On October 15, 2024 MA State Treasurer Deborah B. Goldberg joined the Boston Chamber of Commerce’s Government Affairs Forum. See below for Treasurer Goldberg’s speech:
Introduction
Good morning, everyone. It is always a pleasure to be with all of you.
As Treasurer, it is my mission to promote economic stability, security, and opportunity for everyone in Massachusetts, regardless of their background. These are the guiding principles that drive every action we take, as we continue to invest in our people, communities, and small businesses, building toward an economy that works for everyone.
Rainy Day Fund
I have always been adamant about building up and maintaining our reserves to position the Commonwealth to be financially secure no matter what the future brings. When I arrived in Jan 2015 it was at a woefully low level of $1.2 billion….
Today after the Final FY24 Supplemental Budget filed by Governor Healey passes, $265 million in excess capital gains will go to the Transitional Escrow Fund, and $265 million will be deposited into the Stabilization Fund, that will push the balance to right around $9 billion.
PRIM
The Pension Reserves Investment Management Board (PRIM) has constructed a portfolio that consistently performs well, while looking toward the future. Last year, I announced that we were in the process of implementing a new committee to help oversee sustainable investing and improve our ability to deliver long-term returns for beneficiaries.
Today, I have with me Veena Ramani, PRIM’s Director of Stewardship. Veena has led PRIM in ensuring our Stewardship and Sustainability Committee is fully operational, and it has already made strides towards assessing how the Fund is best positioned to address material environmental and social factors that affect Fund performance.
The Committee has engaged in a research-based, data driven approach to identify stewardship priorities. These priorities, which include climate transition planning, fair pay, sustainable forestry and transparency, are areas of high potential for risk mitigation and value creation within the PRIT Fund.
By using a systematic, materiality-based process, MassPRIM is pioneering an approach to stewardship that is forward looking and innovative, while remaining anchored to our fiduciary duty to ensure the long-term value of the PRIT Fund.
This work positions PRIM as an industry leader as we continue to generate steady returns. The PRIT Fund ended FY24 with a record balance of $105.3 billion for the fiscal year, surpassing the previous record of $96.6 billion set in fiscal year 2023.
Clean Water Trust
The Clean Water Trust continues to be a successful fund that provides money to municipalities for safe water infrastructure and it also generates local economic activity.
Just last week President Biden announced a plan with the EPA to remove all lead service lines in the country, in ten years. For several years, the Trust itself has had programs targeted at removing lead from drinking water.
The first, which began in Jan 2020, is the School Water Improvement Grant Program or SWIG. SWIG provides schools that have identified lead and copper with grant funding to purchase and install water bottle filling stations. It has provided $1.9 million to replace 622 fixtures in 626 schools serving an estimated 177,000 children.
The Biden Infrastructure Bill provided funding for our second program that gives grants to cities and towns to identify any lead service lines in its service area, public or private, and gives them the opportunity to develop a plan to remove them. Since inception in June 2022, the Trust has approved 149 grants to communities for a total of $36 million.
These two projects are merely the first steps in removing all lead service lines from our drinking water systems.
And very importantly, the Trust has financed $31 million in 0% interest lead service line removal projects in five communities. While still ongoing, so far, 215 lead service lines have been removed from use.
Massachusetts has more to do, but we are making progress and are committed to achieving the goal of zero.
Invest MA
We are also prioritizing our investing in small businesses across the state through our Invest MA program.
Creating and supporting a strong small business sector, including a robust banking sector, is critical to providing economic stability in Massachusetts. Small businesses and sole proprietorships make up 85% of businesses in our Commonwealth, and historically about two-thirds of the new jobs created in the United States each year.
The Investing For the Long-Term Initiative (Invest MA) intends to promote the success of small businesses by boosting loans to them through increased deposits that add capital to a bank. We created Invest MA to shift state cash deposits under the control of the Treasurer to Massachusetts banks that are willing to expand their small business lending.
Participating banks have now received a total of $420 million. This program synchs nicely with our Small Business Initiative that I shared with you last year.
Small Business Initiative
Our Small Business Initiative (SBI), is an online, statewide toolkit on how to plan, maintain, and grow a successful small business for budding entrepreneurs all over the state.
In addition, we created the Small Business Empowerment Series, which last year served 81 business owners. Building on that success, this past spring we continued the program and reached an additional 39 business owners in the state.
The Small Business Empowerment Series includes free workshops that equip entrepreneurs with the knowledge and skills necessary to create a strategy, implement successful planning, and make wise financial choices.
By providing this kind of support from the beginning, we hope to ensure greater success for entrepreneurs, positively impacting local communities, and the state’s overall economy.
Lottery
And I know the big news is that iLottery has been approved and is on its way!
My team at the Massachusetts State Lottery has always done a great job of making do with the few resources they have been given. But with increased competition, they have constantly been trying to stay ahead of the curve, first with casinos then sports betting, and we were beginning to see how we could easily fall behind.
iLottery will help to ensure that the Lottery can continue to compete in an increasingly saturated market.
In the first full year of operation, Massachusetts can expect over $70 million in net profit from online sales. That number quickly scales to over $180 million by year three, over $230 million in year five, and almost $360 million in year ten.
These dollars will go toward funding childcare initiatives aiming to improve affordability and accessibility. I do not need to tell you how critical affordable childcare is to filling job openings, let alone growing the workforce.
A 2023 publication by The Massachusetts Taxpayers Foundation found that the scarcity of childcare facilities and qualified workers to staff them is costing Massachusetts families $1.7 billion a year in lost wages due to missing work or reduced work hours.
And employers are losing $812 million a year in low productivity and employee turnover because workers cannot find adequate childcare, according to the Foundation.
iLottery’s profits will go towards addressing this challenge.
Additionally, it will realize increased profits for our over 7000 retail partners. In every other state, in-person sales increased at a greater rate after lotteries went online. A new platform will give us the ability to drive customers into stores in a way that we simply cannot do now.
In fiscal year 2024, retailers earned a record $350 million in commissions and bonuses. That averages over $45,000 per retailer. iLottery will increase these numbers.
MSBA
The Massachusetts School Building Authority (MSBA) is another agency that works directly with communities to support children and families.
Since its inception in 2004, the Authority has approved 1,046 projects and has made over $17.4 billion in reimbursements for school construction projects across the Commonwealth.
In recognition of increasing costs, The MSBA Board voted to provide an additional $178M combined with one-time funding of $100 million included in the FY24 state budget, for $278M in supplemental grants. The $278M supports 30 projects that were affected with pandemic related construction cost increases.
The MSBA has also been able to increase its project funding limits. Late last year, the Board voted to increase the construction funding limit by 40% to $605 per square foot.
These changes will allow us to continue to address the growing demand for school building assistance.\
CORE
Everyone in this room knows we have a retirement crisis. Despite trends towards Auto IRA plans, experts are beginning to acknowledge that our Massachusetts Multi-Employer CORE Plan is conceivably the better choice for nonprofits and small businesses.
The CORE Plan was launched in 2017 with a simple mission: to help Massachusetts non-profit employees save and invest for a financially secure retirement by providing a tax-deferred and post-tax 401(K) savings plan for eligible organizations that choose to adopt it.
Many Americans are not saving enough for retirement, partly due to the lack of adequate retirement plans offered by employers. In fact, nearly half of small businesses (48%) with under 100 employees do not offer a workplace retirement plan at all. This alarming trend impacts all sectors; however, non-profits face unique challenges such as high costs, regulatory complexity, fiduciary liability, and administrative burden.
CORE addresses these barriers by offering a simple, low-cost, and convenient option for non-profit employers and employees. And offering a comprehensive benefit plan helps small nonprofit employers recruit and retain talent. Faced with fierce competition by the private sector for the same talent pool, having an employer-offered retirement plan helps make small nonprofits more desirable places to work.
Our goal is to increase the availability of the plan to more non-profits. The plan is currently capped by statute at non-profit organizations with 20 employees or less. Expanding the eligibility cap to 100 employees would provide them with the opportunity to save for their futures.
We will continue to work with the legislature this session to get this over the finish line and provide a better retirement savings opportunity for the people in this important sector.
Baby Bonds
Last year, Jim, you called me “the children’s Treasurer” so let me give you an update on Baby Bonds.
Based off recommendations and findings of our 2022 task force, we partnered with legislative champions to file a Massachusetts Baby Bonds Bill. We envision this program to consist of government sponsored trust funds created for eligible children at birth. Once these kids reach adulthood, they can access the funds for asset-building investments like attending post-secondary education, buying a home, starting a business, or saving for retirement.
Since we last spoke, Baby Bonds has continued to gain momentum across the country. Congress has taken steps towards passing legislation at the federal level. At the state level, in July 2021 there were 7 states that had passed, proposed, or were considering legislation, and by September 2024, that number has jumped to 20, including Massachusetts.
Connecticut and Washington D.C. have legislation, and Georgia, along with 6 others, are constructing pilot programs.
We anticipate 6 more states will file Baby Bonds legislation in the upcoming year, positioning Massachusetts to be a positive example of how we can help young people towards asset building activities that contribute positively to our economy.
BabySteps
And not to be confused with Baby Bonds, our BabySteps Savings Plan is our seeded savings accounts to prepare for children’s future post-secondary education.
Through public-private partnerships and our 501c3 trust fund, we will deposit $50 into any U.Fund 529 savings account opened for Massachusetts babies before they turn one.
Since its inception in 2020, the BabySteps Savings Plan continues to show growth year after year. To date, there have been about 41,486 accounts opened and funded, a little over $2 million in investment thanks to our public/private partnerships.
Just this year, between January and July, there have been over 6,400 BabySteps accounts funded. This is 26% more accounts than at the same time last year.
BabySteps is the direct result of a successful public-private partnership. We are thrilled to have terrific private sector partners support the program’s funding, and we are always looking for more. Any help you can give sending folks our way is an investment in Massachusetts’s future.
A key success factor of BabySteps is it gives us access to the children and their families to combine capital with wrap-around services, such as financial education, giving the kids and their families the skills they need to make informed and responsible decisions about their money, future, and opportunities.
Financial Education
Speaking of financial education… Financial education provides the foundation for which people can prepare for their future and navigate the complex economic world.
Since I last spoke to you, 3 additional states now require a semester-long financial education course bringing the number to 26. Included are neighboring states Connecticut, Rhode Island, and New Hampshire. Unfortunately, Massachusetts is not one of them, and we continue to fall behind.
Ready for this? In the Center for Financial Literacy at Champlain College, Vermont’s report card, Massachusetts was one of only 5 states to receive an “F”, for having “virtually no financial education requirements.
Seven states got an A grade for requiring students to take a semester-long personal finance course in high school. And guess who they are?? Alabama, Iowa, Mississippi, Missouri, Tennessee, Utah, and Virgina.
Our office tries to help fill the gap. Through our public-private partnerships, my team at the Office of Economic Empowerment offers resources and programs, like the Worth and Wealth Seminars, 315 grants for Credit for Life Fairs, Operation Money Wise for service members and Veterans, and workshops for seniors on frauds and scams…
We continue to make financial education a legislative priority, because when people have the tools to make smart financial choices, it positively impacts the economy for everyone. We would love for the business community to help push for this legislative initiative.
ABCC
The Alcoholic Beverages Control Commission (ABCC) is always ready, willing, and able to help our small businesses and promote local economic development.
The ABCC’s work with communities and industry stakeholders is especially important as the City of Boston prepares to distribute 225 new liquor licenses. To understand the vast reach of this legislation, the bill authorizes the City to distribute a set number of licenses annually across 13 different neighborhoods that have been previously passed over or priced out of this process.
In addition, the bill creates 15 non-transferable licenses for community spaces, small theaters, and non-profits. And let me be clear, these are not just 225 new licenses, these are new businesses that Boston is gaining as a result.
In fact, later today the ABCC will be hosting a webinar with the Massachusetts Restaurant Association and the City of Boston Licensing Board focused on the liquor license application process in Boston. This support is especially crucial as new licensees enter an industry that is increasingly unstable and volatile. The ABCC has the infrastructure in place to be ready to assist and provide guidance to new licensees in successfully navigating the rules and regulations of the industry.
Since last year, The ABCC has continued to expand their outreach licensee compliance training programs and special events to support people of color and those from low-income communities, showing them how to open and manage successfully in this type of regulated environment.
Over 2023 and 2024, the ABCC conducted 41 Compliance Seminars to assist alcoholic beverage stakeholders with recent statewide compliance issues and best practices. During these seminars and municipality trainings, approximately 2,534 alcoholic beverage stakeholders participated and 25 Massachusetts municipalities were visited.
Conclusion
In conclusion, I want to recognize the active role that all of you, as business leaders, play in supporting this important work and moving the needle forward towards an economy that works for everyone. Your support is crucial to ensure that Massachusetts, and especially the Boston area, is a great place to live, work, and to do business.
I look forward to continuing to make progress as we work together to build a more prosperous Massachusetts for now into the future. Thank you.
The above press release was submitted to us by the Office of MA State Treasurer Deborah B. Goldberg
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