Focus on What Works

2008 Annual Report

Center for Shamie Center for Center for School Reform Better Government Economic Opportunity PIONEER INSTITUTE 2008 Annual Report Pioneer’s Mission ounded in 1988, Pioneer Institute is a non-partisan public policy think tank committed to keeping F Massachusetts economically competitive and to strengthening the core values of an open society. To inspire market-driven policy reforms, Pioneer promotes individual freedom and responsibility and limited, accountable government.

Directors Pioneer’s Centers Nancy S. Anthony Center for School Reform Michael A. Ervolini Mission: Increase educational options available to Stephen Fantone students and parents, drive system-wide reform, and ensure Joseph M. Giglio accountability in public education. The Center’s work builds on Pioneer’s legacy as a recognized leader in the charter public Kerry Healey school movement and as a champion of greater academic rigor Ellen Roy Herzfelder in Massachusetts’ elementary and secondary schools. Current initiatives promote choice and competition, school-based Charles C. Hewitt III management, and enhanced academic performance in public Dr. Fred Hochberg schools. Alfred D. Houston C. Bruce Johnstone Shamie Center for Better Government Alan R. Morse Jr. Mission: Promote limited, accountable government, Beth Myers competitive delivery of public services, elimination of unnecessary regulation, and a focus on core government Lovett C. Peters functions. Current initiatives promote reform of the state John E. Reed WUDQVSRUWDWLRQ V\VWHP SXEOLF HPSOR\HH EHQH¿W UHIRUP and VRXQG¿VFDOPDQDJHPHQWLQVWDWHDQGORFDOJRYHUQPHQW Mark V. Rickabaugh Diane Schmalensee Alan Steinert, Jr. Center for Economic Opportunity William B. Tyler Mission: Keep the Commonwealth competitive by Walter G. Van Dorn promoting a healthy business climate and reducing the cost of doing business in Massachusetts. Current initiatives promote affordable housing, high-quality healthcare, transparent Honorary Directors regulation and the revitalization of our urban areas. Emmy Lou Hewitt

Edna Shamie Pioneer Institute is a tax-exempt 501(c)3 organization funded through the donations of individuals, foundations and businesses committed to the principles Pioneer espouses. To Phyllis Stearns ensure its independence, Pioneer does not accept government grants. 1988 2008

*LIWVOLVWHGUHÁHFW3LRQHHU·VÀVFDO\HDU Pioneer Lead Donors 2FWREHUWR6HSWHPEHU

FOUNDERS Mr. David H. Koch ($50,000+) Mr. Lovett C. Peters Alfred P. Sloan Foundation Mr. and Mrs. Mark V. Rickabaugh Anonymous Shelby Cullom Davis Foundation Anonymous

CHAIRMAN’S CIRCLE Mr. and Mrs. C. Bruce Johnstone ($25,000+) Mr. and Mrs. Walter Van Dorn, Mr. and Mrs. M. Dozier Gardner Shattuck Charitable Trust and the Jaqueline Hume Foundation Alice Willard Dorr Foundation

TRUSTEES’ CIRCLE ($10,000+) Mr. Roger Milliken Mr. and Mrs. Robert Anthony, The Roe Foundation Sidney A. Swensrud Foundation Dr. and Mrs. Paul S. Russell Mr. William S. Edgerly Mr. Ray Stata Eli Broad Foundation Mrs. Phyllis Stearns Mr. David C. Evans Mr. and Mrs. David A. Spina Mr. and Mrs. Bruce Herzfelder Mr. and Mrs. Gerard Townsend Mrs. Emmy Lou Hewitt Mr. and Mrs. William B. Tyler Mr. and Mrs. Alfred D. Houston Mr. and Mrs. Carl Ferenbach, J.P. Humphreys Foundation Vermont Community Foundation Mr. John E. Reed, Mr. and Mrs. Dean K. Webster Mestek, Inc.

PIONEERS ($5,000+) John H. and H. Naomi Tomfohrde Foundation Associated Industries of Massachusetts 0U&KDUOHV/RQJÀHOG Mr. Carter S. Bacon and Ms. Margaret Wiles Mr. Caleb Loring Mr. and Mrs. Walter L. Downey Mr. and Mrs. Alan R. Morse Mr. and Mrs. Stephen D. Fantone NAIOP Massachusetts Frederick O.J. Muzi Foundation National Grid U.S.A. Mr. Joseph M. Giglio Mr. and Mrs. Richard Schmalensee Mr. William J. Hayes Mr. and Mrs. Alan Steinert, Home Builders Association of Mass., Inc. Eastern Charitable Foundation PIONEER INSTITUTE 2008 Annual Report

Pioneer is a pretty straightforward place. We take pride in working constructively with legislators, Pioneering Spirit business groups and policymakers to move our beloved Bay State closer to being that City on a Hill about which John Winthrop sermonized. We stand for something though —common sense. We acknowledge that the public pension system is out of control; that our transportation agencies are too focused on their lists of new construction projects and too little on consumer interests like congestion, reliability, and safety; that every child needs access to a good school QRZQRW¿YH\HDUVKHQFH:HVHHWKHJRRGLQ the new healthcare reform act, but have been a leading voice for healthcare cost containment. Perhaps Winthrop’s call for an example for the Ruth Stott Peters world “specially ordained by God” was marked (1916-2009) by hubris. But it evinced strong optimism— driven by a conviction that entrenched interests can be overcome when required. Winthrop was largely right. For much of our history, Americans have played a role for good in the world; as models of individual responsibility with a thirst for freedom from unneeded government intrusion and an entrepreneurial spirit. Massachusetts has played no small part in our ability to walk tall. These qualities—being straightforward, optimistic and wedded to core American values—were on display at every Pioneer event Ruth Stott Peters attended. On January 4th of this year, Pioneer Institute said a sad goodbye to our longtime friend and supporter. We will miss Ruth. But we choose to be inspired by her deep involvement in civic affairs; by her avid support of charter schools and “what works”; by her community involvement, such that even at the age of 90, she was reading weekly to young children at the Salvation Army School in Dorchester. We were inspired by Ruthie’s ability to tell it like it is, but always in a way that brought out our best. In our business of public policy, that means helping people identify the right ideas. Sometimes it PHDQVKHOSLQJWKHP¿QGWKHFRXUDJHWRHPEUDFHWKHP To Governor Winthrop, we would say that though our Commonwealth is perhaps not specially ordained by God, we still love it and commit ourselves to improving it. To you, our supporters, we thank you for standing with us as we do this work.

James Stergios William B. Tyler Executive Director Chairman 1988 2008 Pioneer By the Numbers: 2008

PUBLICATIONS 16 research papers, policy briefs, and event transcripts MEDIA HITS articles, interviews, and editorials in newspapers, trade journals, TV and radio in Massachusetts 161 and across the nation

ATTENDEES >100 average per Pioneer event

EVENTS 16 hosted by Pioneer

$OOÀJXUHVUHÁHFW3LRQHHU·VÀVFDO\HDU 2FWREHUWKURXJK6HSWHPEHU PIONEER INSTITUTE 2008 Annual Report

The Center for School Reform

2008 marked the 15th anniversary of the Massachusetts Education CSR Reform Act. How did the Bay State celebrate the legislation responsible for making the Commonwealth the nation’s undisputed Advisory Board leader in K-12 education and among the world’s best in mathematics Dr. Kenneth Ardon and science? Salem State College By watching vested interests and the Patrick administration slowly, Cornelius Chapman, Esq. steadily undo the policies that made Massachusetts a school reform Burns & Levinson LLP beacon to the nation. The state’s school auditing and accountability Nancy Myers Coolidge RI¿FHZDVHOLPLQDWHGWKHVWDWH¶V%RDUGRI(GXFDWLRQZDVVWULSSHG 0LIÁLQ0HPRULDO)XQG of its independence; and Massachusetts’ commitment to the highest academic standards in the nation is in peril. Dr. Charles Glenn Boston University Conversely, Pioneer is focused on what works. Much of our work this year defended the policies vested interests attempted to undo— Dr. Susan Goldsmith accountability and high academic standards. As we did, we continued Boston University to promote the innovative ideas that will make our schools even Ed Kirby better. Walton Family Foundation

Defending What Works Dr. Kathleen Madigan AccountabilityWorks School and District Accountability Dr. Paul Peterson In op-eds, public testimony, and outreach to legislative, business and Harvard University school leaders, Pioneer has consistently underscored the need to: Gerard Robinson Black Alliance for ‡5HVWRUHWKH0DVVDFKXVHWWV%RDUGRI(GXFDWLRQWRLWVULJKWIXOSODFH Educational Options as an independent policymaking body. Only in this way can we be sure that politics are removed from our classrooms. Dr. Sandra Stotsky University of Arkansas ‡5HHVWDEOLVK WKH LQGHSHQGHQW VFKRRO GLVWULFW DXGLWLQJ DQG DFFRXQWDELOLW\RI¿FH8QWLOLWVHOLPLQDWLRQWKLVRI¿FHHQVXUHGWKDW Henry M. Thomas, III the roughly $9 billion annually dedicated to our schools was spent Urban League of 6SULQJÀHOG properly and focused on maximizing student achievement. ‡8VHGDWDLQRXUFODVVURRPVWRLPSURYHWHDFKLQJDQGDFKLHYHPHQW 7KRVHVDWLV¿HGZLWKWKHVWDWXVTXRPD\DWWDFNWKH0&$6DQGREMHFWLYHDVVHVVPHQWVEXW tests are just the messengers. They tell us where we excel and what we need to improve. Watering down student and teacher assessments will not eliminate the achievement gap; it will only hide it. 1988 2008

High Academic Standards Massachusetts’ success is also a function of being unafraid to set high academic goals for students. Experts agree, Massachusetts’ curriculum frameworks are the richest in the nation. As others pressed to dilute the existing academic standards and to delay implementation of the high school graduation requirement to pass the MCAS history exam, Pioneer was active— in the media, producing research and hosting events like History and Civic Education: The Learning of Liberty for Civic Life, with the Bancroft and Pulitzer prize- winning historian Gordon Wood. Building On What Works Pioneer has long promoted innovations in the Commonwealth’s public schools. 0DVVDFKXVHWWVZDVRQHRIWKH¿UVWVWDWHVWRHVWDEOLVKFKDUWHUSXEOLFVFKRROVDQGIURP WKH¿UVW3LRQHHUKDVVXSSRUWHGWKDWHIIRUW:LWKHDFK\HDUGDWDFRQ¿UPWKHEHQH¿WVRIWKH “Massachusetts” charter school model, one unique in requiring business and educational SODQQLQJDQGLQREMHFWLYHO\FORVLQJWKRVHVFKRROVWKDWGRQRWIXO¿OOWKHLUSURPLVH7KH result? Our charter schools are among the nation’s best. Because they work, Pioneer is committed to expanding Massachusetts’ charter schools. In 2008, we hosted Why Democrats Support Charter Schools to demonstrate that we are not alone in our support. But Pioneer recognizes that charter schools ZLOOQRWVXI¿FHWRHQVXUHHYHU\FKLOGDFFHVV to a high-quality education. The scale of the problem in urban districts requires a menu of options to boost student achievement. Pioneer’s report Scaling Up Educational Innovation lays out a variety of successful school delivery mechanisms, including charter schools, independent vocational-technical schools, pilot schools, METCO, school-based management, and university partnerships. Pioneer further recognizes that we must not allow our Catholic schools, which provide urban parents high-quality school options, to disappear before our eyes. Following on our work related to private school capacity to serve inner city youth, Pioneer released School Choice Without Vouchers, a study that draws practical lessons from other states to outline a responsible tax credit strategy for putting private and parochial VFKRROVZLWKLQWKH¿QDQFLDOUHDFKRIXUEDQSDUHQWV:HDOVRFRVSRQVRUHGWKHUHOHDVHRI the Fordham Institute’s latest research on the nation’s Catholic schools. PIONEER INSTITUTE 2008 Annual Report

Finally, Pioneer is working with local districts to decentralize education dollars down to the school level. Principals are closer to the needs of students and teachers. Allowing school principals to manage their school budgets, as charter schools do, will provide WKHPÀH[LELOLW\WRERRVWVWXGHQWDFKLHYHPHQW7KLVPRGHOZKLFKLVREYLRXVWREXVLQHVV leaders, but to date mostly absent from our district schools, has been pioneered in Edmonton, Canada, and Barnstable, Massachusetts. Improving Mathematics and Science Education in the Commonwealth

Mathematics and science are the keys to prosperity Massachusetts’ success in the 21st century. Pioneer aims to ensure that our is also a function of children can compete in the global economy. We believe being unafraid to set high that two elements are necessary to meet this challenge: academic goals for students. great teachers and outstanding academic content. With the generous support of the Broad Foundation, Pioneer released Differential Pay for Math and Science Teachers, calling for higher wages for teachers in these hard-to-staff subject areas and for a particular focus on performance-based compensation measures. Pioneer also published How to Strengthen K-12 Mathematics Education in Massachusetts, to date the only report in the country to craft state policy recommendations from the President’s National Mathematics Advisory Panel (NMAP). Pioneer’s report was authored by Dr. Sandra Stotsky, an appointee to the NMAP, and member of both the Massachusetts Board of Elementary and Secondary Education, and Pioneer’s Center for School Reform Advisory Board.

The Lovett C. Peters Lecture in Public Policy ,Q1RYHPEHUZLWK'U3HWHU'LDPDQGLVIRXQGHURIWKH;3UL]H)RXQGDWLRQZHFHOHEUDWHG the 9th Annual Lovett C. Peters Lecture in Public Policy. Every year, the Lecture honors distinguished individuals who evince both intellectual stature and tangible accomplishment.

1998 Arne Carlson, 2004 Robert Herbold, Governor of Minnesota COO, Microsoft Corp. 1999 Vaclav Klaus, 2005 Angus McBeath, President, Czech Republic Superintendent, 2000 Walter Williams, Author and Edmonton, Alberta Economics Professor, Public Schools George Mason University 2006 Robert George, 2001 Bob Kerrey, U.S. Senator Jurisprudence Professor, Princeton University 2003 Charles Krauthammer, Pulitzer Prize-winning 2007 Peter Diamandis, Columnist Founder, X Prize Foundation

Peter Diamandis, Founder, X Prize Foundation 2007 Lovett C. Peters Lecturer 1988 2008

The Better Government Competition: “Our Greatest Export”

“The bottom line is that public education is supposed to be the great equalizer in our country.” - Michelle Rhee

7KHERG\RI3LRQHHU·VZRUN³IRUKLJK academic standards, accountability and LQQRYDWLRQ³ZDVQHDWO\HQFDSVXODWHGLQWKLV \HDU·V%HWWHU*RYHUQPHQW&RPSHWLWLRQZLWK keynote speaker Michelle Rhee, Washington '&·V6FKRRO&KDQFHOORU Chancellor Michelle Rhee 0V5KHHOHDGVDGLVWULFWRIVWXGHQWVDQGVFKRROV&KDQFHOORU -RHO.OHLQZKRVHZRUNLQ1HZ

The Shamie Center for Better Government

We hear a lot about reform these days. Pioneer doesn’t mind pointing out Shamie we were focused on these issues before they were on anyone else’s radar. Center Addressing Unsustainable Liabilities Advisory Board In 2006 Pioneer published a series of reports highlighting the state’s RXWVWDQGLQJ SXEOLF HPSOR\HH SHQVLRQ DQG EHQH¿W OLDELOLWLHV RXWOLQLQJ Cornelius Chapman, Esq. solutions that would ensure fairness and affordability. Since then, one Burns & Levinson LLP pension scandal after another has rocked Beacon Hill. Our goal is, as Steve Poftak noted in the Boston Herald, “a pension system that is fair Charles Chieppo to employees, protects taxpayers, attracts a high-quality work force and Chieppo Strategies restores public trust.” Katherine P. Craven Massachusetts School A World-Class Transportation System Building Authority 7KH *RYHUQRU ZDQWV WR ¿[ WKH VWDWH¶V FUXPEOLQJ EULGJHV +H DQG WKH Darius W. Gaskins, Jr. Legislature want to reform our (too) many transportation departments. High Street Associates Building on 2007 research “[Our goal is] a pension system that is Dr. Joseph M. Giglio on the extent of the disrepair fair to employees, protects taxpayers, Northeastern University of Massachusetts’ bridges attracts a high-quality work force and Bruce Herzfelder and roads (Our Legacy of restores public trust.” 1-Group Neglect), Pioneer launched a campaign to prioritize Steve Poftak Lucille Hicks maintenance over new Boston Herald MWRA Board projects. In 2008, when the Tom Keane *RYHUQRUVLJQHGLQWRODZDERQGELOOLQWHQGHGWR¿[RUUHEXLOGEULGJHV Murphy and Partners across the state, Pioneer’s report Additional Reforms for the Governor’s Accelerated Bridge Repair ProposalSURYLGHGVSHFL¿FUHFRPPHQGDWLRQV Eric Kriss for the implementation of the program. These included everything from eliminating the transportation silos currently plaguing transportation Pat McGovern oversight in the Commonwealth and combining responsibility for the Beth Israel Deaconess state’s bridges under a single transportation entity, as well as greater Medical Center transparency of ongoing projects and the need to tap private capital through the implementation of public-private partnerships. Robert Melia Maximus While we recognize the wisdom of repairing existing infrastructure, through outreach, media and testimony, Pioneer has also continued to Dr. Paul S. Russell, M.D. press to rein in reliance on long-term debt to pay for short-term activities Massachusetts General Hospital/ and unsustainable practices, such as MassHighway payroll, police cars, Harvard Medical School and computers.

Brian Wheelan Beacon Health Strategies 1988 2008 The State Budget Over-reliance on highly volatile capital gains taxes as a source of revenue and a nearly 20 percent increase in government expenditures from 2006 to 2008 have left the state unprepared to deal with the stock market’s precipitous decline. We are in a state of crisis; and in crisis lies opportunity — to rethink state government’s priorities and the way it does business. As the state faced the need to make emergency cuts in the fall, Pioneer published Hard Decisions, Needed Leadership, which argued that, rather than making across-the-board cuts, the Governor needed to set priorities, eliminating unneeded programs altogether, while fully funding essential services. Pioneer’s work on the budget came on the heels of its research during the summer that highlighted the crushing $13,000 in debt and other liabilities the state carries for every man, woman and child in Massachusetts. Municipal Finance 7KH¿VFDOFULVLVLVEHLQJIHOWKDUGHVWDWWKHORFDOOHYHO)RUWKDWUHDVRQZHKDYHWKURXJKRXU Middle Cities Initiative, focused on solutions to help our largest cities outside of Greater Boston face the twin challenges of reducing the cost of government while attracting new businesses and residents to build a brighter future. One of the actions Pioneer has underaken is to highlight the VXFFHVVIXOUHIRUPVLQWKH&LW\RI6SULQJ¿HOG But even our smaller municipalities are struggling. “Given the staggering debt we For that reason, we have focused on highly practical DOUHDG\IDFHDQGWKHGLI¿FXOW actions to help our cities and towns cut costs. In economic times that are upon us, we Regionalization: Case Studies of Success and should be very careful about taking Failure in Massachusetts, Pioneer argues that steps that would put us even deeper Massachusetts’ 351 cities and towns cannot afford in the hole.” WRUHPDLQLQGLYLGXDO¿HIGRPVWKDWSURYLGLQJFHUWDLQ Steve Poftak and Charlie Chieppo services on a regional basis only makes sense. The New Bedford Standard-Times services Pioneer examined included 911 dispatch, VSHFLDO HGXFDWLRQ ¿UH¿JKWLQJ SXUFKDVLQJ DQG veterans’ services. Pioneer followed by collecting regionalization agreements from cities and towns and making them available to interested local RI¿FLDOVDW3LRQHHU¶VZHEVLWH ZZZSLRQHHULQVWLWXWHRUJFOHDULQJKRXVHSKS  In addition, recognizing that local solutions cannot wait for changes in state legislation, Pioneer EXLOWDQRQOLQHWRROWRKHOSORFDOOHDGHUVDVWKH\VHHNWRHQJDJHHPSOR\HHVRQWKHSRWHQWLDOEHQH¿WV of joining the state’s GIC. www.gicestimator.com allows local employees to input their average use of the healthcare system and see the difference in cost between their current health plans and GIC options. PIONEER INSTITUTE 2008 Annual Report

A Statewide Media Strategy

Pioneer works hard to engage the public through the state’s network of regional newspapers, radio and television stations.

“Middle Cities can either “Manual toll collection play a central role in moving “America’s Catholic schools are in crisis. In the last two is the past. Ignoring Massachusetts forward or decades, at least 1,300 of the future wastes the be a drag on the state’s them have closed.” tollpayer’s money and global competitiveness. -Liam Day time.” Moving forward will require Boston Herald -Steve Poftak a sustained effort…” $SULO Boston Globe -Jim Stergios -XO\ New Bedford Standard-Times 0D\

“One tool that has proven “[T]he Massachusetts effective at combating the “Any prudent approach Constitution has two Know- achievement gap is charter to addressing our Nothing-style amendments, schools.” which still thrust their mid- VWUDLQHGVWDWHÀQDQFHV -Charles Chieppo 19th century bigotry into our must begin with 6SULQJÀHOG5HSXEOLFDQ world.” 2FWREHU capturing savings.” - Jamie Gass, - Lovett C. Peters Lowell Sun Boston Globe 0DUFK 1RYHPEHU

Steve Poftak on WBZ-TV Jim Stergios Jamie Gass on NECN’s NewsNight on CBS’ Keller at Large 1988 2008 Engaging the Public in Thoughtful Debate

Pioneer Institute seeks to improve the intellectual climate in Massachusetts by commissioning timely and rigorous academic studies from leading scholars, and by injecting new ideas into the public debate through forums and lectures, publications, media campaigns, and outreach to legislators, business groups and the general public. In 2008, we held numerous education events including Tax Credits for Scholarships and Data-Driven Student Achievement DW WKH %RVWRQ 8QLYHUVLW\ School of Education. On April 29th we held Who Will Save America’s Urban Catholic Schools? and on June Changing minds means 16th Implications of engaging them. the National Mathematics Advisory Panel Report, with NMAP members and mathematics curriculum H[SHUWV'U:LOIULHG6FKPLGRI+DUYDUG8QLYHUVLW\ DQG 'U 6DQGUD 6WRWVN\ RI WKH 8QLYHUVLW\ RI Arkansas. On September 4th, we held Differential Pay for Math and Science Teachers. The capstone to 2008’s education events was the Better Government Competition, which focused on K-12 education reform. As well as events to mark the release of new research and to outline our Middle Cities Initiative, Pioneer continued to enrich Greater Boston with our Member Breakfasts, an event marking CATO Institute fellow Gene Healy’s new book The Cult of the Presidency: America’s Dangerous Devotion to Executive Power, and a celebration of the life and legacy of Milton )ULHGPDQIHDWXULQJ+DUYDUG8QLYHUVLW\¶V(GZDUG Glaeser. Of course, the main event of 2008 was Pioneer’s 20th Anniversary, held in November. 3LRQHHU¶VHYHQWVFRQWLQXHGWRDWWUDFWLQWHUHVWIURPDOO¿HOGVRIVWXG\DQGSURIHVVLRQDO backgrounds. Changing minds means engaging them. This year, Pioneer’s membership grew markedly. Pioneer is only as strong as its community of supporters — its ambassadors. PIONEER INSTITUTE 2008 Annual Report

:HDSSUHFLDWHWKHVXSSRUWRIRXU0HPEHUVZKRE\FRQWULEXWLQJRYHUUHFHLYHVSHFLDOEHQH¿WV and invitations to our quarterly Member Breakfasts with speakers of state and national prominence.

MEMBERS Mr. and Mrs. Robert Hanss NSTAR ($1,000+) Mr. Richard Hardy, Mr. and Mrs. Faelton C. Perkins Anchor Capital Advisors Hyde Charitable Foundation Mr. Finley Perry A-Z Properties Harvard Pilgrim Health Care Mr. H. Bradlee Perry Mr. Robert L. Beal Mr. and Mrs. Charles C. Hewitt Mr. and Mrs. Daniel S. Peters Mr. Martin Begien Ms. Lucille Hicks Ms. Gayle L. Peters-Coates Mr. and Mrs. David Boit Mr. Steven G. Hoch Mrs. Regina Pyle Mr. K. Douglas Briggs Mr. and Mrs. Fred Hochberg Rackemann, Sawyer & Brewster Mr. Peter A. Brooke Mr. James Hollis Mr. Alvan F. Rosenberg Brookline Savings Bank Mr. and Mrs. William E. Hoskins Rudbeek Realty Corporation Mr. E. Michael Brown, Mr. and Mrs. James S. Hughes Mr. Marvin G. Schorr Brown Family Charitable Fund Mr. and Mrs. Richard M. Hunt Mr. Roger D. Scoville Burns & Levinson, LLP Mr. Stephen B. Jeffries Mr. David W. Scudder Mr. Gary G. Campbell Mr. and Mrs. Ralph T. Jones Mr. and Mrs. Roger T. Servison Mr. James W. Coghlin Mr. Gordon Kluzak Mr. Ross E. Sherbrooke Mr. and Mrs. John L. Cooper Mr. and Mrs. John Knutson Mr. and Mrs. Daniel J. Sigman Mr. Michael F. Cronin Mr. Edward H. Ladd Mr. Richard N. Silverman Mr. and Mrs. Michael Davis Mr. C. Kevin Landry Mr. Eliot I. Snider Mr. and Mrs. Gary T. DiCamillo Mr. Frederick C. Lane Ms. Ruth P. Stephenson Mr. David F. Dietz Mr. and Mrs. Robert A. Lawrence Mr. James Stergios Mr. Albert DiGregorio, Mr. George M. Lovejoy United Lens Company, Inc. Sterling Realty Trust MacKeeber Associates Limited Mr. Robert W. Doran Mr. and Mrs. David B. Stone Mr. and Mrs. Patricia A. Maddox Duane Morris LLP Mr. Harris Stone Mr. M. Holt Massey Mr. Kingsley Durant Sullivan & Worcester Mr. Thomas P. McDermott Eastern Bank Corporation Ms. Arlette B. Swift Mr. William L. Saltonstall, Fidelity Investments Mr. James C. Taylor Middlecott Foundation 0UDQG0UV-RKQ-)LÀHOG Mr. William F. Thompson Mr. G. Marshall Moriarty Fitchburg Savings Bank Mr. W. Nicholas Thorndike Mr. Mark Mix, National Institute Mr. and Mrs. James M. Fitzgibbons for Labor Relations Research Mr. Frederick G. Thorne Mr. and Mrs. Albert Fortier Mr. and Mrs. John M. Nelson Mr. Jacques Wajsfelner Mr. and Mrs. Eric T. Fossel Mr. Guy W. Nichols Mr. and Mrs. Monte J. Wallace Friedman Foundation For Ms. Kit J. Nichols Mr. Walter Weld Educational Choice, Inc. Mr. Richard Nicolazzo, Mr. and Mrs. Peter O. Wilde Mr. Darius Gaskins Nicolazzo & Associates Mr. David B. Wray Mr. and Mrs. Morris Gray Mr. and Mrs. Warren Norquist Mr. John E. Wrobel 1988 2008 Pioneer’s Middle Cities Initiative Middle Pioneer’s Middle Cities Initiative supports greater civic involvement in Massachusetts’ historic industrial centers. Based on our 2007 Cities report, Rehabbing Urban Redevelopment, the initiative works Mayors’ with mayors, city managers and citizens to create and disseminate Coalition clear information on city performance in education, economic GHYHORSPHQWSXEOLFVDIHW\DQG¿VFDOPDQDJHPHQW 0D\RU(GZDUG&DXOÀHOG We kicked off the initiative at our April 2008 conference, The Lowell Middle Cities at Work, with city leaders and economic development Mayor Robert Correia RI¿FLDOVIURP$PHVEXU\)LWFKEXUJ/RZHOO6RPHUYLOOH6SULQJ¿HOG Fall River and Worcester participating, and a keynote address by the state’s Mayor James Harrington Secretary of Housing and Economic Development Greg Bialecki. Brockton Mayor Scott Lang Other 2008 activities included quarterly meetings of the Middle New Bedford City Mayors’ Coalition, where city leaders discussed performance Mayor Konstantina Lukes data and shared what works in their cities. Special guests included Worcester Treasurer Timothy Cahill and the head of MassDevelopment Robert Mr. Bernard Lynch Culver. Also, in partnership with the Worcester Regional Research City Manager Bureau, Pioneer organized Citizen Advisory Committee meetings Lowell in four of the participating cities to hear residents’ thoughts on what Mayor Dean Mazzarella municipal performance measures would be meaningful for them. Leominster In addition, Pioneer undertook the following projects to assist city 0U0LNH2·%ULHQ leaders: City Manager Worcester ‡ /HDUQLQJ IURP 6SULQJ¿HOG, a how-to manual for city leaders, Mayor James Ruberto details the innovations and policies that helped the City move 3LWWVÀHOG from a free cash position of negative $41 million to plus $17 Mayor Lisa Wong million in three years. Fitchburg ‡ New Business Creation and the Urban Economy provided an overview of small, medium and large business creation trends in the Middle Cities since 1998. ‡2XUEULHIRQGIC Consolidation outlined the framework city leaders should use for deciding whether to join the state’s Group Insurance Commission. Helping Entrepreneurs The viability of our Middle Cities is a function of supporting small business entrepreneurs. Pioneer supports entrepreneurs through mentoring and publication of the Navigating Through Regulations & Licensing Requirements series. With new guides for New Bedford and Taunton in 2008, ten cities now have access to this regulatory roadmap. We support good leadership and engage residents, and build from single successes to broader change. With well-delivered core services and a strong entrepreneurial culture, our Middle Cities can once again be centers of civic pride and economic growth, rather WKDQGRPDLQVOHIWH[FOXVLYHO\WRQRQSUR¿WDFWLYLW\DQGVRFLDOSROLF\ PIONEER INSTITUTE 2008 Annual Report

The Center for Economic Opportunity CEO Advisory Board Massachusetts is an expensive place to do business. Since 2006, when we commissioned The Cost of Doing Business in David Begelfer Massachusetts, a comprehensive analysis of business costs from the NAIOP, Massachusetts Chapter LQWHUQDWLRQDOFRQVXOWLQJ¿UP*OREDO,QVLJKWWKHUHSRUW¶V¿QGLQJV Alison Berglund have set the institute’s business agenda—from unemployment David Boit insurance costs to taxes and from housing to healthcare. Loring, Wolcott & Coolidge Russell Denver Unemployment Insurance $IÀOLDWHG&KDPEHUVRI 8QHPSOR\PHQWLQVXUDQFHFRVWVWRHPSOR\HUVLQ0DVVDFKXVHWWVDUH Commerce of Greater among the nation’s highest. Not only that, loopholes allow seasonal 6SULQJÀHOG employers to use unemployment insurance to supplement salary, a Joseph Downing John Adams fact that is fundamentally unfair to the Commonwealth’s steadiest Innovation Institute employers. In Unemployment Insurance in Massachusetts: Thomas M. Finneran Burdening Businesses and Hurting Job Creation, John O’Leary WRKO and Steve Poftak outlined concrete recommendations for reforming Peter Forman a broken system. South Shore Chamber Pioneer’s work became the point of reference for trade groups and of Commerce legislators as they debated the merits of increasing the rates. As John Friar a result, in 2008 the legislature froze unemployment insurance Northeastern University rates. Brian Gilmore Associated Industries of A Sensible Tax Structure Massachusetts Harry Graff State government increasingly uses fees on businesses and AJ Mayfair, “loophole closures” to balance its budget. At the same time it offers Babson College tax credits to select industries, giving itself the power to pick winners Barbara Kates-Garnick and losers. This is fundamentally unfair and counterproductive to KeySpan Energy the goals of providing equal access The Honorable David Torrisi “State government is not to the American dream of prosperity. Marilyn Weekes DYHQWXUHFDSLWDO¿UP,W Pioneer believes the state should Federal Reserve neither has the expertise to set a competitive baseline tax that Bank of Boston pick winners and losers, nor applies equally to businesses in every is that its appropriate role.” VHFWRURIWKHHFRQRP\IURP¿QDQFLDO services to manufacturing. Pioneer led a media campaign on - Jim Stergios the proposed and existing tax credits for the biotechnology Boston Globe DQG¿OPLQGXVWULHV7KHUHVXOWZDVDUHGXFWLRQLQWKH size of the biotechnology tax credit. Putting Housing Within Reach 7KRXJKWKHEXEEOHKDVEHHQVRPHZKDWGHÀDWHGKRXVLQJFRVWVLQ(DVWHUQ0DVVDFKXVHWWV remain among the nation’s highest, which in turn drives up salary costs for local businesses. Finding innovative ways to increase the housing supply without harming the environment was the focus of Pioneer’s 2008 report on Shades of Green: The Patchwork of Wetlands Regulations in Massachusetts. 1988 2008 Healthcare Healthcare 3LRQHHU¶VOHJDF\LQKHDOWKFDUHSROLF\GDWHVWRRXUYHU\¿UVWSXEOLFDWLRQ Advisory Board in 1988, The Massachusetts Health Plan: The Right Prescription? and continued through the long-term interest of our late and beloved bow- Charles D. Baker, Sr. tied Chairman, Charles “Colby” Hewitt, Jr. Since 2006, the generosity Northeastern University of our supporters has allowed Pioneer to increase its healthcare Grady Clouse programs and endow the Hewitt Healthcare Lecture Series. Averde Health Susan Connolly 2006 Mercer Human Resource Consulting Getting the Incentives Daniel Creasy Right; with Hewitt Lecturer CRICO, retired Dr. Daniel H. Johnson, Jr., past President of the Dr. Richard Frank American and World Medical Harvard Medical School Associations. Dr. Annette Hanson Metro West Medical Center Massachusetts Health Care Roberta Herman Reform: A Blueprint for the Harvard Pilgrim Future, with John Goodman, Health Care President of the National Dr. Nancy Kane Center for Policy Analysis, Harvard School of Regina Herzlinger of the Public Health Harvard Business School, 'HOLD2·&RQQRU and Tim Murphy, Secretary Anna Jacques Hospital of the Commonwealth’s Ann Marie Sciammacco ([HFXWLYH2I¿FHRI+HDOWK Fallon Community and Human Services. Health Care The Elephant in the Room: A Dr. Miles Shore groundbreaking study of the Kennedy School of Commonwealth’s $13 billion Government liability for retired public Hewitt Healthcare Initiative Delia Vetter HPSOR\HHKHDOWKFDUHEHQH¿WV EMC Corporation Core recommendations, including the creation of a separate trust and down payment of $425 million, were adopted by the Governor. 2008 2007 Contributors Who Killed Health Care? with Hewitt Lecturer Regina Herzlinger, who outlined a consumer-driven system to contain costs and increase the Mr. K. Douglas Briggs quality of care. Mr. James M. Fitzgibbons Mrs. Emmy Lou Hewitt 2008 Mr. Amory Houghton GIC Consolidation: Study detailing the potential cost savings for 14 Mr. Richard M. Hunt Massachusetts communities through GIC consolidation. Mr. Edward H. Ladd Lions Head Trust GIC Decision Support Tool: An online tool (www.gicestimator.com) that Mr. Michael R. Sandler allows individual municipal employees to understand the difference in Mr. Marvin G. Schorr cost between their existing health insurance plans and GIC options. Mr. Richard N. Silverman 3LRQHHUHGXFDWHGWKHSXEOLFDVZHOODVVWDWHDQGIHGHUDORI¿FLDOVRQWKH Mr. David B. Stone need to create a more transparent system for healthcare reform-related Mr. William F. Thompson funding. As a result, major changes were undertaken.

Gifts designated for the Colby Hewitt Endowment include only those donated for the purpose of endowing a Healthcare Research and Lecture Program. PIONEER INSTITUTE 2008 Annual Report

Pioneer Institute’s 20th Anniversary November 13, 2008

2008 marked Pioneer Institute’s 20th year. To commemorate the occasion, Pioneer hosted a gala celebration at the Mandarin Oriental +RWHO LQ GRZQWRZQ %RVWRQ 7KH HYHQLQJ ZDV ¿OOHG ZLWK JXHVW speakers such as John Blundell, Director General of the Institute of Economic Affairs in London, which served as a basis when Pioneer was founded in 1988. The keynote address was delivered by Edwin Feulner, President of the Heritage Foundation. State Senators Steven Baddour and Bruce Tarr issued a State House Declaration, honoring Pete and Pioneer for 20 years of service and positive, intellectual change. Testimonials paid homage to Pete and the work he and Pioneer have done to make Massachusetts a better place to live and work. A wonderful tribute from Ruth Stott Peters and a few John Blundell, words from Pete closed the evening’s festivities. Institute for Economic Affairs The celebration also kicked off Pioneer’s Raise the House That Pete Built! capital campaign. With over $350,000 raised, Pioneer is poised to take advantage of a weak real estate market and purchase a permanent home. Edward Crane, A commemorative pictorial highlighting Pete’s family and business career, CATO Institute together with letters from longtime friends from across the country, was released at the event.

Edwin Feulner, Heritage Foundation Governor Mitt Romney and Pete Peters

William Edgerly, State Street Corporation, ret. 1988 2008

3URÀW /RVV Balance Sheet Income Assets  8QUHVWULFWHG'RQDWLRQV   &DVK   ,Q.LQG'RQDWLRQV   $FFRXQWV5HFHLYDEOH   5HVWULFWHG'RQDWLRQV  ,QYHVWPHQWV   2WKHU5HYHQXH   )L[HG$VVHWV  Total Income $1,557,681  2WKHU$VVHWV  Total Assets $1,656,192 Expenses  (PSOR\PHQW&RVWV   2XWVLGH6HUYLFHV  Liabilities and Equity  5HVHDUFK  Liabilities  3ULQWLQJ 3XEOLVKLQJ   $FFRXQWV3D\DEOH   'LVWULEXWLRQ&RVWV   2WKHU&XUUHQW/LDELOLWLHV   (YHQWVDQG0HHWLQJV  Total Liabilities $36,117  6WDII%XVLQHVV([SHQVHV   2IÀFH2SHUDWLRQV  Equity  ,QWHUQHW:HEVLWH   8QUHVWULFWHG)XQGV  Total Expenses $1,216,220  7HPSRUDULO\5HVWULFWHG)XQGV   3HUPDQHQWO\5HVWULFWHG)XQGV  7RWDO2WKHU,QFRPH    1HW,QFRPH   7RWDO2WKHU([SHQVHV  Total Equity $1,620,075

Net Income/(Loss) $244,427 Total Liabilities and Equity $1,656,192

Revenues Expenses by category Operations Other Revenue Operations 2% 14% Development Unrestricted Development Unrestricted 20% DonationsDonations 49% RestrictedRestricted Donations Donations Research & 48%  ResearchPrograms and Programs Communications 61% Communications In-Kind  5% In-Kind Donations  Donations1%  Expenses UHVHDUFKSURJUDPV·VKDUHVRIWRWDOH[SHQGLWXUHV Foundation Foundation LCP Operations Donations OtherOther R&P Donations LCP Operations 16% MCI 7% Corporate MCI 3% 14% Corporate 7% DonationsDonations CEO DevelopmentDevelopment 4% 6% 20%

Shamie Shamie19% Communications IndividualIndividual  5% Donations CSR Donations80% CSR  19% PIONEER INSTITUTE 2008 Annual Report Year-to-Year Revenues and $1,600,000 Expenses $1,400,000

 $1,200,000 5HYHQXHV  $1,000,000 ([SHQVHV  2006 $800,000 2007  2008 5HYHQXHV  $600,000 ([SHQVHV  $400,000  $200,000 5HYHQXHV  ([SHQVHV  $0 Revenues Expenses

Pioneer Institute Donors for 2008 7KHJLIWVOLVWHGUHÁHFW3LRQHHU·VÀVFDO\HDUZKLFKUDQ IURP2FWREHUWR6HSWHPEHU Benefactors Ms. Sandra O. Moose Ms. Jo Anne Borek ($500 - $999) Mr. David Parker Mr. Robert H. Bradley Mr. Charles D. Baker, Jr. Mr. David G. Powell Mr. Lawrence D. Bragg Bank of America Preventive Medicine Associates Ms. Catherine V. Brigham Baystate Health, Inc. Mr. Kenneth R. Rossano Mr. F. Gorham Brigham Mr. and Mrs. Philip W. Bianchi Mr. Lee H. Sandwen Mr. Edgar H. Bristol Ms. Julie Bonenfant Mr. Arnold D. Scott Mr. Erik Britt-Webb Ms. Mary Bragg Mr. Bruce Seddon Mr. Jacob F. Brown Mr. Richard M. Burnes Mr. Lionel Spiro Mr. F. Anthony Butler Mr. Thomas D. Burns Suzanne C. and Carl M. Mueller Mr. John G. Cabot Mr. Cornelius J. Chapman Charitable Fund Mr. Samuel B. Carr Mr. David Dearborn Mr. Sinclair Weeks Mr. Joseph R. Carter Mr. Joseph D. Downing Worcester Regional Mr. John D. Chambliss Mr. Robert C. Dumont Chamber of Commerce Mr. Dean Chin Eastern Bank Ms. Rebecca Cipriano Charitable Foundation Friends 0U7KRPDV0&ODÁLQ Mr. Alan S. Fields (Under $500) Mr. Lewis H. Clark Mr. Richard H. Forbes Alba Press LLC Mr. Alan M. Cody Ms. Rosalind E. Gorin Mr. William N. Bancroft 0U3HWHU%&RIÀQ Amory Houghton Mr. Jack Barron Mr. Richard B. Collins Mr. Richard M. Hurd Mr. Christopher T. Barrow Mr. Robert Costrell Mr. Robert G. Johnson Mr. George S. Bass Angelyn Coupounas Mr. Arthur Kalotkin Mr. Henry L. Bass Mr. Charles E. Cousins Mr. George Kariotis Mr. Duane R. Batista Mr. Fairman C. Cowan Mr. Edmund F. Leland Benjamin Franklin Mr. Howard E. Cox Mr. James MacAllen Institute of Technology Mr. Joseph M. Cunningham Mr. John F. Magee Mr. Eric S. Berman Mr. Lloyd C. Dahmen Mr. Robert F. McKown Mr. Joshua Z. Biber Mr. Nijanand P. Datar Mr. Stephen Mead Ms. Alicia Blatchford Ms. Tamara P. Davis 1988 2008 7RVHHWKHOLVWRIGRQRUVJLYLQJ DQGDERYHSOHDVHVHHSDJHVDQG

Mr. Baily Dent Mr. Louis J. Marett Mr. Charles W. Schmidt Mr. and Mrs. Alain Dermarkar Mr. Lawrence J. Marks Mr. Udo E. Schultz Mr. John P. DeVillars Mass. Charter School Mr. Chris Scott Mr. John J. Dorgan Technical Assistance Mr. Harvey A. Silverglate Mr. W. Stuart Dornette Mass. Republican Party Slade Gorton & Co., Inc. Mr. David Driscoll Mr. Edwin P. Maynard Mr. Steven Snider 0V7HUHVH'·8UVR Mr. Henry F. McCance Mr. Ken Sommers Mr. James F. Dwinell Mr. Merit McIntyre Mr. Jim Spady Elliott Badgley Foundation, Inc. Mr. Douglas McPeek Mr. David Spielvogel Mr. and Mrs. Geoffrey Farnum Mr. John M. McQueen Mr. Arthur J. Stock Mr. Roger Farrington Mr. Leonard Mead Mr. R. Gregg Stone Mr. Tom Fortmann Mr. John E. Mona Ms. Helen Stott Spencer Mr. Mike Franco Mr. David H. Morse Mr. William Strong Mrs. Miriam K. Freedman Mystic Valley Regional Mr. William F. Sullivan Mr. Arnold Garrison Charter School Mr. Carl V. Swanson Mr. Dale N. Garth Mr. Avi Nelson Mr. Edwin J. Taff Mr. John A. Gilmartin Mr. Richard Nestle Mr. Hooker Talcott Mr. Brian R. Gilmore 0U*LOEHUW(2·&RQQHOO Mr. John L. Thorndike Rolly W. Gjeltema 0U7KRPDV+2·&RQQRU Mr. Serge N. Timasheff Mr. Herbert Gleason 0U7KRPDV/2·'RQQHOO Mr. Frederick Tirrell Mr. Thomas F. Gloster 0U-RKQ32·/HDU\ Mr. Peter G. Torkildsen Mr. Peter L. Goedecke Opinion Dynamics Mr. Richard Tucker Ms. Sally Goldberg Corporation Mr. Carl Valeri Ms. Susan S. Goldsmith Mr. Thomas Palmer Mr. Peter Vieira Mr. Oren Grad Mr. Joseph F. Patton Ms. Emily V. Wade Mr. Frederick C. Hapgood Mr. Roger A. Perry Ms. Stephanie Warburg Mr. Kenneth Hayes Mr. James A. Peyser Mr. Kingman Webster Mr. R. Scott Henderson Mr. Ted W. Pietras Mr. Kurt E. Weisenbeck Mr. Bill Heuer Ms. Gladys Pike Mr. John S. Wells Mr. Jeffrey Hewitt Mr. Harold I. Pratt Mr. Michael Wenzke Mr. Arthur R. Hilsinger ProVentive Mr. Thomas Whelton Mr. Richard J. Howell Mr. Donald P. Quinn Mr. David Wolfe Mr. J.C. Huizenga Mr. Michael Robbins Mr. Edward F. Woods Mr. Robert S. Hurlbut Mr. John E. Rodgers Ms. Mary Young Mr. Samuel H. Husbands Mr. Stanley Rothman Ms. Martha King Roxbury Preparatory L.T. & L. Resources Charter School Unlimited Trust Mr. William E. Russell Ms. Catherine W. Labine Mr. Robert Ruzzo Ms. Selma Lamkin Mr. Richard Sampson Mr. Douglass B. Lee Mr. Maurice R. Samuels Mr. Mark Leff Mr. Nicolas Sanchez Mr. Frank Licata Mr. Michael R. Sandler Mr. David A. Light Mr. Glenn Saxe Lions Head Trust Mr. Grant W. Schaumburg Ms. Lida Lloyd 0U5LFKDUG:6FKHIÁHU Mr. John Lowell Mr. John A. Schemmer Lynch & Fierro LLP Mr. Gabriel Schmergel PIONEER INSTITUTE 2008 Annual Report Staff

Lovett C. Peters William B. Tyler Founding Chairman Chairman

James Stergios Executive Director

The belief in the power of individuals and organizations to make things better for themselves and their communities energizes the Pioneer staff to “focus on what works.” From diverse backgrounds that include banking, education, government, real estate development, consulting, law, the oil industry, and the arts, these Pioneers band together to bring solid, credible, market-based research and ideas to the Commonwealth.

Peter Begley Scott Baum Charles D. Chieppo Director, Operations, Manager, Senior Fellow Finance, and Assistant Treasurer Donor Relations

Liam Day James Fenton Director, Communications Operations and Administrative and Strategic Partnerships Coordinator 1988 2008

Shawni Littlehale Jamie Gass Morris Gray Director, Better Director, Center for Treasurer Government Competition School Reform

Maria Ortiz Perez Roger Perry Steve Poftak Project Manager, Middle Cities and Development Director, Research and the Transparency Initiatives Shamie Center for Better Government

Aaron Powers Sarah Smets Design and Editorial Development Assistant Associate 85 Devonshire Street, 8th Floor, Boston, MA 02109 T: 617.723.2277 | F: 617.723.1880 | www.pioneerinstitute.org