Raimondo Administration Criticized for Inflated Wexford Job Numbers

Sunday, January 08, 2017


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RI Governor Gina Raimondo (seen here at inauguration).

Political leaders and advocacy groups — including Republicans, Democrats, and Libertarians— are criticizing the Raimondo Administration for inflating claims of job creation, following a GoLocal investigation. 

As GoLocal reported on Friday, 

"Raimondo has repeatedly claimed that the $32 plus million in public subsidies will create 1,000 new permanent jobs in Rhode Island. After weeks of requesting information about tenants, rents, and job creation, GoLocal was finally able to secure actual job numbers for the project and then fact check those claims. In fact, actual jobs created will be closer to 80 to 90, at a cost of more than $32 million."

Democrats, Libertarians on the Record

Sam Bell with the Progressive Democrats of America said on Friday he thought the revelation was “par for the course” given the state’s history. 

“This is par for the course with Raimondo and the corporate welfare agency that did the 38 Studios deal.  I mean this is an agency that deliberately broke the law to allow Johnson and Johnson to still get corporate welfare payments for just 80 jobs under the QJIA, even though the QJIA sets a minimum of 100 jobs for a company as big as Johnson and Johnson.  They broke the law to help a company create fewer jobs.  They operate in bad faith, and the results are deplorable,” said Bell, of the state's qualified jobs investment act.  “There are still no cranes in the sky in Providence. “

Raimondo has continued to refuse to direct the State Police to release the interview notes from the 38 Studios criminal investigation, despite its conclusion. 

Pat Ford, the Chair of the Libertarian Party of Rhode Island, had helped lead the effort to block the Pawtucket Red Sox from moving to a taxpayer subsidized stadium in Providence in 2015. 

"From the Convention Center to ’38 Stadium,’ I'm still waiting for a single shred of reality to be introducing into the prognostications economic or otherwise of our state's poobahs,” said Ford, of what he dubbed the proposed Pawtucket Red Sox state incentive deal.  “As long as the underlying data for economic development is generated by individuals and organizations with blatant self-interest, Rhode Islanders will never be able to fully understand the implications of our decisions.”

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The rendering of the hotel proposed next to the Wexford building; the hotel is projected to create just over 50 jobs.

“Ultimately we are being asked to subsidize the creation of job incubation when there is nothing to prove that Rhode Island has or is capable of providing any incubation itself,” said Ford. “The model seems to be based on build it and pray like hell someone shows up.”

Advocacy Groups Decry Deal

Taxpayer advocacy groups spoke out against the state’s corporate welfares policies, in light of the Wexford deal. 

“This is precisely why we and all of the fiscally conservative groups oppose the corporate cronyism that goes on in this state.  There is never any independent analysis of the resulting economic impact.  There needs to be a moratorium on corporate hand outs until elected leaders look to make the playing field level for all businesses vis a vis a new tax structure,” said Pam Gencarella with OSTPA. “Additionally, the state needs to look at continuing giveaways, like the millions in tax credits that go to a very profitable company like CVS.” 

Mike Stenhouse with the Rhode Island Center for Freedom and Prosperity pointed to the “lessons” of the  38 Studios deal that he says the state has still not learned. 

"The lesson from 38 Studios that our state's political leaders have obviously not yet learned is that doling out millions of dollars in corporate corporate welfare is not a credible economic development strategy. Whether by politicians or their corporate friends, when there's this much money floating around, fraudulent information will be peddled to the public, not to mention potential hidden agendas.”

GOP Leaders Respond

New House Minority Leader Patricia Morgan spoke out against the revelation of job inflation following GoLocal's article. 

“Obviously to admit that so few permanent jobs are being created by such a large financial incentive would make the project hard to sell to the public,” said Morgan. “But the public deserves the facts; not spin, not window-dressing.  It is taxpayers’ money that is being used. It comes out of their paychecks and their wallets and they deserve much better.”
“Instead of talking about mythical jobs, it would help average Rhode Islanders much more to reform and repair the foundational pieces of our economy , so that all companies large and small can thrive and grow more and better paying jobs for all,” added Morgan. “It’s hard work and requires the spending of political capital, but ultimately it is the more effective means of creating plentiful jobs and financial security for our citizens.”

Representative Mike Chippendale, who had helped lead the General Assembly’s call for an investigation into 38 Studios, the deal that enabled it, and the aftermath, spoke out on Friday. 

'Every one of her ‘major announcements’ about a company moving to Rhode Island has later been revealed to be considerably less of an economic boost to Rhode Island than the governor originally proclaims," said Chippendale. I think rather than ‘resume building’ by attracting companies that are mostly big in name and not size (here in RI), the governor ought to listen to the small businesspeople with whom I speak nearly every day.”

“It's very disappointing to see our Governor mislead us, in her continued mission to save face, from her disastrous attempt to govern our state.  Rhode Island has such great potential of success, yet we are held back by constant controversy. This is yet another example of the continued un-truthfulness of her administration,” said Representative Robert “Bobby” Nardolillo. “The state’s small business community is in need of tax relief and isn't getting it. When these business owners see new businesses coming here to our state, and their immediate incentives, it's extremely disappointing and disheartening to them. I believe all Rhode Island businesses should be treated, and respected, equally.”

The Governor's office was asked for comment from Raimondo on the jobs numbers, but did not provide response from the Governor. 

SLIDES: RI Elected Leaders, Lobbyists' Priorities for 2017


Related Slideshow: RI Leaders, Lobbyists’ Priorities for 2017

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Nicholas Mattiello

Speaker of the House

GoLocal sat down with Mattiello in December to talk about his priorities for 2017.

"We have to see what we can do, but our number one priority is going to be the car tax. I’d like to give retirees a little more tax relief.

I’d like to eliminate the tax on the tax for leased vehicles - when you pay your property tax through a lease you actually end up paying a sales tax on the property tax and that’s a tax that annoys folks and I’d like to eliminate that.

I’d like to raise the exemption on the estate tax, so that we are better able to keep successful folks in the state of Rhode Island for their job creation, for their philanthropy, the general economic activity that they create."

Read the rest of the interview here

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M. Teresa Paiva Weed

Senate President

In the 2016 legislative session, I look forward to continuing to work with the House and the Governor to build upon the economic momentum Rhode Island has been gaining. The Senate is committed to a competitive tax and regulatory environment, along with continued investments in education and infrastructure that help to fuel our state’s economy.

Addressing mental health is a priority for the Senate this year. The Health and Human Services Committee has conducted a series of hearings and will be making recommendations to improve mental health services in Rhode Island.

It is important that we enact the Justice Reinvestment reforms passed by the Senate last year. The Senate will act on these bills early in the new session.

The Senate also will be working to increase wages for direct care workers, including those who serve the developmentally disabled and those who work in home care.

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Patricia Morgan

House Minority Leader

The Republican caucus will continue to champion issues will help average Rhode Islanders.  We will be using the Republican Policy Group to provide oversight to programs and policies that are driving up the cost of living and that are dampening the economic vitality of our state.  These issues are vital to hardworking Rhode Islanders who deserve job and financial security.  We will continue to be a voice for Rhode Islanders who feel that government has stopped representing their best interests. 

We are encouraged that Speaker Mattiello has embraced our proposal to eliminate the Car Tax.  However, shifting that cost from municipal taxpayers to state taxpayers is akin to taking money from the right pocket instead of the left. State subsidies alone should not be the only solution.  While wasteful programs in our state budget can certainly provide a down payment, we must address the root cause of the car tax and give municipalities tools to help them control their spending. Disability pension reform is one such tool.  Abuse of that program drives up property taxes and hurts families and small businesses, alike.

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Joe Shekarchi

House Majority Leader

1) The Car Tax - My top priority for this session is to take substantial steps toward phasing out the car tax and eliminating it completely within five years.  Our local property tax burden is often cited as a contributing factor for why businesses do not invest in our state. Phasing out the car tax will make us more regionally competitive and provide much needed relief to taxpayers.

2) Preparing for 21st Century Jobs and Economy - Rhode Island has finally recovered the jobs it lost in the Great Recession, but we must continue to improve our tax and business climate to turn our recovery into a resurgence.  We’ve lowered the corporate tax rate, created new job tax credits, lowered the cost of unemployment insurance, invested in a long-term plan to improve our infrastructure, and overhauled the Administrative Procedures Act to cut red tape.  Now we must continue to invest heavily in education and workforce development to prepare our residents for the well-paying jobs of today and tomorrow.

3) A responsible budget – Aside from being our state’s spending plan, the budget is also our leading policy document. We have the ability and responsibility to invest taxpayer money in a wide array of state agencies and programs to improve the quality of life for all Rhode Islanders. I do not take that responsibility lightly, and, in the wake of recent headlines concerning UHIP and other programs, I think it is imperative that the House exercises its fiduciary responsibility to Rhode Islanders to ensure their tax dollars are appropriately spent.

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Ken Block

Moderate Party Founder, Former Republican Gubernatorial Candidate

1. Line-item veto. RI is one of only 6 states that do not give their governor the power to strike individual budget items. It is time to join the rest of the country.

2. The ending of legislative grants in RI. Last year, the Speaker awarded himself $125K in taxpayer dollars to lard out to different organizations in Cranston, including more than $30K to Cranston sports teams. This action all by itself is all of the justification needed to do away with this corrupt program.

3. Stop the end of the year legislative circus where hundreds of bills are voted upon in a 48-hour window.

Things I am looking out for besides my three big good government issues for the year:

Keep a lid on any new tax increases - we cannot afford to be more expensive than other places; push back hard against any attempt to expand binding arbitration; encourage cities and towns to adopt more realistic plans to address unfunded pension and OPEB liabilities; and push back against continued attempts to push state tax $ to the rehabilitation of the Superman Building.

We are't getting new development on the 195 land, so my question is where should we putting our $? Into an old building or into new ones?

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John Marion

Common Cause Rhode Island

With the passage of ethics reform in November, Common Cause is turning our focus to the decades long fight to bring balance to Rhode Island government and to making further improvements to our elections.
The line-item veto is a next logical step in creating a better balance between the executive and legislative branches of Rhode Island government. With support of Governor Raimondo and Senate President Paiva Weed, we believe now is the time to give Rhode Island voters a chance to put a line item veto into our state constitution.
Rhode Island saw explosive growth in the use of mail ballots in 2016 and election administrators strained under the pressure. Common Cause supports a system of real early voting to meet the demand of voters and maintain the integrity of the system. The Bay State adopted early voting last year and one out of three voters used the new system.
Our state invested millions in new voting equipment in 2016 but put no systems in place to assess its performance, or make sure there is no tampering with the system. Common Cause supports legislation mandating post-election audits. Such systems are used to catch human errors as well as actions by those who may seek to hack our elections. Rhode Island squanders the advantage of having a paper-based voting system by not adopting post-election audits.
Finally, we will support legislation for automatic and portable voter registration. Building off the success of online voter registration, Rhode Island can use technology to both increase participation of qualified voters and keep the registration rolls cleaner.

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Pam Gencarella


Legislative goals for 2017 include: 

1. Support for taking Providence into bankruptcy.
2. Resolution of the massive UHIP problem in a way that doesn’t hurt the RI taxpayer.  
3. Investigation into and resolution of a final, properly working DMV system and tax system.  
4. Passage of legislation that allows the governor line item veto power in the budget.
5. Passage of legislation that dovetails with President-elect Trump’s plans for illegal immigration, ie. implement E Verify.
6. Passage of legislation that dovetails with President-elect Trump’s plans for child care tax credits and eliminates or significantly reduces RI’s budgeted $50 million (including the $10 million subsidized through the general fund).
7. Passage of real education reform, including a target goal of being one state behind Massachusetts in education results.
8. Reconsider the state subsidies the Speaker plans to implement for local car taxes since this is nothing more than a redistribution of wealth from efficiently run municipalities to inefficiently run cities.  Both Senate President Paiva Weed and Governor Raimondo appear to agree that the car tax phase out should be reconsidered.
9 Reverse the truck toll scheme and instead use the money the Speaker expects to find for car taxes to fund infrastructure rather than creating a mechanism to redistribute wealth.
10. Passage of legislation that eliminates many of the state’s non-essential expenditures as laid out in the Republican Policy Group’s report and the RI Center for Freedom and Prosperity’s “Spotlight on Spending” report.  
11. Passage of legislation that amends RI’s tax structure in an effort to create a business friendly climate.
12. Passage of legislation that places a moratorium on corporate subsidies, ie. no subsidies for the Superman building, eliminate the historic tax credits and film credits, review the jobs credit program so as to eliminate millions in subsidies to wealthy companies like CVS and no more subsidies for new companies in an attempt to bribe them to come to the state.
13. Passage of legislation that reverses the unionization of private daycare workers in light of the June 2014 Supreme Court decision.
14. Passage of legislation that allows further public school choice options.
15. Opposition to further increases in the minimum wage.
16. Passage of legislation that eliminates all legislative grants.
17. Passage of legislation that places a moratorium on green energy initiatives that add to the cost of local electricity in an effort to hold the line on the cost of doing business in RI.

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Rachel Flum

Economic Progress Institute 

Our 2017 legislative priorities again focus on improving economic opportunity for working families.  We will be advocating for further increasing the Rhode Island Earned Income Tax Credit (EITC) from its current 15% of the federal credit up to 20%.  This would allow over 80,000 working Rhode Islanders to keep more of their paycheck and would put us more in line with our neighboring states which have higher state EITCs (CT is 27.5% and MA is 23%).

We’ll also be advocating for increasing the minimum wage which remains at $9.60 while Connecticut’s has increased to $10.10 and Massachusetts is now at $11.00.  Combining a higher minimum wage with a higher EITC has been shown to be very effective at helping improve the economic security of lower income families.
Another priority is to improve the child care assistance program to allow more parents to have access to quality care for their children while they are working and to create tiered reimbursement rates for child care providers so that providers who are providing higher quality care are adequately reimbursed.
Finally, we’ll be keeping an eye on Congress and working to ensure that Rhode Island maintains affordable, quality health care for the quarter of a million residents who benefit from the Affordable Care Act and Medicaid and Medicare, as well as a strong safety net for families, people with disabilities, and seniors, regardless of federal changes.

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Mike Stenhouse

Rhode Island Center for Freedom and Prosperity

2017 must become the year of the family. It's time to do something about our 50th ranked business climate and 48th rank in family prosperity. It's time for lawmakers to focus on helping Ocean State families: enough of the corporate welfare for crony insiders that families are asked to pay for; enough of the green-energy subsidies that drive up energy costs for every RI family and business; enough of the destructive business mandates that kill jobs and opportunities for ourselves and for our children.

It's time to cut spending and taxes and to put some money back in the pockets of working families. 2017 must be the year where we create a better environment where more and better businesses can can produce more and better jobs that will lead to a better quality of life for all Rhode Islanders.

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Bob Walsh

National Education Association (NEA) of RI

While some of our 2017 legislative agenda will likely be reactive to what happens in DC, there are several issues for which we will be advocating. First, in the budget, continuing financial support for both K-12 and higher education, including sufficient resources so our higher education and state workers can be fairly compensated in upcoming negotiations, higher education tuitions remain fair, and needed positions can continue to be filled. Also in the budget would be supporting the expansion of the tax exemption on retirement income for our retirees and the beginning of auto property tax relief for all Rhode Islanders. 

Other issues on our legislative agenda will include leveling the playing field so ALL charter schools play by the same rules and a deeper analysis on whether RI can afford further expansion of this parallel school system given our limited resources. Finally, we need to ensure that all public sector collective bargaining agreements remain in place until successor agreements are reached, including considering binding arbitration if negotiations prove unsuccessful.

Other issues will certainly arise during the session, but those are the basics.

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Jared Moffat

Regulate RI

We feel confident that we have the support we need to get [marijuana tax and regulation legislation] through when there's a vote, because most legislators we've spoken with understand the practical reality. Either we set up a system here or consumers are going to cross the border and buy products in Massachusetts. Not moving forward this year would be like tying our own shoelaces together as we try to keep pace economically with our neighbors.

We've seen several other states do it, and I think that gives our legislators more confidence.  We anticipate that a bill will be introduced early on, and we expect a very serious discussion to follow. 

When asked about Massachusetts delaying the implementation of legalization now until July 2018, Moffat said “no comment."

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Pat Ford

Libertarian Party of Rhode Island

Rhode Islanders will never be able to enjoy even a basic fundamental trust in their Government, as long as they remain convinced that cronyism is pervasive at both the municipal and state level

Legislative grants are both symptom and cause— and as long as they are permitted to poison our well, Rhode Islands progress will ultimately be limited by the cynicism and bitterness left in their wake.

(FORD pictured right)


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