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In Deep Water with Wind Company

Something feels both odd and not quite right about the fact that Democrat Governor Gina Raimondo is sending out fundraising appeals saying that “Gina can’t see this [new off-shore wind] project through without your support.”  So, if I give Raimondo the requested $10, is that going to keep her political career alive or is it going to facilitate a green energy project?  Should the governor be committing the state to long-term agreements with a private sector company that require the same governor to be reelected?

The whole thing is deeply strange.  A week ago, the Providence Journal announced that Rhode Island had “selected” Deepwater Wind to build a massive off-shore wind farm, but most Rhode Islanders probably didn’t even know we were even looking into the possibility.  As Alex Kuffner reports:

Although it was a Massachusetts process, a little-known clause in the the procurement rules allowed other states in the region to join in if they wanted to. Without making its intentions known publicly, Rhode Island acted on the clause.

Even Deepwater CEO Jeffrey Grybowski seemed surprised.

When last we heard about Deepwater’s “Revolution Wind” project, the company was promising all its jobs and economic development to the New Bedford area.  It looks like Massachusetts chose a different company, but Rhode Island was happy to take seconds.

Ideological disagreement with the governor aside, something just seems off about this whole thing.  A secret deal with a connected company materializes at the nth hour, and the governor starts fundraising off it immediately.  Forgive my cynicism, but it seems like more media attention might flow to this subject if it weren’t a Democrat governor and a fashionable “green energy” project.

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Not Quite Job “Creation”

Democrat Governor Gina Raimondo’s inflated view of the power of government was on full display when she announced success at having bought off some more companies with taxpayer dollars:

“It’s not everyday you can say by lunchtime you’ve created 2,000 jobs,” Gov. Gina M. Raimondo, who chairs the board, said as the meeting got underway.

Two of the companies, iXblue, a maritime navigation manufacturer, and Infinity Meat Solutions, which will package and process fresh meats, were lured to Rhode Island from other states by the incentives programs.

“We’d prefer to stay in Massachusetts,” Mack Barber, president and chief executive of iXblue, told the board. “This program brought us here.” He went on to say that it wasn’t just the incentives, but also the interest that state officials showed in bringing the company here.

Raimondo’s spin comes with multiple layers of “umm, no.”  Government doesn’t get credit for “creating” jobs just by giving corporate welfare to the businesses that do the work of creating.  That is especially true when the jobs were so explicitly stolen from other states.  “We’d prefer to stay in Massachusetts” sounds more like resignation than a creative impulse.

Moreover, we’ll never know what jobs might have been created in Rhode Island by Rhode Islanders who would “prefer to stay” in Rhode Island if it weren’t for the forced transfer of their wealth to these companies, and the competitive advantage that these companies gain by engaging the corrupt system.

Want to see real job creation in Rhode Island?  Get the government out of the way so that businesses want to come here without incentives and residents have every opportunity to build their dreams into vocations.

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Matt Brown’s Disastrous Platform

One can have little doubt that Matt Brown’s platform is right in line with the views of progressive Democrats.  One can also have little doubt that Matt Brown’s platform would be economically disastrous for Rhode Island:

On policy, Brown said he wants to reverse various recent state tax cuts, such as by raising the top income tax rate from 5.99% back to 9.9%, where it stood until 2010. He also said he would raise the top corporate rate from 7% back to 9%, but wants to create a graduated system that lets smaller companies pay a lower rate. He has not yet decided whether he wants to raise the estate tax, he said.

Brown pledged to increase funding for Medicaid, the state-federal health insurance program for low-income residents that has grown to about a quarter of the state budget.

So, increase dependency on government and suppress the free market dynamism that pays for government programs.  Brown’s program would push Rhode Island into the accelerated spiral that Connecticut is experiencing and the flight of the productive class.

It seems unlikely that Brown will actually have a chance to push his program as governor, but his end point is that toward which progressives are incrementally moving the state.  We need to take his succinct statements as a warning.

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Raimondo’s Major (Union) Jobs Announcement

The expansion deal that the state government of Rhode Island has just announced with Electric Boat at the quasi-public Quonset industrial park includes an understated feature:

As part of the deal with Rhode Island, Electric Boat has agreed to use union construction workers on the expansion and pay the prevailing wage.

Why would the government of the State of Rhode Island negotiate for the mandatory use of union labor?  If state officials would rather have more money go to construction workers, rather than have it available for additional investment, the prevailing wage requirement would have been sufficient.

The likely answer sheds a different light on the component of the deal requiring “$14 million in state infrastructure spending at the Quonset industrial park.”  If the state is negotiating on behalf of unions, this provision may have been requested by the state negotiators.  That is, they were happy to tie taxpayers hands with a contract requiring new government spending for labor-union work.

Note, by the way, that the vast majority of the deal offered to Electric Boat is a targeted exemption from sales tax.  Imagine how much more other companies would invest here if the state would eliminate or dramatically reduce the sales tax as a blanket measure.  Of course, if people were investing their money in economic development on their own initiative, the government officials wouldn’t so often have a seat at the negotiating table to direct funds toward their friends and political supporters.

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The Million Dollar Quarter: Is Rhode Island for Sale?

Everybody who writes or comments on Rhode Island politics is expressing shock and striving to process the fact that Democrat Governor Gina Raimondo took in $1.3 million in fundraising during the first three months of 2018.  That’s a 40% increase in her cash on hand over a period of time during which polling data and the general temper of the people of the state suggest lackluster support for the governor (to put it mildly).

So what gives?

Spreadsheets available from the state Board of Election Campaign Finance Unit show that a significant majority of the governor’s donations come from out of the state: 60.5%, to be exact.  Out-of-state donors tend to be more generous, too, with an average donation of $725, compared with $524 in state.  In fact 63% of Raimondo’s out-of-state donors gave her campaign the maximum of $1,000 (with one Robert Clark of Saint Louis, MO, apparently giving an illegal $2,500 donation).  This compares with 43% of in-state donations.

By contrast, Raimondo’s nearest Republican opponent, Cranston Mayor Allan Fung, raised only 16% of his $191,460 first-quarter revenue out of state, with the average out-of-state donation amounting to $288.  Just 16% of Fung’s out-of-state donors gave the maximum $1,000 (with none giving illegal contributions greater than that).

The question Rhode Islanders should be asking is:  What do all of Raimondo’s generous out-of-state donors expect to get for their investments?  Neither of the two possibilities that come to mind aren’t encouraging.  Perhaps the donors want special deals from the governor’s office, using Rhode Islanders’ public resources.  Or perhaps they’re using Rhode Island’s governorship — the chief executive office of a state that has been mired in stagnation and controversy for way too long — as a stepping stone for national political ambitions.

Either option suggests a state for sale whose people will either have to tuck their empty pockets back in or brush the footprints off each other’s backs when the governor’s done with us.

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Following in Connecticut’s Regressive Footsteps

As Rhode Island’s Democrat Governor Gina Raimondo attempts to squeak out victory for a second term, we would do well to keep in mind the Democrat governor of our neighboring state, Dannel Malloy, who managed to accomplish just that, and with some of the same personnel.  A recent Wall Street Journal editorial gives some such food for thought:

Governor Dannel Malloy’s eight-year experiment in public-union governance saw income grow by a meager 1.5% for the year, well below Vermont (2.1%). The state even trailed Maine (2.7%) and Rhode Island (2.4%), which are usually the New England laggards. …

Lest you think this was a one-year anomaly, we looked at the personal income figures for every year since 2011. That’s the year Mr. Malloy took office, and the state rebounded well from the recession with 4.9% income growth, the best in New England.

It has been downhill from there. In personal income growth, Connecticut was 49th out of 50 states in 2012, 37th in 2013, 39th in 2014 and 2015, and 33rd in 2016. The consistently poor performance, especially relative to its regional neighbors, suggests that the causes are bad economic policies, not the business cycle or a downturn in a specific industry.

That stinging reference to Rhode Island, as one of two typical “New England laggards” ought to be a warning sign.  For one thing, the RI Center for Freedom & Prosperity’s Jobs & Opportunity Index (JOI) shows Maine making huge progress.

More importantly, though, if the editors are correct and Connecticut’s problems are a consequence of policy, they brought not just a decrease, but a fall from grace — to almost no wage growth if dividends and government transfers are taken out of the equation. Can a state that’s already considered a typical laggard really afford a similar slide?

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Where the Unexpected Windfalls Go

In preparation for my weekly spot with John DePetro, this afternoon, I revisited Katherine Gregg’s Providence Journal article about the 7.5% in raises (actually 7.7%, compounded) state employees under Council 94 are expected to receive as part of a deal with Democrat Governor Gina Raimondo.  Raimondo, you may have heard, is facing a tough election this year.

These paragraphs jump out:

… the events at Council 94 union headquarters coincided with the announcement by the Raimondo administration that year-to-date revenue collections are running $46.5 million ahead of the estimates adopted at the state’s official Revenue Estimating Conference last November, on which Governor Raimondo’s $9.3 billion budget proposal was based.

A statement issued by the Department of Revenue said: “The major contributors to this surplus are personal income tax revenues, $43.6 million more than expected; estate and transfer tax revenues, $5.3 million above expectations; departmental receipts revenues, $4.5 million more than expected; and public utilities gross earnings tax revenues, $5.4 million ahead of estimates.” A few smaller sources of revenue fell short of projections, yielding the net surplus of $46.5 million.

Gregg notes that the new raises will be competing with the pleas of other special interest groups in their annual “more money” dance (which, admittedly, sometimes means more than a budgeted reduction).

But have you noticed that an unexpected increase in revenue is never cited as an opportunity to lower tax rates?  To the extent that it comes up, reduced taxes are typically handled in such a way as to make a special interest out of taxpayers, as with the specific elimination of the car tax.

In any event, time will tell whether Raimondo’s bid for the labor vote creates enough of a boost to save her job.  Valley Breeze publisher Tom Ward is skeptical of her chances, generally:

My take on it: There is no amount of money that will save her candidacy. The unfixable UHIP that continues to cost taxpayers more millions, the now-late and already unpopular tolls that create a new budget shortage, the “scooping” of energy conservation monies – and now, grabbing 911 emergency funds for God knows what. She owns all of it! She will lose a two-way race soundly, and needs to keep independents like Joe Trillo in the race to save her.

We’ll see.  The thing with full ballots is that a candidate can win with a small plurality, as Rhode Islanders keep learning… to our detriment.

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Missing the Real Story of UHIP

As a UHIP skeptic from the very first time it was mentioned as a possibility, I continue to think that everybody is following the wrong storyline.  However, increased scrutiny is starting to bring people around to the right questions… the correct angle.  Consider:

As to why so many things went wrong, [Deloitte manager Deborah] Sills said: “Simply put, the system is very complex … the only eligibility system in the country that integrates more than 10 state and federal health and human services programs and a state based health insurance exchange … As the state’s comprehensive analysis last year made clear, Deloitte and the state needed ‘more time, more people and more training.'”

GoLocalProv has posted the entire 40-page, paper-and-pen application that goes along with the half-billion-dollar computer system, and what’s becoming clearer is that the state simply expected too much from software, hoping to avoid the hard work of reconceptualizing how benefits programs are done.  In this light, the fundamental error of Democrat Governor Gina Raimondo was her failure to understand the nature of the Unified Health Infrastructure Project (UHIP).  It was never really intended to be a cost-savings and efficiency tool, but rather a dependency portal, drawing people into government programs and maximizing the amount of “services” that the state could hire people to provide.

Look at the application.  The complexity comes in because each program requires different information.  That’s not a terrible problem if the applicant knows which one he or she wants, but the entire point of UHIP is to give people things they aren’t applying for, so the application asks for all of the possible information.  Streamlining that would require regulatory and legislative changes, some of it at the federal level.

In order to effectuate those changes, advocates would have to make clearer the underlying objective, and that would run contrary to the plan.  The dependency portal is meant to insinuate itself into reality under the banner of efficiency, which the public would actually support.  Less popular would be a banner proclaiming, “We want to ensure that everybody gets every penny of taxpayer money possible, even without looking for it.”  Even less popular would be, “We want to track everybody’s personal and financial information so that we can adjust their benefits automatically.”

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UHIP Catastrophe: Governor Once Again Blaming Deloitte as “Real” Problem (Also, Chafee)

Yesterday on NBC 10’s Connect to the Capitol, Dan Jaenig asked Governor Gina Raimondo, among other topics, how the state dropped the UHIP ball. The governor started her response by taking a swipe at former Governor Lincoln Chafee, saying he signed a terrible contract with Deloitte. She then continued,

Under my watch, we hit the go button before it was ready. But I will say the real problem here is the company sold us a product that didn’t work.

This is not to defend Deloitte, which apparently has a mixed record with regard to such systems. But let’s be clear. It was you, Governor Raimondo, who gave the catastrophic order, for your own selfish political reasons, to launch an unready system. Accordingly, DO NOT BLAME FORD MOTORS FOR DELIVERING A DEFECTIVE CAR WHEN YOU ORDERED THEM TO REMOVE IT FROM THE ASSEMBLY LINE ONLY HALF WAY DOWN. And similarly for the aspersions you cast at Governor Chafee: the contract, good, bad or indifferent, is completely irrelevant if the manager who takes over the contract inexplicably orders production to be shut down well before the product is finished.

Everyone else – taxpayers and UHIP clients – but you, Madame Governor, is paying the high price for your catastrophic action. Please at least stop casting blame for it in desperate and absurd directions.

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Statistics: Economic and Political

Click on over to my op-ed in today’s Providence Journal:

To be clear, these are massive and sometimes subtle trends, and a particular governor can only be saddled with so much blame or lauded with so much credit. Still, if Rhode Island had kept pace with other states — and with itself before Raimondo took the reins — around 10,000 more of us would be employed.

Anecdotally, that presentation of our economy more closely matches the experience of most Rhode Islanders than does the governor’s self-promotion. Promising four more years of “exactly [that] kind of progress” may therefore not be the pitch that the Raimondo camp believes it to be.

Perhaps that’s why 60 percent of Raimondo’s political donors were out of state in 2017. Opinions may differ as to whether that represents “progress” from her 40 percent out-of-state result in 2014.

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Objection to UHIP on the Surface and Conceptually

The court-appointed “special master” tasked with getting Rhode Island’s Unified Health Infrastructure Project (UHIP) working, Deming Sherman, tells Kate Nagle of GoLocalProv that the system is flawed:

“It (UHIP) was not a bad idea, but bad execution,” said Sherman about UHIP. The good idea of UHIP was to tie five distinct programs together, but the flaws have been that the vendor, Deloitte and the workforce did not work and were not trained, respectively. Just as the UHIP program was being implemented the state laid off key workers. Since then DHS has had a difficult time training and retain workers for the program.

Sherman said the UHIP system has two problems technology and the workforce that operates it.

The surface reaction one has to this is to be incensed that the state government has already spent roughly a half-billion dollars on the system.  Nobody forced state government to undertake a project that it was not competent to oversee.  In fact, the state barely conducted public discussion before jumping in.  Bureaucrats under former Democrat Governor Lincoln Chafee simply went forward as if it was the obvious thing to do.

Similarly, nobody forced Democrat Governor Gina Raimondo to manage her personnel under the assumption that flipping the switch on UHIP would instantly bring a new day.  She took a big, big gamble, attempting to make budgetary room for other things, like her crony capitalist approach to economic development, and the state’s vulnerable populations have suffered for it.

More deeply, though, we should challenge Sherman’s statement that the concept was sound.  The goal of UHIP, which was pushed down from activists at the national level (with the encouragement of Democrat Congressman David Cicilline), is to draw people into dependency on government.  The system has the 40-page application about which Sherman complains in part because the designers want it to collect scads of information about people, which would be constantly updated on the pretense of regularly checking eligibility.

If it weren’t for the human suffering and loss of opportunity that it’s causing, we should actually be happy that UHIP isn’t working, which is a sad statement on the condition of our democracy.  Being saved from insidious ideas by managerial incompetence is not a silver lining that ought to inspire confidence or hope.

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Hair Braiders Should Have the #RIghtToEarn a Living

Oppressive Regulations Harm Low Income Families. Hair braiding is a generational and practical African-style art-form for Jocelyn DoCouto and her family, which hail from Senegal and Cape Verde. Yet, unable to afford the burdensome levels of fees and training required to receive permission from the government to legally work in a field that presents no safety risks, Jocelyn, as well as other would-be entrepreneurs, are not able to operate a business that would provide them hope to achieve financial independence.

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The Great Flurry’ster of 2018 and Changed Rhode Islanders

So what happened with the disruptive snow and wind we were supposed to get yesterday?  That’s the question of the morning.  Something seems to have changed in the Rhode Island psyche after the “December Debacle” in 2007.  That year, the timing and handling of a snow storm, particularly in Providence, under Democrat then-mayor-now-congressman David Cicilline caused a nightmare for commuters and children.  Suddenly, hesitation to disrupt our entire community gave way to being “better safe than sorry.”

Once that old New England toughness lost its dominion, the ordinary incentives of government and politics took over.  If the governor or mayor closes down government and implements parking bans, not only do they give some key constituencies a day off, but they mitigate the risk of something going wrong.  Relatively few Rhode Islanders will even think to wonder about considerations like this, as expressed in a GoLocalProv article appearing this morning:

“Let’s go macro,” said [Providence restaurant owner Bob] Burke. “On any given day the state has $150 million in economic activity. What did we produce [on Wednesday] — $10 million?  Are we a state that can afford to give up $100 to $125 million in economic activity without a really tough fight? On Wednesday, they went down in the first round!”

Similar views were expressed by Mike Stenhouse, CEO of the RI Center for Freedom and Prosperity. “The lack of concern for small businesses by bureaucrats and elected officials looking to make themselves look good – when they prematurely issue parking bans, large truck bans, or shutting down government operations – directly leads to a loss of business and productivity in the private sector,” said Stenhouse.

Whatever it is that’s changed in the Rhode Island psyche has freed government officials from the need to actually make decisions.  Either business people have given up trying to assert their influence in an often-hostile government or those who take the needs of businesses lightly have increased.

Perhaps the change has to do with the “government plantation” that effectively replaces Rhode Islanders who are driven to turn their time into money with others who are more likely to seek government services. Those who work for government get paid no matter what, and those who are the recipients of its beneficence are a step removed from caring about where the money comes from.

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Can We Realize The Destruction Of Families Has Unintended Consequences?

In the Providence Journal this week, Wendy P. Warcholik and J. Scott Moody write, “This growing number of children in Rhode Island without a solid familial foundation should give us all pause. This is not a problem that is going to just go away, and we must find ways to help these children before tragedy strikes, perhaps in your own neighborhood.”

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A State by Any Other Measure

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The Gun Controlling Governor Who’s Never Shot One

As people (mostly gun rights advocates) line up to testify on gun control legislation as if they’re low-income people caught up in the UHIP debacle or Providence drivers nabbed by speed cameras, I thought I’d highlight this interesting detail from Ted Nesi’s latest weekend roundup column (emphasis added):

Governor Raimondo, meanwhile, has been devoting a lot of her public appearances to promoting gun control. In an interview with Kim Kalunian on Thursday, she said she supports her daughter’s plans to join an upcoming school walkout – and has never shot a gun herself.

We would err if we cultivated the standard that only people who know about a thing can ever comment on its use, but the fact that the governor has never, ever shot a gun seems unusually relevant in this case.

After all, she’s pushing legislation to forbid people from buying particular guns and accessories and to expand the ability of government to take guns away even though she has no personal experience with how they might handle differently.  She has no basis to say, “You don’t need that gun instead of this gun,” because she doesn’t know what practical difference there might be.

Moreover, she’ll probably never have to consider firing guns for anything other than sport, because she’s followed around by people with taxpayer-funded guns, and she’s wealthy enough to afford various forms of security even after she leaves public office.

So, the fact that the governor of Rhode Island has never pulled a gun’s trigger doesn’t remove her right to opine on gun ownership.  However, it should encourage some humility in somebody seeking to limit access to a constitutionally protected tool when she hasn’t ever used the tool herself and can expect always to be able to rely on hired help to use it when she needs it.

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