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Donna Perry: New Year, Same Worries for RI Taxpayers

Thursday, January 03, 2013

 

The gavels came down in the House and Senate chambers this week, marking the start of yet a new session. Yet the proceedings had a Groundhog Day feel, as the current Speaker, Gordon Fox, remained Speaker, the Senate President, Teresa Paiva Weed, stayed Senate President, the overwhelmingly Democratic Legislature was clearly intact, and the current Governor, Lincoln Chafee, welcomed them all once again.

Speaker Fox opened the session with an unprecedented and unmistakable gesture by bringing his longtime companion to the podium to signal that gay marriage would be fast tracked in the Legislature and in fact, a bill is being submitted already. It’s been a private and public struggle it seems for Fox to reconcile his inability, as the first openly gay Speaker, to get a gay marriage bill through and this week it was clear he will champion the legislation to final passage.

Once he accomplishes that however, the economic pressures and the taxpayers’ struggles must top his agenda. It may be a new year, but if 2013 ends up looking a lot like 2012, then the state’s taxpayers should be very concerned. The Rhode Island taxpayer was the big loser in 2012 due to numerous factors, but the two key pieces revolved around the 38 Studios meltdown, and, as the year wound down, the very real possibility that the state’s new pension reform law could be overturned by the courts. Thanks to all that, two separate taxpayer tabs, in the vicinity of $100 million, loom in the wings as 2013 gets underway.

It’s very unclear how the state’s lawsuit connected to 38 Studios will fare, and whether the repayment of the loans will end up in the taxpayers’ lap. It’s also possible that due to legal maneuvers begun in the past year, local communities could face huge unexpected new pension obligations collectively hovering around $100 million should the court overturn the pension law.

On top of all that, RI’s dead last rankings for business friendliness, workforce readiness, and job growth—pose equally lethal threats to taxpayers and the viability of their communities and judging from the positioning seen this week, the rankings are starting to rankle.

Legislative leaders seemed to be working off the same script that emphasized “this is the year we will show leadership in tackling the state’s economy and second worse in the nation unemployment problem.” Their recognition of the depth of the problem is welcome, however what will really count in the days going forward will have more to do with political willpower than another round of acknowledgement of the problems.

Example: The General Assembly’s planned “Economic Summit”, set for mid-January reportedly to analyze the regulatory burdens to businesses in RI, certainly has that “Groundhog Day” feel as there were similar efforts by the Legislature last year. (…and perhaps the year before that?) It would be a significant step in the right direction if some type of regulatory reform panel can be formed to organize reforms but what will matter is whether concrete action comes out of it.

Job Growth and vibrant economic sectors are created when there is political will to do the right thing; think out of the box; look at the big picture; make choices for the greater good. It will take political will to resist the pushback from entrenched and tenacious union advocates who have already stated this week that they will again go after binding arbitration for teachers, for example.

It will take political will from leaders like Speaker Fox and others to say, “ you’ve had your shot at binding arbitration and we’ve shut it down. We won’t accommodate your annual effort to get it passed, the communities can’t afford it.” Fox did show political willpower in the past when it came to binding arbitration, yet his counterpart Senate President Paiva Weed did not. Fox also showed political will just in December when he publicly chided Chafee for holding secret talks with the other side on the eve of court, playing into the unions’ strategy to force a reopening of negotiations connected to the pension lawsuit.

So there’s hope, but it will take political will by many others, including members of Labor and Education Committees, when legislative efforts are made from certain quarters to undermine teaching and curriculum changes. They will need to assert to their own colleagues carrying water for special interests, “if you are undermining school reforms underway to correct ineffective practices and curriculums, then you are undermining the ability of the state to turn out the properly educated workforce RI needs .”

It will also require political willpower by the Legislature to honestly assess the true value of tax credit programs, specifically the expansion now proposed for stage shows and musical venues, and to demand transparency on return on investment tied to the awarding of the credits. It will also take huge doses of willpower to revisit municipal pension reform which got nowhere in 2012 even as additional communities now wrestle with soaring unfunded liabilities for locally run plans, and nobody talks about the unfunded health care promises.

If the new session sees legislative players more concerned with superficial posturing, and less inclined to find the will to make the hard choices, then maybe it can all get resolved with the use of a film tax credit. They can make a new film, and set it right within the Legislative chambers. How about “ Groundhog Day 2: RI”?

 

Donna Perry is Executive Director of RISC, RI Statewide Coalition - www.statewidecoalition.com

 

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