One Year Since the Election - What Has Raimondo Accomplished?

Thursday, November 12, 2015

 

View Larger +

 

Rhode Island’s first female Governor was elected one year ago and hit the ground running with promises of reinventing the state. 

GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST

While she only received 40% of the popular vote, there was enthusiasm about her youth, outsider perspective, and her success in pension reform as General Treasurer. “It is time to stop our decline, and to ignite a Rhode Island comeback,” said Gina Raimondo in her inauguration speech.

Raimondo’s resume differentiated her from traditional politicians. She was a venture capitalist, a Rhodes Scholar and had a global perspective from her education and business experience.

“Her biggest accomplishments are that she is a leader and the best ambassador for the state in recent memory,” said Edward Mazze, former Dean of the School of Business at the University of Rhode Island and a leading business consultant.

Now, one year after the election and a quarter of the way through her term, GoLocal looks at her promises and the challenges she asked Rhode Islanders to help her find solutions to. Specifically in her inaugural address and reiterated in her budget address two months late, Raimondo focused on three critical challenges for Rhode Island - improving education, attract entrepreneurs and innovate state government.

View Larger +

PHOTO: Richard McCaffrey

First Take

Rhode Island College Professor Kay Israel identifies Raimondo’s biggest success as the perception of leadership. “Most importantly it's been provide the state with a sense of executive leadership.  The previous administration as it ended seem to accept a lame duck role very early on and seemed to cede most major decisions to the legislative branch,” said Israel. “The Governor appears to have shown initiative and appears to be an equal partner in policy effecting the state economy.”

Similarly, Raimondo got credit for bringing stakeholders to develop policy consensus on a range of issues.

“The Governor’s approach to policy-making deserves praise. She has taken a measured, careful approach to major public policy problems by creating task forces of experts from across the state, and across many sectors, to generate evidence-based recommendations to guide policy proposals - from cybersecurity to lean government to healthcare innovation and overdose prevention,” said Roger Williams University Political Science Professor June Speakman. “These working groups should provide a solid basis for her legislative agenda  in the coming year.” 

Victor Profughi of the University of Rhode Island and veteran political pollster gave Raimondo solid grades for attracting some fresh faces to states government, but also expressed concern. 

“On the cautionary note -- she has such a lengthy challenging agenda that one thinks she might be advised to prioritize a bit more, and I think she needs to focus more,” said Profughi. “She's gotten a lot of things out there, and made a lot of promises, I'm not sure what she'll accomplish.  She's got so many balls in the air, at this point I'm not sure I could point to anything anywhere need beyond being.”

View Larger +

Early Action - Mixed Bag

The Governor came out of the box with some solid wins including her handling of the winter storms, but also some major errors. 

GoLocal unveiled that the women on her staff made significantly less than their male counterparts.

As GoLocal reported, “Despite campaigning on the issue of pay equity for women as a candidate for Governor in Rhode Island, Gina Raimondo’s staff is top heavy with highly paid men, who on average make significantly more than women. Four of the top five highest paid members of the Governor’s staff are men and the only woman in the top five was a Republican appointee. According to data obtained by GoLocalProv through an Access to Public Records Act (APRA) request, of the 30 staff appointments made directly by the Governor to her personal staff, 17 are female and 13 are male, but men on average make 14% more in annual salary.” 

Driving Business Growth

As Raimondo announced in her inaugural budget address, she was targeting the attraction of entrepreneurs. “Rhode Island has developed a reputation as a tough place to do business,” she said. “So to get companies to invest and create jobs here, we need to be proactive. This is especially true because so many other states offer incentives and have much more robust economic development efforts. If we want to compete...if we want companies to add jobs here, we can't put ourselves at such a disadvantage relative to our neighbors.”

View Larger +

However, her first year track record has had a lot of bumps. One of the hottest and fastest growing companies in the country, Teespring, left Rhode Island for California and Kentucky. As a GoLocal investigation uncovered, the Governor’s office and her Commerce Corporation made no effort to retain the company that has been tagged by Fortune and Forbes magazines as one of the fastest growing companies in the country.
  
Similarly, Nabsys, which had taken millions in investment from the State of Rhode Island and Raimondo’s former venture capital firm Point Judith Capital, lost millions when the genome mapping biotech collapsed. In addition, Rhode Island tech innovation program Betaspring which received funding from both the City of Providence and Commerce Corporation has all but left the state for Boston and New York.

“Losing high-profile tech and start-up firms like Nabsys and Teespring certainly doesn’t help the ‘jobs and economy’ focus of the Governor’s plans and public statements,” said Speakman.

Much of the economic development oxygen may have been wasted in Raimondo’s first year dealing with the PawSox request for $120 plus million in state subsidies and their corresponding threats to leave Rhode Island.

Raimondo’s short-term loses will hopefully be made up with some of the legislative and budgetary wins that she claimed coming out of this past session of the General Assembly. 
 
“Governor Raimondo has taken very modest steps to move the state forward by improving the state's business climate.  A great deal  is left to be done, however, to improve what the governor herself acknowledged, which is we’ve been 49th among states where companies want to do business, and dead last in helping entrepreneurs,” said Monique Chartier with the group R.I. Taxpayers.


{image-5}Improving Education

While Raimondo has trumpeted the need to improve education, she has spent most of the first year reorganizing. S

Raimondo traded out Deborah Gist for Ken Wagner and appointed a new board to the Board of Education.  However, there was no major overhaul in education this year during the legislative session. Rhode Island test scores continue to among the bottom especially compared to other school systems in New England and comparative per public spending. 

In Education Week’s annual report, which grades states on their education performance. Rhode Island finished 13th among the 50 states and Washington DC, with an overall score of 78.5 out of 100 points and a grade of C+. The nation as a whole posts a grade of C.

Budget

As the Governor has identified, the budget process and the budget priorities need to be re-calibrated. The Governor’s first budget was passed much intact by the legislature and in the House was adopted unanimously. 
 
“Her recognition that Medicaid is a run-away train and required a special working group to come up with a strategy to reign in the bloated costs, albeit virtually ignoring fraud and abuse.  But it remains to be seen if she will actually be successful,” said Pam Gencarella of OSTPA.

View Larger +

While the budget passed with a number of reforms, the cost savings or revenue targets that some provisions contained fell short. Both the real estate tax and the cost saving of Medicaid missed their target numbers - badly. 

“Her work in job creation, economic development and infrastructure must move forward and be supported in her budget. The Governor needs to get the buy-in of the general public and business community. Her office has to become more transparent. She needs to address those issues that affect all Rhode Islanders - lowering and eliminating some taxes, supporting education at all levels,  reducing the size of government and setting an ethical tone for government service,” said Mazze.

“The governor needs to find a way to fund HealthSource RI and cut costs in Medicaid without sacrificing coverage. She also needs to find a way to fund infrastructure investment with or without a toll. And to allay municipalities’ concerns about the stability of the school funding formula. Finally, of course, keep up the job creation,” said Speakman.

Transparency

The Governor’s biggest weakness voiced consistently during her tenure is her lack of transparency. That failure is undermining her ability to create support for important programs. “To move the state forward - the Governor needs to continue to lead by example. Her office has to become more transparent,” said Dean Mazze.

The Governor must begin to articulate a clear set of priorities said a number of the political and academic experts.  

“[Raimondo] must define and communicate her agenda.  Present an image of a governor who can be effective when dealing with the legislature and whose decision making process shows that all matters have been considered,” said Israel.

View Larger +

The Governor’s lack of responsiveness and inability to work with the media has been a growing issue and attracted a number of groups challenging the lack of responsiveness of the new administration.

“The Governor has certainly struggled with her promises to be a transparent administration.  The media and other good government groups have called her out on being less transparent than prior governors and cite the examples of requests for RIDOT records regarding the tolls,” said Gencarella.

The Future

Raimondo’s first year in office has been one of consistency, competency, but growing concerns about her ability to gain public support for important agenda items because of the decay of openness, said the range of experts.

“She faces the difficult task of finding ways to grow the state's economy and quality of life in a time when infrastructure costs are increasing and sources of tax revenue face possible declines,” said Israel.

 

Related Slideshow: Raimondo’s Budget - Winners and Losers

View Larger +
Prev Next

Winner

Lower-Income Senior Citizens

Acknowledging one of Speaker Mattiello's top priorities for the legislative session -- cutting taxes on social security benefits -- Raimondo's budget proposal exempts Social Security benefits from state personal income tax for single filers with Federal Adjusted Gross Income less than $50,000 and for married filers with Federal AGI less than $60,000.  "This proposal would place Rhode Island on an equal footing with Connecticut," said Raimondo's office -- adding that the proposal is "estimated to reduce the final payments component of personal income tax by $3.9 million in FY 2016."

Photo: Neil Moralee/Flickr

View Larger +
Prev Next

Loser

Million Dollar Second Home Owners

Says Raimondo, "revenue options were specifically chosen to minimize impact on working Rhode Islanders."  The Governor proposed establishing a statewide property tax for non-owner occupied residences (i.e., vacation homes, second residences) and vacant residential land valued at greater than $1.0 million. This effort would provide $11.8 million through a "relatively small number of wealthy taxpayers," said Raimondo.  And some disagreed with the approach. "Her proposal for increasing taxes, whether on health insurance plans, on a new, statewide property tax on second homes valued at over a million dollars, on cigarettes or on anything else, is a complete non-starter," said Monique Chartier with RI Taxpayer. "Rhode Island has a spending problem, not a revenue problem, as evidenced by some of the highest taxes in the country and it is surprising that the governor, with her financial background, does not recognize this."

Image: Andrew_Writer/Flickr

View Larger +
Prev Next

Winner

Construction Workers

The Governor’s budget includes an additional $20.0 million from state debt refinancing proceeds to create a capital fund to help address school facility needs -- and establishes a School Building Authority within RIDE to oversee distribution of school modernization funds, targeting facilities in greatest need. Lifting the school construction moratorium, the budget proposal sets the annual construction aid appropriation at $80.0 million starting in FY 2017.  According to Raimondo, this will "create fiscal stability with predictable funding and allows for projects to be prioritized."  In addition, a non-school package of real estate tax incentives is intended to "encourage construction of job-producing projects, with a focus on development near transit hubs and historic structures."

Photo: Alan Kotok/Flickr

View Larger +
Prev Next

Loser

Smokers

The Governor’s budget proposed a number of additional revenues, including increasing the state’s cigarette excise tax by $0.25 per pack, from $3.50 to $3.75 per pack. "This increase will raise $7.1 million in FY 2016 while discouraging smoking and improving health outcomes," said Raimondo.  According to the Tax Foundation, Rhode Island had the third highest cigarette tax in the country in 2014.   

View Larger +
Prev Next

Winner

Open Government

Raimondo touted launching the state's first web-based budget tool - and good-government watchdogs Common Cause weighed in on the development. Said Executive Director John Marion,"The state budget is the most important document produced by our government every year and until now that document has been trapped inside clunky PDF documents. With the new interactive budget Rhode Island now has a tool that makes those hundreds of pages much more accessible. Two key features stand out; the ability to look at how individual line items have grown or shrunk going back until 2008, and the ability to look at how the Governor's budget stands up to what the General Assembly eventually enacts. That second feature, if updated in real time, will empower citizens and journalists to much more easily follow the General Assembly's budget deliberations than they have been able to in the past. By extension that means we can more easily hold both the Governor and the legislature accountable for the hundreds of decisions made in the budget. Finally, by freeing the budget from PDFs, and providing the raw file for download, the democratization of data has reached Rhode Island's shores. Now anyone who is interested can build their own tool to analyze the choices reflected in the state budget.

View Larger +
Prev Next

Loser

AirBnB

The Governor's budget proposal recommends requiring providers of unlicensed rentals of lodging accommodations, such as Airbnb, to be subject to all state lodging taxes. According to Raimondo's office, this proposal is anticipated to enhance sales and use tax revenues by $851,512 in FY 2016. 

View Larger +
Prev Next

Winner

Tourism Industry

The Governor’s budget modifies the distribution of lodging tax dollars to provide a greater share to statewide tourism efforts to support a major state tourism marketing campaign -- but it comes at a cost.  "To provide sufficient resources for this initiative, the Governor’s budget establishes new revenue sources dedicated to tourism promotion. The budget proposes expanding sales and lodging taxes to online resellers of lodging accommodations, who currently pay no taxes on their markup over the wholesale prices. The budget also closes an existing loophole that exempts vacation houses and small bed and breakfasts from paying the sales and lodging taxes. Finally, the budget would apply sales and local lodging taxes to unlicensed rentals, which have increasingly become an alternative to hotels, bed and breakfasts and other licensed lodging. Further, the Governor proposes redirecting a greater portion of the state hotel tax to dedicate more funds to statewide tourism, marketing, and economic development at the Commerce Corporation. The net effect of changes to the tourism funding formula and new revenue sources is an additional $6.4 million annually."

View Larger +
Prev Next

Loser

State Workers

The Governor’s budget proposes achieving savings of $22.0 million related to personnel and employee benefits.  "Administration officials will work with state employees and their representatives to find the savings while avoiding significant layoffs," said Raimondo -- who volunteered to do her part for cost savings by announcing Thursday evening that she would be taking a 5% paycut herself. 

View Larger +
Prev Next

Winner

Kindergarteners

At the same time the State expands access to pre-K classes, some communities still do not offer full-day kindergarten. "The Governor has noted the importance of providing quality full-day kindergarten in all of our communities. Her budget includes an additional $1.4 million to expand full-day kindergarten to children in every city and town by August 2016. Finally, to ensure that our teachers reflect the growing diversity of Rhode Island’s children, the budget includes $250,000 in grant funding to recruit and train more diverse teachers," wrote the Raimondo office.  

Photo: woodleywonderworks/Flickr

View Larger +
Prev Next

Loser

Hospitals

For DHS, the Governor recommends reinstituting the hospital licensing fee at 5.703 percent on FY 2013 net patient revenues to increase FY 2016 licenses and fees revenues by $156.1 million. 

 
 

Enjoy this post? Share it with others.

 
 

Sign Up for the Daily Eblast

I want to follow on Twitter

I want to Like on Facebook