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As RI Implements Government-First Economic Strategy, JOI Drops

The Providence Journal has published an op-ed that I wrote about Rhode Island’s slip on the RI Center for Freedom & Prosperity’s Jobs & Opportunity Index (JOI):

When numbers that indicate economic health for families is up, a state’s score goes up. When the balance shifts toward reliance on and payments for government, a state’s score goes down. Nothing in the score should disadvantage Rhode Island in particular. The center’s goal with the index is to objectively measure states according to the principle that economic health means independence both from want and from government.

From this perspective, the strategies that elected officials advertise as steps forward are shown to be deeply flawed. Gov. Gina Raimondo has focused on bribing companies to move to the state in order to generate photo ops and claim that her administration is creating jobs. Meanwhile, the General Assembly has passed so-called tax reforms that were designed to game national indexes of business friendliness — lowering tax rates, for example, while increasing the amount of tax collected.

We need economic policies that unleash Rhode Islanders’ own potential and attract others who want to build opportunity for themselves and their employees.  Pitching a new Amazon headquarters, subsidizing a minor league baseball stadium, and building hotels aren’t going to do it.

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A Side Benefit of Giving Away Retirement Bonuses

Katherine Gregg notes, in a Providence Journal article, an interesting side effect of Democrat Governor Gina Raimondo’s plan to pay off long-time state employees to retire.  Gregg notes that the administration is assuming that 426 state workers will retire under the program, receiving $8.94 million in “retirement-incentive payments” and another $4.57 million in pay for unused time off from their years of employment.

[The plan] will also, coincidentally, turn state government into a hiring factory in the six months leading up to the 2018 elections.

So, heading into a statewide election for legislators and the governor, 426 union members will be happily flush with cash and another estimated 252 will have received seats on the state payroll gravy train.  That’s a nice little bonus effect of retirement incentives.

Of course, we shouldn’t accept the governor’s estimates.  Pushing employees into an underfunded pension plan may result in some near-term savings, but in the long term, it’s a terrible idea.  Taxpayer dollars go toward these pensions, and with people living longer and longer and government employees’ pay on ratcheting scales, we’ll only end up paying multiple people at a time for each job.

These sorts of buyouts are a bad idea when the idea is just to save money, and the impulse exposes a much more problematic fact of government.  Think about it:  If these employees are so far from worth what they’re being paid that we’ll give them bonuses up to $40,000 to get rid of them, why are we paying them so much in the first place?  If that’s not an indication that we need huge, systematic reform, then nothing is.

That point highlights the only time that buyouts might be reasonable in principle, which is when doing so is part of a system-wide fix.  But nothing is being fixed, in this case.  The governor’s just looking for a short-term budget trick that comes with some political benefit.

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RhodeWorks Signs Bring More Censure from Feds

Rhode Islanders who follow the news can’t help but begin wondering how many times the federal government will have to send letters of complaint against our corrupt and inept state government.  The Unified Health Infrastructure Project (UHIP) is obviously the giant archetype of the problem, but even those blue RhodeWorks signs promoting Democrat Governor Gina Raimondo are an illustration.  Here’s Patrick Anderson in the Providence Journal:

The Federal Highway Administration has found the hundreds of signs scattered over roads and bridges are “not in compliance” with federal traffic regulations, Carlos Machado, Federal Highway’s administrator for Rhode Island, said Wednesday. …

Nancy Singer, a Federal Highway spokeswoman, provided The Journal with the federal regulation at issue in Rhode Island, which does not allow “promotional or other informational signs regarding such matters as identification of public officials, contractors, organizational affiliations, and related logos and symbols.”

Also of interest is that the signs cost an extra $100 each to make and install, bringing the total to $52,000, because the original estimate didn’t include labor costs.  Unionized state employees are both making and installing the signs.

Recall, in this context, that Raimondo’s Director of the Department of Transportation, Peter Alviti, was previously an employee of the Laborers’ International Union (LiUNA).  Shortly after his hiring, Alviti scuttled a hiring plan that called for the state to bring in more design and development employees, as recommended by an expensive outside analysis, and instead hired more laborers.  One effect of the change was that the new hires shifted from a different union to LiUNA.

Recall, also, that Alviti brought some tasks in-house, like road striping, claiming that having more union members on the payroll year round would be less expensive than hiring outside vendors for the part-year work.

Now we are reminded that the DOT has been finding work for its employees making overly political signs for the governor.  At what point does the federal government stop the cease and desist letters and send in the investigators?

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State House Report with John DePetro, No. 26: Resurrected Legislation and the Ghost of Failures Past

For my weekly call-in on John DePetro’s WADK 1540 AM show, last week, the topics were the likelihood of an evergreen veto override, whether the DCYF would haunt Gina, PawSox, DACA, and Rhode Works transparency.

Open post for full audio.

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The Governor’s Inappropriate Blurring of Roles with DACA Initiative

A larger percentage than I’d like of recent posts, in this space, have to do with the actions of Democrat Governor Gina Raimondo, but the hits just keep on coming, as they say.

We can offer wry quips, as John Loughlin deftly did, about Raimondo’s initiative to pay the $495 filing fees of applicants for federal Deferred Action for Childhood Arrivals (DACA) status.  Loughlin imagines the governor paying off the minimum corporate tax for small businesses in the state as an alternative.  Put aside, though, the specific policy (and questions about why the governor wants to create more incentives for illegal immigrants to locate in Rhode Island) and look at the process.

Data point 1: As Kim Kalunian reports on WPRI, the governor announced this program with at least the trappings of her official office, holding a PR event in the State Room of the State House, at a government podium.  Additionally, in a fundraising appeal (see below), Raimondo blends this initiative with various official programs of the State of Rhode Island as if they’re of the same nature.

Data point 2: The governor’s statement notes that “the Rhode Island Foundation is coordinating contributions and making grants to community agencies that have stepped up to do this work.”

Data point 3: A fundraising appeal for the initiative that the Providence Journal’s Kathy Gregg tweeted out was sent courtesy of the PAC, Friends of Gina Raimondo.

This blurring of public and private sector is absolutely inappropriate, but it’s a regular practice of Raimondo’s.  Recall, for example, the overlapping interests of Wexford Science and Technology (of I-195 Redevelopment fame), Raimondo, the RI Foundation, and the Brookings Institute.  Or consider her “hiring” of a chief innovation officer for her cabinet one step removed from government by being housed in the RI College Foundation.

It would be one thing if the governor were merely expressing support for some private-sector initiative, but instead, she’s acting through a shadow government serving unknowable interests and a far too obvious ideology.

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The Promotion of a Governor, Q.E.D.

How out of control is Democrat Governor Gina Raimondo’s use of government for self promotion?  So out of control that somebody appears to have leaked an internal email to the Providence Journal that puts the cherry on top of my observation, yesterday, that the whole state government has turned toward narrative-building and the promotion of the governor:

Raimondo’s communications director, Mike Raia, spelled out the plan to all of the public-relations folk in the executive branch in an email earlier this month, which has since been obtained by The Journal, with the subject line: “October 2: #1000DaysOfProgress — Comms Planning.”

Reading like a campaign flier for Democrat Raimondo, who is expected to seek reelection next year, Raia’s email read, in part: “October 2, 2017 marks Governor Raimondo’s 1,000th day in office. In those 1,000 days, Rhode Island has built some incredible momentum and our state has made a lot of progress….”

But wait, there’s more!

“In addition to the Governor’s events, we are asking every Cabinet member to plan at least one event highlighting a specific and tangible accomplishment from these 1,000 days. Please copy and complete the form below with two suggestions, including locations, for your agency and send it … no later than 4 p.m. on Friday, September 8. Our office will provide final guidance on events by Friday, September 15 to ensure that we have adequate coverage across the entire state.”

Apparently, it’s not enough simply to do the people’s business, in Rhode Island.  UHIP is still a disaster; the DCYF is still in disarray; the budgeting and revenue offices have to figure out how to address a massive deficit upcoming; and on and on.  One might wonder whether a state government that surprises people when it does something right has the spare capacity to be choreographing PR blitzes, but all those PR folks have to do something.

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When Government Becomes a PR Machine

Gary Sasse asks an interesting question on Twitter regarding Kathy Gregg’s Providence Journal article about the expanding PR corps in state government:

Does the proliferation of PR folks reflect a lack of trust that civil servants can be trusted to deliver the Governor’s spin?

Although Sasse is on to something, his question is targeted a little below the critical development.  The entire nature of government information distribution has changed under Governor Gina Raimondo.  We can see this in minor controversies, like her use of unknown numbers of blue Rhode Works signs to promote her name… and efforts to hide the costs of doing so.  And as Gregg notes, we can see it in the fact that the state employees who are actually doing stuff, and are therefore better positioned to explain that stuff, are harder to reach, more often redirecting questions through the spin apparatus.

Maybe most notably, we can see the change in the behavior of department heads.  Stefan Pryor has turned the Commerce Corp. into an elaborate Raimondo promotion vehicle, and watching him talk in hearings or in interviews proves him indistinguishable from a PR flack.

Education Commissioner Ken Wagner wasn’t quite that bad on a recent Newsmakers but was notably more reliant on catch phrases and talking points, whereas his predecessors engaged much more in genuine-seeming conversation during such appearances.  Deborah Gist, for example, always gave the impression of “I know what you’re asking, and I’m going to answer your question to the best of my ability.”  Wagner’s impression is more like “I know what you’re asking, but I’m going to pretend that I don’t, or that these fancy phrases actually answer your question.”  (I’ll probably have more to say on this for my Last Impressions podcast, Friday.)

Basically, it used to be that the PR folks were the professionals tasked with conveying the thoughts and intentions of elected and appointed officials and doing a little bit to promote government initiatives, while the other professionals were there to do and explain their work.  The big change under Raimondo is that she’s attempting to steer the whole ship of state toward the task of marketing.

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Alexion Closure… Centralized Economic Development Not Cutting It

Back in 2012, just as the Town of Portsmouth was beginning to crow about the profitability of its taxpayer-subsidized wind turbine, government officials had to eat that crow when the unit failed, with a fix priced at more than the supposed profit.  That anecdote came to mind when I read of Alexion Pharmaceuticals’ plan to close up its Rhode Island shop.  According to WPRI’s Nancy Krause:

Alexion Pharmaceuticals Inc. announced Tuesday morning it is closing its plant in Smithfield and moving manufacturing operations to other sites in the United States and Ireland.

A spokeswoman told Eyewitness News Alexion has 250 employees at the location, which the company said has been a key manufacturing site for Soliris – a high-priced treatment for two rare genetic disorders – over the past 10 years.

Add that 250 to the 715 Benny’s employees now set to lose their jobs, and it begins to appear that the economic winds might blow away every single job increase that Governor Gina Raimondo’s Commerce Corp. has bribed, or will bribe, companies to create in the state.

Of course, we can’t know whether anything that the State of Rhode Island could have done would have saved the nearly 1,000 jobs that are now going to be erased from our local ledger from just these two companies, but if the economy is shedding jobs while only creating them when heavily subsidized, that’s a very strong signal that we should try another approach.  Simply change the state’s focus to making it easier for residents to live and do business, and companies will have more incentive to stay and innovate here.

All those bribes would have gone a long way toward making such refocusing possible.

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One Thing is Clear: The Progressive Agenda Is A Failure

Despite the false hopes expressed by lawmakers based solely on a reduced unemployment rate, Rhode Island families are hurting. The Ocean State suffers under a terrible business climate, and remains stuck 48th rank on our Center’s Job’s & Opportunity Index. Just this week, it was announced that Benny’s, a Rhode Island institution, is closing.

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“Raimondo” Certainly Not Synonymous with “Transparency”

Thanks to the indefatigable John Vitkevich, of Portsmouth, for pursuing information about Governor Gina Raimondo’s blue campaign signs, posted at taxpayer expense under the pretense of providing transparency as to the progress of RhodeWorks progress.  As Kathy Gregg reports in the Providence Journal, it has taken action by the attorney general’s office to make the governor be transparent about the signs:*

Of DOT’s unwillingness to identify the state account that paid for the signs, Special Assistant Attorney General Sean Lyness wrote: “We confess some unease. The DOT has consistently indicated that it maintains no documents responsive to this request… Nonetheless, there is some cost to the State of Rhode Island for these signs and it is axiomatic that this cost – assuming it is paid with State funds – must come from some budget line item(s).”

After finding DOT, in fact, had “an Excel spreadsheet of the costs″ for the signs, Lyness wrote: “Under the DOT’s interpretation, this running tally of signage costs could be withheld as a ‘draft’ indefinitely. This interpretation contravenes the definition of the term ‘draft,’ which contemplates an eventual completed document.”

The Raimondo administration’s arguments are audacious and insulting, with the insinuation that the state government could develop an entire program and pay for it without ever producing a document that the public has a right to see.  The hope, one presumes, is to make “citizen-critics” like Vitkevich just go away.  We need more people who just won’t.

 

*  Obviously, this assumes that the Raimondo administration doesn’t attempt to defy the AG’s ruling.

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Magellan and the Cost of Business in RI

Good news, Rhode Islanders!  We paid another company to locate in Rhode Island jobs that it already planned to create:

The Commerce Corporation board approved up to $2.1 million in tax credits that Magellan can receive over 10 years if it creates 75 new jobs. An additional 25 full-time jobs are also expected to be added by the company. Commerce Secretary Stefan Pryor said an outside analysis showed the deal will be revenue-positive for the state.

In case you don’t have a calculator handy, that’s $28,000 per job.  This is madness.  Bureaucrats and political operatives are playing the big shots with our money with no real skin of their own in the game.

If we have to subsidize companies to the tune of $28,000 per job to locate in our state, we’re clearly making it $28,000 too expensive to create jobs in Rhode Island.

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Rhode Island Motto: “Hope for Bribery to Live Here”

Kate Bramson has checked in on Rhode Island government’s “Wavemaker” program, which bribes college graduates to live in the Ocean State:

The state has selected 224 college graduates to receive personal income tax credits under the state’s Wavemaker Fellowship program, which would defray their student loan debts totaling about $868,000 while the recipients work in science, technology, engineering, mathematics and design jobs in Rhode Island. …

This year’s average annual tax credit is approximately $3,875 per student, but recipients earn varying amounts based on their education levels. Those with associate’s degrees are eligible for up to $1,000 of credit each year, while those with postgraduate degrees are eligible for up to $6,000.

The working class and underemployed in the state must be very comforted by the knowledge that they’re helping to give a $6,000 bonus to a Ph.D. in a high-paying job.  But that’s the key to living in Rhode Island: do something (or be something) that local elites like.  Otherwise, you’re out of luck.  You’re a nobody loser.

Many of us have watched in disbelief every time some government-employed or otherwise-connected schemer walks away from an impropriety scot-free, but the mystery is solved when once one understands a quirk about Rhode Island culture.  Just as many Americans romanticize mafiosi, Rhode Islanders tend to look up to those who “got theirs.”  The insider crooks are the archetypes around which we build our entire system of government.  The political message is, “Vote for me, and I’ll get you yours just like my pal got his.”

Sure, it is odd that the same folks who implicitly acknowledge that we have to pay people to live here and companies to set up shop here also tend to insist that the tax-and-regulatory burden doesn’t drive people out.  But that seeming contradiction only underscores the principle:  Doing something for insiders means you’re not a mooch, but somebody deserving of support.  If you just want to mind your own business and keep what you earn, then you’re a mooch.

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Center Blasts Newest Truck Toll Tyranny; RIDOT’s Laughable Denial

It has come to light that, on August 11, RIDOT *corrected* requested a hearing, scheduled for today, to issue commercial truck route restrictions within the state. The Rhode Island Center for Freedom and Prosperity (for whom I am Communications Manager) has just issued a statement strongly condemning this. It says, in part,

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About the Legislators’ Conditions on “Free Tuition”

This morning, I expressed some reservations about free community college as a program that meddles with young adults’ decision-making process.  A wonkier concern is what Linda Borg’s Providence Journal article says about legislating in Rhode Island.  Here’s the red flag:

Once they enroll, students must maintain a 2.5 GPA. There is no longer a requirement that CCRI graduates remain in Rhode Island, although college officials said about 90 percent of their students wind up staying here after leaving CCRI.

The sentence about remaining in Rhode Island is not correct.  According to the language of the legislation that passed with the state budget, “to be considered for the scholarship, a student”:

Must commit to live, work, or continue their education in Rhode Island after graduation. The Community College of Rhode Island shall develop a policy that will secure this commitment from recipient-students.

Via email, Borg states that CCRI’s Vice President of Student Affairs/Chief Outcomes Officer, Sara Enright, told her that the requirement had been removed.  If Enright is expressing actual policy, then CCRI and, by extension, the Raimondo Administration intend to simply ignore language that our elected representatives had insisted be in the bill.  This point is underlined by the fact that the governor’s initial version of the legislation did not include this provision.  In other words, this is a condition that the legislature decided was necessary in order to put the program into law.

It would be one thing for CCRI to implement “a policy that will secure this commitment” that tacitly has no enforcement mechanism, but the administration apparently doesn’t even intend to pretend that students have a moral obligation to honor a commitment.  That’s not how the rule of law is supposed to work in Rhode Island, and the legislature should take steps to enforce its prerogative on the administration.

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Incumbents Comply with Incumbent-Protection Regulation

Is anybody really surprised that only 7% of Rhode Island politicians (neutrally meant) with open campaign finance accounts failed to comply with a new law requiring them to submit their bank accounts to the state, as Political Scene reports?

The law, which went into effect in 2016, requires all candidates and officeholders to submit bank statements to the Board of Elections following fourth-quarter campaign finance reports. This year marked the first time the statements had to be filed. While copies of the bank statements are not public documents under the law, the Board of Elections provided Political Scene with the names of those who have not yet complied.

As of this week, 49 of 668 individuals with active campaign-finance accounts had failed to file their bank statements. Another 24 of 199 political action committees also failed to file the statements in the required time frame.

The most significant effect of such legislation is to dissuade people from running for public office.  So I have to file a campaign finance report regularly with the state?  OK, I guess I can do that.  And an Ethics Commission report, too?  Well, that’s a lot of forms.  What’s that?  Open a new, separate bank account and give copies of statements to the state government?  Gee, this local volunteer office is looking like more trouble than it’s worth.

Here’s a noteworthy indication of how carefully legislators review the laws that they pass:

Reached last week, [Democrat Representative from Cranston Arthur] Handy said… he initially misunderstood the new law and thought he was exempt because he didn’t meet a spending threshold. (Another campaign-finance bill passed in 2015 requires that candidates who raise or spend $10,000 or more in a year retain a treasurer or deputy treasurer other than themselves.)

From my conversations with the folks at the Board of Elections, all candidates are supposed to have separate bank accounts for campaign purposes, even if they raise no money, but realizing how ridiculous that is, the board isn’t enforcing it against those who don’t have to file campaign reports.  Of course, the way to avoid it all is to not volunteer in the first place.

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