January 21, 2009
Caprio on Port Development
During our discussion with General Treasurer Frank Caprio, I asked him for his perspective on port development in both Providence and Quonset. He responded (stream, download):
I think we need to focus on a cluster of industries, not get...not play the timing the market type of thing--if something's hot now let's push for it. We need a strategic plan as to how we're going to get there. We can't float from EDC Director to EDC Director....I think we have an opportunity, especially with the re-shaping of the financial world. I don't think it's going to be as in vogue to be in the 61st floor in some skyscraper in Boston. So maybe we can use those things to our advantage, but we need a tax structure in Rhode Island that puts us on the playing field.His line of thinking is in agreement with many others, including Ed Achorn:
[Governor Carcieri] has stubbornly opposed a containerized-cargo port at Quonset Point since he was first a candidate for the office, and his economic-development efforts have been, to put it kindly, ill-considered. While the state has shed thousands of real jobs, the governor has been wandering down pretty side paths with his Economic Development Corporation, exploring boutique ideas and tossing around such buzz phrases as “innovation factory” and “information economy” while ignoring the state’s greatest comparative advantage.Caprio also mentioned his philosophy--going back to his days in the Legislature--of reducing capital gains taxes in the Ocean State to be more competitive with Massachusetts. He also agreed with my suggestion that keeping up with Connecticut and Massachusetts was nice, but we should really strive to be MORE attractive to business than our neighbors.Granted, much of Rhode Island’s difficulties, which long predated the national recession, can be traced to its uncompetitive taxes, unfriendly business climate and generally mediocre public schools.
Marc -
I want to restate a fact that AR never talks about or admits.
The capital gains rate in both MA and CT is over 5%.
The capital gains rate in RI is .7%.
That is a substantial difference.
-Matt
Posted by: Matt Jerzyk at January 21, 2009 11:32 AM"but we should really strive to be MORE attractive to business than our neighbors"
YES!!
This is why I keep yelling that we need to lower the state sales tax. That would be a lot more attractive to business, the retail business, than our neighboring states. Right now, almost everyone in RI lives close enough to a MA or CT border to save some money on sales tax. Think it's a coincidence that Rt 6 in Seekonk and Rt 1 in Attleboro are majorly built up retail areas? Hell no, they're targeting RI. So if we lower our sales tax to like 4%, that's then motivation for people to shop in RI, which would then attract many retail stores and restaurants into RI, especially the towns right off the highways, like EP and Cumberland, which has multiple positive effects. It increases the tax income in RI without costing RI citizens anything more. They were probably going to spend the money anyway, but spent it in MA. Now that money stays in RI. It pulls in more money from our neighboring states' citizens who follow the trend and go for the cheaper taxes as well. In addition, it creates jobs, which gives RI more income tax revenue. And maybe best of all, it increases these tax revenues without overburdening our school systems. It's like free money. Most towns' answer to needing more tax revenue is to build more houses for the property tax. This would be the best of both worlds.
Posted by: pitcher at January 21, 2009 11:38 AMMatt, if you listen to the audio, you'll here us discuss that. I didn't quote it because the main thrust of the post was port development. Regardless, to me, that doesn't matter. As I said, it's my belief that we should strive to make RI MORE attractive--not equally attractive-- to MA and CT. One of those ways is to have a lower (again, not "about the same as") tax burden.
Posted by: Marc at January 21, 2009 2:11 PMMarc -
Regarding your last sentence, it is my belief that a .7% rate on capital gains is SUBSTANTIALLY lower than the MA and CT rate of 5+%.
Do you disagree?
-Matt
Posted by: Matt Jerzyk at January 21, 2009 4:12 PMMatt, of course not. I just think 0% would be better. ;)
Posted by: Marc at January 21, 2009 6:22 PMit is my belief that a .7% rate on capital gains is SUBSTANTIALLY lower than the MA and CT rate of 5+%.
Do you disagree?
-Matt
Posted by Matt Jerzyk at January 21, 2009 4:12 PM
It is that a 7% income tax is SUBSTANTIALLY higher than MA or CT at 5% and 5.3% and that a 7% sales tax (8% on food) is SUBSTANTIALLY higher than MA or CT at 5% and 6%.
Do you disagree?
---Mike
Thank GOD for Seekonk.
Buy EVERYTHING cross-border or online.
ScrewRI-and the crooks who run it.
Governor Carcieri "stubbornly" opposed a container port at Quonset Point during his first campaign and since because it was a project that had NO interested outside companies that wanted to foot the bill and the citizens of RI did not want it ... period! Every town and city around the bay did not want it. Myrth York did not want it! Sheldon Whitehouse did not want it! Tony Pires did not want it! The ONLY one pushing for a port was Bennett, who stood with Almond and his pie in the sky container port. An unknown Carcieri won the primary against Bennett, in part, because of the container port issue.
I recently read an old article that claimed over 22,000 jobs would have been created with a container port at Quonset. What jobs would these have been? Maybe truck drivers from *out of state*? Where else? No idea, except the proposal was for a "hi tech" port meaning many fewer jobs.
A letter to the editor recently claimed "a" company was willing to put up $600 million ... WHAT??? WHERE??? WHO??? Maybe someone should have called the Statehouse and told someone who this mystery company/person was!
Want to see what a container port would look like in RI? Take a ride down to New Jersey just over the Hudson from New York. Then imagine that section of the NJTPK with BAD roads. No thanks!
The last line of Achorn's quote pretty much sums up WHY this state does not and can not draw in NEW companies. Having all that open land at Quonset is not a lure for companies to come to RI. That is where a container port, so these people believe, would be our savior, even though we, the taxpayer, would be footing the bill!
Possibly the best use for Quonset would be either:
A. Move TF Green airport there. All these people in Warwick hate the airport and don't want it there, even though it was probably there first. Just try to imagine what would happen to taxes and the "economic development" in Warwick without the airport.
B. A casino. It's out of the way, off the highway has water access, an airport and lots of land to build something first rate with a massive convention center, hotel and parking.
C. Another major league baseball team. New England is pretty big to only have 1 team. The region could certainly support another one.
Posted by: pitcher at January 21, 2009 9:21 PM