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Donna Perry: New Session Will Focus on Old Debts

Thursday, January 05, 2012


The gavel may have come down on a new legislative session in Rhode Island this week but old debt and old bad decisions are what will most command lawmakers’ attention in the coming days.

That’s because mounting deficits in several local communities vividly became a state problem at year’s end when East Providence was forced into a form of state intervention and Woonsocket threw out a plea for state help when it almost failed to meet weekly payroll in the school department in the final week of the year.

The fiscal fretting, stubborn deficits, and inevitable bad bond ratings have given way to a sobering reality that municipal fiscal problems of crisis proportions don’t begin and end at the boundary line of Central Falls.

As the 2012 legislative session starts, local communities need their own Gina Raimondo-like champion from within the ranks of state lawmakers who will make their plight the front and center issue.

By all indications, the city finances of East Providence, now being overseen by a state Budget Commission, are at the moment in more urgent condition than Woonsocket’s but not by much. Both cities have been carrying deficits from school department costs, are now carrying junk bond status, and seem to be lurching from one season to the next through an uncertainformula of stalling on bills, running up new deficits, and now, seeking to tap education aid to shore up cash flow.In fact, the pursuit of state aid in the case of both cities has meant pressuring the state to turn over their allotment of state education aid from the new funding formula earlier than what was scheduled. Woonsocket would have missed its school department payroll as December closed out if its share of state education aid-- $4.5 million – had not been turned over ahead of schedule. Likewise, East Providence is seeking to have its $12.5 million in education aid turned over now or the city could run out of cash within weeks. Both communities also face pension obligations that hover in the $100 million dollar range. It should come as no surprise that the local plans are not adequately funded and their current fiscal plight make vivid examples of why municipal pension reform must be achieved this session.

Widespread Challenges

But it’s also clear the dilemmas posed by this growing municipal debt crisis represent only part of the state’s widespread fiscal challenges.

A “Real and Present Danger” narrative regarding the state’s intake of revenue is taking shape and could prove to be an equally dramatic story.

Legislators will need to apply the same level of urgency and focus they brought to the statewide pension reform bill to a strategic approach to state revenue that is one part safeguarding present gambling intake, and one part big picture planning for new sources.

As Massachusetts goes forward with the siting of up to four gambling establishments, regardless of what plays out in Foxboro, our state needs a forward looking, aggressive and comprehensiverevenue plan, in which, like it or not, gambling has to play a central role. The state not only needs to safeguardthe$300 million a year present gambling activity generates, but also needs to enhance what present sites offer beyond the table games expansion option which will be on the November ballot.

It’s true that leaders like Speaker Fox have been speaking with urgency in recent days about the state’s need to protect its gambling turf but it could be the state has already gambled away too much time in disjointed deliberations about a destination casino of our own before the Bay State got into the game.

Rounding it all out is the backdrop of the election year and lawmakers’ instinct not to do anything too bold so as not to hand possible opponents an easy line of attack.

But they may find campaign oriented themes may start to surface much sooner than next fall.

“Save Our Cities” and “Don’t Gamble Away Our Revenue” may be appropriate slogans for 2012.

Donna Perry is a Communications Consultant to RISC, RI Statewide Coalition (http://www.statewidecoalition.com)

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The casino debate keeps coming up all the time and it is a pipe dream - more get rich schemes. RI is coming into this game very late BUT the people have spoken many times at the polls against these casino proposals. Lawmakers on Smith Hill have ignored the voters and proceeded to make the budget dependent on the $300 million revenue stream each year. They have boxed themselves in by not pushing tax reforms and cut spending to promote economic growth. They instead go for the “fast money schemes” to plug their budget woes.

Casinos really do nothing to help the economy except for the temporary construction jobs. The jobs they do offer are usually low paying or minimum wage positions. The assistance they provide to the state and local governments is minimal as demands for emergency services and public safety personnel will put strains on local budgets. Casinos also cause crimes to increase and promotes gambling addictions to society. This is all very well documented.

The recent promoting of Quonset and a Casino “mega-plex” by Rep. Trillo is too little too late and no doubt would not be welcome in North Kingstown. Massachusetts has already moved forward with many site locations for casinos. CT has to be nervous with the large scale casino planned for western Ma. That could siphon off enough revenue to close one of those two palaces. Residents of Foxboro are against the proposal there as they have enough on their plate with the Patriots football enterprise.

RI needs to get serious with their budget and cut the spending. If they are worried about the $300 million casino revenue, they should be more concerned with the pending cuts of federal aid, which amounts to $2.2 Billion or one third of the budget.

Comment #1 by Lance Chappell on 2012 01 05

Sane minds see the huge pile of problems Rhode Island faces as almost insurmountable. Democrats see that same pile as nothing that few aid cuts to cities and towns, and tax hikes can't solve on June 29, at about 11:00pm.

Comment #2 by David Beagle on 2012 01 05

Interesting. Especially interesting when Perry, her brother, the past two Republican governors, the Republican state legislators, the chambers of commerce, the tourism groups, RIPEC, and all the other incompetents five years ago spent millions to convince Rhode Islanders to vote against their own interests in order to protect a slot parlor owned by South Africans and another slot parlor owned by a Florida resident.


Now she and the "we haven't got a clue" crowd are hyper ventilating over the "clear and present" Massachusetts threat?

This is delicious.

And they really think that throwing table games into either facility is the answer to stemming the MA cannibalization?

Someone should remind them that MA residents represent more than half the patrons at the two RI slot parlors, yet MA patrons for 20 years have chosen to drive right past the RI slot parlors and continue onto southeastern CT --- and extra hour's drive each way. For every $1 they spent at the RI slot parlors, they spent $4 at the CT casinos.

And one thing the "no clue" crowd hasn't figured out yet: it isn't just MA patrons that are going to give the RI slot parlors the backhand, just imagine the number of RI residents who will prefer visiting a MA casino than Twin River or Newport Grand.

And, for that matter, just imagine the number of RI residents who will prefer visiting a Plainridge or Raynham slot parlor rather than Twin River. People don't realize that RI is restricted, through its Gtech contract, to offering ONLY electronic slot machines. MA will offer both electronic and traditional reel-to-reel slot machines, the kind that are ever present at the CT casinos.

We are firmly stuck behind the 8-ball. Thanks Gov. Carcieri and Almond. Thanks Republican state legislators. Thanks RIPEC. Thanks Laurie White and the Providence Chamber of Commerce. Thanks tourism. Thanks PPAC. Thanks for nothing!

Comment #3 by Mark Richards on 2012 01 06

I make less than $200,000. So I'm paying more state income taxes and property taxes on my used car.
Hey Donna how do you like your tax cuts and tax free boat?
You are a TOOL!

Comment #4 by Real Clear on 2012 01 08

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