Pam Gencarella: Where Does Raimondo's Vision Put Us in Five Years?
Pam Gencarella, GoLocalProv MINDSETTER™
Pam Gencarella: Where Does Raimondo's Vision Put Us in Five Years?
There are numerous statistics that tell the story about RI’s economy, whether it’s our ranking as a business friendly state or the level or our taxes, or the cost of doing business, but there is none more compelling than the job recovery statistic. By March of 2013, our neighbor, Massachusetts, had regained every one of the jobs they lost in the great recession of 2008. At the same time, RI had only regained 22% of the jobs we lost. Today, that discrepancy still exists. Massachusetts has nearly doubled the number of jobs lost while RI still hasn’t even reached the pre-recession levels. According to gallup.com, “RI and Connecticut tie for compiling the worst collective job creation scores since 2008 and are the only states to have ranked in the bottom ten each year.”
Systemic Change Is Needed.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTWith that in mind, maybe this could be the administration that does things differently when it comes to developing a Five Year Budget that fits a vision for improving RI’s economy (but first, be sure to denounce and dismantle that ‘Regional Plan for Sustainable Development’, laughably referred to as an economic element of the State Guide Plan). Rather than growing the budget by leaps and bounds every year, wouldn’t it be great if Governor Raimondo looked at specific systems that are known to require a serious overhaul? While she has said that she doesn’t believe you can cut your way to recovery, report after report have delineated examples of fraud, waste and abuse in our welfare systems, including the Medicaid system. The Washington Examiner lists RI as one of the states spending the largest portion of their budget on welfare programs. Like many other states that decided expanding Medicaid was the answer, RI’s Medicaid expansion produced unanticipated cost overruns. It’s time to get serious about routing out the fraud, waste and abuse.
Then there is the cost of illegal immigration. Of course this is a political hot potato but it is the elephant in the room that no one is talking about. Rhode Islanders for Immigration Law Enforcement (RIILE) and other national organizations have pegged the cost at about $300 million in the state of RI. Governor Raimondo and Speaker Mattiello need to take a serious look at the system and enforce the immigration law. RI simply cannot afford to put the welcome mat out any longer for unfettered illegal immigration into this state when it is facing enormous deficits.
Talk is Cheap: Here’s Some Action Items.
And how long do we have to talk about business overregulation in RI before we take
action? Governor Chafee’s last Regulatory Reform Report, dated Dec. 23, 2014, highlighted what we have all known - inefficiencies and heavy burdens in the regulatory processes. Instead of continuing to talk about it, FIX them.
It will require policy and law changes. As the report says, remove obstacles that hamper economic competitiveness. Remember, RI’s economy does not operate in a vacuum. In the report, small businesses openly listed a number of concerns from the $500 corporate minimum business tax to the state mandated apprenticeship requirements. They listed the high cost and the abuse of numerous employer subsidized systems like the unemployment system, the temporary disability insurance system and the workers’ compensation system. They referred to the excessive cost for adherence to fire safety codes that came on the heels of the Station Nightclub fire of 2003. They cited the burdensome professional licensure requirements. All of these issues have been on the table for years and as a result of doing nothing, the statistics speak for themselves - RI has not recovered the jobs it lost in the recession of 2008. Massachusetts has nearly doubled the jobs. Action is needed this year.
The Winds of Change
Do you think that as the winds are creating a wind chill of about 20 below that the Governor, the Speaker of the House, and the Senate President are having heated debates over this year’s budget? Are they meeting to discuss their economic vision for RI as they work together to put out a budget next month that all will agree on. Remember, this is the first time in quite a while that one party holds both the majority in the General Assembly and the Governorship.
We the people are expecting a unified vision from these two branches of government as they provide a Five Year Budget for improving RI’s economy and agree to the actions needed to catch up to Massachusetts in job creation.
We want a Five Year Budget that indicates our government leaders have addressed the structural problems, one that does what it takes to project no future deficits and does not further break the backs of the taxpayers. We want a budget that does not force a continued outmigration of talent and wealth. Now that we have one party in both branches of government will we see the political will to address critical issues or will it be more of the same hot air?
10 Questions Raimondo Has to Answer as Governor
Moving the needle?
Forbes recently ranked Rhode Island 5th worst in the country for business environment -- a not uncommon position for the Ocean State in recent years. Forbes placed RI as high as 20th for quality of life -- but #49 for "regulatory environment."
How soon can Governor-elect Raimondo improve Rhode Island's basement-level assessment and make it more competitive -- and what will she have to do to make that happen? Addressing the sales tax? Estate tax? Look to Raimondo's State of the State address -- and first budget proposal -- for signs as to how the direction the new Governor plans on taking the state.
Gambling hole?
As GoLocal's Stephen Beale pointed out, RI has no plan to deal with $307,000,000 shortfall, when casinos in MA are operational, and RI's third largest source of revenue -- gaming and the Division of Lottery -- will take a huge hit. "A consultant's report showed Rhode Island losing $108.8 million a year in casino gaming revenue by 2017. And that was a best case scenario. The worst case had the state bleeding $158.4 million by 2017," wrote Beale.
How will Governor-elect Raimondo deal with the 800-pound gorilla in the room? Newport Grand failed in its bid for table games on the ballot in November. Will Raimondo let the General Assembly continue to prop up the ailing slots parlor?
RhodeMap RI?
The previously little-known economic development plan under the State's Division of Planning -- made possible by a federal HUD grant -- has heated up in a big way as opponents are voicing their concerns as to the scope and reach of the plan, if incorporated into the state's broader economic plan.
Will Governor-elect Raimondo get behind RhodeMap RI's vision fully, and how would she address detractors who don't appear to be going away at any point soon? Given that there will most likely need to be legislative components to implement the plan, watch to see where Raimondo's leadership is on this issue.
Marijuana legalization?
Some of the air came out of the marijuana legalization balloon when former Speaker of the House Gordon Fox stepped down last year, and the notably more conservative Speaker Nicholas Mattiello took the helm, making the prospect of a marijuana legalization bill appear dim, at best.
The Daily Chronic reported that the Democratic gubernatorial candidates indicated during the campaign that they were "monitoring the effects of regulation and taxation in Colorado and Washington." Raimondo's certainly given no indication she'd be inclined to consider a tax-and-legalize measure, but as gaming revenues start to taper off, will marijuana discussion ramp up as a new revenue option?
Union relations?
While Raimondo appointed five transition team members with big banking ties, she also appointed two union heads -- Pat Quinn with SEIU 1199 and Michael Sabitoni with the RI Building and Construction Trades Council.
While Raimondo managed to secure union endorsements following a primary that saw them go primarily to opponents Angel Taveras and Clay Pell, the legacy of her pension reform still looms large (remember AFSCME famously hired Forbes' Edward Siedle to investigate Raimondo's handling of the state pension fund, namely her move into hedge funds). How will Raimondo negotiate with public sector unions given a past history?
Pension Lawsuit?
What will come of the pension reform lawsuit? While it was quiet leading up to the election following the failed settlement earlier in the year, watch to see the next steps from Raimondo -- and newly elected Treasurer Seth Magaziner (who appointed a fairly union-friendly transition team) to see what attempts may arise to reach a new settlement -- and what implications that may mean for Raimondo, the architect of the landmark 2011 pension overhaul. Depending on the outcome, watch to see how Raimondo's political star rises -- or falls -- from the outcome of the suit -- and how Raimondo addresses the financial implications if a mediated settlement is achieved.
Budget proposal?
All eyes will be on Raimondo's first budget proposal in January. What will her priorities be? Will there be bold moves to improve the state's business climate? Education, infrastructure, tax code -- how will Raimondo choose to tackle the state's biggest issues? And will the Democratic leadership agree with her agenda?
General Assembly?
For the first time since 1991 -- when Governor Bruce Sundlun took office -- a Democrat will be embarking on a gubernatorial administration, and Raimondo will be working with a Democratic legislature. What will Raimondo's working relationship be with Speaker Mattiello and Senate President Paiva-Weed? Will the General Assembly be in lockstep with a Raimondo agenda -- if not, what will the points of contention be? And with a democratic lock on power, what will the Republicans be able to accomplish?
Mandate issue?
Winning the general election to become Rhode Island's first female Governor with 40% of the vote, Raimondo follows in the footsteps of Governor Lincoln Chafee with winning with less that 50% of the vote. Raimondo however has the advantage over her predecessor by being elected as a Democrat, allowing her to work with leadership in the General Assembly. However, with 40% of the vote, how will the public who didn't vote for her view here policies and proposals? Will Raimondo have to win over the public, or will Raimondo take her support from the business community and forge a path regardless?
Transparency?
While General Treasurer, Raimondo came under fire for lack of transparency for the lack of disclosure of hedge fund fees paid for the state's retirement investments, punctuated by Attorney General Peter Kilmartin ruling that Raimondo could keep certain details of the state's investments from the press. Forbes' Edward Siedle wrote, Does [Kilmartin] seriously believe that hedge and private equity billionaires entrusted with state workers retirement savings should be shielded from scrutiny regarding potential violations of law?
While Raimondo will no longer be calling the shots as the head of the State Investment Commission, all eyes will be her decisions in the Governor's office. How transparent with the Raimondo administration be with the press-- and the public?
