The Rhode Island House takes baby steps…and stumbles

Survey after national survey has placed the state in the unenviable position of being perceived as hostile to business and job growth. The baby steps in lowering the corporate tax rate and raising the level of assets in an estate before taxation kicks in are, at least, a move in a right direction. Yet it is mystifying why the General Assembly seems hell-bent on perpetuating the state’s image of inhospitality to business.
By the time you read this, the General Assembly may have already passed legislation that doubles qualifying electric costs. Adding  this to the Deepwater-sanctioned  prices for electricity creates the impression that the state wants to be “green” by lowering usage — since manufacturers and other businesses will be shuttered because of astronomical costs. One obnoxious feature of this legislation is that the “distribution customers” (i.e. you and I), pay whether or not we buy our power from National Grid. Ratepayers will also see skyrocketing electric costs. The whole scheme, based on a specious “study”, is a direct threat to economic growth.
Proposals to raise minimum wage have to be carefully vetted. The chief question to be answered is whether a wage should be paid on market value or is it, instead, a tool for social change? If the latter, how should that interface with the various welfare programs presently underwriting low income wage earners?
Why, after all these years, do we continue to fund 39 fiefdoms in such a small state? Certainly regionalization, particularly for educational districts and public safety, should be a no-brainer. While politicians love an empire to rule there is no justification for all the “little governments” in this postage stamp state. Now, real guts would eliminate this “State of Redundancy” to borrow economist Len Lardaro’s phrase.
If most people were asked if they wanted to live in Wisconsin   instead of Rhode Island, given the natural assets of both locations, I think most people would chose the Ocean State. Yet, over the past 4 years businesses have been flocking to Wisconsin because of its initiatives to reinvigorate its economy. Tax credits, loans, and grants were some of the reasons why 19,000 net businesses were created there. Seattle-based Amazon chose Kenosha, Wisconsin over 12 states for its location of its $155 million distribution center, which will add 1250 jobs by 2016.
The State of Wisconsin’s economic development agency teams up with the University of Wisconsin System with seed money to assist faculty and students commercialize their ideas from the classroom. The University is also a resource for a variety of business instruction, ranging from one-day to longer courses for entrepreneurs all across the state, while offering research and a talent pool of graduates.
Now, Rhode Island (to some degree) does the same thing — but what seems to be lacking here is a plan. Wisconsin has a matrix which it follows. It shows preferential treatment to companies already there that want to expend or acquire other business assets in-state.
What is apparent is that stutter steps are not the way to go. Bold initiatives which have been time tested as successful initiatives by other states have to get implemented in Rhode Island pursuant to a cogent master plan.
The State has a choice: continue with the small steps and stay non-competitive or get a move on!


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