Howard: To fix RI, stop asking experts, start asking residents
July 5th, 2012 at 5:00 am by Ted Nesi under Nesi's Notes, On the Main Site
Ted Nesi is off. He’ll return on Friday.
By Samuel G. Howard
A reading of an old newspaper article (or a history book) can often provide insight into present circumstances. It’s enlightening, and a bit frustrating, to discover that the same battles tend to be fought decade after decade. So it is with Rhode Island. Take this accounting of Rhode Island’s problems:
- Unemployment is high, at 11%.
- State investment in education isn’t pretty; the governor balked at raising URI faculty pay by 3% while costs are increasing. Their union said most of the raise would pay health insurance premiums.
- Highways aren’t much better: Rhode Island has the fourth-highest rate of structurally deficient bridges in the United States.
- Income taxes are down; the highest bracket pays 5.99% on earnings over $129,900. The other tax brackets are 4.75% for earnings more than $57,150 and 3.75% on the rest of wage-earners [pdf]. Combined, state and local taxes take 11.9% from the 20% of taxpayers with the lowest incomes while reducing the incomes of the top 1% by a mere 5.6% [pdf].
- Observers are suggesting that the state should essentially fail to pay the loan guarantee it made for 38 Studios by fulfilling only the moral obligation. It might take a hit on its borrowing costs, but it’d be better than paying roughly $100 million to bondholders.
In contrast, a 2002 article by Brian Jones in the Providence Phoenix said that under former Gov. Lincoln Almond the following happened:
- Unemployment down to 4% from 7% in 1995.
- Half a billion dollars invested in construction at state colleges, while health insurance was increasing among Rhode Islanders.
- Roads improved while the interest rates on state bonds fell.
- Taxes down 10%.
Well, at least taxes are down even more since 2002. That’ll come as a relief to the 11% of Rhode Islanders still unemployed, and the others who are underemployed or simply aren’t counted because they’ve given up looking for jobs.
It’s incredible how a decade can make a difference. Lincoln Almond seems like the most competent administrator in the entirety of Rhode Island’s history. And this was a man portrayed on the front page of The Journal in 2002 as chronically asleep.
A few other articles reveal the cyclical nature of Rhode Island’s economic woes: an April interview Ted Nesi did with the Information Technology and Innovation Foundation’s Robert Atkinson, an article in 2008 by Ian Donnis, and finally a 1997 article by Peter Phipps from The Journal expounding on the state’s cycle of convening councils to study and recommend policy.
Rhode Island is stuck in a rut. We’ve largely turned away from the course set by Governor Almond, retaining only the tax policy. And this chronic inability to address the problems facing this state has clearly eroded our citizens’ faith in government. (Try pointing out that Rhode Island doesn’t rank anything more than middling at worst in corruption rankings.)
Part of the problem is the nature of statehood. States don’t have access to the tools the federal government does. There are only two options for addressing budget deficits: cut spending or raise taxes. Since raising taxes – even on the wealthiest – has been ruled out by leaders, states have to cut spending.
There’s a further problem here. Virtually all economic reports are based around the idea of funding the “next generation” of high-paying jobs. Usually these are also highly-skilled jobs. Thus we learn that Rhode Island must invest in work force development.
We’re never going to invest in serious work force development: Our most recent high-profile foray into the technology sector has collapsed with 38 Studios. (In the meantime, the highly-efficient Slater Technology Fund - established in 1997 during Governor Almond’s tenure – is still backing effective companies with a $33.6 million state investment over 15 years.)
There’s only one best work force development: providing jobs and reducing the burden on your poorest citizens. Reducing in-state tuition at our state colleges needs to be a priority, so that Rhode Islanders can not only afford an education but also graduate with less debt and thus pump more discretionary spending into the economy. In turn, that generation will have more money to spend on their children.
Put another way, new technology doesn’t necessarily lead to better-paying jobs. Improvements in weaving didn’t make workers richer in the 18th century; it actually destroyed thousands of livelihoods. However, the costs of food had dramatically decreased the century before, meaning that even though workers had less physically, they were able to spend more because they weren’t spending it all on food.
If the 38 Studios disaster has proven to us anything, it’s that Rhode Island can’t succeed by pretending to be something it simply isn’t. Rhode Island needs to engage with its own citizens – if only because they’re hurting.
It’s not enough to simply pull together some “economic experts” to point the way forward. It’s time to go to Woonsocket, to Westerly, to Newport, to Providence – every city, town and village in this state – and ask Rhode Islanders what they need. Then you’ll have your economic vision.
Samuel G. Howard is a featured writer at Rhode Island’s Future. He grew up in Providence.
Tags: economy, lincoln almond, op-eds, other voices, samuel g. howard
Nesi's Notes covers politics and the economy in and around Rhode Island for WPRI.com. (Twitter: 
If you notice…..the unemployment rate spiked as soon as we started cutting taxes on rich people….
why? Because what’s the incentive for the “job creators” to hire people? You think they are in business to put people to work or to make profits? IS that what they always tell us?
Your right! Who in the heck would put any stock in Gary Sasse and Len Ladaro same old, same old the last twenty years out of their mouth.
Mr. Fish, your statement is the most ridiculous statement I have seen you make to date. That is like saying Unemployment is high because the sun rises at 5:00am.
Small business owners are in business to make money, but to grow their business and make even more money. Just like you are to earn a paycheck and earn more money. It is the American way. The unemployment rate and the tax cut are not in immediate lock step with each other as you would have people believe. In fact even URI economist Len Lardaro stated on Newsmakers a few weeks ago that the lowering of the tax rate does not have an immediate impact on jobs and the economy. The impact will take a few years before it is felt. Perhaps you should take an economics course and educate yourself. I’ll bet however you know full well what you are doing and stating as you collect your check from the public sector union members who pay your salary. Your leadership has made a career on lies to your members to fatten your pockets.
We are the smallest state with the most corruption, nothing will change unless we the people vote for someone who knows what their doing. Enough with all who you know. You want to see change well we need to form an alliance against corrupted officials in office and there are many. Put an end to write offs on expense accts under the entertainment section is one. Cap salaries/ salary reductions for these elected officials who helped screw RI to the wall and as for 38 studios/state possibly took out insurance well we need to have the insurance/or curt schilling to pay for this, not a taxpayer. The taxpayers did not sign for this loan guarantee and we do need experts as well as the people’s voices!
bee -
Well said!
The general RI population seems to value too much when a local pol knows our name. We vote on such stupidity. We are the “smallest state” in too many ways.
Mr. Howard, you seem to mean well, but this article and your article on corruption in Rhode Island are both complete drivel. Rhode Island is less corrupt because there are fewer convictions???…oh Lord that is the problem, corruption here is so widespread, it has such a long history and is so ingrained and has long been tolerated. The apple is already rotten to the core, so I guess you could say things are not getting worse. And turn to the same morons that just keep electing the same bought and paid for General Assembly for a solution to the problems? With the state motto being “I know somebody”, it’s not likely that the GA will change much going forward nor will the problems be solved. Unfortunately despite all the hoo-haa over pension reform, this state is still corrupt and dominated by the public employee unions as it always has been. I also dislike your undercurrent of the social justice theme, it’s just plain old class warfare disguised as sympathy for the underclass. Taxpayers of higher incomes pay more than enough taxes to do what needs to be done and help the truly unfortunate among us. The fact that the politicians squander the money in every conceiveable way is where the problems lies. I for one refuse to pay one more cent in taxes for any reason until the corruption and the control of the public employee unions is ended and the state stops throwing money down ratholes to enrich said groups.
Rhode Island voters must throw out every Democrat this November.Gordon Fox just lied to all the taxpayers about Studio 38.Cicilline also lied about Providence finances.You cant trust one Democratic Politican.In 2014 The Missing Linc has to go.Many business owners are not hiring because they can put more work on less people.Over 40and unemployed in Rhody Its best to move out.Corruption and Dishonesty rule in Rhode Island.
Lets stop blamong everything on the rich. The fact is a poor man never got rich by making a rich man poorer….
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