Talking Politics

Can R.I. cut its way to a better business climate?

By Ian Donnis
Posted 4/4/23

S TORY OF THE WEEK:  Can Rhode Island tax-cut its way to a more appealing business climate? That question has been subject to debate for years and it won’t stop now. For supporters, …

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Talking Politics

Can R.I. cut its way to a better business climate?

Posted

STORY OF THE WEEK: Can Rhode Island tax-cut its way to a more appealing business climate? That question has been subject to debate for years and it won’t stop now. For supporters, the Carcieri-era move to flatten the top rate of the state income tax was a step in the right direction, for example, while critics said too much stock was placed in the notion that rich people flee Rhode Island due to high taxes.

Now, the Rhode Island Senate has rolled out one of its top priorities for this session – a move to eliminate the tangible property tax for an estimated 85% of the businesses that currently have to pay it. Senate President Dominick Ruggerio unveiled the initiative during a speech to the Northern RI Chamber of Commerce. “This is a step we can and should take to help companies to continue to grow and invest here in Rhode Island,” Ruggerio said.

Under a bill sponsored by Sen. Melissa Murray (D-Woonsocket), the state would compensate cities and towns for lost tangible tax revenue, with an exemption offered to businesses for up to $100,000 in liability for things like computers and furniture. This is likely music to the ears of the local business community. The proposed cut is all the more noteworthy given how the Massachusetts Society of CPAs is sounding an alarm about what it calls an exodus of high-income residents leaving the Bay State.

Still, economic uncertainty raises questions about Rhode Island’s ability to pay for more tax cuts; the May revenue-estimating conference will reveal the latest data on state revenue. And when it comes to attracting business, Rhode Island’s glass chin remains our under-performing public schools, an area where Massachusetts still comes out on top.

CD1: The calendar is set for the special election to succeed U.S. Rep. David Cicilline in the 1st Congressional District, with the primary set for Sept. 5 and the general election for Nov. 7. More candidates are floating runs on an almost daily basis. We’ll see who formally declares by the June 29-30 deadline, but a field of 10 or more candidates isn’t completely out of the question.

Former GOP AG Arlene Violet revealed on A Lively Experiment on RI-PBS that she is seriously considering an independent run. Violet is a first-ballot Rhode Island Hall of Famer (disclosure: we are former co-panelists on WPRI-TV’s Newsmakers), and somewhat like Robert “Cool Moose” Healey, she might find support as a folk hero/unconventional candidate, although running as an independent makes life a lot more challenging.

Here’s my current list of candidates who say they’re running: Nick Autiello, Mickeda Barnes, Stephanie Beaute, Nathan Biah, Sandra Cano, Stephen Casey, John Goncalves, Sabina Matos and Allen Waters. With the calendar turning to April, keep an eye on Pawtucket Mayor Don Grebien and a native son of Pawtucket who now works in White House, Gabe Amo.

MATOS: A lot of the Democrats running in CD1 share similar views on the issues, so setting themselves apart from one another will be among the challenges in a crowded field. Lt. Gov. Sabina Matos brings some political assets to the contest, including winning statewide last year and building her profile through many years on the Providence City Council. During an interview on Political Roundtable, she said it’s her experience that mostly sets her apart from rival candidates.

Asked if she is violating a pledge to voters by seeking a different office so soon after the November election, Matos said, “No, it’s not actually – right now, for me and any other elected official that is contemplating running, it’s not a violation. I always, when I look at myself and my political career, I consider myself to be a public servant. I have always looked for ways in which I can better serve the people of the state of Rhode Island. This is a new, this is new, we had no clue that Congressman Cicilline was going to be resigning. So right now, I just analyzed the situation and thought that this is a way in which I can continue to serve the state of Rhode Island.”

APPOINTMENTS: The administration of Gov. Dan McKee and Lt. Gov. Matos will mark 100 days in office in mid-April. Here’s Matos’ response to why there are still so many interim directors in state government, including at the Department of Health, DCYF, the Executive Office of Health and Human Services, and the Department of Administration: “The administration has been actively searching for directors for the different agencies. Those agencies have a direct impact on the life of the people of Rhode Island. And that’s our decision that shouldn’t be rushed. And we should not be just putting in someone just to say that it has, we have someone in there. So I trust the process that the governor is going through with his staff to make sure that we get the right directors for the agencies.”

CANNABIS CONFIDENTIAL: As I reported last year, the state’s new Cannabis Control Commission will decide regulations and determine who gets 24 new retail cannabis licenses in Rhode Island. The pertinent law called for Gov. McKee to appoint three members to the commission by last July 4. When I looked into this last October (4th item), the governor’s office said McKee was waiting until the General Assembly was back in session. Here’s how McKee spokeswoman Olivia DaRocha explains the lag: “The Rhode Island Cannabis Act requires that a comprehensive background check be conducted on all of the governor’s selections prior to appointment. This is an extensive process involving coordination with the State Police. The governor’s selections will be announced when the full background check process is complete for all potential candidates.”

GOVLAND: Tony Silva, who stepped down amid controversy as Gov. McKee’s chief of staff in 2021, has signed on to coordinate fundraising and political activity for McKee’s campaign organization. Attorney General Peter Neronha found last year that McKee had no involvement in Silva’s attempt to pursue a development project in Cumberland. Neronha also found that Silva used very poor judgment and appeared to throw his weight around. Asked about this last August – his most recent appearance on Political Roundtable – McKee emphasized how no laws were broken and how he was not involved. Pressed on Neronha’s finding about Silva’s conduct, the governor steered clear of criticizing his former aide.

AMAZON: For better or worse, Amazon is a big economic force. Rory Schuler of the Johnston Sunrise reports on how the giant retailer has yet to set a firm date for opening its local distribution center: “While empty Amazon warehouses litter the nation, the online mega retailer insists their Johnston distribution center will open as planned. And the company plans to hire ‘more than 1,500’ local job-seekers.”

REPUBLICAN THUNDER: One of the longstanding challenges for RI GOP is tepid support from Rhode Island’s business community. Money is the mother’s milk of politics, or so it’s been said, so Senate Minority Leader Jessica de la Cruz’s unveiling of a new Senate Republican Leadership PAC could boost the cause. As de la Cruz said via news release, “It is no secret that election cycle after election cycle, Democrats outraised Republican candidates at every level. My goal is to raise the necessary funds to assist our state senate candidates in the upcoming cycle. In 2022, we had an outstanding group of candidates that stepped up to run, and although they were not successful, many of them have committed to run again in 2024. By creating a separate leadership committee, we can pool together resources to supplement candidates’ efforts. Unfortunately, Rhode Island has been dominated by one party for decades, and if we want to foster a pro-growth environment, we must elect candidates that will make it easier for Rhode Islanders to start and grow their businesses.”

TAKES OF THE WEEK – a mix of views from various Rhode Islanders.

State Rep. LEONELA FELIX (D-Pawtucket): “This week, during a House floor debate, some of my colleagues used derogatory language such as “drug addict,” “opium den,” or “crack house,” when referring to individuals with substance use disorder. As someone who has also experienced the pain of addiction, I was left speechless, knowing how hurtful and stigmatizing these words can be. People with substance use disorder already face enough stigma and shame, and this type of language only reinforces those negative perceptions.

“Although I wished to respond in the moment, I took some time to gather my thoughts. I decided to act and, together with Haley McKee, a leader in the addiction and recovery space, organized a day of action at the Statehouse. In just two days, we brought together individuals, families, friends, advocates, providers, and allies from across the state to share their stories of pain, struggle, and resilience with lawmakers. They shared how addiction has impacted their lives and communities, the pain caused by using derogatory language, and the resources needed to support public health and recovery efforts.

“It is important to recognize that addiction is a disease, just like cancer, diabetes, or heart disease. We do not use derogatory language or blame individuals for these illnesses, and the same should be true for those with substance use disorder. By avoiding stigmatizing language and instead centering people’s humanity with our words, we can foster a cultural shift that has the potential to save lives.”

Businessman and former gubernatorial candidate KEN BLOCK: “Surprisingly, politically ambitious people with wide statewide name recognition are not competing for David Cicilline’s seat representing R.I.’s 1st Congressional District (CD-1). An open congressional seat is a big deal. So what could be standing in the way? The problem is the special election, which will be held in November. Special elections are notorious for their low turnout. A lesser-known candidate can steal a special election when a tiny fraction of voters cast ballots.

“Moreover, the winner of this November’s race must immediately begin running for reelection in November 2024. I can easily see how these factors have kept the big players out of the race this year. Unless a big name jumps into this year’s special election and wins, I would expect to see more recognizable names lining up to run for CD1 in 2024, when a presidential general election guarantees a healthy turnout of voters. This November’s special election is winnable by pretty much anybody who can get their message out – and, of course, have a message that resonates with voters.”

MARGAUX MORISSEAU, deputy director of the RI Coalition to End Homelessness and a longtime anti-payday activist: “Payday lending is a predatory practice charging 260% APR and it is targeted at low-income Rhode Islanders, costing our communities millions of dollars annually and propelling our neighbors into a cycle of debt, which has caused some families to become homeless. Rhode Island is one of only two New England states permitting triple-digit interest rates, something we would not tolerate if it was aimed at small business owners.

“The US Defense Department argued predatory lending ‘undermines military readiness,’ so Congress acted in 2006 to protect active-duty military personnel by capping loans to such individuals at 36%. Payday lending reform is a priority for Rhode Island voters and legislators; 56 Democratic, Republican, and Independent legislators – 75% of House members – have signed Rep. John Lombardi’s letter urging a vote on Rep. Karen Alzate’s H5160, a bill that would cap the interest rate at 36% and end the loophole exempting payday lenders from the rules that apply to other small loan lenders. Powerful corporate lobbyists have used their influence to keep this bill from advancing for 13 years. The time is now to allow payday lending reform to have a committee and floor vote.”

PATRICK CROWLEY, secretary-treasurer of the RI AFL-CIO: “There is always lots going on in the world of organized labor, but this week was particularly busy. While some news stories focused attention on how inflation is hampering the push to rebuild our infrastructure (think Tidewater Landing in Pawtucket and the Superman Building in Providence), any union organizer will tell you that the real news about economic development in Rhode Island often has an under-reported side: worker exploitation. Thanks to Justin Kelley from the Painters Union and the reporting of Amanda Milkovits in The Boston Globe, Rhode Islanders got a taste of what it’s like to work at a non-union job site: dangerous and sometimes illegal working conditions.

“And exploitation isn’t limited to the construction industry. We saw earlier this week when healthcare workers who are members of the Service Employees Union local 1199 overwhelmingly voted ‘no confidence’ in their management at Women and Infants Hospital after enduring disrespect, harassment, racialized language, and systematic mistreatment. Likewise, Teamsters Local 251 members were forced to hold a strike against the Rhode Island School of Design because they are treated like expendable labor, even though RISD is sitting on an endowment of $440 million.”

Ian Donnis can be reached at idonnis@ripr.org

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