Russell Moore: A Modest Proposal to Governor Chafee

Monday, June 02, 2014

Russell J. Moore, GoLocalProv MINDSETTER™

November can't come fast enough.

That was my sentiment after watching the Channel 10 "News Conference" with Governor Lincoln Chafee last week. First thing first: kudos to political reporter Bill Rappleye for asking incisive, cogent, on point questions and follow up questions, as usual.

When Chafee volunteered his main priorities in the state budget this year, I hoped he would point to initiatives to improve education, a plan to make the state more enticing for economic development, or cuts in spending in order to make government more affordable. There was no such luck.

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Priorities

"I have two priorities in this year's budget. Pay the 38 studios debt...And the second is, if you're not going to have tolls, pay for the expense of our infrastructure with real money," said Chafee. He then named increased license fees, registration fees, and the gas tax as potential areas to squeeze more revenue out of taxpayers.

So there we have it. His main priorities are more taxing and spending.

I scoured the internet, yet I couldn't, for the life of me, find instances in which people proposed that we pay for infrastructure upgrades with counterfeit cash. Excuse the sarcasm, but I honestly don't have the slightest idea of what Chafee means when he says that we have to pay for infrastructure with "real money", as if there were some other option.

Yet, in a way, you have to give Chafee two points for consistency. To his credit, the Governor has always maintained that he believes Rhode Islanders are under-taxed. Who can forget the main theme of his 2010 campaign--hiking the sales tax? (Thankfully, the state legislature would have none of that nonsense.)

Consistency

The problem is he's wrong. Every objective ranking I've ever seen has shown that Rhode Island is consistently one of the 5 highest taxed states in America (all taxes considered). With that in mind, Rhode Island needs to be cutting, not hiking, taxes and spending.

Earlier in the interview, Chafee tells Rappleye that he felt like he was alone in opposing the 38 studio's deal back in 2010. It sounds good. The problem is that's not true. There were scores of politicians who opposed the ill-fated deal. It often seemed like former Governor Don Carcieri and his cronies on the EDC board were the only folks supporting the deal--even back in 2010.

Here's one example. In late August of 2010, then Treasurer Frank Caprio contacted the ratings agencies and asked them not to rate these bonds in an effort to kill this ill-fated deal. He also reached out to bond buyer magazine and an article was published on bondbuyer.com on August 30 of 2010 in which he warned investors not to buy these risky bonds.

A Modest Proposal

There are others. Gina Raimondo, then a candidate for General Treasurer (she's now running for Governor), also came out in staunch opposition to the deal. Ken Block, who ran for Governor that year and is once again seeking the same office, was also opposed to the deal.

Nobody listened to any of those in opposition, which included Chafee. And as he points out, we are facing a $12.5 million payment to make these bonds whole this year, and for several years into the future until the whole $88 million dollar debt is paid.

I still don't think believe this payment should be made because it's not a legal state debt and I don't think it would cost us anywhere near $75 million dollars more in borrowing over the long term.

Compromise

However, politics is all about compromise, and therefore I have a modest proposal for Governor Chafee.

If Rhode Islanders are forced to pay off the 38 studios debt that they never approved and don't legally owe to begin, then Governor Chafee should make good on the $250,000 EDC loan that his well-connected, good friend, and former spokesman Mike Trainor got dismissed in bankruptcy court back in 2010.

Trainor and a business partner from Connecticut got the $250,000 loan in 2006 to fund a storm window business that would, unbelievably, install windows for out-of-state customers. This enterprise was ill-fated and the company went out of business by 2008.

Make Rhode Island Whole

When this disaster was brought to light in early 2011, Chafee personally vouched for this man--saying that he believed that Trainor would make the state whole on the loan. If that's not going to be the case, I'm sure I speak for everyone in Little Rhody when I say that I, for one, would appreciate it if Chafee would put the money up personally.

Here's a tremendous opportunity for goodwill on Chafee's part. In exchange for Rhode Islanders paying the 38 studios debt they don't legally owe, he could pay off the Trainor EDC loan. This is a perfect opportunity to lead by example.

Chafee shouldn't let this chance go to waste! I'm sure it would go over much better with the average Rhode Islander than hiking car registrations, driver's licenses, or gas taxes.

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A native Rhode Islander, Russell J. Moore is a graduate of Providence College and St. Raphael Academy. He worked as a news reporter for 7 years (2004-2010), 5 of which with The Warwick Beacon, focusing on government. He continues to keep a close eye on the inner workings of Rhode Islands state and local governments.

Related Slideshow: Gov. Lincoln Chafee Trip List

Below is a snapshot of the dozen out-of-state trips Governor Lincoln Chafee made in 2013 on official state business. For each trip, the purpose, dates, destination, accompanying staff, and cost to the state, if any, is listed. GoLocalProv compiled the Governor’s travel schedule based upon documents provided in response to a public records request.