Our prosperity depends on strong communities

From The Beacon, November 2010, Vol. XXXVI, #10

The budget rainclouds have been bursting overhead with such force and regularity that it’s easy to see only the storm we’re in, instead of scanning the horizon to be aware of other challenges that are coming our way. But looking at a long-range forecast for Massachusetts is essential because we may be able to avert future problems if we plan and act early enough.

A look to the future reveals a stark truth: unless we reverse current trends, our state will lose too many workers and families over the next decade, and we will lack the essential resources to compete for jobs, investment and wealth with the rest of the country. This is an urgent problem, because it we fail to act now, it may be too late to prevent a permanent downturn in our economic prospects.

A recent analysis by noted economists at the School of Public Policy and Urban Affairs at Northeastern University predicts several troubling developments for Massachusetts, based on our current trajectory. First, Massachusetts will lag behind the nation in the growth in households by the year 2020. While the average state will see a 14.8 percent growth in households from 2007 to 2020, we will see only a 9.1 percent increase. This means that more families and workers will live elsewhere, drawing business investment and jobs away from Massachusetts.

What’s much more disturbing is that we may change from the Bay State to the “Gray State” because Massachusetts will age much more quickly than the national average. All of our growth in households will be accounted for by people aged 55 and older. Actually, 135 percent of the growth in Massachusetts households will be accounted for by those over 55. How is this possible? Well, it’s projected that the total number of households will increase by 222,700 from 2007 to 2020. During this time, we will lose 77,700 households headed by those under 55, and gain 300,371 households headed by people 55 and older.

Specifically, the number of households in the 35 to 44 age range will decline by 36 percent, households in the 45 to 54 age range will decline by 24 percent, households in the 55 to 64 age range will increase by 54 percent, and households in the 65 to 74 age range will increase by a whopping 65 percent. All of these losses and gains are much greater than the national average.

This raises very serious long-range problems for Massachusetts. We will not have an adequate workforce to compete effectively for business investment and employment. As our population becomes older, state tax revenue will diminish accordingly, because a greater portion of our residents will be of retirement or semi-retirement age. Yet even with a weaker tax base, an older population will create an increased demand for costly public services, especially in the area of health care and senior programs. Additionally, fewer wage earners will be called on to pay for expensive pension and health benefits for retired public employees, making these taxpayer obligations even more unaffordable.

If we sit back and let these demographic predictions become reality, Massachusetts will lose its competitive edge, and other states will take our jobs, businesses, capital, families and workers. We can’t wait until 2020 to change course, because it would be too late.

The only way we will be in a position to compete and thrive is with a solid foundation that invites businesses and families to stay put and invest for the long-term. Education, public safety, infrastructure and quality-of-life services in neighborhoods should be the lifeblood of any strategy to make our state more attractive to young people and young families. The common denominator: all of these core services are delivered by cities and towns.

That’s right. Strong communities must be at the center of the state’s economic agenda. Otherwise we will experience a slow, irreversible decline, and today’s recession will be eclipsed by decades of stagnation.

There are only so many hours in the day. The recession has demanded an unwavering focus on the here and now. Budgets must be balanced, deficits must be closed, programs must be salvaged, and residents must be helped. It’s the same during every economic downturn – budgets are managed on a month-to-month basis, revenues are tracked weekly, and it seems that every day brings a new challenge. This makes long-range planning more difficult than ever, as resources are stretched too thin and there is little time to devote to issues and concerns looming over the horizon.

State officials, however, cannot ignore the long-range troubles ahead, and they must recognize the urgent need to embrace and invest in cities and towns. Local and state leaders must work together to preserve the core programs and services that families, workers and businesses need and value.

The challenges are clear, and so are the solutions. Our future depends on strong communities in every corner of Massachusetts, which is one more good reason why today’s fiscal problems can’t be shifted disproportionately and unfairly to cities and towns – and one more good reason why state leaders need to treat communities as partners.