Good morning and thank you for the opportunity to join you for what I am sure will be an interesting conversation.
It’s great to see so many familiar faces here today. Thank you, team Goldberg!
It is always a pleasure to be with all of you who help keep our economy vibrant and strong both in Boston and throughout the state.
I am proud of the work we do at Treasury to ensure economic security and economic opportunity for all Massachusetts residents. We strive to achieve this goal by investing in our people, communities, and our small businesses.
I have never seen Treasury as a separate set of agencies and departments.
Even though we oversee a little bit of everything, from the Clean Water Trust to the Alcoholic Beverages Control Commission and from Lottery to Unclaimed Property, our mission remains the same.
By continuing to invest in education, infrastructure,
economic development initiatives, and increased unrestricted local aid, we are creating a more prosperous and resilient future for Massachusetts.
And you know I am thrilled to continue this very important work. Second longest serving Treasurer in the history of the Comm.
And now we can talk about my favorite thing in the world, bond ratings. One of the most important ways that we secure our future is by maintaining a strong and stable credit rating.
Ratings agencies have taken notice of Massachusetts’ confident navigation through the fiscal disruptions of the pandemic and the continued rise of the state’s Rainy Day Fund.
Despite economic uncertainties, I am proud to say our Rainy Day Fund balance has reached a historic high of approximately $8.1 billion, or approximately 12% of budgeted operating expenditures, providing excellent coverage for when, no doubt, it rains again.
The state’s collaborative leadership and commitment to sound fiscal practices led to a well-deserved, and in my mind long overdue, upgrade from S&P in April of this year!
They raised Massachusetts’s general obligation long-term credit rating to AA+ (stable outlook) from AA (positive outlook) and upgraded bonds backed by annual appropriations from the state as well as upgraded our Commonwealth Transportation Fund Bonds to AAA.
All of this helps my debt team in the market, where demand for our bonds remains strong!
By making investments in our infrastructure, our roads, our schools, we continue to make Massachusetts a competitive place for businesses to thrive.
Turning to the state’s pension fund, Mass PRIM, the team has constructed a portfolio that performs well in both up and down markets.
Despite a challenging market and persistent geopolitical and economic crises, we continue to outperform our peers and our benchmark.
The Fund has continued to advance its work with diverse investment managers through the FUTURE Initiative, created after the Investment Equity legislation passed in collaboration with partners on Beacon Hill.
PRIM has now allocated more than $9 billion [or almost 10%] to firms owned and operated by women, people of color, and those with disabilities. And we are just getting started! The FUTURE Initiative takes important steps towards addressing inequities while still ensuring we are maximizing returns.
PRIM is also on the forefront of sustainable investing, or what I would call “common sense,” investing…what every successful, savvy business person has always done
Our groundbreaking partnership with MIT Sloan School helps to reduce the ambiguity around these types of investments and improves the quality of measurement and decision-making that puts us in a position as an industry thought leader in enterprise risk.
And a newly created, standing Committee will help oversee this strategy and improve our ability to deliver long-term returns for beneficiaries.
These initiatives again position PRIM as an industry leader, as we continue to generate consistent returns.
The PRIT Fund ended FY2023 with a record balance of $96.6 billion for the fiscal year, surpassing the previous record of $95.7 set in fiscal year 2021.
Even with extreme volatility in the market the Fund returned 6.0% gross and posted strong positive gains in each of the last three consecutive quarters.
And with all the talk you hear about private equity, in FY2023, PRIM’s Private Equity portfolio ranked third out of 176 U.S. public pension plans based on 10-year performance.
As we all must remember, PRIM has an eye on the long term. We never ride the volatility of the markets, and we never react to them. And we are on track, as planned, to be fully funded by 2036.
Clean Water Trust
The Clean Water Trust is a successful operational fund that provides money to municipalities for safe water infrastructure and generates economic activity for private businesses.
The Trust has continued its two grant programs targeted at removing lead from drinking water.
The first program, the School Water Improvement Grant Program, or SWIG, the best acronym in state government, provides schools that have identified lead and through a free testing program with MassDEP can use grant funding to purchase and install water bottle filling stations.
Since its inception in January of 2020, it has provided $1.7 million to replace 565 fixtures in 227 schools serving an estimated 110,200 children.
The second program provides cities and towns grants to identify any lead service lines in the service area, public or private, and develop a plan to remove the service lines. The program is funded by President Biden’s Infrastructure Bill and since being announced in June of 2022, the Trust has approved 113 grants to communities for a total of $26.3 million.
These projects are the first step to removing all lead service lines from our drinking water systems.
As we learn more about the health risks posed by PFAS in our drinking water, the Trust moved to make the cost of borrowing as low as possible to help these projects move towards construction and not be held up by the cost of borrowing. Since January of 2020, the Trust has offered 0% interest rate financing for all PFAS projects and has committed to financing $198 million in projects throughout the Commonwealth.
Not only do these projects improve public health and environmental quality, but they also create jobs, promote environmental sustainability, and stimulate economic activity.
We are working closely with the EPA and the Massachusetts congressional delegation to ensure that critical federal funding and support for the Trust continues. These resources are essential to ensuring Massachusetts residents have access to clean drinking water to safeguard a healthy future for everyone.
Another area where we work directly with communities is the Massachusetts School Building Authority (MSBA), which partners with local communities to build and renovate sustainable, efficient, and affordable schools.
We have awarded over $5.8 billion in grants to 421 school projects for school construction and renovation projects.
The MSBA’s work goes beyond the traditional brick and mortar. We provide technical assistance and support for the development of educational plans and engage local communities in the grant making process to promote affordable and sustainable learning environments.
We have updated our policies to further support districts in affording their share of the projects - ensuring that districts can use all available federal and state grants and rebates to offset their share of the costs. We are implementing informational roundtables for districts to share the potential opportunities available in the new Investment Tax Credit. I have been particularly concerned about the escalating costs to districts caused by inflation, increasing construction costs. I have been working closely with the legislature to address many of these challenges.
And I am thrilled that work resulted in changes within the Fiscal Year 2024 budget, which lifts the MSBA cap from $800 million to $1.2 billion. This will allow us to address the growing demand for school building assistance.
The Fiscal Year 2024 Budget also dedicates $100 million in one-time funding for school building construction projects impacted by Covid-related inflation. I am grateful for our partners in the legislature for providing these important resources that will assist the MSBA in fulfilling its mission of supporting quality education for our future generations.
Now on to the Lottery! For the past 50 years, the Massachusetts Lottery has supported our local communities by providing critical local aid dollars to our 351 cities and towns.
Since selling its first ticket on March 22, 1972, the Lottery has generated over $149 billion in revenues, awarded over $105 billion in prizes, paid over $8 billion in commissions and bonuses to its statewide network of retailers, and returned over $32 billion in net profit to the Commonwealth for unrestricted local aid.
To ensure we safeguard this crucial funding for local services in an increasingly competitive marketplace, we are constantly looking to innovate.
In Fiscal Year 2023, the Lottery topped $6 billion in sales for the first time. We brought in more revenue than ever before, paid out more in prizes than any previous year, and returned a record high profit to the state’s 351 cities and towns.
Working within one of the lowest advertising budgets in the business (4.5 million on revenues of 6 billion) and statutory constraints, this team continues to find cutting-edge solutions.
In February, we launched a new $50 ticket – The “Billion Dollars Extravaganza”. This ticket has generated over $721 million in sales. It was the most successful instant ticket per capita in the first month of sales in the history of all instant tickets in the entire country.
This one ticket alone will bring in over $80 million in commissions and bonuses for our agents, and more than $13 million in additional tax revenue for the state.
As a reminder, sharing in the Lottery’s accomplishments are the network of over 7,000 retailers who sell our products. In fiscal year 2023, retailers earned a record $350 million in commissions and bonuses. That averages over $45,000 per.
We look forward to working with our partners in the legislature, as well as our retail partners, to ensure the Lottery’s success for another 50 years!
I do want to make sure that I mention our team at the Alcoholic Beverages Control Commission (“ABCC”), who are always ready, willing, and able to help our small businesses and promote local economic development.
Despite the challenges posed by the pandemic, they performed extraordinarily well, positively impacting local economic development while preserving public safety.
The ABCC has recently expanded 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.
During FY23 and FY24, the ABCC conducted fifteen Compliance Seminars to assist alcoholic beverage stakeholders with recent statewide compliance issues and best practices.
During these seminars and municipality trainings, approximately 1,500 alcoholic beverage stakeholders including licensees participated and thirteen Massachusetts municipalities were visited.
Those municipalities included Gateway cities, Barnstable, Brockton, Chelsea, Lawrence, Salem, Springfield, and Worcester.
Also, during FY23, the ABCC translated its Frequently Asked Questions on its website into eleven additional languages to expand access and support a wider range of small business owners.
Working with communities is crucial to understanding and meeting the long-term needs of local small businesses as they navigate increased costs of living and complex financial decisions, big or small.
That is why, OEE has created high impact programs to promote economic opportunity and financial stability throughout the state.
These programs help ensure that our economy works for everyone.
Our BabySteps Savings Plan, for those of you who don’t know, is our seeded savings accounts that were kicked off in January 2020. Through public/private partnerships and our 501c3 trust fund, families who check the box on their birth certificate paperwork can open a 529 savings account which we deposit the first $50 in. This is for every baby born or adopted in Massachusetts and we even wrap financial education around the child and their families. This program begins to prepare for children’s future post-secondary education, community college, college or vocational/technical training.
To date, there have been about 30,000 accounts funded. Compared to previous years at the same time there are about 10% more accounts for babies born in 2023. This indicates excellent growth, and even more so given the economic environment and challenges that people have been experiencing this past year.
In low-income zip codes across the Commonwealth the uptake since the program’s launch has increased by 44%, a far greater rate than that in higher income zip codes.
BabySteps promotes sustainable and consistent engagement. 32% of accounts have set up automatic contributions through Fidelity investments, ensuring future savers.
And our newest expansion, SNAP into BabySteps, is offering increased benefits for residents receiving SNAP.
We also have led a diverse cross-sector coalition to develop and propose a Massachusetts Baby Bonds program, which would bring asset building opportunities, like buying a home, starting a business, and accessing higher education, for kids in our most vulnerable communities. This program would help future generations achieve upward mobility, saving taxpayers money in the long term and boosting the overall economy.
And, very importantly, and a high priority to me….I continue to advocate for Massachusetts to join the growing number of states that require schools to offer financial education.
Financial literacy education is not equally accessible nor widely available in our schools. According to OEE’s Report on Personal Financial Literacy Education in Massachusetts Schools in 2021, 73% of school districts who took part in this study noted that they do not require schools to teach personal finance to their students.
Financial literacy is not just a skill, it is a necessity. Young people today face a complex and dynamic economic landscape that poses both challenges and opportunities. It is important for students to possess the knowledge to budget, save, invest, borrow, and navigate the financial system.
23 states, including Rhode Island, New Hampshire, Alabama, and Florida have all passed legislation requiring financial education in schools. Lobby your legislators on this one please. In fact, I will be testifying on this bill later today.
Sustaining and growing our workforce is a critical component to a healthy economy…
In order to do so, we must invest in childcare infrastructure to relieve this growing and significant problem.
The pandemic brought to light instabilities in our economic ecosystem, particularly for women and working families.
Women were disproportionately leaving the workforce during the pandemic partially due to the lack of available and affordable childcare.
To mitigate the strain of the pandemic on families, my office partnered with Citizens Bank and developed a grant and training program in two cities considered childcare deserts, Lynn, and Springfield.
We issued grants of up to $4,500 for individuals interested in starting their own family childcare business.
Not only did these grants foster new small business owners but also brought much needed relief to families who could now go back to work without worrying about who would look after their children.
The lack of accessible childcare is just one challenge in retaining an educated workforce as we experience demographic shifts in the United States.
These challenges are why my HR Department implemented a comprehensive Workforce Recruitment and Retention Plan.
With this Plan we can better assess our shortcomings and hold ourselves accountable to create a more inclusive and desirable place where people want to work.
Small Business Initiative
Another area where my office looks to promote opportunity is the Small Business Initiative (“SBI”). This work invests in our communities by empowering the entrepreneurs and innovators who drive our economy forward.
Last year, our Treasury team launched an online, statewide small business toolkit on how to plan, maintain and grow a successful small business for budding entrepreneurs all over the state.
These valuable educational materials provide new and existing small business owners in Massachusetts with important information related to business planning, maintenance, and growth.
In collaboration with Citizens, SBI hosted free virtual workshops called the Small Business Financial Empowerment Series to provide entrepreneurs with what they would need to create a stable and growing business.
Investing in our communities makes Massachusetts more competitive, more resilient in the face of uncertainty, and more attractive to talent and innovation. It pays off for all of us.
In conclusion, I want to acknowledge the vital role that all of you, as business leaders, play in helping to drive our economy forward. You help to ensure that Massachusetts is a leader in so many business sectors, such as biotechnology, education, health care, and clean energy. And you help make Massachusetts a great place to live, work, and to do business.
The key to our success is through partnership and collaboration. Together, we can build a more prosperous and equitable Massachusetts for ourselves and our children.