Thank you, Secretary Bialecki, for that warm introduction and for your leadership. To the members of the Cabinet and the Legislature, and the members of the Administration, ladies and gentleman, everyone, thank you for having me today and for coming together to think together, and work together, on how we shape our own future and build a stronger one. I know that you have covered and will cover some of the highlights of what we have accomplished together and will talk some about where we're going. I want to, within the frame of the commitment to invest in innovation and infrastructure, talk a little about a proposal that you all know we have placed before, not just the legislature but the whole Commonwealth, and why it is so important.
Sometime during the big blizzard last month I was out on the Pike -- when you weren't supposed to be on the Pike -- heading to or from that bunker in Framingham, I don't remember which. Except for plows and emergency vehicles, the roads were clear of other drivers. Most of the work of preparing for the storm was done. The big decisions -- like whether to declare a state of emergency or to do the travel ban -- were made. Except for the constant business of tracking the path of the storm, reading my hourly email updates on outages, and shelter needs and school closings, and getting on periodic briefing calls with the Cabinet, there was little for me to do at that moment. For a minute, I let my mind wander to that nearly empty road, imagine the Pike nearly empty, knowing it would be jammed again soon enough, with people who depend on it.
And I thought to myself, believe it or not, "our grandparents gave us that." Like Route 3 and I-95 or the street I came down to get here this morning; like the T or Logan Airport and UMass and Bridgewater State; like that bunker in Framingham we use during emergencies, the generation or two before ours asked themselves what kind of Commonwealth they wanted for themselves and for us, and then set about to shape it. They sacrificed to make things better for us, making investments that led to one of the greatest expansions of wealth and opportunity in the history of the world. We take it all for granted now -- because they made decisions that permit us to take it for granted now.
As you know, I have challenged us all to ask ourselves these same kinds of questions again. What kind of Commonwealth do we want and need for our time and the generation to come? What kind of educational opportunities do our children need? What kind of roads and bridges and public transit system do we need? What does a leading edge economy and a just community need and deserve to accommodate current growth today and encourage faster growth tomorrow?
And instead of dodging the question that everybody hates, political people and the general public alike, I also asked us to think hard about how to pay for it, to have an adult, fact-based conversation about taxes.
Mostly, thankfully, that is just what we have been having. The Senate President, the Speaker, the legislators I have met with in their hometown coffee shops and pizza parlors, the business leaders in their board rooms and factories, the teachers in early ed and leaders in higher ed, the maintenance and repair workers at the T, and the people that I meet in the grocery store -- I promise you it takes me three times as long to get through the grocery store these days -- mostly they have not retreated to their customary rhetorical corners. They have considered the facts candidly, if a little nervously. And I am grateful for that. I am hoping for more of the same with you today, and among you in the weeks and months ahead.
Let me tell you what I am hearing.
People in town want subways that run later in the evening. People in the suburbs and our Gateway Cities want buses that run on the weekends and bridges that are safe. People in New Bedford want a way to have access to the work and social opportunities in Boston, and in Boston to the affordable housing opportunities in the South Coast. People in Pittsfield want better connections to markets and customers in New York City, where their regional economy tends to focus.
People get that we need a better transportation system. Workers need it to get to their jobs. Students need it to get to school. Tourists need it to get to the sights. Police and firefighters need to get to emergencies. Business people need it to get to appointments and to deliver their goods and services. People need it to get to the doctor, to affordable housing, to the grocery store, and to the gym. Whether it's good roads, reliable commuter rail, frequent bus or subway service, a nearby airport or a convenient ferry, transportation is about more than moving from Point A to Point B. It's about quality of life, about our economic opportunity and growth. It's about opportunity.
Of course, education is also about opportunity. That's why every mom and dad wants the best education for his or her child -- no matter what neighborhood they come from. That's why a diverse group of business leaders just last week announced their support for increased early education investments, and why the President of UMass has pledged to halt the annual hikes in fees and tuition if the state picks up a bigger share of college costs. Kids understand that, too, even the little ones. I have countless, really wonderful opportunities to visit with little ones in their classrooms and hear their stories about what they want to be when they grow up. As a parent, I hear optimism and energy, eagerness and hope. As a governor, I hear a call to action.
Whether it is from adults or children, whether about schools or roads, it all adds up to the same thing. Everybody wants opportunity. And opportunity requires growth. What our residents want is not frivolous or unreasonable. In fact, it's precisely what this Commonwealth needs to be economically strong today and tomorrow.
In January I laid out a plan to prepare for that future. The budget I filed is a plan for growth -- by investing in education, innovation, and infrastructure to grow opportunity.
By our best estimates, it will take about a billion dollars in new revenue dedicated to transportation to pay the bills we inherited, restore our roads and rails and bridges to a state of good repair, and expand the system modestly but strategically so that it unlocks economic growth in underserved parts of the Commonwealth.
Likewise, because job growth in Massachusetts uniquely depends on the innovation economy, and because the success of that depends on a well-educated workforce, I have also proposed to target new investment in education where it is shown to have the highest impact. Those high-impact areas are early education, extended learning time in middle schools in places where poverty is concentrated, college affordability and workforce development. It will take another 900 million dollars or so in new revenue to get the nearly 30,000 kids off the waiting list for early education, to extend the school day for middle schoolers in Gateway Cities, so they get what they need, to make college more affordable, and to support our community colleges as the platform for skills training. By the way, business leaders estimate that the return on investment for early education alone is 10 to 16 percent.
Business leaders, including some of you in this room, have called for just such investments for many, many decades, and you are right to do so. Brainpower is our signature economic edge, and failing to invest in that in Massachusetts would be like Texas failing to support the oil industry or Iowa failing to support corn farmers. Ironically, now that we have put the means on the table to make those investments, some say now isn't the time to invest in education, let's just focus on transportation. To those who say that now is not the time, I challenge you to show me which 4-year old we should leave behind. There are 240,000 people looking for work in Massachusetts right now -- and 120,000 vacancies. All of that having to do with the skills gap. How can we possibly wait to build a more robust and responsive system of adult education and workforce training?
Transportation and education. This is what the public wants and our economy needs. The hard part is how to pay for them.
As you know, I have proposed to fund these investments mainly by rebalancing the sales and income tax rates. Specifically, I have proposed to cut the sales tax from 6.25 percent to 4.5 percent, raise the income tax a percentage point to 6.25 percent, double the personal exemptions, and eliminate a number of special deductions that no longer serve us very well.
Here's what it means: For half the workforce, total taxes would either stay the same or go down, and for the other half total taxes would go up according to one's ability to pay. (By way of illustration, if you make about $100,000, your total taxes would go up a couple of hundred bucks) That's the order of magnitude we're talking about.
And with these changes, we are still a long way from being "Taxachusetts." In fact, taxes would remain lower than or comparable to all of the states with which we compete in the region and beyond.
At the same time, raising taxes by no means lets us off the hook to of the business of reforming state government. I have again proposed a number of reforms to improve the way government functions and achieve further savings. The total projected savings from these latest measures, if enacted by the Legislature, will be over $100 million annually. They follow a raft of reforms over the years which include closing loopholes and extending the retirement age in the public pension system, asking public employees to shoulder a bigger share of their health care costs, replacing police details with civilian flaggers, simplifying the transportation bureaucracy and shutting down the Turnpike Authority, systematically combing through and discarding or updating old regulations, with the help of many of you here, reducing headcount by 6,000 positions, and more. These and other reforms have saved us all billions, and have enabled us to invest in education, innovation and infrastructure even during the downturn. And that i
But reform alone will not be enough to give us the 21st Century transportation and education systems our people deserve and our economy needs to grow stronger.
People often ask me and they probably do you, what precisely does this plan mean for me?
We've created two new online tools to show that.
One is a map that will show you the specific projects you can expect to see in your own backyard. You will be able to see things like the roads and bridges that will be rebuilt, the schools that will be better funded, and the numbers of kids who will be moved off the waiting list and into quality early ed in your own community.
Second is an online tool that shows the impact of our budget proposal on an individual or family's budget. With this tool, we show just what increase or decrease will be in total taxes for individual households.
This is also a fun tool for the policy wonks in the room because you can toggle different factors and see what the impact would be. Come up with your own budget proposal. It's something we're encouraging to be used on the House and the Senate side, as well.
Both can be found right on our webpage -- Mass.gov/governor. Check them out, share them with your constituents, your colleagues, your neighbors and your family as well.
I will just end by saying this. It's very much in the spirit of the "Choosing to Compete" strategy. And that is that we as Americans, and as residents of this Commonwealth, rarely ever leave the things we decide are important entirely to chance. Americans rarely leave what's important to chance. When we decided that educating our children was important, we created public schools and land grant universities. When we decided settling the west was important, we built the transcontinental railroad. When we decided freedom was important, really important, we freed the slaves and gave women the right to vote. It's a journey. Rarely what we think as Americans is important to chance. Right now, we're going to have to decide whether accelerated growth is important enough to invest in or leave to chance. Fortunately for us, our grandparents didn't leave the Mass Pike or I-95 or that infernal MEMA bunker to chance. They made choices that shaped a better future. Now it's our turn.
I look forward to working with you. Thank you very much for having me.