Providence's Economic Battle Over Building More Hotels
Kate Nagle, GoLocal Contributor
Providence's Economic Battle Over Building More Hotels
The Procaccianti group is looking for a tax stabilization agreement from the city for twelve years for the project, saying it would created up to 200 temporary jobs -- but arguments over permanent jobs -- and the quality of those jobs -- is dividing both unions and city council members, with the measure on hold until the council comes back in session later in August.
"We need construction jobs since these jobs pay well. If Providence is going to move forward economically, we cannot continue to hold developers hostage to matters they have no control over such as wages paid in the hospitality industry," said URI Professor of Business Edward Mazze.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST"We are sending the message that Providence is not open to business unless the business is willing to "play ball" in an environment that is controlled by unions and elected officials with their own agendas," continued Mazze. "Construction of a hotel should be evaluated on its contributions to the economy (creation of jobs in construction and in support of construction and the extended multiplier effect) and quality of life (meets the building codes and needs of the community.)"
The construction of the 150 extended room would purportedly provide hundreds of construction jobs until completion, but City Council member Kevin Jackson is one of the critics questioning the tax breaks in light of the number of potential permanent jobs created.
As to whether the jobs would be unionized at the new hotel, the Procaccianti group said it would adhere to the letter of the law.
"Management remains fully committed to following federal labor law and the clearly defined process by which the hotel employees can decide for themselves to be represented by a union or not," said Procaccianti Marketing Director Ralph Izzi.
Addressing the Impasse
City Council President Luis Aponte said was talking into consideration both the quality of new jobs created-- and also the overall economic development of the city -- in reviewing the proposal.
"Let's start off from the vantage point that people can build what they like," said Aponte. "If you use your own dollars, and not use a TSA, or need a PEDP -- that's one thing. When you look for public investment -- tax abatements, TIFs, some sort of city involvement -- we have to look at differently than straight development with no public sector support."
"I get it -- the building trades have long been suffering, I get that...but we have an obligation to the public as to what a project is supposedly going to yield, and one of the few things we can say are what kind of jobs are being created, how to we ensure those jobs are good jobs," said Aponte. "[Our] role is not to determine union vs. non-union, but we do have a role in determining that our investment will yield community benefits, for the people who ultimately subs these jobs by paying taxes."
"The idea that there is a trade-off between “more jobs” and "better jobs" is foolish. The labor market responds to fundamental economic forces that drive the demand and supply for labor and, consequently, affect the compensation package that workers receive for their work. Economic opportunities created through construction and operation of a hotel, for instance, change the labor market dynamics, lead to increased demand for labor (unskilled and skilled labor), and benefit the whole community via indirect (economic activity created throughout the supply chain) and induced (economic activity created by household spending of income earned either directly from hotels or from the supply-chain )," said Tibaldi.
"Thus, creating jobs – regardless of the pay rate – has positive effects for the community," continued Tibarldi. "Thus, creating jobs – regardless of the pay rate – has positive effects for the community."
Mazze noted that RI's "unfriendly" business reputation should be a factor under consideraton of how to move forward.
"To overcome our reputation of being unfriendly to business along with our higher than average unemployment and underemployment rates in Providence, we must stop elected officials from defining what jobs are acceptable as long as there are no legal prohibitions to the jobs. A person with a job is important to the community," said Mazze. "Stop holding individuals interested in working to standards created by elected officials who are trying to attract certain types of jobs to Providence where the skills may not be there and where their past track record of attracting and retaining jobs has been a disaster."
RI Business Rankings in US
WalletHub
Rhode Island has 2015's eighth highest insurance premium penalties for high risk drivers, according to a WalletHub report.
Rhode Island ranks fifth overall in the category of speeding over 20 mph annual premium increase at $482. While ranking third overall in the category of 2 accidents annual premium increase at $2,721.
Rhode Island ranks ninth overall under the reckless driving annual premium increase at $749.
WalletHub
Rhode Island has been ranked as the 8th most eco-friendly state in the country, according to a recent study by WalletHub.
Rhode Island ranks third in environmental quality and 16th in Eco-Friendly Behaviors Ran landing them in 8th overall.
RI is behind Washington and New Hampshire who are in the six and seven spots respectively, and in front of Connecticut and Hawaii who come in at the nine and ten spot.
WalletHub
Rhode Island is 2015's 4th Worst State to be a taxpayer, according to a recent WalletHub report.
Rhode Island ranks 48th of 51 with an average state and local tax price of $7,159 which is good for a 27% difference from the national average.
The states that are directly behind Rhode Island are Wisconsin at $7,159, Nebraska at $7,298 and Illinois at $7,719 for a 37% difference from the national average.
WalletHub
Rhode Island has the highest vehicle property taxes in the country, paying an average of $1,133 according to a report from WalletHub.
Virginia and Kansas are the two states just ahead of Rhode Island in the 49 and 50 spots, paying $962 and $905 respectively.
RI also ranks 42nd in average real estate tax, paying an average of $2,779, according to the WalletHub report.
WalletHub
WalletHub has ranked Rhode Island as the 7th worst state to be rich in in a recent in depth analysis of 2015's Best States to be Rich or Poor From a Tax Perspective.
On a scale with 1 being the best, and 25 being average, Rhode Island ranks 37th in low income earners, 42 in middle income earners and 45th in high income earners.
To see the full report, click here.
Gallup
Providence-metro ranks at the bottom for job creation in 2014
Rhode Island has been ranked amongst the worst in job creation, according to a recent survey done by Gallup.
Gallup gives the Prov-metro area an index score of 23, the lowest score is the New York- New Jersey area with 20.
Salt Lake City, Utah and Austin-round Rock, Texas rank the highest with a score of 37.
See the rest of the rankings here.
Forbes
The 2014 state rankings by Forbes has just been released and Rhode Island moved up two spots from #48 in 2013 to #46 in 2014.
What does Forbes say about RI's business environment"
After Michigan and Illinois, Rhode Island has experienced the third worst net migration out of its state in the country over the past five years. With a recent unemployment rate of 7.6%—lower than only Georgia and Mississippi—residents are leaving the state in search of jobs. Rhode Island has been stuck in the bottom five overall for six straight years. One plus: labor costs are 5% below the national average, which stands out in the expensive Northeast.
Tax Foundation
Findings from The State Business Tax Climate Index were released this morning by Tax Foundation which found Rhode Island to have the 45th best tax climate for businesses for 2015. The state's rank has not changed since last year after The Index analyzed 100 different tax variables in multiple categories.
Read more about the report here
WalletHub
After conducting an online suvery consisting of 1,050 individuals from both parties across the nation, WalletHub ranked Rhode Island as having America's 33rd fairest tax system.
Click here to view the poll's entire findings
Thumbtack/Kauffman
Providence is the second worst city in America for small business, according to a new survey conducted by Thumbtack.com and the Kauffman Foundation.
More than 12,000 small businesses in 82 cities across the country participate in the survey. Providence received an overall "F" grade for small business friendliness.
The Economist
Small Business Friendliness Grade: F
The Economist grades states on an A+ to F grading scale for its small business climate. Rhode Island is one of just 6 states to earn an "F" grade.
Overbearing bureaucracy and excessive licensing is stifling small business in America.
Read More About The Economist Grade Here
CNBC
CNBC ranks each state in cost of doing business, economy, technology and innovation.
Rhode Island's unemployment rate as of May 2014 was 8.2 percent. This is RI's lowest unemployment rate since August 2008.
Read More About CNBC Ranking Here
Forbes
Forbes ranks each state in business costs, economic climate, and growth prospects. RI is third worst in 2013.
The most damning in the commentary:
After Michigan, Rhode Island has experienced the second worst net migration in the country over the past five years.
Read More About Forbes Ranking Here
ChiefExecutive.net
#39 ChiefExecutive.net
ChiefExecutive.net ranks each state in taxations and regulations, workforce quality, and living environment.
The most damning in the commentary:
Sky-high unemployment rate bespeaks continuing terrible business climate.
Read More About ChiefExecutive.net Ranking Here
Tax Foundation
#46 Tax Foundation
Tax Foundation ranks each state in corporate tax rank, sales tax rank, and unemployment insurance tax rank.
Rhode Island and the other states in the bottom ten suffer from the same afflictions: complex, non-neutral taxes with comparatively high rates.
Read More About Tax Foundation Ranking Here
Wallet Hub
#24 Wallet Hub
Wallet Hub ranks each state in ROI rank, state tax rank, and overall government services.
Rhode Island ranked #50 for worst roads and bridges, but ranked #4 in safety.
Read More About Wallet Hub Ranking Here
ALEC
#47 ALEC
ALEC ranks each state in economic performance and outlook.
Although Rhode Island ranked low in economic performance, a forward-looking forecast is based on the state’s standing in 15 important state policy variables. Some of these variables include top marginal personal income tax rate and sales tax burden.
Read More About ALEC Ranking Here
Kauffman Foundation
#50 Kauffman Foundation
Kauffman Foundation ranks each state in entrepreneurship.
Entrepreneurial activity generally is highest in Western and Southern states
and lowest in Midwestern and Northeastern states.
Read More About Kauffman Ranking Here
Free Enterprise
#47 Free Enterprise
Free Enterprise ranks each state in performance, exports, innovation + entrepreneurship, business climate, talent pipeline, infrastructure.
Rhode Island has continued to feel the direct impact and ripples from the recent recession—it ranks 47th overall in economic performance. However, positive rankings of 15th in talent pipeline and 16th in innovation and entrepreneurship suggest the existence of a foundation on which to build the future.
Read More About Free Enterprise Ranking Here
The Pew Charitable Trusts
#40 The Pew Charitable Trusts
The Pew Charitable Trusts ranks each state in job growth and job creation.
Rhode Island added 6,223 jobs in 2014.
Read More About The Pew Charitable Trusts Ranking Here
Gallup
10th Worst in Gallup's Annual Ranking of State Job Markets 2014
Rhode Island has been ranked 10th worst for job creation in Gallup's annual ranking of state job markets in 2014 with a job creation index number of 21
Rhode Island is one of two (Connecticut) states to rank in the bottom ten each year since 2008.
The 2014 State level findings have were drawn from 201,254 interviews with employed adults across the nation.
See the full list of rankings here.
