The Importance of Public Finance Experience

Massachusetts needs a strong independent State Treasurer to manage our public assets. The teasurer should have a background in both the worlds of business and finance and understand the hardships today's economy places on all of us. We need common sense solutions to complex public sector problems.

Today, people are working harder and longer; yet they are barely able to make ends meet. The decisions the Treasurer make impact all of our lives. It's not just a job about numbers but also about the people whose lives are impacted by those numbers.

With the recent meltdown of Wall Street and corporate greed driving our nation to the brink of bankruptcy, the choice of who will be our next State Treasurer is a critically important one.

I have worked at the highest levels of both the private business world and in the complex process of public financing. The difference between them is important and I understand it fully.

We cannot afford to continue doing "business as usual." I would greatly appreciate the opportunity to be your next State Treasurer; I ask for your support.
 

Stephen J. Murphy

BidMassachusetts

“BidMassachusetts” would be a technology-driven program that allows Massachusetts banks to bid online for state Certificate of Deposit funds. This effort results in higher earnings for the state and Bay State taxpayers. Under this program, both large and small Massachusetts financial institutions would have an equal opportunity to acquire state funds.

“BidMassachusetts” would be designed to enhance, simplify, and maximize the investment of our state's tax dollars. Instead of picking a rate based on market averages, I would start the bid at the current 6-month Treasury Bill rate. The returns can only go up from there.
 

“BidMassachusetts” would also make the CD distribution process much more efficient and accurate. By utilizing Internet technology, we would cut out the paperwork. There would be only one step in making the process of funds switching hands operate - the bid online.
Finally, large and small Massachusetts financial institutions would have an equal opportunity to acquire state funds. Each institution could semiannually evaluate the needs of its community and its borrowing public, and could place bids accordingly with “Bid Massachusetts”. I will make it easier than ever for these banks to get what they need to help their customers.
 

The Importance of Local Banks to our Communities

As Treasurer, I will move the Commonwealth’s assets from large banks (the ones that charge 28-30% interest on credit cards) to smaller more locally owned community banks that have continued to try to partner with all of us during these tough economic times. We will not reward the large banks that gouge our citizens with 30% interest rates by depositing the Commonwealth’s money with them.

Supporting Massachusetts ESOP Companies

There are more than 90 ESOP (Employee Stock Ownership Plans) companies headquartered in Massachusetts providing jobs to more than 40,000 employees. Research has linked ESOPs to higher sales and employment growth and increased productivity. Massachusetts ESOP firms range in size from nine to 13,000 workers, with the median size being 110 employees. The average wealth per ESOP participant in the state rose from $39,895 in 1999 to $56,210 in 2006.

As state treasurer, I will launch a Bay State ESOP Initiative to promote and encourage the formation of new ESOPs in the Commonwealth. ESOPs such as Concord Lumber Co. in Littleton, Marland Mold in Pittsfield and Nypro, Inc. in Clinton have a proven track record of wealth creation, increased productivity and encouraging entrepreneurial attitudes. We should be supporting Massachusetts companies to become employee-owned because no group of employee-owners is going to move their company offshore to India or China.

I will provide a $10 million investment through a “linked-deposit” program to assist Massachusetts banks in funding ESOP transactions.

In addition, my office will assemble an “ESOP Toolbox” of resources and information for businesses and employees wanting to learn more about ESOPs and the various organizations that can assist in their creation.
 

Investing in Small Business

Small businesses are vitally important job creators in Massachusetts. The state’s estimated 651,100 small firms employ some 1.5 million people, about 49.7 percent of the non-farm private labor force. Women-owned firms generate more than $23 billion in revenue, according to data from the U.S. Small Business Administration.

As treasurer, I want to help empower these entrepreneurs play a key role in our state economy’s recovery. For many aspiring small business owners, however, access to start-up capital has become hard to find these days. I believe that these small businesses can be safe and secure investments, which generate not only a return for Massachusetts’ assets, but also for our people.

I will create a Small Business Linked Investment Program to provide capital for small businesses owned and operated by Massachusetts residents. One-third of the funds invested would be available for qualifying small businesses which are 51 percent or more owned, operated and actively managed by one or more women, minority persons, or persons with disabilities.

The program would operate under the following rules:
· A lender may submit applications through the treasurer’s website for those borrowers and businesses which the lender believes are eligible.
· If the application is approved by the treasurer’s office, the treasurer purchases a certificate of deposit from the lender at three percent below the 1-year Treasury bill rate.
· The minimum rate for the certificate of deposit shall be one percent.
· The lender makes the loan to the borrower and may charge the borrower up to, but no more than four percent, above the rate of the certificate of deposit.
· The term of each certificate of deposit cannot exceed one year, but may be renewed at the option of the treasurer on an annual basis for a total term of up to five years.
· The state does not guarantee the loan nor is the certificate of deposit collateral for the loan.
 

Linked Investment Program for Agriculture

Agriculture in Massachusetts is a $6 billion economic sector with the state’s 7,691 farms accounting for $498 million in cash receipts. But many Bay State farmers struggle with the high cost of borrowing operating funds for their business each year.

As treasurer, I would establish the Ag-Link initiative to provide an interest rate reduction on operating loans and lines of credit to the Massachusetts food and farming community. The Treasury would place deposits with Massachusetts banks at below market rates when the bank agrees to reduce the interest rate on a farmer’s loan.

The program would allow a Massachusetts farmer, forest products producer or value-added food manufacturer to apply for reduced-interest loans of up to $100,000. If an eligible farmer’s application is accepted, the Treasurer purchases a certificate of deposit at a reduced rate from a lender for one year. In turn, that lender lowers the interest rate of the loan given to the qualifying applicant.

Rural Fire Department Assistance Program

Massachusetts is home to more than 140 all-volunteer or call fire districts, most of which are concentrated in the five western counties. Because of the limited commercial tax base in these rural communities, many fire departments lack the resources to adequately finance their operational and equipment needs for fire protection, emergency response or training. In addition, large tracts of state-owned land in many small towns are exempt from taxation hindering the ability to foster economic development and derive needed revenue.

Fire houses in such communities as Chesterfield and Peru are antiquated and undersized for today’s fire apparatus and are not in compliance with federal occupational health and safety regulations.

As treasurer, I would file legislation creating the Massachusetts Rural Fire District Assistance Program to help provide state aid for rural and suburban fire districts. Modeled on the School Building Assistance Bureau, eligible communities could qualify for appropriations.

Green Schools

As chairman of the Massachusetts School Building Authority, I will prioritize Green Schools by helping school districts that are constructing new buildings or renovating existing structures become more efficient with their use of energy and natural resources.

Begun in 2001, the Green School Initiative has provided funding to 45 public schools during its Pilot Phase, resulting in 20 schools that became “certified” as green schools and total installation of 580 kW of photovoltaic (PV) and 11.4 kW of wind electricity capacity.

Projects such as the advanced biomass and power conversion at the Granby New Elementary School in Granby and fuel cell, landfill gas, photovoltaic and wind energy installations at the Pembroke Public Schools have demonstrated that renewable energy can cut fixed costs, saving precious dollars for textbooks, libraries, school sports and other pressing educational needs.

Now that the Massachusetts Renewable Energy Trust is no longer funding grants for the design of green schools the state treasurer must work with the Collaborative for High Performance Schools, which is one of the first green school rating systems available in the country, on implementing new guidelines, registration and application process so that school districts can continue to benefit from alternative energy systems.

Transitioning our schools to appropriate technologies will save taxpayers money as well as provide clean energy jobs for our building and construction trades.

Economically Targeted Investments

As Treasurer, we will set aside $500 million of pension reserve funds to spur economic development within the four corners of the Commonwealth. One of the problems with our economy is that banks are not loaning to small businesses. This $500 million fund would be made available by the Treasury to act as a bank to put construction trades to work immediately and grow the economy providing permanent jobs to worthwhile projects across the Commonwealth. There is a collateral benefit to investing in development projects within our cities and towns.

Financing Energy Efficiency & Conservation

Efforts to bring renewable energy solutions to save money, create jobs and protect the environment are underway in every corner of the Commonwealth. School districts are looking at wind power to lower their electricity bills, sawmills are capitalizing on wood waste for cogeneration and plans to construct a new biofuels plant in Greenfield are underway.

However homeowners looking for ways to cut costs can often do so by increasing the energy efficiency of their homes. As treasurer, I would oversee financing opportunities, including rebates and low-interest loans for Massachusetts homeowners to purchase and install energy efficient equipment or to undertake whole-house improvements.

By partnering with local banks and financial institutions, the Home Energy Loan Program (HELP) would require that:

· All installed equipment and materials will be new.
· Rebates would be made available only for projects completed after the program’s effective date.
· Loans would be available only for projects initiated after the program’s effective date.
· Eligible applicants could apply for additional rebates or loans in future years, as long as the additional projects comply with program guidelines at the time of application.