RI Commerce’s 17 Deals: More than 70% Goes to Out-of-State Companies
Monday, May 22, 2017
Rhode Island Commerce has been wheeling and dealing to try and spark Rhode Island’s economy. The agency is either building the foundation of a new Rhode Island economy or funneling millions in tax subsidies to a range of in-state and out-of-state companies.
More than 71 percent of the tax subsidy dollars has gone to out-of state companies. Just $8.6 million has been tapped for Rhode Island companies, while over $22 million has been awarded to out-of state and out-of-country interests.
SLIDES: SEE WHO'S GETTING THE MONEY BELOW
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTAccording to Rhode Island Commerce, they have awarded approximately $30.7 million in the past 17 months. These subsidies are expected to create over 1,400 new jobs in Rhode Island.
After two and a half years in office, Governor Gina Raimondo and her Secretary of Commerce, Stefan Pryor, believe that the economic buds are about to bloom.
However, while the strategy is waiting to take hold, Raimondo's economic performance is a mixed bag at best. Rhode Island’s revenue is off by more than $100 million. And, for the past two months Rhode Island has lost jobs.
Now, Vistaprint Corporate Solutions is coming before the Commerce Board on Monday for a vote. Of the seventeen companies that have received tax credits, eight of the companies who qualified for the job incentive tax credits have been awarded to out-of-state companies. The award of subsidies to Vistaprint was criticized by Rhode Island printers who do not appreciate large corporate competitors receiving millions in state monies.
“As a reminder, the tax credits aren’t paid out till the jobs are created and paying state income tax,” said Matt Sheaff, spokesperson for Commerce Corporation.
Big Companies, Small Offices
The program has lured some big name companies to open small offices in Rhode Island.
The most generous of the packages awarded to Johnson & Johnson — the New Jersey-based company will receive over $59,000 per job. Johnson & Johnson employees over 125,000 in 60 countries around the world.
The company plans to locate 75 in Rhode Island and they will receive subsidies in excess of $4.4 million. Similarly, General Electric will receive almost $4.6 million for 100 jobs. GE has sales over $75 billion and employs more than 300,000 globally.
“Based on third party economic analysis, these jobs are projected to add an additional $46 million in revenues to the state over the next 12 years,” claims Commerce. The third party analysis is conducted by Appleseed — a NYC-based economic consulting firm “with more than 20 years' worth of experience conducting economic impact analysis and economic development studies.”
“Also, most of the tax credits are paid out over 10 years and only once the jobs have been created and have been paying income tax for a year," Commerce added.
Former Director of Administration Gary Sasse wrote in a recent MINDSETTER™ piece in GoLocal, “The first question voters should ask is ‘do the proposals meet the fiscal reality test?’ Is it disingenuous for a candidate to suggest that new initiatives be financed by either reallocating parts of the state’s $8.7 billion budget, or earmarking existing tax revenues to new projects without identifying the activities that would be eliminated?”
Related Slideshow: Who is Getting Money from Commerce - May, 2017
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