COVENTRY, R.I. (WPRI) – Elected officials in Coventry have taken an apparently unprecedented step by washing their hands of responsibility for one of their employee pension plans, saying taxpayers have no obligation to come up with enough money to stop it from running out of cash within 12 years.

All told, Coventry’s three local pensions plans – one for police, one for municipal employees, and one for non-teacher school personnel – have racked up a $121 million liability for promised benefits, with less than $23 million saved to pay the bill. In fact, just two years ago the newly elected Town Council voted to sweeten police officers’ pension benefits, adding roughly $9 million to the tab in one fell swoop.

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PROVIDENCE, R.I. (WPRI) – A Providence-based payment processing company founded by one of the state’s most well-known technology entrepreneurs on Tuesday announced that it secured $12 million in venture capital financing to help with its expansion.

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The field of likely 2014 candidates for governor of Rhode Island has come sharply into focus over the last week thanks to three key announcements: Democrat Ernie Almonte’s switch to the treasurer’s race on Thursday, Republican Brendan Doherty’s decision to sit out the race on Friday, and Moderate Party founder Ken Block’s announcement this morning that he’s running again.

Almonte’s exit leaves Treasurer Gina Raimondo and Providence Mayor Angel Taveras as the two potential heavyweights in the Democratic primary, setting up a head-to-head clash between the two. Almonte’s absence could boost Raimondo, since both of them have reputations for pension truth-telling and fiscal responsibility, issues that appeal to moderates and conservatives; Taveras has a more wide-ranging portfolio.

That assumes, of course, both Raimondo and Taveras actually jump into the gubernatorial race. While the two Democrats are taking the steps necessary to mount campaigns, until there’s an official announcement the possibility remains that one of them won’t pull the trigger. Raimondo has $1.7 million already and her fundraising shows no sign of slowing, while Taveras has $560,779 and can tap the deep-pocketed network of former DSCC chief J.B. Poersch; a lengthy primary fight could be expensive and bruising.

On the Republican side, Doherty’s decision to take a pass – along with John Robitaille’s a few months back – is great news for Cranston Mayor Allan Fung, who’s made no secret of his interest in the governor’s office.

Doherty had the support of new party chairman Mark Smiley and could have assembled a campaign team easily; he also demonstrated real fundraising prowess in his congressional bid last year. Without a real primary, Fung can now spend the next 16 months raising money and preparing for a quick two-month general-election campaign once the Democratic candidate is picked. It almost worked for Robitaille in 2010.

Then there’s Ken Block.

The Moderate Party standard-bearer received 22,146 votes in 2010, good for 6.5% of the total. Put another way, Block garnered two-and-a-half times the 8,660 votes that gave Lincoln Chafee his margin of victory over Robitaille in the election. Republicans blame Block for Robitaille’s defeat, which Block contests, but there’s little doubt he makes the math harder for centrist and center-right candidates. A January PPP poll showed Block getting between 8% and 16% of the vote depending on his competition.

As for Chafee, it’s likely nobody was more pleased about Block’s announcement than the incumbent.

If Chafee remains an independent, which still seems probable, his best-case scenario is probably another four-way field: Chafee, Raimondo/Taveras, Fung, Block. But there’s no guarantee he can turn a crowded field into another victory – PPP put him in third place, with only about 20% of the vote, under that scenario, which suggests a Democrat or Fung could be 2014′s Chafee, winning with the support of just a third of the electorate.

The silver lining for Chafee is another finding from the PPP poll. In a hypothetical three-way contest with Chafee running as the Democratic nominee against Doherty and Block, his support reached 35%. Obviously that contest isn’t going to happen – but it suggests about one in three voters are still open to casting a ballot for Chafee depending on their other options. “Landslide Linc” he ain’t, but he has a path.

Of course, the most important fact of all is that it’s only May of 2013, with a year and a half left before voters choose the next governor. But make no mistake: what happens this year will have a big impact on who takes the oath of office in January 2015.

• Related: Minority turnout surged in RI in 2012; white vote slumped (May 9)

PROVIDENCE, R.I. (WPRI) – Moderate Party founder Ken Block will once again be the face of his party’s 2014 gubernatorial run, according to a website that went live this morning.

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PROVIDENCE, R.I. (WPRI) – Fewer than two percent of all certified food stamp retailers in Rhode Island were disqualified by from accepting EBT cards in 2012, but a reform advocate says that figure is just the tip of the iceberg of a fraud problem that is costing taxpayers millions of dollars each year.

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But Arnold’s actual story is actually more interesting than that, according to the summer issue of WSJ.Money magazine.

Arnold, 39, closed his hedge fund last year and retired to begin giving away his $2.8-billion fortune, mainly through the Laura and John Arnold Foundation he and his wife founded:

Arnold and his wife, Laura, have a somewhat unique approach to giving. Most billionaires tend to write checks to good causes they’re part of, hospitals where they were treated or universities they attended. … Or there are donors who make sizable gifts to meet an obvious need in a community, such as hunger or education. But at a time when charitable giving in the U.S. is still down from its peak in 2007, the Arnolds want to try something new and somewhat grander. John says the goal is to make “transformational” changes to society.

The Arnolds want to see if they can use their money to solve some of the country’s biggest problems through data analysis and science, with an unsentimental focus on results and an aversion to feel-good projects — the success of which can’t be quantified. No topic is too ambitious: Along with obesity, the Arnolds plan to dig into criminal justice and pension reform, among others.

Among Arnold’s critics is Rhode Island’s own Mike Downey of AFSCME Council 94:

J. Michael Downey, president of Rhode Island’s biggest union of state employees, says he considered it a “wonderful Christmas present” when The Wall Street Journal reported in December that Arnold was helping to fund a pension-reform effort in concert with Gina Raimondo, the state’s Democratic general treasurer. Downey says he’d never heard of Arnold before the article appeared but sees Arnold’s Enron background as evidence that he cares less about workers than pursuing a Darwinian form of capitalism. “That’s how he operates,” Downey says. 
For his part, Arnold says he is “pro-worker” and that solving pension reform will only save jobs in the long run.

EngageRI isn’t the Arnolds’ only involvement in Rhode Island; their foundation is partnering with the Pew Center on the States to help cities and towns, including Pawtucket and Scituate, deal with their underfunded municipal pension plans. They’ve also donated $8,000 to Treasurer Gina Raimondo and her political action committee since last May, according to R.I. Board of Elections filings.

The entire WSJ article is worth a read. It managed to win Arnold praise from Gawker’s Hamilton Nolan, archenemy of plutocrats. “We salute, John Arnold, and your cold-blooded and dead-eyed approach to making this world a better place,” Nolan wrote in a post on Friday. “If every billionaire were like John Arnold, we would be slightly less apoplectic. (Momentarily).”

• Related: EngageRI raised $900K in 2011 and 2012, tax returns show (May 13)

(photo: Laura and John Arnold Foundation)

1. Providence’s push for a new Ocean State Regional Water Authority deserves a closer look. The bill, which was supposed to get a hearing Thursday but got yanked from the agenda, would pave the way for the city-owned Providence Water Supply Board to lease its system to the new authority. Notably, any lease or sale agreement entered into by the Ocean State Regional Water Authority wouldn’t be subject to approval by the R.I. Public Utilities Commission; if the capital city got a big upfront payment under the terms of the lease, the new water authority would presumably need to borrow a significant amount to pay the tab – money that would come out of ratepayers’ water bills. The new authority would also still need to come up with a lot of cash over the coming decades to pay for more than $300 million in water-infrastructure projects. Selling a water supply isn’t a new idea – London’s system is privately owned and operated, though not without its critics – but if Providence needs cash and the water system needs capital, it’s unclear if a quasi-public is the best approach. An alternative option would be selling or leasing Providence Water to a private company. For example, Aquarion Water Co., a division of Australia’s Macquarie Group, is in talks to buy yet another Connecticut town’s water system, with the promise of cash and new property-tax revenue once the deal goes through. Perhaps a firm like Aquarion could bring capital from outside Rhode Island to invest in the water system. The privatization option is at least worth considering if Providence Water is keen to change the current regime.

2. This week marks the 65th anniversary of the end of passenger trolley-car service in Providence. The United Electrical Railways’ last streetcar ended its final trip at the Swan Point trolley shelter in the early hours of May 15, 1948. “It was, thus, officially ending a transportation era, which began in Rhode Island in 1864, with horsecars,” a local journalist remarked at the time. “The first line was electrified in 1892 and trolley cars hung on despite introduction of busses [sic] in 1932 and trackless trolleys in 1931.” Has the time come for streetcars to make a grand return to Providence (if not Blackstone Boulevard)? Mayor Angel Taveras included the idea in his big economic-development plan, though funding remains elusive; possible solutions have been offered by Jef Nickerson and Stephen Miller.

3. While taping “Lively Experiment” on Thursday, Director of Administration Richard Licht good-naturedly chastised me for overlooking the “silver lining” of Rhode Island’s falling unemployment rate and instead focusing on the state’s shrinking work force. To the extent that reduced unemployment is a sign of reduced human misery, Licht is right to see good news. The question is how much that’s the case. Since January 2010, when the jobless rate peaked, the number of unemployed Rhode Islanders has fallen by 18,510 – yet the number of employed Rhode Islanders has risen by only 5,624. If those 12,886 unemployed-but-uncounted workers had stayed in the labor force, Rhode Island’s April unemployment rate would have been 11.2%. While that’s still better than the 11.9% unemployment rate of January 2010, it would be far less positive than last month’s actual reported jobless rate of 8.8%. And this isn’t a universal phenomenon: the 6.4% April jobless rate in Massachusetts doesn’t change when you carry out the same exercise, because the Bay State has increased total employment and the size of the labor force since the worst of the recession. That said, DLT statistician Donna Murray told me Friday she thinks a key reason for the recent drop is delayed retirements finally taking place: raw data shows the number of Rhode Islanders ages 55 and older who weren’t in the labor force because they don’t want a job jumped by 15,800 from December to April.

4. We’ve read a lot about various controversies surrounding the Obama administration this week, but some of the most thoughtful critiques of the president didn’t have to do with the daily headlines – they have to do with his entire foreign policy. First there’s Mark Ambinder’s review of “The Dispensable Nation,” which he describes as “the best anti-Obama book I’ve read” thanks to Vali Nasr’s critique of “a president with extreme myopia.” It fits right in with two other new pieces on Obama’s Syria policy: Dexter Filkins’ long New Yorker analysis, and Jeffrey Goldberg’s latest Bloomberg View column.

5. A loyal and good-looking Saturday Morning Post reader informs me Rhode Island’s capital gets a mention from indie band Vampire Weekend on their new album. The lyrics to “Hannah Hunt,” the sixth track on the release, begin: “A gardener told me some plants move / But I could not believe it / Til me and Hannah hunt / Saw crawling vines and weeping willows / As we made our from Providence to Phoenix.” Long trip.

6. The New York Times’ David Carr has a must-read column this week about the disastrous business strategy of Advance Publications in New Orleans, where their Times-Picayune is under assault from The Advocate of Baton Rouge. A recent raid of Times-Pic journalists by The Advocate, Carr writes, “served as a reminder that The Times-Picayune’s former monopoly over talent was a thing of the past. That doesn’t mean that The Advocate will have anywhere near the impact on New Orleans that The Times-Picayune once did, or that it will magically defy the laws of contemporary publishing economics. But it does suggest that Advance’s belief that it had New Orleans to itself and could do as it wished was deeply mistaken.”

7. This week’s dispatch from WPRI.com ace Dan McGowan: “Providence City Council President Michael Solomon this week announced plans to create a 15-member commission tasked with studying the vacant ‘Superman building’ and other potential economic-development projects throughout the city. Both the council and the Taveras administration have expressed concern about offering incentives to help turn the 111 Westminster St. property into apartments – the city has already approved 13 tax stabilization deals since 2011 – but Councilman Terry Hassett said the city must find a way to preserve the iconic structure: ‘We simply cannot allow 111 Westminster to languish,’ he said. No matter what recommendations the new commission makes for the building, the state will still need to subsidize at least some of the project, according to Bill Fischer, a spokesman for High Rock Development, which owns the property. Fischer said his client has continued to meet with Governor Chafee, Mayor Taveras and House and Senate leadership and that he hopes leaders are beginning to understand the magnitude of the project. ‘It’s hard to imagine a refurbished Kennedy Plaza with an empty Superman building sitting next it,’ Fischer told WPRI.com.” Read all of Dan’s reporting here.

8. Congratulations to The Providence Journal’s Phil Marcelo, who was selected this week as one of the International Center for Journalists’ 14 International Reporting Fellows for 2013. Phil will travel to Liberia in mid-July to report for the Projo on how Rhode Islanders are helping the country rebuild after its civil war. By coincidence, Liberian President Ellen Johnson Sirleaf was in Washington this week, where she met with both U.S. Sen. Jack Reed and Congressman David Cicilline.

9. Rhode Island PBS was kind enough to include me on the panel for this week’s episode of “A Lively Experiment,” along with Richard Licht, Gary Sasse and Maureen Moakley. Topics include the State House fight over economic development, the various scandals in Washington, and whether Richard deserved that raise. Watch tonight at 7 p.m. on WSBE Learn (Ch. 36.2), Sunday at noon on WSBE-TV (Ch. 36.1) or online at the RI PBS blog.

10. Set your DVRs: This week on Newsmakers – former Treasurer Frank Caprio in his first TV interview since the 2010 campaign. Watch Sunday at 10 a.m. on Fox Providence. This week on Executive Suite – ShapeUp CEO Rajiv Kumar. Watch Saturday at 10:30 p.m. or Sunday at 6 p.m. on myRITV (or Sunday at 6 a.m. on Fox). See you back here next Saturday morning.

Ted Nesi ( tnesi@wpri.com ) covers politics and the economy for WPRI.com and writes the Nesi’s Notes blog. Follow him on Twitter: @tednesi

An earlier version of this post incorrectly said the Ocean State Regional Water Authority wouldn’t be subject to oversight by the R.I. Public Utilities Commission; the authority’s lease and sale agreements would not be subject to the commission’s oversight, but its other activities would be.

Attorneys on both sides of the case met Friday afternoon with R.I. Superior Court Judge Sarah Taft-Carter, who is handling the suit, court spokesman Craig Berke told WPRI.com. In December, she ordered the state and the unions into a formal mediation process overseen by the Federal Mediation and Conciliation Service.

The lawyers met with Taft-Carter in her chambers for about 20 minutes to update her on the progress of the mediation process, Berke said. The parties have said they aren’t allowed to detail their discussions publicly. Friday’s meeting was the fifth status conference on the pension talks since February.

Taft-Carter has scheduled the next status conference for June 7, Berke said.

• Related: EngageRI: Why the law is OK (March 18) | Prof: Law may be unconstitutional (Dec. 24)

PROVIDENCE, R.I. (WPRI) – Former State Police superintendent and congressional candidate Brendan Doherty on Friday said he has no plans to run for statewide office in 2014, likely clearing a path for Cranston Mayor Allan Fung to run unopposed in a Republican primary for governor next year.

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PROVIDENCE, R.I. (WPRI) – Rhode Island’s unemployment rate fell to 8.8% in April, reaching the lowest level in four and a half years thanks to a shrinking work force, according to new data released Thursday.

Rhode Island employers added 500 jobs in April, the fifth increase in the last six months. The state would need to add another 29,000 jobs to get back to the peak employment level reached in 2006, which wouldn’t happen until February 2018 if the pace of job growth in April continued.

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Wired magazine’s Jake Pearson is out with a big feature called “Drugstore Cowboy” that tells the behind-the-scenes story of the federal sting that led to Rhode Island’s Google windfall. Here’s a sample:

On February 25, 2009, a then 34-year-old career con man named David Anthony Whitaker left the Wyatt Detention Facility in Central Falls, Rhode Island, and slid into the backseat of an unmarked government car. … This was merely standard procedure when transporting a government cooperator. …

He had been bringing in obscene amounts of money by selling black-market steroids and human growth hormone online. …

That life ended on March 19, 2008, when a Mexican immigration agent nabbed Whitaker and brought him back to LAX, where the Secret Service promptly arrested him. …

At one point during a meeting with Whitaker and his lawyer, the Feds asked him how he had grown his online enterprise. Whitaker’s answer was immediate: He had used Google AdWords. In fact, he claimed, Google employees had actively helped him advertise his business, even though he had made no attempt to hide its illegal nature. It was reasonable to assume, Whitaker said, that Google was helping other rogue Internet pharmacies too.

Read the rest on Wired.com.

• Related: Let’s put the $165M from Google into the police pension funds (April 3, 2012)

PROVIDENCE, R.I. (WPRI) – Former Auditor General Ernie Almonte announced Thursday that he’ll run for general treasurer in 2014, abandoning his long-shot bid for governor against Gina Raimondo and Angel Taveras.

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• Related: Caprio calls ‘shove it’ remark ‘stupid,’ prepares comeback (May 14)

Home prices in the Providence-New Bedford-Fall River metropolitan area are 13% undervalued relative to the economic fundamentals of the region, significantly more than the 7% undervaluation nationwide and 8% undervaluation in Boston, according to an analysis by Trulia, the real-estate data firm.

Jed Kolko, Trulia’s chief economist, explained the methodology in a blog post:

[W]e assess whether home prices are overvalued or undervalued relative to their fundamental value by comparing prices today with historical prices, incomes, and rents. Incomes determine how much people can pay for housing, and price increases aren’t sustainable if they push prices too high relative to incomes. Rents reflect how much people value housing even if they won’t benefit from price appreciation (as renters don’t, but owners do); the price-to-rent ratio is like the price-earnings (P/E) ratio for stocks. Using data from multiple sources … we create several measures of fundamental value and combine them in order to calculate how overvalued or undervalued home prices are relative to fundamentals.

Home prices in the Providence area have fallen a long way since the height of the housing bubble: Trulia estimates prices were 51% overvalued during the middle of the 2000s, while they were 39% overvalued nationwide. (The Providence metro area encompasses all of Rhode Island plus Bristol County, Mass.)

Housing prices are below their fundamental value in 91 of the nation’s 100 largest metro areas, including Providence, according to Trulia. The only places where homes are estimated to be overvalued are in California, Texas, Oregon and Hawaii.

There aren’t exactly a flood of new people arriving in the area to snap up those supposedly cheap houses.

Trulia reports Providence was the sixth-slowest-growing major metropolitan area in the U.S. last year, eking out a population uptick of 0.1%, compared with 3% in fastest-growing Austin, Texas. Providence also has some of the oldest housing stock in the country: 6.6% of the homes for sale in March were built before 1900.

• Related: Study: Cost-of-living in Providence 23% above national average (Feb. 20)

PROVIDENCE, R.I. (WPRI) – A Providence councilman has proposed a five-point plan to help reduce or prevent a property tax hike, but the Council’s top fiscal advisor said a residential rate increase is “unavoidable” for Rhode Island’s capital city.

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PROVIDENCE, R.I. (WPRI) – Legislation to create a regional water supply board in Rhode Island would pave the way for Providence – and several other communities – to lease their water supplies for a profit, Providence Water Supply Board Chairman Brett Smiley said Tuesday.

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PROVIDENCE, R.I. (WPRI) - In his first TV interview since losing the 2010 governor’s race, former General Treasurer Frank Caprio told WPRI 12 he regrets his infamous comment that President Obama could take his endorsement and “shove it,” attributing the outburst to the frustrations of a losing campaign in its final weeks.

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• Video: Watch the full Newsmakers with Frank Caprio (May 14)

PROVIDENCE, R.I. (WPRI) – Rhode Island’s congressional delegation slammed the Internal Revenue Service on Monday for giving special scrutiny to conservative groups, but U.S. Sen. Sheldon Whitehouse suggested the scandal reflects a broken national campaign-finance system.

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PROVIDENCE, R.I. (WPRI) – Engage Rhode Island’s fundraising slowed significantly in 2012 compared with the prior year, when the advocacy group provided crucial support for the pension law pushed through by Treasurer Gina Raimondo, WPRI.com has confirmed. Its union opponents said they spent $80,000 in 2011.

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PROVIDENCE, R.I. (WPRI) – Rhode Island’s capital city paid out nearly $12,000 per month in claims for pothole damages and other accidents between Jan. 2009 and March 2013, WPRI.com has learned.

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1. Now that we know both Gina Raimondo and Angel Taveras have hedge funds managing big chunks of Rhode Island’s biggest and second-biggest public pensions, it’s likely citizens and other policymakers will want to take a closer look at their investing strategies. (Taveras aides emphasize that, unlike Raimondo, the mayor didn’t actively move money into hedge funds – he just left it there after taking office.) The treasurer has defended her use of hedge funds as a way to, well, hedge – to invest in assets that won’t move in lockstep with the stock market à la 2008. Yet while publicly traded stocks have rebounded smartly since the recession, The Economist reports that hedge funds are “going nowhere fast.” An index fund with 60% equities and 40% bonds would have returned more than 90% over the past decade; hedge funds returned only 17% after fees. Raimondo doesn’t dispute this, saying that she and the State Investment Commission have made a strategic choice to accept lower returns in order to minimize losses. Still, government pension funds are the ultimate long-term investors: should they have piled into public equities when they were cheap in 2008-09 rather than run away from them – particularly for systems whose funding levels are only 59% (Rhode Island) and 36% (Providence)? Without big investment gains, taxpayers and retirees will be left to fill those sizable shortfalls. Josh Barro, though, says Raimondo has this right: “Higher equity rates of return are purely compensation for risk, and downside risk would be born by RI taxpayers. … Hedge funds might be bad for other reasons, e.g., they charge too many fees. But she’s right not to chase returns by adding risk.”

2. With private-sector labor in a seemingly unstoppable decline, there’s been some interesting discussion on the left lately about alternative ways of organizing workers outside of traditional unions. Josh Eidelson tackled the question in The American Prospect earlier this year, and this week The Washington Post’s Harold Meyerson weighed in. Some of the ideas sound reminiscent of Fuerza Laboral, the Central Falls-based group that helps low-paid workers fight employer exploitation. Josie Shagwert, Fuerza’s former executive director, explained its work on Executive Suite last Labor Day.

3. U.S. Sen. Sheldon Whitehouse had a notable victory on the Senate floor this week, winning 67 votes for his proposal to create a National Endowment for the Oceans, Coasts and Great Lakes, which would fund aquatic research, restoration and conservation. Notably, 13 Republicans voted in favor of Whitehouse’s proposal, among them John McCain, Lindsay Graham, Jeff Sessions, Saxby Chambliss and Thad Cochran – a sign the senator has stronger relationships across the aisle than some back home might expect in light of his liberal image. (Not that Whitehouse’s lefty bona fides should be in doubt: the other night MSNBC’s Chris Hayes devoted a TV segment to the senator’s most recent speech on climate change.) That said, the oceans endowment is still a long way from handing out grants. It’s unclear if and when the House will take up the Water Resources Development Act reauthorization that it’s attached to, it doesn’t have any designated funding yet, and last year the measure was stripped out of a BP cleanup bill by House-Senate conferees. Legislating is a long game.

4. Speaking of the Senate, sometimes it seems like Massachusetts freshman Elizabeth Warren is an honorary member of the Rhode Island delegation. She was in Rhode Island last month to headline a fundraiser of Jack Reed, who helped get her onto the Banking Committee and has worked with her to defend her baby, the new Consumer Financial Protection Bureau. Just this week Warren announced her support for Sen. Whitehouse’s sequester alternative, which would replace the across-the-board spending cuts with revenue from the Buffett Rule and higher corporate taxes. It’s not surprising Warren would make common cause with Reed and Whitehouse – they’re kindred spirits as wonky liberal Democrats from Southern New England. Warren is also in the somewhat odd position of being her state’s senior senator just months after taking office, thanks to John Kerry’s appointment as secretary of state – perhaps she’s looking a bit to her colleagues from the south.

5. A must-read for politicians and bureaucrats - Cass Sunstein on why government forms should be simple.

6. So former Senate President Joe Montalbano will get a Superior Court judgeship from Governor Chafee – no surprise perhaps, considering that in 2011 when I pressed the governor on whether it was appropriate to make Montalbano a magistrate, he gave me a look and replied: “I’m not going to fight with the General Assembly.” Chafee’s decision to give judgeships to Montalbano and another magistrate, Patricia Asquith, is a double-win for the Senate because it will let the chamber dole out two more plum appointments once their magistrate slots are vacant. But is it even constitutional for Rhode Island to have magistrates, who are appointed by judges, and can send people to jail and grant divorces? Former Rep. Keven McKenna thinks not. He argued forcefully before the Senate Judiciary Committee last year that magistrates’ actions are “constitutionally void” and a violation of the will of Rhode Island voters, who approved merit selection 19 years ago, because magistrates exercise the powers of a judge but aren’t picked by the governor and the Judicial Nominating Commission. “Chief judges and chief justices have no authority to appoint anyone to exercise judicial powers. Only the governor can do that,” McKenna said. “Separation of powers is really simple: The governor can only administer, the General Assembly can only legislate, and judges can only adjudicate – they can’t appoint. Appointments are not adjudicating functions.” Those comments fell on deaf ears with the senators in attendance that afternoon – among them Senate President M. Teresa Paiva Weed, who’ll likely be fitted for the black robes herself someday – though Charlestown Rep. Donna Walsh keeps pressing the issue.

7. Could this be the African Century?

8. This week’s dispatch from WPRI.com ace Dan McGowan: “When the Taveras administration announced plans this week to transfer ownership of the decrepit George C. Arnold building on Washington Street to the Providence Redevelopment Agency, it marked the first time in 15 years the city has moved to exercise its use of eminent domain. In 1998, former Mayor Buddy Cianci used that power to take over another crumbling downtown building that housed the Fox Lady, the city’s most famous strip club. In its place now is Bravo Brasserie, a French restaurant that has become one of the jewels of downtown. The Arnold building may not be the only building the city seizes: Taveras has signaled he is willing to keep using those powers to redevelop unkempt properties in the coming months.”

9. My colleague Tim White offers some belated praise for the Chafee administration. Target 12 recently exposed a state worker charged with inspecting needy Rhode Islanders’ home-heating systems rather strangely parking his state car behind his house during work hours. (Watch the video.) Key to the report was a series of documents – time-cards and itineraries – that confirmed the employee not only was on the clock but wasn’t where he told his supervisors he was. In the course of his reporting, Tim tells me he ran into a roadblock with lawyers from the Department of Human Services, who were reluctant to provide the records. “Then Chafee’s office stepped in.” The governor’s spokeswoman, Christine Hunsinger, worked to get all the documentation released to WPRI, telling Tim: “It’s better to be transparent.” (Amen!) Tim also notes that this is different from what happened with an eerily similar 2009 report in which Target 12 found that the entire Department of Labor and Training fraud unit was failing to do its job. The Carcieri administration refused to release the relevant documents, which were eventually leaked. Last summer, however, Chafee signed a beefed-up public records law that called for greater transparency. “Coincidence?” Tim wonders.

10. Set your DVRs: This week on Newsmakers – Congressman David Cicilline. Watch Sunday at 10 a.m. on Fox Providence. This week on Executive Suite – Siena Restaurant Group’s Anthony and Chris Tarro, plus Laurie White and Jon Duffy from the Greater Providence Chamber of Commerce discuss “The Garage.” Watch Saturday at 10:30 p.m. or Sunday at 6 p.m. on myRITV (or Sunday at 6 a.m. on Fox). Happy Mother’s Day to all the moms reading this. See you back here next Saturday morning.

Ted Nesi ( tnesi@wpri.com ) covers politics and the economy for WPRI.com and writes the Nesi’s Notes blog. Follow him on Twitter: @tednesi

This post has been updated.

Taxpayers in Rhode Island’s capital city paid the highest commercial property taxes charged in any of the nation’s 53 biggest cities in 2011, according to the latest edition of a widely cited comparative study by the Lincoln Institute of Land Policy and the Minnesota Taxpayers Association.

The previous edition of the study listed Providence as having the second-highest commercial property taxes among big cities, behind only Detroit – a statistic that’s been widely referenced locally ever since Governor Chafee cited it on Newsmakers and then had his research confirmed by PolitiFact.

But the tax burden on commercial property in Providence grew even heavier in 2011, when Rhode Island’s cash-strapped capital slapped a tax bill of $4,975 on commercial property worth $100,000 – $69 more than second-ranked Des Moines and $75 more than third-ranked Detroit. Here’s a chart:

Taveras has proposed freezing the commercial tax rate for seven years – apparently at what has been the highest level in any major U.S. city, according to this study. Even that may not happen: City Council members have expressed skepticism about the proposal, suggesting they may raise commercial taxes even more.

The study said Providence also charged the fifth-most on apartment buildings among the 53 big cities in 2011, with a tax of $21,765 on a $600,000 property, behind Des Moines, Detroit, New York City and Buffalo. In addition, Providence ranked 11th-highest for homestead property taxes on the median-value home and 9th- and 10th-highest for industrial property taxes on machinery, equipment, inventories and fixtures.

The latest edition of the study was cited Friday on Twitter by Gary Sasse. “Rhode Island’s economic health is linked to more competitive business taxes in the Capital City,” he commented (in abbreviated tweet form). Not coincidentally, the owner of the now-vacant Superman building wants a tax break to redevelop it.

PROVIDENCE, R.I. (WPRI) – R.I. Gov. Lincoln Chafee on Thursday sided with former campaign rival and Moderate Party Chairman Ken Block after Block ripped House Speaker Gordon Fox’s plan to restructure the state’s troubled Economic Development Corporation.

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PROVIDENCE, R.I. (WPRI) -  Several Rhode Island school administrators spent thousands of taxpayer dollars on a trip to China, dining at high-end steakhouses and an in-state overnight staff retreat in 2012, according to a Target 12 review of school district travel data.

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[A] collection of Democratic lawmakers on Thursday renewed their push to keep rates low but also backed interest rates that were based on the markets. Their plan would base rates on a 91-day Treasury bill and allow the Education Department to add to that to pay for the administration of loan programs.

“The student loan interest rate offered by the government shouldn’t be needlessly high, it should be based on actual costs,” Sen. Jack Reed, D-R.I., said in introducing the plan.

The versions from both parties include a proposal that was central to Obama’s budget: interest rates would shift based on financial markets. …

Basing student loans on 10-year Treasury notes’ rates would, at least for now, offer a deal to some students. … That’s not to say, however, the rates would be a good deal forever. If Treasury increases its rates, students’ loan rates would rise, too.

For context, under the current system Congress sets the actual numerical interest rate on student loans – that’s why the rate is currently set by law at 3.8% and is (again) scheduled to rise to 6.8% on July 1. (Hence the growing focus on the issue at the moment.)

Reed’s bill would have Congress stop setting the rate by statute and start basing it on market movements instead, as outlined above. However – unlike similar proposals from President Obama and House Republicans – Reed’s bill would set a maximum cap on rates: 6.8% for subsidized loans and 8.25% for unsubsidized loans. It would also allow students to refinance their loans at a lower rate.

Why the cap? According to Reed, it’s necessary because someday interest rates will return to a higher level.

Reed’s staff says college graduates in the Class of 2007 would have paid almost 8% and the Class of 1981 would have paid almost 17% if the House GOP proposal had been law at the time. Using CBO economic forecasts, they project rates will be back above 8% by 2018 under the Obama/GOP proposals.

The White House and Republicans argue Reed’s proposal could raise costs for borrowers or force other taxpayers to subsidize student loans. “In order to have a cap, we would have to charge students more in order to hedge against the possibility that rates would go up to unmanageable levels in the future,” an administration official told reporters April 10.

While a capped market rate is Reed’s vision for a permanent fix on student loans, in the meantime he’s introduced a bill to freeze current rates for two more years while Congress comes up with a long-term resolution. “Some who claim it is important to avoid burdening our children and grandchildren with national debt are all too willing to bury these young people in student debt,” Reed said in a statement Thursday.

Reed isn’t the only local senator arguing for a fresh approach to student loans. Massachusetts’ Elizabeth Warren on Wednesday introduced a bill to let students borrow at the same rate that big banks get from the Federal Reserve’s discount window.

(photo: Manuel Balce Caneta/AP)

PROVIDENCE, R.I. (WPRI) – Nearly two years after Providence closed several public schools, the city is still paying hundreds of thousands of dollars to keep the lights and heat running in the empty buildings, WPRI.com has learned.

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