With just a trace amount of snow in Rhode Island so far this winter, can the groundhog even think about seeing its shadow? Thanks for stopping by. You can follow me through the week on the twitters. (A quick program note: your humble correspondent is taking a quick mid-winter break, so this column will return on Feb. 3). Here we go.
*** Want to get my column in your inbox every Friday? Just sign up right here ***
STORY OF THE WEEK: If you had spun a tale back in, say, 2018, about how Rhode Island would have nine-figure budget surpluses for not one, but two consecutive fiscal years, lawmakers and political reporters would have questioned your grasp on reality. For decades, a structural deficit meant that even though the budget had to be balanced each year, more red ink would await legislators the following January. The silver lining of the pandemic is how a windfall of federal aid, combined with strong state tax collections and a large number of unfilled state jobs, have significantly boosted Rhode Island’s fiscal standing. One indicator is how the projected structural deficit for 2028 is a mere $40 million – far less than the annual deficits that were common 10 years ago. The state budget (which includes billions in federal funds) has grown dramatically over that time, from about $8 billion to the $13.6 billion plan passed by lawmakers last year. Regardless, the improved fiscal standing enhances the state’s ability, in theory at least, to have more flexibility in making long-term investments. With a possible recession looming, however, the question is whether the surpluses of the last two years stand as a rare exception to the prevailing trend of deficits for state government in Rhode Island.
MCKEE’S PLAN: Gov. Dan McKee describes his $13.7 billion budget proposal as the way to flesh out his goals of raising incomes, improving student performance and enhancing the health of Rhode Islanders. The money has millions more for education and invests in capital projects across the state. McKee fulfilled an earlier pledge to expand abortion coverage for state employees and women on Medicare. The governor’s plan (subject to a host of legislative changes) also includes $100 million in tax relief and the start of what is described as a five-year plan to lower Rhode Island’s 7% sales tax to the 6.25% rate of neighboring Massachusetts. To some, McKee’s initial 0.15% cut in the tax is underwhelming (see the following item). But Brian Daniels, director of the state Office of Management and Budget, made the point that the reduction is part of a long-term plan. “What we’ve seen multiple times in the past is we’ve made promises we can’t pay for, because it’s really hard to give up the money when you have it,” Daniels said at a budget briefing at the Capitol on Thursday. “So the governor wants to make sure that we are making these decisions in light of that fiscal outlook, that we are doing what we can afford each year, with the constant goal of trying to get down and equal to Massachusetts as quickly as possible.”
GOP REBUTTAL: RI Senate GOP Leader Jessica de la Cruz offered a clear contrast to Gov. McKee’s State of the State address during her response on Tuesday. She said Republicans will introduce legislation calling for Rhode Islanders to get a refund from the estimated $610 million surplus. “Let’s lower our 7% sales tax to 5%, so we can do even better than Massachusetts” she said. “Why does Rhode Island continue to be so timid and lackadaisical with tax policy? We cannot and will not prosper without bold tax reform.” De la Cruz renewed her call for more educational choice for parents, and she said McKee “has yet to execute” on the housing crisis.
PRYOR NOTICE: The task of making headway on housing issues in Rhode Island now belongs to Stefan Pryor, the former Commerce secretary. Pryor has a strong knowledge of state government, a lot of development-related experience, and solid communication skills. But Rhode Island’s housing crisis is a multi-faceted problem that has defied past attempts at improvement. (For some useful context, check out this thread from Jennifer Hawkins of the nonprofit developer One Neighborhood Builders.) Ultimately, Pryor will be judged on whether he is able to foster progress.
TAXING MATTERS: Legislative leaders in Rhode Island have generally held the line against broad-based tax increases for quite a while, and the state last year approved an expedited phaseout of the car tax. So why, according to the Rhode Island Public Expenditure Council, has the state fallen back – for the first time since 2015 – into the bottom-10 of states for tax competitiveness? “Well, technically, we’ve slipped because some other states have been doing positive things,” RIPEC President/CEO Michael DiBiase told me during an interview on Political Roundtable. “And we’ve stood still. We do have, you know, relatively high taxes overall. So we start from a position, I think the highest we got was 35th in the last several years. So you know, other states don’t have an income tax or may not even have a sales tax. So we have relatively high taxes here.”
BLUE HUE: The elevation of Providence Police Chief Hugh Clements, as the new director of the U.S. Justice Department’s Office of Community Oriented Policing Services, is a noteworthy capstone for Clements’ career. It also shows how far the Providence Police Department has come from the dysfunction of Buddy Cianci’s time as mayor. Back in 1999, for example, under then-Chief Urbano “Barney” Prignano, the department was struggling to implement the widely accepted practice of community policing.
FALL RIVER: Give a listen to the sound-rich audio version of my colleague Ben Berke’s story about how the arrest of a fifth-generation Fall River police officer raises questions about a fatal shooting from his past.
GET LUCKY: Politicians love lotteries because it brings in state revenue without raising taxes. Here’s a look at how states spend their lottery loot.
TAKES OF THE WEEK: Various views from Rhode Islanders
State Rep. BRIAN C. NEWBERRY (R-North Smithfield): Sitting in the front row during Gov. McKee’s State of the State address — the fourth governor I have heard in person deliver these things — I was struck, in a room packed with around 200 people, all but a handful of whom were Democratic politicos, by just how little enthusiasm they exhibited. McKee touched on a number of ideas, sales, gas and small business tax relief chief among them, that a traditional Democrat in the mold of a Bill Clinton or Bruce Sundlun would favor. These are the types of things Republicans could support in concept, even if we argue over details (I personally would prioritize property tax relief, for example) and are the stuff of bipartisan political compromise. Yet you could almost hear crickets chirping in the House chamber. The one moment of true enthusiasm came when many members gave a standing ovation for McKee’s nonsensical proposal to ban “assault-style rifles,” whatever the heck those are. It goes to show just how far left the Democratic Party has moved. Tax relief for consumers? Meh. Focusing on symbolic social issues that will accomplish nothing, solve nothing, make thousands of ordinary people into criminals but assuage the desire of people desperate to feel virtuous? Standing O.
PATRICK CROWLEY, secretary-treasurer of the Rhode Island AFL-CIO: “Rhode Island took significant steps forward this week on two big issues: climate and education. The Governor’s Workforce Board established the Green Energy Workforce Advisory Committee, which will help the state meet its goals on the Act on Climate as they relate to workers, especially those employed in or connected to legacy energy industries. And Gov. McKee called in his State of the State Address for a plan, in the first 100 days of his term, to reach Massachusetts education levels by 2030. What we have done to public education over the last 15 years — more charter schools, more high-stakes tests, onerous evaluation systems for teachers, draconian pension changes — is a failed status quo that needs to be acknowledged. I think the next 100 days will be a significant chance to change direction for our public education system in Rhode Island.
Policy analyst at the Institute on Taxation and Economic Policy ANDREW BOARDMAN: Amid the recent dysfunction in Washington, perhaps it was easy to miss this positive example of government delivering for the people: The Federal Trade Commission earlier this month announced a move to bar the use of noncompete clauses in employment contracts, freeing tens of millions of workers from these restrictive covenants designed to curtail their ability to move to better jobs or start their own businesses. If implemented, the new policy is expected to boost pay, unleash entrepreneurship and alleviate wage inequities. In addition to being a clear win for working people, the FTC proposal entitles Rhode Island to some bragging rights. State leaders proved themselves ahead of the curve with a 2019 law stopping bosses from wielding noncompetes against workers in lower-paying jobs. We should all be encouraged to see the feds following in Little Rhody’s footsteps on this one.
Sen. DAWN EUER (D-Newport), chair of the Senate Judiciary Committee (and Senate sponsor of the Act on Climate): Since the passage of the Act on Climate in 2021, there has been much discussion (and debate) regarding state efforts toward meeting our climate goals. Thanks to the strong leadership of our federal delegation, we have once-in-a-generation funding opportunities, through the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, to address critical infrastructure needs, combat climate change, and create jobs, while reducing costs for utility ratepayers and taxpayers. To realize the full potential of these laws, state agency heads need to incorporate the Act on Climate into their everyday decision-making, coordinate with other agencies and advocates, and ensure we are making the most of directly granted funds and applying for every possible competitive grant. We also need to make sure that decision makers are incentivized to pursue federal funding opportunities. RI Energy has two pending filings with the state Public Utilities Commission. One is regarding the utility’s plan to “modernize” the electrical grid, and the second regards their plans for “smart meters.” While we desperately need to invest in tech, upgrade our grid and invest in technology, upgrades need to be done in a way that leverages every possible penny of federal funding and limits increases for ratepayers. Making sure our electricity grid is maintained, reliable, and modern is the key role of our utility and we shouldn’t be expected to pay them extra incentives for completing that basic function.
RI POLI-MEDIA PEOPLE ON THE MOVE: Former U.S. Rep. Jim Langevin has been named a senior fellow at Brown’s Watson Institute and a visiting scholar at URI … longtime RI poli staffer Seth Klaiman, most recently with Seth Magaziner, has joined the New Harbor Group … Marc Crisafulli has been selected by Gov. McKee as the new chair of the I95 Commission …. Congrats to Brown alum Kayla Guo on landing an internship at Politico …. CCRI has hired Jennie Johnson as VP for the Division of Workforce Partnerships.
KICKER: Fast Times at Ridgemont High (1982) has been in heavy rotation on AMC. The coming of age movie remains largely known for Sean Penn’s role as stoned surfer Jeff Spicoli and appearances by an array of other future stars (Forest Whitaker, Nicholas Cage, Judge Reinhold and Jennifer Jason Leigh). More than 40 years on, Fast Times also reflects the emotional complexity of approaching adulthood. And like a time capsule from another era, the decision by Leigh’s high school-age character to get an abortion is absent the pitched court and cultural battles of our current moment.
Ian Donnis can be reached at idonnis@ripr.org
