RI not alone in scaling back subsidies for movies

November 23rd, 2010 at 10:24 am by under General Talk

you paid for 6.75 of those dresses

Rhode Island’s tax credit for movies and TV shows has been controversial ever since it was enacted back in 2005. The law offers companies a credit to get back 25% of their production costs if they film here so long as the production costs at least $300,000. Since it was created, state taxpayers have helped subsidize flicks like “27 Dresses” and “Dan in Real Life.”

Gov. Carcieri proposed eliminating the credit when he put together his budget proposal for this year but lawmakers opted to keep it, although they did cap its total cost at $15 million last year. The credit is managed by the Rhode Island Film & TV Office, which has an annual budget of $278,157.

It remains to be seen whether the film credit program will survive next year’s $300 million budget deficit – but Rhode Island won’t be alone in dumping it if that’s what winds up happening, Bloomberg News reports:

Incentives for Hollywood have been scaled back in Wisconsin, capped in Rhode Island, suspended in New Jersey, Iowa and Kansas and scheduled to expire in Arizona. While states continue to expand and introduce subsidies, programs around the country face allegations of corruption, doubts about job-creating power and, most of all, questions about affordability.

“We are starting to stem the tide of state government pandering to the film industry,” said Bill Ahern, policy director for the Washington-based Tax Foundation, which advocates lower taxes.

In the last five years, $3.5 billion in tax credits, rebates and other financial assistance have gone to makers of films, television shows and commercials, according to a calculation by the foundation. In the next fiscal year, states will face $72 billion in budget deficits, the National Conference of State Legislatures estimates.

The subsidies began in Louisiana in 1992 and today are offered by 42 states. A shakeout will halve the number in the next decade as lawmakers conclude they can’t sustain funding, according to Larry Brownell, head of the Association of Film Commissioners International in Redondo Beach, California, which represents every state with incentives except Massachusetts.

Speaking of which, the Film & TV Office’s website lists the 1956 musical “High Society” as a past project – I know that movie’s set in Newport, but was it actually filmed there?

Deepwater Wind hires Carcieri’s former chief of staff

September 13th, 2010 at 12:44 pm by under General Talk

Jeff Grybowski

Jeff Grybowski, who served in the Carcieri administration from 2003 to 2007 including 10 months as the governor’s chief of staff, has joined Deepwater Wind as its chief administrative officer and senior vice president for strategy and external affairs, the company said today.

Deepwater, of course, is the hedge fund-backed wind power company picked by Carcieri in September 2008 to develop two offshore wind farms with the state’s enthusiastic (but non-financial) support. Bill Lynch, now a candidate for Congress, criticized Grybowski’s involvement with Deepwater back in 2008 when he was head of the R.I. Democratic Party. It will be interesting to see if he or his brother, Attorney General Patrick Lynch – another Deepwater critic – will sound off on Grybowski’s hiring.

Deepwater also announced that it is now officially a Rhode Island company, with its Providence office serving as its corporate headquarters; before, the HQ had been in Hoboken, N.J., near the New York City base of the company’s chief financial backer, D. E. Shaw. The Hoboken office remains open. No sign of the press release on Deepwater’s website yet.

On a related note, all this news comes the same day Carcieri co-wrote an op-ed in Politico calling on Congress to approve a federal Renewable Electricity Standard.

Update: No mention of Grybowski’s hiring in a Carcieri press release issued moments ago praising Deepwater’s decision to make Providence its corporate home. “This decision by Deepwater Wind to relocate its corporate headquarters to Rhode Island is further proof of the company’s commitment to help us develop the nation’s first offshore wind farm and create good paying jobs for Rhode Islanders,” the governor said. (Carcieri also put Grybowski on the Judicial Nominating Commission last year.)

Update #2: Checked in with a Deepwater spokeswoman to double-check on what the corporate headquarters relocation really means. The company’s senior management team will indeed by based here in Providence, while the Hoboken office will be “a development office only,” she said.

(image credit: Hinckley Allen Snyder LLP)

Education secretary celebrates RI not using $33M

September 9th, 2010 at 9:06 am by under General Talk

President Obama’s education secretary, Arne Duncan, put out a statement yesterday announcing his department has approved Rhode Island’s application to receive $32.9 million from the new Education Jobs Fund that Congress created in July August:

“There is a huge sense of urgency to get these funds out the door. I commend these states for being among the first to submit their applications and thank our team at the department for making funds available within a matter of days,” said Duncan. “These education dollars will help these states keep thousands of teachers in the classroom working with our students this school year.”

…except they won’t, as discussed ad nauseam here last week, because the General Assembly has no plans to reconvene and hand out the money, which in any event Gov. Carcieri wants to use to close the state’s deficit for this fiscal year. But Duncan’s statement demonstrates the state-federal disconnect over this money that I mentioned before, and how it causes confusion and uncertainty on the ground.

Update: It took so long for the Senate to pass that state aid bill I didn’t realize it was early August, not July, by the time it finally happened.

Why Carcieri can’t decide how the teacher money gets spent

September 1st, 2010 at 4:19 pm by under General Talk

The Projo’s front-page headline today – “Money meant for teachers to fill deficit” – has led to a flurry of statements from candidates and officeholders. They called on Gov. Carcieri to reverse his decision to close the state’s budget shortfall with $32.9 million Congress is sending the state through an Education Jobs Fund created last month.

There’s only one problem – it’s not Carcieri’s decision to make.

Carcieri is Rhode Island’s governor, not its dictator. In the end, it is lawmakers in the General Assembly – where Democrats have held a veto-proof majority since the 1980s – who’ll make the final decision on how to spend the $32.9 million, just as they make every other decision on how the state spends its funds.

The state’s legislators only meet during the first half of the calendar year unless the leadership decides to call a special session in the summer or fall. And House Speaker Gordon Fox has no intention of calling lawmakers back before the end of the year, his spokesman told me a few minutes ago.

Until lawmakers meet and take a vote on how to spend the federal education money, it doesn’t get spent. That would be the case even if Carcieri said he wanted to use the funds to cut a check to every classroom teacher in Rhode Island. Checks and balances!


The fallout from Caprio’s Schilling critique

August 31st, 2010 at 6:12 pm by under General Talk

Frank Caprio may have capsized the $75 million deal with Curt Schilling’s 38 Studios, and the governor is not pleased. More in my new story on the main site:

Gov. Donald Carcieri was blindsided and angered by Caprio’s public criticism of the deal, which began in an interview published in this morning’s edition of the elite financial newspaper Bond Buyer and continued in a lengthy press release the treasurer’s gubernatorial campaign released laying out his opposition. …

In addition to the Bond Buyer interview, over the last two days Caprio brought his concerns directly to analysts at Moody’s and Standard & Poor’s, the two credit-rating agencies that are currently evaluating the 38 Studios guarantee. The transaction is expected to close by the end of September, according to EDC officials.

On top of that, the financiers working on the deal will check in with the treasurer’s office to ensure its soundness and the accuracy of the state’s financial disclosures. “They basically look to his office to determine the endorsement of the state, so could it kill the deal? Yes it could,” David Layman, a spokesman for the treasury, told Eyewitness News.

Read the whole thing. And if you have questions about the 38 Studios agreement, leave them in the comments and I will try to answer them.

Carcieri, Caprio, Chafee – a tangled web

August 27th, 2010 at 4:35 pm by under General Talk

Lame duck Gov. Donald Carcieri has had a few less-than-nice things to say about his former-fellow-Republican, Lincoln Chafee, who’s now running for governor. Chafee has gotten Carcieri’s dander up by going after the governor’s support for the $75 million loan guarantee to Curt Schilling’s video game company, 38 Studios.

One interesting wrinkle in all this is Carcieri’s relationship with another gubernatorial candidate, Democrat Frank Caprio. The two men worked together at Cookson America in the 1990s, and are said to have a warm rapport. With Carcieri’s former aide, Republican John Robitaille, trailing Chafee and Caprio in the polls, the man who is likely the governor’s second-favorite candidate – Caprio – could reap the benefits of any damage Carcieri does to Chafee.

(It would make it a lot easier to type blog entries about the three of them if at least one of these men had a last name that didn’t start with “C.” At least Chafee’s “A” doesn’t come until the third letter.)

Meanwhile, officials at the EDC told me today it may take until near the end of September for Wells Fargo and Barclays to close on the 38 Studios loan transaction. Much more in my new story over on the main site.

RI Republicans face historic wipe-out in November

August 26th, 2010 at 4:21 pm by under General Talk

WRNI’s Ian Donnis has a post today noting the Rhode Island Republican Party’s lack of campaign cash for the fall elections, which could prevent the party from capitalizing on voter anger in what promises to be a banner year for Republicans nationally.

But I’d argue the local G.O.P.’s situation is even worse than that – they are facing a historic electoral wipe-out this fall that threatens to leave them at their lowest ebb in history.

Right now, Gov. Donald Carcieri – who is barred by term limits from running for re-election – is the only Republican who holds one of Rhode Island’s five statewide constitutional offices. (The other four are lieutenant governor, secretary of state, attorney general and treasurer.)

On top of that, all four men who represent Rhode Island in the U.S. Congress are Democrats. And back at the State House, Republicans hold just 10 of the 113 seats in the General Assembly – less than 10 percent, a historic low. (They haven’t controlled both chambers since the eve of World War II.)

That means if a Republican does not win one of the state’s five constitutional offices or one of its two U.S. House seats, the G.O.P. will not control a single high-profile office in Rhode Island come January.

At that point, the state’s highest ranking Republican politicians could be Mayors Scott Avedisian of Warwick and Allan Fung of Cranston, along with the party’s leaders in the General Assembly, Rep. Robert Watson and Sen. Dennis Algiere.

Is that scenario plausible? I’d argue it is.


AG: Deepwater Wind actions worst in 224 years

August 23rd, 2010 at 4:21 pm by under General Talk

Attorney General Patrick Lynch joined an environmental organization and two businesses on Monday in asking the Rhode Island Supreme Court to throw out the R.I. Public Utilities Commission’s Aug. 11 decision to sign off on a deal between National Grid and Deepwater Wind.

And in his statement asking the court to take up the case, Lynch draws an eye-popping historical parallel:

Not since the events surrounding the case of Trevett v. Weedon [sic] (1786) – in which the Justices of this Court’s predecessor were summoned to the floor of the General Assembly to face firing for non-implementation of an enactment that abridged specific trials and stripped the court of jurisdiction – has the judicial function been so threatened in this state. …

So too, the current affair – featuring an attempt at retroactive legislative dictation of the result of a case-specific fact question that had been adjudicated – will have an impact far beyond the parties. This case provides an opportunity for the Court to illuminate Rhode Island’s ongoing exploration of the separation-of-powers.

Now that’s what I call a rip-roaring writ of certiorari.

Update: So, what happens next? First, the Supreme Court has to decide whether to take the case. If it does, the two sides will have to file their opposing briefs and then argue the case before the justices. Considering that Deepwater wants to get going on building the wind farm, they may ask for an expedited review, which would likely see the case decided before the end of the year. But that’s just an informed guess.

Updated #2: Turns out the AG’s office was writing a little too hastily – the correct name of that post-Revolutionary War case they referred to was Trevett v. Weeden, not Weedon. But Wikipedia reports (and other sources confirm) that Weeden was one of the cases that set the stage for Marbury v. Madison, the famous 1803 U.S. Supreme Court case that established the principle of judicial review.

RI not getting all the Medicaid money it thought

August 4th, 2010 at 4:15 pm by under General Talk

After weeks of delays, the U.S. Senate just voted 61-38 to approve additional aid to states – but not before scaling back the measure and blowing a hole in Rhode Island’s budget for the new fiscal year, which started July 1. Here’s The Hill:

The two moderate [Maine] Republicans were drawn to support the measure after Democratic leaders scaled back the measure from $24 billion to $16.1 billion and provided offsets for the entire cost of the legislation, which includes $10 billion for education programs to prevent teacher layoffs. …

For liberals, the offsets came at a price: Almost $12 billion of the $26.1 billion tab is covered by cutting food stamp benefits to low-income Americans beginning in 2014.

Wednesday’s cloture vote [aka, the vote to cut off the Republican filibuster] sets the stage for a final passage of the bill no later than Thursday afternoon — depending on how long GOP leaders want to delay. …

The House is expected to approve the measure when lawmakers return from the August recess.

Officials in Rhode Island have been nervously watching the machinations in Washington over the past few months – because, like other states, Rhode Island balanced its $7.8 billion budget for this fiscal year assuming the Medicaid money would come through.

The scaled-back bill passed by the Senate will provide Rhode Island with an additional $69.3 million, according to budget officials here – nothing to sneeze at, but still one-third less than the $107.7 million lawmakers included in the budget they approved in June.

Gov. Carcieri, who questioned then whether it was responsible to count on the Medicaid money, or his successor as governor were tasked with making across-the-board cuts in state spending to make up the difference in the budget. (His spokeswoman, Amy Kempe, said she would not comment until both the House and Senate had passed the Medicaid money.)

Considering the relatively small size of the shortfall – $38.4 million, or about 0.5 percent of Rhode Island’s total budget this year – it may be possible to make up the difference if tax revenue comes in higher than expected. We’ll know more once the money finally makes it through Congress.

Update: Sen. Jack Reed’s office pegs the state’s share of Medicaid money at $72 million, and says Rhode Island will receive an additional $32.9 million “to help prevent teacher and first-responder layoffs” in cities and towns. It’s not clear to me yet how the latter pot of money will be allocated and distributed – I’ll let you know when I learn more.

Reed calls it “a smart investment,” and says House Speaker Nancy Pelosi plans to call the House back into session next week to vote on the measure, which will presumably be approved easily, and then sent to President Obama for signing.