Gov. Lincoln Chafee is using some of the choicest real estate in all of American journalism – the New York Times op-ed page – to make his case about why he’ll be making the right move Thursday when he signs into law a bill allowing same-sex marriage (presuming it passes the House).

Chafee’s 1,200-word opinion piece – “Why I Am Signing Marriage Equality Into Law” – lays out clearly and succinctly the case the governor has been making since his inaugural speech in 2011: that allowing gays and lesbians to wed in Rhode Island will fit with the state’s history of tolerance and benefit its economy to boot. He also goes out of his way to praise the Rhode Island Senate’s GOP caucus for backing the bill, and makes a point of highlighting some of the brighter spots in the state’s economy.

This isn’t Chafee’s first foray onto the Times’ opinion page. In February 2010, just after he launched his successful campaign for governor, he published a piece called “Goodbye to All That” that suggested, following Evan Bayh’s disillusioned departure from the U.S. Senate, the need for a third political party.

One bit of political trivia that’s still unresolved: when exactly did Chafee actually start expressing support for same-sex marriage? Chafee notes in his op-ed that he opposed President Bush’s proposed constitutional ban on gay marriage in 2004, but at that point he only supported civil unions; during Chafee’s 2006 re-election campaign, however, he was on record supporting full marriage rights for gays and lesbians.

Whatever the case, Chafee supported same-sex nuptials long before most Democrats, let alone Republicans.

My friend Josh Barro of Bloomberg View, who spends a happily inordinate amount of time writing about Rhode Island, interviewed Governor Chafee this week during the governor’s media roadshow in Connecticut and New York City. Josh pressed the governor on why he’s flatly ruled out defaulting on the 38 Studios bonds yet signed a law that reneged on promises made to state retirees – and Chafee’s reply was not convincing:

That raises a question that many state residents – especially retired employees – would like to see answered: If Rhode Island can’t afford to keep its promises to retirees, how can it afford to keep its promise to the 38 Studios bondholders? Chafee isn’t prepared to answer. …

And when it came to 38 Studios, Chafee couldn’t even answer a simple question: Is it ever appropriate for the state to issue moral obligation bonds?

“I’m not an expert on that issue,” he responded. After a year of dealing with the fallout from 38 Studios’ collapse, you would think he would be.

As the interview ended, Chafee remarked, “I’ll have to think a little more about Josh’s question” — the one about why you can freeze COLAs but can’t default on 38 Studios.

Local officials are fearful that the bond market won’t differentiate between a default on the moral-obligation bonds issued for 38 Studios and the general-obligation bonds backed by the state’s full faith and credit, particularly since Rhode Island is a municipal minnow compared with, say, California. A top policymaker once asked me to imagine a Wall Street Journal headline the day after: “Rhode Island defaults on bonds.”

While that’s certainly possible, it’s worth scrutinizing.

First of all, if any state officials in the country should be able to go to Wall Street and soothingly explain why the 38 Studios case is a unique one and the default won’t set a precedent, wouldn’t they be Gina Raimondo – a former venture capitalist beloved by financiers who crafted a landmark law slashing pension liabilities – and Rosemary Booth Gallogly – a veteran policymaker who’s overseen the successful restructuring of municipal budgets in Central Falls and elsewhere, all while explicitly protecting bondholders?

Maybe, maybe not. (And maybe Raimondo and Gallogly aren’t interested in trying.) But if that’s the case, a moral-obligation bond is effectively a general-obligation bond in all but name, with full repayment by Rhode Island taxpayers promised no matter what. If so, shouldn’t voters have to approve moral-obligation bonds at the ballot box as they already do with general-obligation bonds – and shouldn’t Rhode Island be paying the lower interest rate investors get on a lower-risk general-obligation bond?

By Ted Nesi and Tim White

PROVIDENCE, R.I. (WPRI) – Treasurer Gina Raimondo continued to raise campaign cash at a rip-roaring pace during the first three months of 2013, far outpacing the other leading candidates for the state’s top job.

Read the rest of this story »

By Dan McGowan

Add Nellie Gorbea to the growing list of potential candidates for secretary of state.

Gorbea, who currently serves as executive director of HousingWorks RI, told WPRI.com she is giving “serious thought” to joining outgoing Democratic Party Chairman Ed Pacheco and Newport businessman Guillaume de Ramel in the race to replace the term-limited Ralph Mollis next year.

“A lot of people have been asking if I’m considering it,” Gorbea told WPRI.com. “I’m looking into it. I’m having thoughtful conversations.”

Gorbea, a Democrat, is a veteran in local politics, having served as a top aide to former Secretary of State Matt Brown and as president of the Rhode Island Latino Political Action Committee (RILPAC). As head of Housing Works RI, she helped craft last year’s successful bond referendum campaign that generated $25 million for affordable housing in the state.

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By Ted Nesi

PROVIDENCE, R.I. (WPRI) – Gov. Lincoln Chafee announced plans to sign a bill legalizing same-sex marriage during a ceremony on Thursday evening, immediately after the final version legislation is expected to win passage in the House of Representatives.

Read the rest of this story »

• Related: How the Rhode Island shifted on same-sex marriage (April 24)

High Rock Development isn’t the only organization putting out studies about the “Superman building” today.

The administration of Providence Mayor Angel Taveras quietly released a 95-page study [pdf] Tuesday afternoon that suggests state taxpayers should consider providing $60 million in historic tax credits to subsidize the conversion of the former Bank of America building into apartments. That’s significantly more than the $39 million requested by High Rock in its own proposal for the redevelopment.

However, Taveras all but disowned the study’s conclusion in a statement his office released along with it, saying: “I am concerned this proposal would not be the wisest public investment – especially if there is a less costly alternative to maintaining the Superman Building as a contributor to our state’s economy. More work needs to be done to explore the option of maintaining the building as office space.”

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By Dan McGowan

PROVIDENCE, R.I. (WPRI) – The overwhelming majority of Rhode Island’s public school teachers do not want Gov. Lincoln Chafee to extend Education Commissioner Deborah Gist’s contract, according to a poll released Tuesday by the state’s leading teachers unions.

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By Dan McGowan

PROVIDENCE, R.I. (WPRI) – The owner of Providence’s iconic “Superman building” is asking House and Senate leadership to approve nearly $40 million in state money and the city to grant a tax stabilization for a project that would transform the city’s tallest structure into apartments, WPRI.com has learned.

Read the rest of this story »

• Superman building proposal: The summary | The market study | The economic impacts (PDFs)

The Providence Journal’s Sunday print circulation fell 10% during the six months ended March 31, figures released Tuesday showed, as the newspaper’s parent company reported a first-quarter loss of $8 million.

The Journal’s print circulation on Sundays – the most lucrative edition of the week for most papers – totaled 109,516 copies, down by 12,763 since March 2012, the Alliance for Audited Media (formerly the Audit Bureau of Circulations) reported Tuesday morning.

The Projo sold an average of 79,244 traditional print editions on weekdays between Oct. 1 and March 31, a decrease of 6,252 from a year earlier and 45% fewer than in September 2007.

Saturday circulation dipped below 100,000 for the first time, falling by 10,484 to 98,651. Weekday circulation fell below 100,000 for the first time in 2010. The overall pace of circulation loss has slowed since 2009-10, when the annual rate of decline on Sundays peaked at 17%.

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The federal government is poised to shower billions of dollars on Rhode Island’s health providers over the next decade due to the looming expansion of Medicaid under President Obama’s Affordable Care Act.

The health law expands Medicaid, the joint federal-state health insurance program for the poor, to cover childless adults who make up to 138% of the federal poverty level, currently $15,856. A new study by the Rhode Island Public Expenditure Council projects that roughly 40,000 more Rhode Islanders will sign up for the program between the start of the expansion on Jan. 1, 2014, and the end of 2023.

Yet Rhode Island taxpayers will need to spend just $450 million in local matching funds to get $3.15 billion in federal money (seven times as much) to cover the newly enrolled 40,000, according to RIPEC. That’s thanks to the extremely generous terms of the Medicaid expansion: the federal government will pay at least 90% of the cost for patients added under Obamacare, compared with only 51% for the current members.

Rhode Island’s Medicaid program spent $1.8 billion in federal and state dollars to cover 224,000 people during the 2010-11 fiscal year. Medicaid accounts for roughly a quarter of Rhode Island’s entire state budget.

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By Dan McGowan

PROVIDENCE, R.I. (WPRI) – The landmark pension reform settlement reached between Rhode Island’s capital city and its retirees and public employee unions cost the city nearly $1 million in lawyer fees over the last two fiscal years, WPRI.com has learned.

Read the rest of this story »

By Ted Nesi

ATTLEBORO, Mass. (WPRI) – Former Boston Celtics player Jason Collins became the first openly gay active athlete in a major U.S. sport on Monday, and he’s crediting Massachusetts Congressman Joe Kennedy III with helping him make the announcement.

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• Related: Enthusiastic Joe Kennedy III says it’s ‘surreal’ to join Congress (Jan. 7)

Treasurer Gina Raimondo has invested 10 times more pension money in hedge funds than the median state-government retirement system does, a WPRI.com review of financial records shows.

Raimondo, as chair of the State Investment Commission, won unanimous approval in June 2011 of a new allocation strategy for the pension fund’s $7.7 billion in assets that added hedge funds to the portfolio for the first time. As of June 30, 13.9% of Rhode Island’s pension assets were invested in hedge funds.

By comparison, the median state pension plan in the U.S. allocates just 1.4% of its assets to hedge funds, according to a February study of 134 state retirement systems by Wilshire Associates, a Santa Monica-based investment adviser.

However, that number masks wide variation among different plans, with the share of the individual systems invested in hedge funds ranging from zero to as much as 26.5%, according to Wilshire.

Hedge funds are privately managed alternative investments that are only open to sophisticated investors. The Hedge Fund Association says they “can use one or more alternative investment strategies, including hedging against market downturns, investing in asset classes such as currencies or distressed securities, and utilizing return-enhancing tools such as leverage, derivatives, and arbitrage.”

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Welcome to another edition of my weekend column – as always, send your takes, tips and trial balloons to tnesi@wpri.com. For quick hits all week long, follow me on Twitter: @tednesi.

1. When the Rhode Island Senate backed same-sex marriage, the biggest winners included two people who voted no: Senate President Teresa Paiva Weed and Senate Judiciary Chairman Mike McCaffrey. Gay marriage was a rare issue that not only split the Senate Democrats’ ruling coalition but represented a real political liability for its socially conservative incumbents, McCaffrey foremost among them. While most people aren’t experts on the General Assembly, it wouldn’t have been hard for Ray Sullivan to educate Democratic primary electorates next year if their local senators were blocking same-sex marriage – and to recruit activists to make that case at voters’ doorsteps. (Think about it: How many Warwick voters tick off McCaffey’s name every two years assuming they’re getting someone with relatively Obama-ish views?) Paiva Weed – one of the shrewdest political minds on Smith Hill – has deftly removed the biggest electoral threat facing men like McCaffrey, Dominick Ruggerio and Frank Ciccone, all without any apparent damage to her authority as leader of the upper chamber. She also cleared the path for McCaffrey, a labor ally, to succeed her as Senate president – while simultaneously earning plenty of goodwill from liberals in her caucus, not to mention Speaker Fox. Well played, Madame President, well played.

2. How’s the 2014 race for governor shaping up? Read my new Bloomberg View op-ed and find out.

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After reading this story by Dan McGowan and yours truly about why the Rhode Island Senate shifted on same-sex marriage, Bloomberg View’s Josh Barro sees a lesson for proponents in other states (my emphasis):

This is similar to what happened in New York in 2011: passing gay marriage depended not only on four Republican state senators voting yes but also on Dean Skelos, the Senate’s Republican presiding officer, agreeing to let gay marriage come to the floor even though he opposed it. Rhode Island and New York are both examples of the “no fingerprints” strategy for gay-marriage opponents: letting it become law while taking as little credit or blame as possible.

If the Supreme Court doesn’t intervene, this will be a key political theme over the next 20 years: gay marriage opponents strategically acquiescing so they can stop fighting a fight they know is doomed and electorally costly. Rhode Island’s topsy-turvy politics mean that the officials making that calculation today are Democrats (all five Republicans in Rhode Island’s state Senate support marriage equality), but in most states, it will be Republicans who search for ways to lose gracefully on the issue.

By Dan McGowan

PROVIDENCE, R.I. (WPRI) – Frank Caprio is looking to get back into Rhode Island politics.

Read the rest of this story »

• Related: Caprio leaves Dems, tweaks Obama two years after ‘shove it’ (Nov. 5)

By Dan McGowan

PROVIDENCE, R.I. (WPRI) – The average Providence resident would see his or her property taxes increase by 6% and the city would eliminate its structural deficit by asking the state to boost municipal aid under a budget proposal introduced Thursday by Mayor Angel Taveras.

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By Ted Nesi

PROVIDENCE, R.I. (WPRI) – House Democrats led by Speaker Gordon Fox on Thursday proposed a complete overhaul of the state economic agencies as they unveiled a sweeping set of bills they say will “improve the coordination and quality” of Rhode Island’s troubled economy.

The Democrats’ other proposals include bringing back the tax credit for historic buildings, this time capped at $5 million per project and potentially $30 million in total; allowing employers to pay workers biweekly; considering curbs on the overuse of jobless benefits by seasonal employers; and creating a new tax credit for local employers who add jobs after making major capital investments.

Read the rest of this story »

Felix Rohatyn, the banker who famously helped save New York City from bankruptcy in 1975 as chairman of New York’s Municipal Assistance Corporation, has an interesting op-ed in today’s FT arguing political and labor leaders should negotiate solutions to thorny fiscal problems, notably underfunded pension plans – a timely take in light of Rhode Island’s debate over the Raimondo and Taveras approaches:

Once again, business and labour share a huge stake in our cities’ fortunes, and the consequences for both if we fail to stabilise our finances and set a course for growth will be devastating. Yet amid the solutions proposed, no one argues that the two sides must work together to restructure the finances of troubled states and cities. …

If the nation is to enter a new era of opportunity and growth, our government, company executives, labour leaders and employees have to co-operate on matters of common interest. They need not abandon their principles, but they must create a climate where dialogue and compromise are possible, and mutual sacrifice may be negotiated. One thing is certain: the path of stalemate leads nowhere. We need to take a new direction now.

I’ll have my own story on all this soon, but for now check out Mike Stanton’s piece in today’s Projo about yesterday’s fight at the State Investment Commission over Treasurer Raimondo’s use of hedge funds:

Rhode Island has moved about $1 billion of its $7.6-billion state pension fund into hedge funds over the past 18 months, a move that General Treasurer Gina M. Raimondo defended against critics Wednesday during a meeting of the state Investment Commission. …

On Tuesday, Raimondo’s office provided The Providence Journal with records showing that the state paid $15.8 million in fees to 19 hedge funds for the eight months ending June 30, 2012. But the office could not immediately produce how much has been paid since then, given how the records are kept. Those fees aren’t in the detailed monthly investment reports produced for Investment Commission meetings, because they are not directly billed to the state. …

Raimondo, in an interview, said that hedges in such investments as currencies, agricultural commodities and precious metals are designed to move against the stock market, and provide a better alternative to lower-yielding Treasury notes that reaped more years ago. Noting that the pension fund lost $2 billion in the ’08 crash, Raimondo said an analysis showed the loss would have been $1.5 billion with hedge funds in the portfolio.

• Related: Chart: How Raimondo has changed RI’s pension investments (April 4)

By Dan McGowan

PROVIDENCE, R.I. (WPRI) – Less than an hour after the Rhode Island Senate overwhelmingly approved legislation to legalize same-sex marriage, Gov. Lincoln Chafee on Wednesday said he met with advocates to begin discussing plans to sign the bill into law “as quickly as possible.

Read the rest of this story »

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – The Rhode Island Senate voted 26-12 on Wednesday afternoon to approve a bill legalizing same-sex marriage, a historic victory for its supporters that almost certainly means gay nuptials will be allowed in the Ocean State starting Aug. 1.

Read the rest of this story »

• Related: Big campaign has RI gay-marriage backers near victory (April 24)

By Dan McGowan

The chairman of Providence’s most powerful City Council committee has landed a job with House Speaker Gordon Fox as a policy analyst, WPRI.com has learned.

Councilman David Salvatore, who heads up the council Ways and Means Committee, was hired April 22 and will earn $53,716 a year.

According to House spokesman Larry Berman, Salvatore will help House develop and implement policies, monitor current and potential legislation and research legislation in other states to develop policy and legislation in Rhode Island.

Salvatore previously worked as an unclaimed property administrator and a business processing manager in the general treasurer’s office, but was let go by Treasurer Gina Raimondo last year. Salvatore claimed his termination was a result of a pension reform op-ed he co-authored in The Providence Journal, but Raimondo called the accusation “absolutely untrue.” (more…)

By Dan McGowan

The executive director of Rhode Island’s beleaguered Republican Party has resigned, WPRI.com has learned.

Ann Clanton, who was appointed to the post in March 2012, left the party earlier this month after Mark Smiley won a controversial election to become chairman of the party. Clanton supported former Providence mayoral candidate Dan Harrop over Smiley in the chairman’s race.

Smiley told WPRI.com that lawyer Matthew Fabisch has been appointed interim executive director, but is not currently being paid. Campaign finance records show Clanton earned $2,500-per-month between May 2012 and Sept 2012, but did not collect a check from the party for the rest of the year.

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By Dan McGowan & Ted Nesi

When the Rhode Island Senate meets Wednesday to vote on legislation that would legalize same-sex marriage, it will be taking up an issue that died in the House just two years ago and was still considered a long shot as recently as last winter.

But a savvy political campaign that first threatened and then encouraged state lawmakers – combined with a rapid shift in public opinion – now has Rhode Island poised to become the final state in New England to allow gay and lesbian couples to wed.

Read the rest of this story »

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – Rhode Island moved another step closer to legalizing same-sex marriage on Tuesday after a key legislative panel approved a bill that would allow gays and lesbians to wed in the state, setting up another crucial vote for Wednesday.

Read the rest of this story »

Back in January U.S. Sen. Sheldon Whitehouse told WPRI.com one of the most important ways for a U.S. senator to be effective is basically out of his control: seniority.

If that’s the case, Whitehouse’s senior colleague Jack Reed is about to get significantly more effective.

U.S. Sen. Max Baucus of Montana on Tuesday became the sixth Senate Democrat to announce he will retire rather than seek re-election next year. All but one of those six lawmakers – New Jersey’s Frank Lautenberg – have served in the Senate longer than Reed, who was first elected in 1996.

The departures of those five – Baucus, Carl Levin, Tom Harkin, Jack Rockefeller and Tim Johnson – will vault Reed from 14th to 9th on the list of the U.S. Senate’s most senior Democrats. Of course, that assumes Reed himself will win re-election next year – about as safe an assumption as there is in politics.

• Related: Levin retirement sets up Jack Reed for powerful chairmanship (March 7)

The fine folks over at Bloomberg View asked me to write a short op-ed for them about the outlook for Rhode Island’s 2014 gubernatorial race, focusing on Treasurer Gina Raimondo’s high profile after the pension fight and how it will impact the campaign. Here’s how I kicked off the piece:

Rhode Island General Treasurer Gina Raimondo has experienced a meteoric rise to fame that most politicians can only envy.

Raimondo, a 41-year-old former venture capitalist, was virtually unknown in 2010 when she coasted to victory as a Democratic candidate in a deep-blue state. Soon the new treasurer surprised almost everyone by engineering the most sweeping overhaul of a public-pension system ever enacted. By the time her reforms became law in November 2011 she was one of the most popular politicians in Rhode Island, and the subject of adulatory coverage in both the New York Times and the Wall Street Journal.

Even before the pension process was over, there was growing speculation that Raimondo might run for governor in 2014, in no small part because the incumbent who signed the pension law — independent ex-Republican Lincoln Chafee — has had an approval rating in the 20s for most of his term in office. It has become clear in recent months that the treasurer is likely to throw her hat into the ring.

Read the rest on Bloomberg.com.