Raimondo’s Challenges Are Piling Up for Her Second Term

Superman

When Raimondo first ran for Governor, she claimed in a political ad that she would resurrect the then-one year vacant building.

This coming April, the Superman building will "celebrate" its sixth year of vacancy. The tallest building in Providence has turned into the biggest eyesore in the state and a bit of an embarrassment for the Raimondo administration.

Commerce RI has shopped the building to Citizens Bank, PayPal, Samsonite and about another 30 potential tenants.

The building is in ever worsening condition and the cost of reclamation grows — estimates of the price tag are growing with some claiming the effort would exceed $100M.

Education

Raimondo will have a difficult time being a credible national leader with the condition of Rhode Island’s public education system. Raimondo supporter Saul Kaplan of Business Innovation Center said Rhode Island needs to issue a “state of emergency” after test scores were released.

Gary Sasse of the Hassenfeld Institute at Bryant University outlined that school improvement can only transpire when a state’s Governor takes a leadership role. He recently said on GoLocal LIVE:

"Well, we got here for three or four reasons and the best way to figure out how we got here is to look at what Massachusetts did right and what we did wrong. The first is a constitutional reason — when people in Massachusetts challenged the adequacy and equity of the [funding] formula…the Massachusetts Supreme Judicial Courts said they had a case and that put enough pressure on the political class that they had to fix it and that’s about 25, 30 years ago.  We’ve challenged it several times — I’ve written several amicus briefs and first challenged it with good friend Buddy Cianci in ’81.

So we do not have education as a fundamental enforceable right.  Give parents and give educators several to force change when the system is not performing and particularly not pulling well for disadvantaged kids. So we have a constitutional problem. 

Second is a problem of political will. When Massachusetts reformed its system it was comprehensive and consistent and through both Democrat and Republican Governors it has stayed the same — there was strong Senate leadership by [Willaim] Bulger, and you know Governor [Bill] Weld, and while it hasn’t been as perfect as the people of Massachusetts would lead you to believe, it has been basically comprehensive and consistent compared to Rhode Island’s piecemeal [approach]. We lack the political will. 

Governors of various states say my ‘job one’ is educating my kids — my job [as Governor] one is making certain there’s good performance, high performance in my schools — my job one is making sure we’re meeting their highest educational expectations. We give lip service to this. But I go back and look at [Massachusetts] Governor Weld and I look back at Governor [Jim] Hunt in North Carolina. In most states, [they’ve] turned around their education system because it’s the governor’s force of will that they wouldn’t rationalize underachieving. They wouldn’t take no for an answer, they didn’t worry about corporate welfare, they worried about the welfare of kids. What this cries out for is leadership."

Staffing

Already Raimondo has had two staffers depart and the rumors are building about other top departures.

Jon Romano has left the Governor's staff to go to staff the Democratic Governor's Association. That may be good for her national aspirations, but it creates a significant hole in her office. 

And, Lara Salamano of Commerce has announced her exodus. She helped save Raimondo by developing a highly credible tourism campaign after the "Cooler and Warmer" debacle that Raimondo repeatedly defended.

"Under her leadership, the ‘Fun-Sized’ tourism digital ads have generated more than $3 million dollars in hotel revenue leading to over 10,500 new direct hotel bookings and nearly 8,000 flight bookings," said Stefan Pryor in announcing Salamano's leaving. 

Maybe not to the level of Trump, but Raimondo has had a difficult time recruiting. She is now on her third chief-of-staff and it took months and many offers the last time.  

Fane Tower

It is the biggest private investment in Providence in 20 years. Raimondo made a personal appeal to Providence Mayor Jorge Elorza, but he still vetoed the ordinance to increase the height limitation.

Now, her staff has made direct personal appeals to key council members urging them to vote for an override of Elorza’s veto.

The project is strongly supported by the building trade unions and is estimated by Fane to create as many as 1,400 jobs for upwards of three years or more.

The project continues to be stuck in a regulatory morass with little public leadership by Raimondo.

Hasbro

Raimondo cannot afford to let Hasbro move its corporate headquarters out of Rhode Island, but as GoLocal has previously reported the company is looking to consolidate more functions; more staffing and function is likely to move to California to be more integrated to the entertainment industry; and the company, if it stays in Rhode Island, is likely to place its headquarters in Providence.

The reality is, it is another hit to the increasingly struggling City of Pawtucket (see next slide).

Hasbro has significant challenges with its stock off significantly from its 52-week high of $109 per share -- it is now trading at $84.83 as of the close on Wednesday. The company is facing a number of investor lawsuits and the loss of one of its largest distribution channels with the closure of Toys R Us.

Pawtucket

The Governor has repeatedly voiced privately and publicly that the state needs to do more to help the City of Pawtucket, which has lost in the past 24 months the Gamm Theatre, Memorial Hospital, and the Pawtucket Red Sox.

But, she may have little impact on a Hasbro decision to leave Pawtucket and consolidate it functions in Rhode Island to be more efficient.

Pawtucket’s previous failures will have little effect on Hasbro’s needs to make business decisions.

Mayor Dan Grebien may have made a mistake last time putting all his efforts into trying to save the PawSox and not being focused on trying to keep the far more economically important Memorial Hospital with 800 employees.

For Raimondo, the legacy in Pawtucket is now turning catastrophic.

Marijuana

It was another banner week for the Commonwealth of Massachusetts’ marijuana program and there was the announcement of a third retail location opening this weekend in Salem.  According to Massachusetts sales data, for the two recently opened locations, the state's coffers are taking in about $50,000 a day in new revenue.

What will be the number when 10 or 20 locations are located and some are in urban and more populated areas?

The pressure for Raimondo may build during a period of consistently missed revenue numbers.

Revenue

Through the first four months of the 2019 fiscal year, there are some early signs of revenue problems.

According to data released by the Rhode Island Department of Revenue, personal income tax payments are off 2 percent and additional trouble may be brewing due to the failure to launch sports betting on time.

The missed income numbers hit during a period in which a record number of Rhode Islanders are working.

The report finds that general revenues for October were $10 million less than expected.

Paul Dion of the Revenue office tells GoLocal that one impact may be due to changes to federal tax law. Some taxpayers pre-payed real estate property tax in 2017 calendar to take advantage of the now limited real estate tax deduction of $10,000. Now, some are receiving refunds in the 2019 FY. Refunds are running 43 percent higher than estimated.

What isn't reflected is the new sports betting numbers -- those numbers are going to badly miss projections due to the nearly two-month late start.