The Best Laid Plans...

by Megan Hauptman, Rick Salamé & Abigail Savitch-Lew

published January 31, 2014

Already this year in Rhode Island: the unemployment rate rose to the highest in the nation, the temperature oscillated between extremes, and student protestors dressed as guinea pigs gathered in front of the state house. Looking forward: some big predictions for the country’s smallest state.


In the future, all economic activity will be handed over to robots, freeing Rhode Islanders to live a eudaemonic life of leisure and personal development. But in the meantime, the state with the highest unemployment rate in the country will have to find more immediate solutions to its economic malaise. With state and federal elections coming up, figures from gubernatorial and mayoral candidates to university presidents is preaching a new vision of the Rhode Island economy—but not the same one.

     The loudest story of the future, and the catch phrase of Democrats, technocrats, and university spokespeople is the “knowledge economy,” an economy driven by high-tech research and development, universities, biotech, and healthcare services. Everyone from Mayor Taveras, Governor Chafee, and US Senator Jack Reed to Brown University, the University of Rhode Island, and the 195 Redevelopment District Commission is simultaneously demanding and predicting a post-industrial economy in which informationrich services drive the bus. For the Providence Journal’s John Kostrzewa, the “knowledge economy” isn’t just the future
of Rhode Island—it’s also its past. “Rhode Island has fallen behind,” Kostrzewa wrote in December 2012, “because the state has not made the transition from a post-industrial economy to a knowledge-based one in which people use technology and their brains more than their hands to do work.”

     One problem with all this is that a state economy built off of advanced research and healthcare—what bloggers like to call “meds and eds”—has the potential to create a two-tiered labor force with a massive income divide between highlyeducated, highly-skilled workers in fields like education and healthcare and lower-skilled workers in dependent service industries. And, a second problem, a local “meds and eds” economy is risky as higher education becomes an increasingly concentrated sector with a disproportionate amount of resources going to a small number of geographically clustered institutions—according to Richard Florida in The Atlantic and Aaron Chatterji in the New York Times. Only a few cities will be able to keep brains and cash from going elsewhere, they argue. But Providence might be insulated from this risk because it has sufficiently prestigious institutions to survive and even benefit from industry concentration, according to Florida.

     For gubernatorial front-runner General Treasurer Gina Raimondo, the economic future of Rhode Island is right with its economic past in manufacturing. Her campaign unveiled a “Rhode Island Innovation Institute” to “make Rhode Island a leader in manufacturing again,” according to her website. But there’s a twist: rather than producing textiles the manufacturers of the future will be commercializing advanced technologies developed in the research laboratories of Rhode Island universities. Per Raimondo’s proposal, the government will facilitate the flow of information and capital from the academy to the workshop. It’s the same old knowledge economy that everyone’s been talking about for years, but with a blue-collar tinge. It remains to be seen exactly how she will “foster collaboration” between the relevant institutions.

     Across the aisle, Republicans rarely bash the knowledge economy. But perhaps sensing that “meds and eds” has become the Democratic party’s talking line, the RI GOP has chosen to make hay out of Rhode Island’s high taxes. According to CNN Money, Rhode Island has the sixth highest taxes in the country, but it’s highly uneven across different taxes. Republican gubernatorial candidate Ken Block’s economic platform has only five items—three of them are reductions or restructurings of taxes and the other two just reduce state expenditures. As for his primary opponent, the entry portal to Republican gubernatorial hopeful Allan Fung’s website proudly states, “On day one of a Fung administration I will declare Rhode Island ‘Open for Business’.” Perhaps he’s referring to reports like that of the Tax Foundation, a conservative think-tank that ranked the state 46 out of 50 for “business tax climate” for 2014. The unemployment insurance tax is a losing 50th place.

     But while the rates on the books might be high, businesses might not have it so bad in lil’ Rhody. Between Hasbro’s $1.6 million tax exemption; the $75 million loan guarantee for failed video game company, 38 Studios; and the Renaissance Hotel’s $9 million tax break, it seems that Rhode Island and Providence love to cut tax deals with corporations. According to WPRI, the city has made 100 “tax stabilization agreements” since the 1980s and 44 of them are still active. Fête Lounge in Olneyville, for instance, pays only 35.04 percent of their would-be assessed commercial property tax. No matter how bad the tax environment is, expect rates to lower if Republicans take control of the state government this November. Limitless prosperity for all nightclubs is sure to follow.

     None of these proposals are really that radical. All of them have been part of the tired and thread-bare conversation for years, and neither Governor Chafee’s budget nor the legislators on Smith Hill are making big plays in 2014. The future is just going to be the present, and the present is just like the past. 75 percent of respondents to a poll on the Providence Journal website say the state economy will be worse in 2014. Ten percent think it will be better. The poll is still open. Maybe things will change. –RS

Climate & Environment

Much of Rhode Island sits directly on the water, which means that the Ocean State faces dire changes to its beaches, cities, and marine commerce from future sea level rise spurred by climate change. By 2100, the ocean that surrounds Rhode Island is predicted to rise at least three to five feet, flooding low-lying coastal cities and towns, and inundating rivers and waterways further inland. The walkway along the Providence River, leading to Waterplace Park—the outdoor amphitheater illuminated by floating torches during WaterFire—would be entirely submerged. And if the sea level continues to rise past five feet, much of Providence’s downtown would follow soon after. Storm surges, intensified by shifting global temperatures, could cause more intense coastal flooding before the arrival of next century. Rising sea temperatures have already endangered winter flounder and other cold-water species that thrived in the Narraganset Bay; continued temperature raises will likely change the make-up of New England marine life drastically, also affecting the state’s fishery economy.

     This past month, Governor Chafee addressed the effects of climate change on Rhode Island in his last “State of the State” address. Chafee is stepping down from his post as Governor at the end of 2014, but in this January speech he pledged to use his last year to address environmental concerns and to protect the state’s natural resources, starting with a voter referendum on borrowing money for a $75 million environmental bond. Public water improvements, flood prevention, green infrastructure construction, and shellfish management and restoration ($3.2 million slotted for artificial oyster reefs and the like) are just a few of the items outlined in Chafee’s proposal.

     Rhode Island, which lacks its own fossil fuel deposits, already depends on outside oil pipelines and coal producers. Chafee proposed that Rhode Island participate in a consortium of New England states to build up their collective hydro, wind, and solar power infrastructures, rather than continuing to rely on non-local, costly, and pollutant-heavy energy sources. This proposal is likely to meet resistance from more economically conservative, business-friendly members of the state legislature, as debates around climate change often pit the economy against the natural environment. Probusiness groups and leaders point to jobs lost in the energy industry if more stringent environmental sanctions are levied. But this is a false dichotomy, according to Rhode Island’s Senator Sheldon Whitehouse, who has repeatedly called the Senate’s attention to the negative economic impacts of climate change in an ocean-dependent state. Tourism revenue is already being lost as beaches shrink and collapse, many fishing jobs are likely to be made obsolete by warming ocean temperatures and species change, and negative health impacts will continue to grow as a result of increased pollution and environmental degradation. Senator Whitehouse, who headlined a 40,000 person rally against the construction of the Keystone XL pipeline last February in DC, is the Senate’s most vocal member on climate issues; he’s given a floor speech on climate change every week that the Senate’s been in session since April 2012.

     As a representative of a state whose history, economy, and identity are tied to the ocean, it’s fitting that Whitehouse talks a lot about global warming. Apocalyptic visions of climate change are not unique to Rhode Island, but as a state with nearly 500 miles of ocean coastline, the effects of climate change and sea level rise are already becoming visible. The future is, unfortunately, not too hard to picture. –MH

Upcoming Legislation

Exasperated by gridlock in Washington, donors and PACs of the right and left have shifted their focus to gaining influence in state legislatures. Blue states are getting bluer and red states redder. Policy on abortion, gun control, voting rights, and other issues remain in flux. Rhode Island, the most Catholic state in the union—and one of the most blue—wages its own peculiar battles.

     Compared to its neighbors, the Ocean State has historically taken a conservative line on abortion. According to the Guttmacher Institute, Rhode Island is one of 19 states that, except in cases of threat to life, rape, or incest, prohibits insurance coverage of elective abortion for state employees. It’s also one of 32 states that, except in specific rare circumstances, does not provide coverage of elective abortion for Medicaid recipients. But Governor Chafee has enough on his plate without micromanaging the reproductive lives of Rhode Island women. In 2012, sidestepping state lawmakers who wanted to ban insurance coverage of abortion on the new insurance exchange, Chafee used his executive powers to create an exchange that did offer coverage of abortion. The debate heated up last year, when the Rhode Island General Assembly passed a bill allowing the sale of license plates with the words “Choose Life” to fund a Christian pregnancy clinic that opposes abortion. Governor Chaffee promptly vetoed the bill.

     Activists on both sides of the issue are likely to be busy this spring. Pro-choice Rhode Island lawmakers are talking with the Rhode Island Coalition for Reproductive Justice about how to expand access to family planning services and reproductive healthcare for lower-income women. “We as legislators have to make sure that our specific beliefs—whether they be inspired religiously or politically—not interfere with a woman’s right,” said Democrat Josh Miller at a State House press conference hosted by the Coalition on January 21.

     Meanwhile, anti-abortion activists continue to oppose the lack of a single abortion-excluding plan on Rhode Island’s healthcare exchange. Kristen Day, Executive Director of Democrats of Life, says Rhode Island has violated a citizen’s right to not support the procedure. Rhode Island is one of a few states in which all the plans offered on the marketplace include abortion coverage, and federal law states that each state must include a plan without abortion coverage on their exchange by 2017.

     On voting rights and gun control, the Ocean State ain’t so blue. In 2011, Rhode Island joined seven red states in passing laws requiring the presentation of photo ID at the polls. State Senator Gayle Goldin, of Providence’s East Side, says the measure to repeal the law did not make it out of committee last year despite widespread disapproval, and that the portion of the law requiring a photo ID is set to go into effect this year unless lawmakers win their repeal.

     Last summer, with gun-rights activists protesting outside the State House, a measure to ban semi-automatic assault weapons and high-capacity magazines died in the General Assembly. Lawmakers did pass bills making it illegal to knowingly use a stolen weapon, prohibiting the possession of weapons with altered identification, and creating a task force on gun background checks. On January 23, the task force advised the state to submit mental health information for people prone to violence to the FBI’s federal backgroundchecking system. While Rhode Island received a good rating for gun control from, a website maintained by the Law Center to Prevent Gun Violence, it is one of only 15 states that does not submit mental health records to the federal system. Goldin says she and others will be reviewing the task force’s recommendations to determine next steps.

     In the meanwhile, let’s hope the Rhode Island GOP can think of better fundraisers than the one they hosted last September—a semi-automatic rifle raffle. –ASL