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Does Rhode Island Have a Clear Strategy for Economic Development?

Tuesday, January 14, 2014

 

With Rhode Island lagging the rest of the country in most every economic measure, GoLocalProv.com talked with Rhode Island's legislative leaders, candidates for Governor and business reform advocates as to their strategies for Rhode Island's growth and recovery.

URI Economist Len Lardaro said this week that "there's a lack of meaningful economic leadership (in state government)."

Rhode Island was recently ranked 40th in the country by Moody's for projected job growth 2014, at a forecasted 1.33% dramatically lower than the predicted national 1.7% growth rate. All of this raises the question, what is Rhode Island's plan for economic development? 

Slides: See Leadership -- and Candidates' -- 2014 Economic Development Plans BELOW

On the eve of his State of the State address on Wednesday, Governor Chafee remained optimistic at Rhode Island's outlook at the outset of 2014.

“Rhode Island is making progress. Since I took office we have created 11,100 new jobs, unemployment is headed in the right direction, and last month, for the first time in over a year, all five of the economic indicators are headed in the right direction," said Chafee.

With the 2014 General Assembly recently underway, Speaker of the House Gordon Fox outlined his priorities for economic development in the coming months. “A great deal of focus in last year’s legislative session was placed on economic measures, ranging from the structure and governance of our state’s economic development efforts to reinstating the historic tax credit, to creating new workforce training programs. Jobs and the economy will continue to be our highest priority this year."

Senate President M. Teresa Paiva-Weed pointed out that in the recent Moody's projections, Rhode Island was slated to outperform all but one New Engand state -- and improved its ranking over the previous year.

“Rhode Island ranked 46th on this same projection last year, with .5 percent projected growth, and has improved to 40th with 1.33 percent projected growth. That ranks the state ahead of New York, Pennsylvania, and all New England states except Connecticut," said Paiva-Weed. "The Senate will seek to build on this momentum as we continue to focus on the economy and the unemployment rate. A particular focus this session will be on workforce development initiatives. Examining the state’s tax structure is also important as we seek to move the needle.”

Gubernatorial Hopefuls Unveil Platforms

Rhode Island General Treasurer Gina Raimondo, who has now officially launched her bid for Governor, unveiled a "bold and innovative" approach to jobs and the economy.

In conjunction her campaign kick-off, Raimondo unveiled a plan that includes the creation of a "Rhode Island Innovation Institute",a focus on workforce development, addressing the upcoming end to the moratorium on school construction and college affordability, and investing in infrastructure -- and creating a "green bank" to leverage public and private funds to "scale up" Rhode Island's green infrastructure.

GOP gubernatorial candidate Ken Block addressed his economic development platform, saying his goal is to "turn Rhode Island's negative business climate into a competitive, job-creating engine for economic growth," focusing on the addressing fixes to the state's unemployment insurance tax and temporary disability insurance tax -- and exempting from future capital gains taxes any new investments in Rhode Island-based businesses.

"To fire up economic development in Rhode Island, we need to systematically address the factors that make our state an uncompetitive place to do business.
Too many politicians talk about creating jobs without providing any specifics. My campaign is based on providing detailed proposals to remedy our economic problems – I will be showing voters exactly how my administration will turn our economy around," said Block.

House Minority's "Strive for 25"; "Regressive" Taxes Challenged

Earlier in January, House Republicans unveiled a legislative program for 2014 entitled "Getting to 25" aimed at getting Rhode Island “back into the mainstream,” according to House Minority Leader Brian Newberry.

"Getting to 25’ is the broad theme of the GOP agenda, and it speaks to moving Rhode Island up toward 25th place among states rather than settling for 49th or 50, said Newberry in a statement. "The planned legislative package focuses on improving taxpayer protection, stimulating job growth and economic development, and putting in place smarter approaches to state spending."

Mike Stenhouse with the free-enterprise RI Center for Freedom and Prosperity, countered that the General Assembly should minimize its policy creation.

"Rhode Islanders can no longer be held hostage by the status quo. The 2014 General Assembly should be judged not by how many new policies it creates, but rather on how many existing, anti-growth policies it repeals or rolls-back. If Rhode Island can roll-back taxes and spending levels as the Center recommends, tens of thousands of new jobs could be created, along with a lower-cost of living and renewed opportunities for all Ocean State families and businesses."

See more details of the proposed economic development plans BELOW.  

 

Related Slideshow: 7 Strategies for Rhode Island Economic Development in 2014

What will it take to move the Rhode Island economy forward in 2014?  GoLocal talked with elected officials, candidates, and leaders for their economic development plans in the coming year. 

Below are key elements of the economic priorities for Governor Lincoln Chafee, Speaker of the House Gordon Fox, Senate President M. Teresa Paiva-Weed, House Minority Leader Brian Newberry, gubernatorial hopefuls General Treasurer Gina Raimondo and Ken Block, and RI Center for Freedom and Prosperity's Mike Stenhouse.  

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Governor Lincoln Chafee

"My goal is to have the state continue to focus on the fundamentals.  We will invest in education, workforce development and infrastructure , and provide aid to  cities and towns to lessen the burden on property taxpayers.  I’m confident that these investments and our focus on the basics will allow Rhode Island to exceed Moody’s predictions.”
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Speaker Gordon Fox

"Among the many pieces of legislation the House will address will be issues of higher education affordability, expanding apprenticeship opportunities, and offering help to our manufacturers.  We will also look closely at our tax structure to make sure we are competitive with our neighboring states, including the corporate tax and the estate tax, and I will carefully review the recommendations of the commission studying our sales tax.”

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Senate Pres. Paiva-Weed

Greg Pare, spokesperson for the Senate President, said that the Senate is planning to issue recommendations soon on workforce development initiatives to address the skills gap among Rhode Island job seekers.

"An example of a proposal anticipated in that report is the elimination of state’s Indirect Cost Recovery on the Job Development Fund, which is about $1.2 million this year. Those funds would be directed towards job training and skills development programs to provide immediate impact and help workers gain the skills necessary to succeed in today’s economy."

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Gen. Treasurer Raimondo

"To grow our economy, we need to make Rhode Island a leader in manufacturing again.  Great things can happen at the intersection of government, higher education, and the private sector.  Rhode Island is lucky to have thriving institutions in each of these three sectors, and we need to foster collaboration among them to find solutions to our challenges, and spark our economy.  

By promoting partnerships in high-growth areas, [Rhode Island Innovation Institute] will help grow our manufacturing base, and create new, high-quality jobs."  

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Ken Block

"First, we need to fix Rhode Island’s broken Unemployment Insurance program. The state’s Unemployment Insurance tax, paid by employers, is ranked worst in the country by the Tax Foundation. It is one of the factors that makes Rhode Island an uncompetitive place to do business. Also, it is inherently unfair that a large group of businesses are effectively subsidizing the payrolls of a small group of businesses who misuse the system. There is a simple change to state law that can fix this problem."

"Rhode Island’s temporary disability tax (TDI) is broken, and places an unnecessarily high tax burden on Rhode Islanders. This tax, paid for by employees, will be reduced by changing the way we manage the program. As Governor, I will substantially reduce the cost of purchasing this insurance by requiring that Rhode Island’s program adhere to national norms."

"To best encourage new job creation, I propose the following tax incentive: exempt from future capital gains taxes any new investments in Rhode Island-based businesses. This change would create a powerful incentive for investors who are deciding where to locate a new business, or where they relocate an existing one. This proposal has the potential change the economic playing field for Rhode Island."

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Minority Leader Newberry

“It would be overly ambitious to set being #1 as a goal right now, but we think 25, the middle of the pack, is a reasonable goal to set, one we think we should pursue, and one we can achieve,” said Newberry. "One of the initiatives is a requirement that every bill receive a fiscal evaluation before it can be heard by committee, better insuring that legislators know the real cost of the legislation they are acting on."

"Another proposal would exempt social security income from RI state income tax, making Rhode Island more tax-friendly for our seniors and keeping them here rather than migrating to more tax-friendly states."

“Strong action is way overdue here. Nearly 60% of Rhode Islanders now believe that the state is headed in the wrong direction. We think they’re right, and our central goal is to get it turned around."

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Mike Stenhouse

"As part of the Center's 2014 Prosperity Agenda we recommended that the state:
 
Repeal or rollback of the state’s regressive sales tax; or the requirement that families have no choice on what schools best educate their children; or punitive estate taxes that drive wealthy people to other states; or restrictions on out-of-state companies to sell health insurance in RI; or the minimum franchise tax, which stifles entrepreneurship; or corporate welfare, to level the playing field; or even renewable energy mandates that drive up costs for every family and business …"
 
 

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Comments:

Rhode Island Does Have a Clear Strategy for Economic Development..It's called Illegal Immigration and Entitlement Programs! IT also includes free drivers licenses for anybody that shows up at the DMV with a fake name..and I'm sure they will also be given a voter registration card with clear instructions in Spanish of how to vote DEMOCRATICA. All of this with no background checks,(because that would be racist and hurtful). Importing more crime and poverty!..What a great outlook for our state! And the sad part about all of this is that we the hard working,middle class taxpayers are going to pay for this big scam so some creepy,power hungry politician can steal another election.And just to let you know, public sector union people, medicare people,social security people, that the very people you voted for are eyeballing your money,and they will take it! it will come in the form of cuts and reduction in benefits because there is no place left for them to go because they've cleaned everything else out ! and they need your money to give to their new poor illegal friends to keep them happy. GET IT? GOT IT? ..GOOD.

Comment #1 by LENNY BRUCE on 2014 01 14

"Economic Development?" Get real!
If our General Assembly and union leaders have not discovered that we need to change the way we do business by now, it is not going to happen!

Comment #2 by Chris MacWilliams on 2014 01 14

Chris,
It can happen if rhode islanders get off their butt and vote for legislators that will repeal the laws that have driven our state into the ground. The legislators can not eliminate taxes altogether, but they should lower them to the point where RI is competitive with the other NE states. They can lower taxes if they lower the cost of government at both the state and local levels. How?

First by consolidating municipal services at the county level rather than the city/town level. We don't need more spending on K-12 education contrary to what Chafee says. Per the Nat. Educ. Assoc.'s (teacher's union) own research studies our spending per pupil is 2nd or 3rd highest in the country. Do we really need independent fire districts with their own taxing authority? Our fire fighting services are highest in the country on a per person basis. Why, RI is a geographically small, densely populated state. So why should our fire safety services be so high? The Gen Assy enacted minimum manning laws and laws that created these independent fire districts.
We need to elect legislators that will repeal these unnecessary labor laws and other regulations that are are causing our cities and states to go bankrupt.
And this conflicted (with 2 or 3 relatives that have or will have state pensions ) judge that is allowing closed door negotiations that could unravel the 2011 state pension reforms should be impeached.
Again, we need to elect state legislators that created this mess to now correct it. Look at your legislators voting record at the http://www.rilin.state.ri.us web site. Look at the bills they sponsor at this web site, then vote accordingly. This isn't brain surgery, but it does require a little work and time (to vote).

Comment #3 by robert benson on 2014 01 14

Gonna be a long year if the strategy is to rely on small statistical PROJECTIONS from Moodys'.

Comment #4 by David Beagle on 2014 01 14

Same people in charge gets that same awful results.

Comment #5 by Gary Arnold on 2014 01 14

thw answern to your nheadline is
No

Comment #6 by Howard Miller on 2014 01 14

The strategy they have in place is to bankrupt the cities and towns of Rhode Island.

Comment #7 by Reagan Republican on 2014 01 14

RI have a plan for anything? the repeat electors cant handle the choice of coffee, tea, or oj with breakfast
here is a good way to start
term limits for all state reps
speaker of house 1 term period
senate president 1 term period
people of RI need to vote for speaker and senate president
governor needs to be a 2 year term (why did we vote a 4 year deal?)
VALID PROOF OF ID TO VOTE! (you cant go and buy many meds without id so you cant vote either)
if we ever get the sack to clean house then we can get fresh ideas and move on to bring in a plan for economic development, until then we are stuck with the eanie meanie miny moe strategy that has been the policy for far too long.

Comment #8 by steven richard on 2014 01 14

There is no magic bullet and legislators/Governors come and go, that has made little difference to the economy. There are also macroeconomic forces we have little contol of (e.g. "free trade" pacts that off-shore good jobs, massive immigration that drives down wages, loss of Federal support for sewage control, public housing..) but we can do some things to help:
Mr Benson's regionalization suggestions made above; both liberals and conservatives should want to work to root our fraud and abuse in government programs - both to protect taxpayers and those needing the program; insist the schools produce graduates with good reading, writing and quantitative skills; rebuild infrastructure; protect quality of life; invest in/protect what few natural resources we have (agriculture lands, seafood, wind resources...wink examine regulations and zoning to minimize nitpicking obstacles while protecting from laxity (such as in West Virginia!); raise the minimum wage to help build purchasing power; support local businesses with our own purchases; work with neighboring states to promote our region instead of raiding each other; and, work to establish a cultural climate of civil discourse and a feeling that we "are all in it together" to rebuild pride in our interesting state.

Comment #9 by barry schiller on 2014 01 14

How about we just join Massachusetts and get this misery over with. Or maybe half to Mass half to Ct. Maybe the Pequots want to buy Southern RI.

Comment #10 by bill bentley on 2014 01 14

Until voters have the ability to pass laws through voter initiatives NOTHING will change in RI.

Comment #11 by Jim D on 2014 01 14

We need more tax cuts and credits for the “job creators,” since they do all the work and create all the wealth. Where would workers be without their CEO or owner? Who would tell the painter how to paint, and the ditch digger how to dig the ditch? Workers would be totally lost if they had to think for themselves.

Besides, these trickle-down policies have been working so well since the Bush and Carcieri Administrations, why should we change them now? Also, workers need these second jobs in order to live.

Let’s also make cuts to unemployment insurance, TDI and other entitlement programs - and reduce the minimum wage. The way to growth is to increase the productivity of these low wage, part-time slouchers - particularly minorities - who we know are content to live off the rest of us.

Of course we also need to cut corporate and estate taxes. Where would we be without the new iPhone 5, the new hamburger stand, credit default swaps or hula hoops - just ask your pool boy? And why would the “productive” people - you know, the “hard workers” - work so hard if they couldn’t pass their fortunes to their heirs. I’m sure your landscaper or nanny would agree that we need to cut estate taxes.

These are just my suggestions, but take them with a grain of salt. Anyone knows that if I was as smart as the job creators, then I too would be successful and rich.

Comment #12 by Johnny cakes on 2014 01 14

How many would vote to eliminate these quasi state agencies from instituting bonds that ultimately taxpayers are responsible for?

This would be the first Voter Initiative I would push for.

I would go door to door to get signatures.

There has to be a real change that puts some of the power back to the taxpayer - the voter.

BTW Johnny Cakes good post!

Comment #13 by Jim D on 2014 01 14




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