to AA from AA-plus, citing a failure by state officials to follow through on rainy-day replenishment despite economic growth above the national average and through prolonged economic expansion.
Fitch Ratings and Moody’s Investors Service rate Massachusetts GO bonds AA-plus and Aa1, respectively.
Priorities for the initiative include bolstering the state’s skilled-workforce pipeline, expanding opportunities for companies to access both private investment capital and public infrastructure resources, scientific innovations that deliver higher outcome, and affordable therapies to patients.
According to Baker, the bond authorization would enable Massachusetts to strengthen the ecosystem through collaborations that maximize third-party investments.
Baker also looks to extend the authorization of a key state tax credit that finances job growth. The proposal would permit the MLSC to award tax incentives for an additional 10 years and increases the center’s annual statutory cap up to $30 million on tax credit awards.
Investment fund programs would be funded a projected $55 million over five years through an annual consolidated net surplus, the same funding mechanism as the current initiative.