The Ten Biggest Issues Facing the RI General Assembly in 2014
Tuesday, December 17, 2013
As the fiscal year 2015 budget will no doubt be the centerpiece of discussion and debate, one "x' factor that will likely play a major factor is a settlement in the state's pension lawsuit -- and how much that could be.
"While the budget certainly will need scrutiny, the 274 million ($112 local, $162 state) pound gorilla in the marble madhouse will be what the proposed mediated pension settlement will be and how the legislature wrestles with the gorilla in an election year," said Dan Beardsley, the Director of the RI League of Cities and Towns.
Lisa Blais with the taxpayer group OSTPA similarly said that she was "waiting for the other shoe to drop -- name the result of mediated state 2011 pension reform."
While mediation talks are still taking place, GoLocal talked with elected officials, candidates, and leaders in the community as to what they saw as coming into focus for the coming General Assembly session.
See Major Issues Facing 2014 General Assembly BELOW
Economy, Economy, Economy
The General Assembly leadership said they are focused squarely on the economy -- and jobs. “Speaker Fox believes that the House must continue its focus on improving the economy and creating jobs. That work began in the last session with the overhaul of the Commerce Department and many other initiatives involving job skills’ training, education, the reinstatement of the historic tax credit program, and adopting business-friendly policies such as biweekly pay. Many of the issues on Go Local’s list will be considered, but economic development will remain the highest priority," said Larry Berman, spokesman for Speaker of the House Gordon Fox.
“The economy will continue to be the Senate’s top priority in the 2014 session. The Senate will focus on the critical issue of workforce development," Greg Pare, spokesman to Senate President Teresa Paiva Weed told GoLocal. “The Senate looks forward to reviewing the recommendations of the many commissions which are presently meeting, including the commissions studying the sales tax and bridge tolls and the funding of our transportation infrastructure. We will work together with the Governor and the House of Representatives to review the Board of Education’s proposal.
While the approval of same-sex marriage proved to be one of the defining moments of the 2013 General Assembly session, several of last year's focal areas -- Sakonnet bridge tolls, the approval of the new Board of Education as well as the new Commerce Corporation to replace the EDC -- face the possibility of revisitation this year.
URI Distinguished Professor of Business Edward Mazze was highly critical of the potentially outstanding items. "Two terrible mistakes must be corrected - the micro-management of economic development which led to the restructuring of EDC and the elimination of the Board of Governors of Higher Education. Both activities have done little to create jobs, attract businesses and retain businesses. We need to have professionals manage these activities not legislators with their own agendas. The GA should consider a two year budget cycle for better planning and use of resources, support a Constitutional Convention to address issues such as consolidation of services, term limits for legislators, optimal number of legislators needed, ethical behavior of public officials and a better system of introducing legislation using a cost-benefit analysis approach," said Mazze.
Mazze continued, "2014 needs to be the year the GA moves away from three bad habits: 1, being known as the "let's make a deal" state; 2, thinking about what is good for the entire state rather than a small group of legislator's supporters, and 3, telling Rhode Islanders the truth when it comes to the realities of the Rhode Island economy such as tolls for the Sakonnet Bridge, the sales tax as a revenue source rather than an economic generator and the payment of 38 Studio bondholders by the insurance company guaranteeing the bonds rather than from public funds."
"First of all, Rhode Island transportation infrastructure affects all Rhode Island residents," said DiPalma. "It’s imperative we address RI’s transportation infrastructure. The time to act is now."
"From my perspective we need to address an approximately $1B funding problem over the next decade, including $800M for RIDOT, driven by bridge rehabilitation and statewide resurfacing, and $200M for the RITBA," said DiPalma, stating that "a toll on the Sakonnet Bridge is not appropriate for a variety of reasons, including its lack of equity and fairness to the residents and businesses of the East Bay, and particularly Newport County
DiPalma went on to say that he believed a solution can be developed "via a combination of using predominantly existing moneys from the General Fund and new sources of revenue".
Rhode Island GOP gubernatorial candidate Ken Block said with regard to the upcoming session that he is opposed to the bridge tolls. "The General Assembly must eliminate the Sakonnet Bridge tolls. It is unfair that a local community has been arbitrarily chosen to fund transportation infrastructure across the state."
Moreover, Block called for the entire budgetary process to be more transparent. "The General Assembly’s budget process is broken. There is almost no transparency and legislators are not given anywhere near the time they need to review the budget before the leadership pushes it through. The rushed process leads to mistakes like last session’s merger of the boards responsible for elementary/secondary and higher education. In 2014, I would like to see the General Assembly use an open process to create our budget instead of making major policy decisions behind closed doors at the last minute," said Block.
"On the expenditure side, we need to ask: what has the Governor's office been doing with the Simpatico Waste and Fraud Report, tendered earlier this year?" asked Chartier. "The timeline of activity on Governor Chafee's website pertaining to this important report ends in March. It is estimated that the annual waste and fraud to be found in state spending easily exceeds the annual deficits that the state now faces. Implementation of the report would automatically remove all politics and all dread from the budget-cutting that Smith Hill must undertake in the face of these substantial deficits."
Meanwhile, Mike Stenhouse with the RI Center for Freedom and Prosperity said that "Rhode Islanders need a little R & R" in the upcoming session.
"The 2014 General Assembly session should be judged not by what new bills it passes, but rather, by what existing laws it reforms so as to encourage economic growth and individual responsibility. In that regard, the Center encourages legislators to give Rhode Islanders a little "R & R" via Repeal or Rollback of some of the more burdensome statutes that have proven harmful to our state," said Stenhouse. "Specific ideas include: repeal or rollback of the state Sales Tax; rollback of wasteful levels of state spending that are strangling our economy; repeal of laws that restrict parental choice when it comes to their children being forced to attend schools in their zip code, even if they are failing schools; rollback of Renewable Energy Mandates that result in higher energy costs for every family and that cost our state jobs; repeal of the state's punitive Estate Tax; repeal of the Minimum Corporate Tax; and rollback of the Minimum Wage to federal levels."
One of the big ticket items that will likely be in contention to be on the ballot in 2014 is a constitutional convention question.
GOP candidate Block has been vocal in its backing. "I support a Constitutional Convention and I hope that Rhode Islanders approve it in 2014. We need to reform our system of government, starting with the General Assembly, and that is only possible through a Constitutional Convention. For example, we can restore the Ethics Commission’s authority to review and investigate actions by members of the General Assembly."
John Marion with Common Cause said that the notion of a convention should warrant a good deal of attention in the coming GA session -- but whether it is needed is a question of nuance and debate.
"Secretary of State Mollis has already said that if the General Assembly doesn't pass a resolution putting the Constitutional Convention question on the ballot, then he will. Therefore I expect we'll see the legislature pay much attention to the issue of the question itself," said Marion. "What I do think you'll see are important constitutional issues being raised by many parties (Common Cause included) with the expectation that the Assembly might put some of those on the ballot to ward off a convention. For a fifth consecutive year we will be trying to get the question of whether to close the loophole that exempts the General Assembly from most of the state's ethics laws on the ballot. Others will be pushing for amendments on the line-item veto, equal education funding, and probably other areas of constitutional change. Gary Sasse laid out that argument quite strongly in his recent GoLocal piece. We hope the Assembly listens.
Former Director of Administration Gary Sasse, who had questioned need for a Constitutional Convention in his earlier piece for GoLocal, shared his thoughts on the upcoming session, which included "economic development initiatives."
"Last year the General Assembly addressed the way the State will develop and implement economic policy. Hopefully this year they will address substantive issues that could improve Rhode Island's competitiveness. For example, tax reform and closing the educational achievement gap," said Sasse.
Related Slideshow: The Ten Biggest Issues Facing the RI General Assembly in 2014
The latest report by the House Finance Committee illustrates that Rhode Island will start the next fiscal year, which starts in July 2014, with an estimated deficit of $149 million. The report shows the FY 2014 Budget contains numerous overspending problems—meaning that the General Assembly will have to cut costs somewhere.
So where will the cuts come from? Lawmakers will have to examine the state's costliest programs. According to the Rhode Island Public Expenditure Council, the most expensive government programs in Rhode Island are Elementary and Secondary Education, Public Welfare, Pensions, Higher Education, and Interest on Debt. Click here to view a comprehensive list of the state's costliest government programs.
The state may be two years removed from Central Falls filing for bankruptcy, but 2014 could be the year that other financially strapped Rhode Island communities follow suit—most notably Woonsocket and West Warwick.
With bankruptcy on the table in both 2012 and 2013, this year poses more financial uncertainty for the cash-strapped city of Woonsocket. Earlier this year, the city's bond rating was downgraded due to the city's numerous financial issues—including a growing deficit, increasing unfunded pension liability, and a severe cash crunch.
Similarly, the embattled town of West Warwick faces a variety of financial questions in 2014. With its pension fund set to run out by 2017, the town must address its unfunded liabilities this year if it hopes to regain financial stability. That, coupled with an increasing school department deficit, make West Warwick a contender for bankruptcy.
Look for Woonsocket and West Warwick's elected state officials to address their respective cities' financial issues in the upcoming legislative session.
With the Special Joint Legislative Commission to Study the Sales Tax Repeal set to report their findings to the General Assembly in February, the possibility of sales tax repeal in Rhode Island could become a reality in 2014.
"Our sales tax is killing small businesses, especially those in border communities," said Rep. Jan P. Malik (D-Dist. 67, Barrington, Warren), the commission's chair. "How can Rhode Island continue to compete at 7 percent, with Massachusetts already lower than us and considering reducing its sales tax even farther? How can Rhode Island restaurants compete at 8 percent? They can’t. We need to find a way to fix this, and a serious discussion of our sales tax is a discussion we need to have, now, before more small stores close their doors."
In addition to Malik, proponents of sales tax elimination include the Rhode Island Center for Freedom and Prosperity and Forbes Magazine.
EDC Reorganization to Commerce Corporation
On January 1, 2014, the Rhode Island Economic Development Corporation will be replaced with the Rhode Island Commerce Corporation—a move which has the potential to impact to adversely affect recipients of federal funding contracts made possible currently through the EDC.
This could include the state's Broadband Initiative, Brownfields program, and other contracts made through the EDC. As a result, recipients will now be required to re-apply for federal funding as of January 1st.
The massive overhaul of the EDC was prompted by the 38 Studios debacle, which is projected to cost Rhode Island taxpayers $102 million. 38 Studios, the now defunct video game company, filed bankruptcy in May 2012 just months after securing a $75 million loan from the EDC.
With the state's marijuana decriminalization law going into effect this past April, Rhode Island may be a candidate for marijuana legalization in 2014.
Legislation to legalize marijuana has been introduced in each of the last three years, but has never been voted on. Earlier this year, Rep. Edith Ajello (D-Dist. 3, Providence), who is chair of the Judiciary Committee, introduced the bill in the House. Roughly half of the Judiciary Committee supports the measure.
The bill also has the support of the Marijuana Policy Project, an organization focusing on drug policy reform, which hopes to legalize marijuana in ten states, including Rhode Island.
Approximately 52 percent of Rhode Island voters support legalizing marijuana for recreational use, according to a Public Policy Polling survey conducted in January.
Marijuana is currently legal in Colorado and Washington.
Come November 2014, Rhode Island voters will likely be asked whether they wish to convene a constitutional convention, which involves individuals gathering for the purpose of writing a new constitution or revising the existing one.
Every 10 years, Rhode Island voters are asked whether they wish to amend or revise the constitution. Voters rejected this opportunity in 1994 and 2004. Although rare, Rhode Islanders can vote to hold a constitutional convention and in effect, take control over the state government.
If approved, a special election is held to elect 75 delegates, who then convene to propose amendments to the Rhode Island Constitution. These amendments are then voted on in the next general election.
The likelihood of this occurring highly depends on if the General Assembly does its job to ensure residents that the state is heading in the right direction financially and structurally.
Rhode Island’s last constitutional convention took place in 1986. It proposed 14 amendments—eight of which were adopted by voters.
Education Board Structure
Less than a year after the General Assembly created the 11-member Rhode Island Board of Education to replace the Board of Regents for Elementary and Secondary Education and the Board of Governors for Higher Education, there are multiple questions surrounding the structure of this newly consolidated agency.
Although lawmakers voted to merge the state's two education boards in June, the Board of Education now wants to split its agency to create two separate councils—one with the statutory authority over kindergarten to grade 12 and another governing higher education.
The Board of Education will present its proposal to the General Assembly during its next legislative session and lawmakers will once again determine how the agency should be structured.
The Board of Education currently governs all public education in Rhode Island.
Sakonnet Bridge Tolls
Rhode Island may have implemented tolls on the Sakonnet River Bridge this past year, but they could be gone by 2014.
On January 15, the East Bay Bridge Commission—which was established to allow lawmakers and officials investigate various funding plans, potentially eliminating the need for tolls on the Sakonnet River Bridge—will report its findings to the General Assembly. The General Assembly is then required to vote on the issue by April 1.
The commission was established in July following the General Assembly's approval of the 10-cent toll.
Located on Westminster Street in Downtown Providence, the former Bank of America Building (commonly referred to as the Superman Building) may be the tallest building in the state, but as of right now, it's just a vacant piece of property.
The building's current owner, High Rock Westminster LLC, was most recently looking for a total of $75 million to rehabilitate the skyscraper—$39 million of which would come from the state.
With the sting of the 38 Studios deal still fresh in the minds of lawmakers, a $39 million tax credit appears unlikely.
The question of what will become of the Superman Building remains to be seen.
Championed by Republican gubernatorial candidate Ken Block (while head of the RI Moderate Party), the movement to eliminate the Master Level, which allows voters to vote for all candidates of one political party with a stroke of the pen, is poised to heat up in 2014.
Despite Block's strong push to repeal the 1939 law, the measure did not get a vote in the General Assembly last session.
In October, Block told GoLocal that he believes that House Speaker Gordon Fox is responsible for the General Assembly not voting on the proposal.
“Despite the support of a majority of 42 state Representatives, thousands of emails from concerned RI voters and unanimous testimony of more than 100 people who came to the State House in person to testify that the Master Lever had to go, the Speaker personally killed the bill in the most unaccountable way possible—he did not allow the House Judiciary Committee to vote on the bill,” Block told GoLocal.
Speaker Fox has stated on multiple occasions that he believes the Master Level is a legitimate tool that many voters use.
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