“He thought it was too big. He was doing what the Republicans usually do, and we were doing what the Democrats usually do,” said a Democratic lawmaker who was in the legislature at the time.
The package, costing about $131 million, was tiny compared with the state’s total budget then of more than $20 billion. Today, few involved in Massachusetts’s economic policy even remember it.
Instead, the most pressing issue for Romney was finding money to fill a yawning budget gap of about $3 billion. He avoided raising income or sales taxes, but he targeted what his administration called corporate tax “loopholes.” To pro-business groups, Romney was raising taxes on businesses just when these firms were needed to help grow the state’s economy.
“The fact that he let his commissioner of revenue go on a rampage to raise corporate taxes suggests to me he wasn’t being very energetic about translating his pro-business viewpoint into action,” said David Tuerck, executive director of the Beacon Hill Institute, a pro-business research group.
Michael Widmer, president of the Massachusetts Taxpayers Foundation, remembers a meeting with Romney’s staff in which business groups expressed their displeasure with the tax changes.
“From a pro-business governor . . . it was one, surprising, and two, it had the effect of exacerbating our competitive disadvantages,” Widmer said.
Romney, however, also worked to prevent the shutdown of a major Air Force base and helped win a new facility built by Bristol-
Myers Squibb in Devens.
“Mitt Romney spent 25 years as an entrepreneur and businessman in the real world economy and understands what it takes to create good jobs,” said Saul, the campaign spokeswoman.
Stemming the losses
In early 2004, a year into Romney’s term, Massachusetts began to stop losing jobs. The state then added jobs every year until Romney stepped down in early 2007. But it was still more than 100,000 jobs below the peak of early 2001. By mid-2008, another recession had hit, and the number of jobs began falling again.
Other states that never fully recovered from the 2001 downturn were Illinois, Michigan and Ohio, all industrial states that had lost scores of manufacturing jobs. Like those states, Massachusetts has been losing manufacturing jobs for more than a decade. And Romney was unable to stem the tide. At the end of 2002, just before he entered office, there were 338,000 manufacturing jobs in the state. By the time he left, there were 298,000, a drop of 12 percent, according to federal data.
“Under his administration, Massachusetts lost a huge number of blue-collar jobs that provided an opportunity for the middle class,” said Sum, the Northeastern economist.
Widmer noted that it’s often hard to pin a state’s economic performance on a governor.
“The job-creation record was weak. I don’t fault Romney for that. . . . There were larger economic conditions,” Widmer said. “On the other hand, he’s campaigning as a job creator.”