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Russell Moore: Make Twin River A Destination Resort Casino

Monday, February 03, 2014

 

Sometimes, hitting rock bottom is a good thing.

Nobody wants to be there, but when you're the cellar dweller you have a chance to assess where things went wrong, and, what’s most important, you can decipher why things went to Hell in a Del’s lemonade cup.
That was my reaction after meditating on the fact that Rhode Island currently once again has the worst unemployment in the nation—higher than even Michigan—at a disgusting 9.1 percent.

Our Tyranny

GoLocalProv MINDSETTER™ Don Roach made a great point a few weeks ago in his column when he pointed out that if Rhode Island ever got its unemployment rate, and other key economic rankings to where Massachusetts is—we’d be dancing on Memorial Boulevard. Yet even trying to get ourselves to the middle of the economic pack seems as frustrating as trying to get at table at Twin Oaks on a Saturday night.

Let me put it another way. A person who sits on the couch for 15 hours a day and gorges himself on junk food—assuming he isn’t stupid—knows that if he ever wants to lose weight, he needs to try something different. Yet Rhode Island doesn't seem to be trying anything different. 

We're staying the course and were living under the tyranny of low expectations.

Wishing and Hoping

The Rhode Island economy is like an unhealthy person. And our leaders seem to think that minor tweaks or simply doing the same things we’ve always done while wishing and hoping things will get better is an acceptable course of action. Like the lazy, overweight person who refuses to change his behavior, the economic status quo clearly isn't working for Rhode Island.

I have plenty of respect for Senate President Teresa Paiva Weed and House Speaker Gordon Fox. Both are intelligent, well meaning leaders have the best interests of the state at heart.  But let’s face it, the economic reforms of 2013 left something to be desired. Merely changing the name of the bureaucracy that is the RI Economic Development Corporation isn’t going to cut the mustard for a state that is in so desperate need of an economic upheaval.

And believe it or not, it’s hard to blame Governor Lincoln Chafee for our economic malaise. (Be patient and hear me out on this one.)

When he campaigned for Governor in 2010, Chafee never laid out any specific economic proposals other than a plan to raise sales taxes without cutting any taxes to offset them. And we elected him anyways because we liked his dad and he was friendly with President Barack Obama. Love him or hate him, he never really promised to address the economy outside of focusing on our “assets.” And he hasn't.

Time to be Bold

The whole no vision thing has been a disaster. Rhode Island’s economy is stagnant, and the state is in a position where it needs to take bold, decisive, and, dare I say it, risky action to jump start its economy. The beauty of the situation is that there isn't much inherent risk in changing things when you’re ranking last in almost every major economic bellwether.

To their credit, the Rhode Island Center For Freedom and Prosperity has put forward a proposal that certainly would spur economic development—eliminating the sales tax. I give the organization credit for coming up with an idea to shake things up and having the courage to bring it forward.

Incentivize Work and Production

But I disagree insofar as I think Rhode Island could eliminate a different tax. If tax cutting is the answer to spur economic development, and I agree that it is, why not phase out the income tax instead of the sales tax? Doing so would encourage and incentivize production and work instead of consumption.

A 0.0 percent income tax would attract people who like to work and build businesses to live in RI. While we're at it, we should also repeal the estate tax, which would encourage people to die here instead of moving somewhere else to protect their assets.

Further, one of the things I find most interesting about Rhode Island is how much people who don’t live here like the state. To think about it, I’ve seldom, if ever heard someone who isn’t from Little Rhody say a bad word about us. On the contrary, and I’m probably as guilty as anyone here, it’s our natives who are always complaining.

(How can you blame us, the residents are the people who have to put up with all the corruption, incompetence, and economic malaise that accompanies our great state.)

Build a Monte Carlo

Given those facts, it’s not surprising that we’re attractive tourists. Tourism and entertainment can replace manufacturing and provide the jobs we need to rebound economically. Newport, Narragansett, Providence, and so many other communities offer great restaurants, unbelievable scenery, and awesome arts scenes. Rhode Island should do even more to market these tourist destinations.

Further, we should either make Twin River a destination resort casino, or build our own resort style casino, or both—and quickly. We need our own Monte Carlo. If done right, it could bring in even more revenue to our state’s coffers. And what’s best, that revenue would be from out-of-staters instead of Twin River, which predominately milks revenue from in-state residents—which is less of a boon to our budget.

In other words, Rhode Island should become the Monaco of the East Coast of the USA. If we didn’t have an income tax, people would actually want to reside here full-time as opposed to just visiting. Instead of a Flight of Earls, we’d have an influx of them. That's a good thing. Earls have money and they spend it. They make great customers.

Just Say "Yes"

Here's the question the naysayers throw at reformers who propose bold solutions like cutting taxes. Picture someone dressed like an assistant manager at Benny's with the $2 dollar tie and white dress shirt saying in the whiniest voice possible, "Where are you going to get the lost revenue?"

Here's the answer: we’d gain a huge chunk of extra revenue by all the economic activity our state would receive by people flocking here thanks to our lack of income taxes. We could hike sales taxes in the short term to make up for any revenue shortfalls created by the income tax phaseout. In the long run, the increased economic activity would allow the state to then scale back those taxes when the economy becomes awesome.

By getting ahead of the curve and legalizing, regulating, and taxing marijuana, we could add an additional chunk of revenue to help make up for the income tax phase out. That too, would increase tourism---and recreational marijuana users would come to RI and spend money on more than just drugs. In other words, just say yes.

And yes, my plan would rely on cutting out the waste, fraud, and abuse in government that politicians talk about but seldom address.

It’s pretty easy to sit back, criticize plans of people who have offered solutions. It’s much harder to offer them yourself. When you do that, and get elected in the process, you end up with a state with the highest unemployment rate in the nation.

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: 10 Questions Pell Has to Answer When Running for Gov of RI

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10. Pell's Base?

Where is Pell’s voter base going to come from?

It is difficult to identify Clay Pell’s base beyond a few prep school chums (in California) and the lovely people who live on Bellevue Avenue in Newport.  
 
Every winning candidate needs a core base to leverage to win.
 
Taveras is counting, in part, on the Hispanic community as his base.
 
Raimondo is working to solidify two core groups – women and fiscal conservative Democrats.
 
Pell, who is both wooing and being wooed by progressives and public sector unions (see #6), must grow beyond the group the summers in Newport.
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9. Seriously

Seriously – Another No Private Sector Experience Governor?

Voters should understand that two sources of revenue have funded Clay Pell’s adult life – the federal government and trust funds.  His public service in the Coast Guard is admirable, but Clay Pell has never had to worry about: 
 
Mortgage, rent, car, health insurance, groceries, credit card, electric, oil/gas, telephone, cable, cellphone, college loans, tuition, or even yacht payments.  
 
They were all taken care of before his own birth.
 
He has to convince voters that he is credible.
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8. Decision making

Has he ever had to make an executive decision?

There is no indication that Clay Pell has ever had to make a significant management decision in his life. We all saw how David Cicilline struggled with managing Providence’s budget – Mayor’s offices and Governor’s offices are tough places for on-the-job learning.
 
Like their decision making or not, both Taveras and Raimondo have had to make executive decisions – Pell is going to need to assure voter he can make management decisions (See tough decisions below).
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7. Ordinary RIers

Can Pell connect to Rhode Islanders?

Most of the places Clay Pell spent his formative years, Rhode Islanders have not experienced.  The reason why – they are private clubs, top-flight private schools and colleges. The Thacher School to Harvard to Georgetown Law School.  Each of these premier schools has an annual tuition of more than $50,000 a year.
 
While Pell may claim to be committed to “ordinary” people (as he said in a WJAR interview), he needs to demonstrate that he is can understand the plight of unemployed and underemployed Rhode Islanders.
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6. Progressives

Progressives and Unions are in Love with Pell, is that good for RI?

Two powerful and influential groups in the Democratic primary are progressives and public service unions. With Rhode Island’s unemployment the worst in the United States and the economy, de facto, still in the recession, the next Governor will have many difficult decisions. 
 
The decisions will include difficult budget choices – not likely to be popular with public sector unions and progressives.
 
As the Wall Street Journal wrote this week, "...makes him attractive to public unions who are likely to spend heavily in the primary. Robert Walsh, the executive director of the National Education Association Rhode Island, has already welcomed Mr. Pell's entry into the race. "Suddenly, an opportunity appears."
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5. Kwan Factor

Is he more than Michelle Kwan’s husband?

Rhode Islanders love a good celebrity and Clay Pell’s wife Michelle Kwan is certainly a celebrity. She won her first ice-skating World Championship in 1996 when she was just 15 years old. And had qualified for the Olympics in 1994 at age 13 only to be bumped by the recovering Nancy Kerrigan.
 
The two-time Olympian Kwan will wow Rhode Island during the campaign, but will she overshadow her husband?
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4. Claiborne Factor

Is he more than Claiborne Pell’s Grandson?

The venerable Claiborne de Borna Pell retired from the United States Senate nearly two decades ago. While older voters may be fond of the deceased Senator’s legacy – many Rhode Islanders were not old enough to vote or did not live in the state when Pell was in office.
 
While the Pell family name may have some limited impact and young Clay Pell’s campaign will dredge up lots of legacy stories (so many you may think Clay was the author of the legislation creating the Pell grants).
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3. GOP Factor

Can Pell beat a Republican?

Pell’s ability to skate between Raimondo and Taveras to win the Democratic primary in a coalition of union and progressive’s support will force him to win from the left.
 
Coming out of the primary will have defined him to the general election voter as a liberal of the highest degree. Brookings Institute Vice President Darrell West recently told an audience during a speech at the Newport Art Museum that progressives are back in vogue (citing the recent election of ultra progressive Bill deBlasio as Mayor of New York), but with Rhode Island’s economy stuck in a recession, Pell may have a difficult time convincing voters in the General Election that he is viable.
 
Remember in the past five elections – Rhode Islanders have elected Republicans to the Governor’s office four times (Almond twice, Carcieri twice) and in the last election while a liberal Lincoln Chafee won, more than 60% of the voters cast a ballot for the conservative Frank Caprio (D), GOP candidate John Robitaille or the business leaning Moderate Party candidate Ken Block.
 
Either GOP candidate will be able to paint Pell as too liberal for the challenges facing Rhode Island’s stagnant economy (9.1% unemployment).
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2. Experience, any?

Does Pell have any experience?

Pell graduated from law school in 2008. That is right; Clay Pell has only been out of school for 5 plus years.
 
It is hard to believe that his experience in Coast Guard as a junior officer and his White House Fellowship qualifies him to be the chief executive of a state – he has never managed senior staff (he has never been senior staff), never managed employees of any significant scale, he has never managed a major budget, and he has zero economic development experience – a trait that some voters might look for after Chafee’s term.
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1. Tough Enough?

Is Pell tough enough?

Both Gina Raimondo and Angel Taveras demonstrated in the past three plus years in office the ability to make “tough” decisions.  
 
Taveras had to clean up the Cicilline budget mess that had nearly bankrupted the City of Providence and Taveras even fired all the teachers in the Capital City. Of course, he walked that dog backwards during the following months ensuring a lack of trust with both teachers and fiscal conservatives.  
 
Raimondo’s pension reform effort has drawn passionate support and venomous scorn.  Regardless, it has demonstrated Raimondo is battle tested.
 
Pell’s professional career is not only short (5 plus years), but also been advisory – the buck has never stopped at Clay Pell’s cubicle.
 
 
 

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