RI’s Poor Business Environment - Leaders Defend and Attack State’s Performance

Wednesday, July 11, 2018


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L-R Speaker Mattiello, Governor Raimondo, and Commerce Secretary Pryor

For months, Governor Gina Raimondo has been spending hundreds of thousands of dollars telling voters that Rhode Island is “9th Best in the Nation” to do business, but on Tuesday the far more respected CNBC ranking of the “Top States for Business” had Rhode Island the 5th worst in America at 45th — tied with Maine.

It was the second year in a row Rhode Island ranked #45 and it may undercut the message of Raimondo’s campaign — her tagline is “Let Keep Going.”

Incumbent Democratic Leaders Claim Rhode Island Is Making Progress

Raimondo’s office and legislative leaders say the state is making progress, despite the needle not moving. 

“There are more jobs in Rhode Island today than ever before and the unemployment rate has been cut by one-third since Governor Raimondo was sworn in. Every ranking uses a different methodology. This particular ranking puts a heavy emphasis on infrastructure, and it’s no secret Governor Raimondo inherited the nation’s worst infrastructure,” said Mike Raia, Communications Director to Governor Gina Raimondo.

Speaker of the House Nick Mattiello told GoLocal, “While this is one ranking that may have a negative slant toward Rhode Island, there are other surveys and statistics which paint a much brighter picture of our state’s strengthening economy.  Since becoming Speaker in 2014, when we had the highest unemployment in the nation, Rhode Island’s rate is now down below the national average at 4.4%,  and we’ve gone from 36th in the country in wages to the ninth best, according to the U.S. Bureau of Labor Statistics.”

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Rhode Island ranks 45th in U.S. tied with Maine

Similarly, Senate President Dominick Ruggerio said, “The Senate has focused on improving our state’s business climate and better-equipping workers with the skills they need to succeed in a 21st-century economy. We have cut income, corporate, energy, estate, and unemployment taxes, significantly reduced regulatory burdens, and trained thousands of Rhode Islanders through our workforce development programs.”

And, Raimondo, Mattiello, and Ruggerio all blamed the messenger to some extent — criticizing the CNBC ranking’s methodology.

“I will ask my policy office to review the findings of the CNBC survey to see where we may improve and build upon the economic momentum Rhode Island has been gaining,” said Ruggerio.

According to Mattiello, “While CBNC might not consider Rhode Island attractive in its rankings, the website Business Insider considers our state to be the 17th best economy in the nation.” (Note, Rhode Island’s ranking in Business insider was #9.)

While incumbent Democratic leaders were defending the state’s strategies, Matt Brown, who is challenging Raimondo in the Democratic primary blistered the failed strategies.

“Governor Raimondo's idea of economic development is corporate giveaways -- taking money from the taxpayers of Rhode Island and giving it to hand-picked corporations,” said Brown.

“This is a widely discredited and failed approach, as CNBC's analysis of our state's competitiveness reflects.  To build a real, sustainable and robust economy that works for all Rhode Islanders, we need to invest in the industries of the future, including renewable energy, healthcare, and small business. We must also invest in the things that will make our state a place where people and businesses want to come and stay, including the quality of our public schools and the affordability of our housing,”  added Brown.

Raimondo’s campaign refused to respond to questions about the lack of improvement.

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Morgan offers specifics versus Fung

GOP Criticize — Morgan Offers Ideas

Fung’s campaign struggled to reference any economic development policy initiative in how it would improve the state's ranking if elected.

“I’ve proposed with lowering the sales tax, reducing business fees to the lowest in the region, and creating a concierge program to help businesses cut through red tape,” said Fung.  Fung’s camp seems unaware that the state has had an ongoing ‘concierge’ service and has had a successful effort to cut regulations.

Fung GOP gubernatorial opponent, House Minority Leader Patricia Morgan, offered far greater specifics as to how to improve the Rhode Island economy.

“Catchy slogans won’t fix Rhode Island. I have said throughout this campaign that Rhode Island needs a revolution to return us back to the days when we were a powerhouse state. To do this, we need to look at broad changes and focus on real economic development, not paid ads and corporate handouts," said Morgan.

Morgan said, “First, I would re-purpose Commerce Corporation from an agency that hands out corporate welfare to one that coordinates each state agency so that they are working together to become more business-friendly. They will work with the agencies to go through every regulation and policy to ensure it doesn’t impede business. They will also employ an appropriately funded government program to streamline our processes and practices to remediate the current hostile and anti-business environment. Commerce Corp will assemble a team to visit any entrepreneur who wants to expand in our state. They will be there not to give out money, but to provide assistance in removing barriers and delays,” said Morgan.

“In conjunction with this, I am going to instruct CommerceCorp to establish three new state business parks, a Quonset North, East Bay and South that uses the very successful model currently employed at Quonset Point.” Said Morgan.

She also said we would create Inspector General to increase transparency and accountability, establish a program to help companies pay for on the job training of tradespeople, and would use the money collected from the Internet Sales Tax to reduce the overall sales tax, “so that all consumers and businesses can benefit from a lower rate. Then RI will no longer be stuck with one of the highest rates in the country.”

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Commerce Secretary Pryor says RI is making progress.

Meanwhile, the state’s economic development agency — RI Commerce — says that improvement is being made.

Stefan Pryor’s spokesman Matt Sheaff said, “Rhode Island continues to make good progress on key economic indicators and in a variety of ranking systems. On this year’s CNBC survey we improved in half of the categories (5 out of 10) including ranking 15th best in the nation for our workforce (up from 27th last year). On the ranking of our economy, we continue to improve, up one spot to 28th this year and our quality of life ranking improved by four spots.”

“It's worth noting that CNBC's approach to infrastructure ranking continues to lag our progress in this area, holding Rhode Island back (for now). In 2018, the Tax Foundation said Rhode Island improved from 50th to 23rd on our unemployment tax ranking and improved from 44th to 41st overall on the Business Tax Climate Index,” he adds.


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