The Rhode Island Latino Civic Fund Gubernatorial Debate: Question About the Economy

Brian Hull of Rhode Island's future asked the first question at last night's debate hosted by the Rhode Island Latino Civic Fund, held at CCRI's Liston Campus Auditorium. The question was about what the candidates would do to put the state's unemployed back to work "in jobs that pay a living wage", and what their plans were for increasing the availability of affordable housing in the state.

Unofficial transcripts of the answers from the candidates are listed below, in the order that they spoke.

• Victor Moffitt
• John Robitaille
• Ken Block
• Lincoln Chafee
• Todd Giroux
• Frank Caprio
• Patrick Lynch

Victor Moffitt: First of all, I have a plan to bring jobs into Rhode Island in two separate ways. Number one, reducing the sales tax to bring more retail jobs back to the state. We've been at a competitive disadvantage for 18 years against Massachusetts and Connecticut, so by reducing the sales tax to 5%, we're going to increase retail jobs here and actually have Rhode Islanders working in Rhode Island instead of in nearby Massachusetts and Connecticut. I also have several ideas on increasing tourism in our state, to bring jobs into the state. Many of you heard about my aquarium idea. It's not only an aquarium, but also the possibility of a science museum and hotels and restaurants to build up our state to be a resort destination where people will come here and spend a week, and spend their money. This would create literally thousands of jobs in our state helping to reduce our unemployment.

As far as the affordable housing goes, the only way we're going to improve affordable housing in this state, we've already seen a lot of our housing prices go down substantially due to the recession, but we have to do more with our banks. They need to make money available to people to be able to buy a house. Right now it's you lose...this has to be changed. We need to look at the banks and make the banks be more friendly to people who want to borrow. Jump to Victor Moffitt's follow-up

John Robitaille: I totally believe that government does not create jobs, the private sector does, and what we need to do in Rhode Island is become competitive, to create an environment within which private businesses and small businesses and large businesses can create jobs. Unfortunately, over the past few generations, Rhode Island has grown its government so that it is unaffordable and unsustainable. Our taxes are uncompetitive. I have friends who have businesses that are moving out of this state and taking jobs with them. And the answer to creating new jobs is to lower taxes, to streamline permitting and regulations, to sort of get government out of the way so we can rebuild this economy. And then we really need to start looking at job training and tie it to economic development so that we are training people in the skills and the trades for the twenty-first century jobs that we are trying to attract here. It's very complex, with a lot of moving parts, but the dominant thing here is to make Rhode Island competitive, so that the businesses that we have can stay, and we can attract new businesses. The answer is jobs, it's all about jobs.

As far as affordable housing goes, I don't think there's an easy answer there either. We have seniors living in houses that they can't afford. Because of the heavy property taxes in this state, we are driving seniors out of there own homes, the homes that they have been living in for decades. We have a serious problem here with affordable housing, at all levels, whether you are living in the inner city, or living in the suburbs, it is a major crisis. What we have to do is stimulate this economy, and I truly believe that a lot of these issues will begin taking care of themselves. Jump to John Robitaille's follow-up

Ken Block: I am extraordinarily optimistic that our unwound economy, our underperformance, our high unemployment relative to our immediate neighbor Massachusetts is wholly fixable and reversible. The only difference between Rhode Island and Massachusetts is a border, laws and tax policy. And what we've seen is that when you're uncompetitive as far as tax burden, you suffer a price and a penalty, and I personally know dozens of entrepreneurs who have taken tens upon tens, if not hundreds of millions of dollars in payroll, with their businesses, across the border. This can be fixed. Right now, our top-end tax rate is 5.99%, Massachusetts is 5.3%. We are still 12% higher. I believe we have to get our tax rate underneath Massachusetts to incent the mobile businesses who've left this state to move on to less expensive environs to come back, and once we have a good success story, once we have a good product to sell, we need somebody who sits in the Governor's office, who can help sell the story of Rhode Island and bring the businesses back, not only from Massachusetts, but from around the country.

I have a vision to make Rhode Island the research triangle of New England. North Carolina took many square miles of cow pastures and turned it into a bustling hub of economic development centered around tech. Tech business are highly mobile, the jobs pay a lot, and if we can create and incent hundreds of tech businesses to set up shop here, we can begin to rejuvenate our entire economy. It's something that we have to do. If we can resurrect our economy, targeting very smartly, the mobile businesses first, then we can begin to tackle the harder problems of how to we create jobs for those who don't have the skills. Moving manufacturing businesses back here is going to be a massive challenge, because these are not mobile businesses. It can be done, but we have to get financial stability in our government. The Governor needs a line-item veto, to help bring financial stability back. Jump to Ken Block's follow-up

Lincoln Chafee: It is inexcusable that Rhode Island should have the third or fourth highest unemployment in the country. And there's no reason for that in this great state of ours. So my view is that we take those assets that we've invested in, and as I mentioned in my previous opening statement, even though I was voting against the war, even though I was voting against the tax cuts, even though I was voting against the environmental rollbacks of my party, [voting against] Justice Alito for the Supreme Court, I was able to deliver for Rhode Island, in three specific areas in particular. Moving 195, that's 630 million dollars...that's 15 acres of valuable real estate downtown. We have the Brown Med school moving downtown and just down the street, we have the Rhode Island Hospital campus. So it's natural, in this real estate that's going to be opened up by moving 195, that healthcare industries will come there. I saw it in Houston, I saw the tremendous growth in Houston. I said what's going on here, and they said it's healthcare related; it's the med school, the Baylor Med School and the Rice Med School. So it can happen, we need it here in Rhode Island.

The second area we have invested in is in the intermodal district, the new train station connector to the airport. It's the only place in the country -- in the country -- where we have an Amtrak line next to an airport and now we've connected them. They were never connected. My work on the environment and public works committee delivered $230 million to build the train station and connect it to the airport. It's going to bring great jobs to this area. Throughout all of civilization, growth has occurred at the crossroads where people travel. Here we have route 95, we have Amtrak, as I said we have the airport, so corporations will naturally want to come there, with the right leadership. Then finally, $120 million to put the road into Quonset and green jobs should grow there, with the right leadership. There's a billion dollars that I was successful bringing to Rhode Island. Now we need to build on those assets. Jump to Lincoln Chafee's follow-up

Todd Giroux: One of my major platform issues is homestead protections for folks, where we require banks mandatorily modify loans that are in trouble. What I want to do for the unemployed of Rhode Island: we have folks that are on long-term unemployment, with second and third extensions, I'd like to ask those folks to voluntarily participate in state teams where each town gets 100 people, so our communities get value for the unemployment dollars we spend, these folks volunteering their time, in exchange for their extended unemployment benefits. Every town in every corner of the state would have the opportunity to see results, to participate. Folks will greet each other, they'll buy their cup of coffee or their lunch. Every town will have activity and work for the money that we spend.

Secondly, I want to improve the cash flow to homeowners and business owners through low-interest revolving funds. We have programs in the state. One of these agencies, the Providence Preservation society, has a special relationship with the Fed, where these low-interest revolving funds are available. We've only got two agencies in the state that can provide these types of loans. New York, for example, may have 36 of those agencies, Rhode Island has 2. We need to grow these types of programs. So, low interest loans to homeowners give them cash to hire their local business, where they hire folks off of the unemployment rolls. Low interest revolving funds also provide cash to businesses, and again these same revolving fund concepts can refinance people away from the mortgage company that wants to foreclose on them. Not government handouts, this is personal accountability, without government handouts. Jump to Todd Giroux's follow-up

Frank Caprio: I will do my best to give specific answers. When you are talking about the economy in inner city or distressed areas, you are talking about small business. That's where the lifeblood of the community is. For the last six months, I've spent a lot of time meeting with and discussing small business issues with small business owners. I met with over a thousand of them, and I've heard a few things loud and clear. One is, don't raise our taxes. We pay enough in taxes. Don't nickel and dime us to death with all the fees and permits and all of the other things that the state likes to do. The other thing is get out of our way. Cut out all of this red tape, all the time it takes to solve issues when you are dealing with government. I got elected State Treasurer, and I said let's do something a little different in this office. Let's try to run it like a small business. When someone calls this office, let's have them talk to a real person, not voicemail. Let's answer their question. And if it's not something directly dealing with our office, let's not say you have to call this other department, no, take down what their issue is and you solve the problem for them and get back to them. That's my vision of how we'll get small businesses moving, get access to credit, cut through the red tape, and every decision at that statehouse needs to be made through the lens of how does this affect the small business.

On affordable housing, I was in the legislature, and I was very active in the fight on this issue and restored the neighborhood opportunity loan program when Governor Almond tried to cut it out, $5 million. The reverends were protesting at the statehouse, they got arrested actually, and we found a creative way of financing to keep it alive, and then put a question on the ballot, $50 million for affordable housing in our state [which] passed in every community in the state, every community. When I'm governor, we'll take programs like that, and continue them. If the people of Rhode Island want to invest in affordable housing, in the inner city and across the state, and we vote on it across the state, and if it passes, that's how you leverage the dollars to do good in our community. Jump to Frank Caprio's follow-up

Patrick Lynch: Again, this question is about our state getting its priorities back in order. It's about checking where our emphasis has been, and redirecting our energies in a new direction. We have both a legislature and a governor that has overemphasized the richest and the wealthiest and let small businesses die on the vine. I agree with Mr. Caprio and I think every person up here that the small businesses are the ones to revive our state. The question is what we are going to do for them. That's why I've laid out, months ago, a plan to get small businesses back on their feet. I call it the small business bill of rights. Two minutes isn't near enough to address it, but a couple of basic components are that we can think about making Rhode Island a hub zone. We can get loans out to small business and if we emphasize putting the money where it should be rather than putting in things like the flat tax, for the 1,800 most wealthy citizens in the state. Bad decisions after bad decisions and never forward looking enough. We have to have a leader who will step up and make those decisions.

In terms of housing, I've been in the housing fight and I have to congratulate Senator Pichardo, because the crisis that happened across America and still severely hits Rhode Island that started with the mortgage crisis and with his help and, obviously, other legislative leaders who are here, we passed initiatives to put protections in place for people that are getting run out of their homes. As a President of my National Association of Attorney Generals, I shut down Countrywide Household Financial, and returned millions and millions of dollars to thousands of Rhode Islanders because they were getting taken advantage of. And, by the way, that crisis is still here. It's not just about keeping them in their homes, and it is. I put out a housing policy that will also protect renters and inform people. Housing is an economic development issue and so I'm proud that it was included in this answer, and it has to be included in every platform and consideration for our economy in the future. Jump to Patrick Lynch's follow-up

REBUTTALS REVISIONS EXTENSIONS

Victor Moffit: Again I'm very glad to hear that over the past six months or a year, some of these candidates have talked with small business. I've been working with small business owners for the last almost 40 years in Rhode Island, in the tax and bookkeeping business. So I think I know what small business will need in this state. They need to have the government stay off of their backs, let them do their business without all of the rules and regulations that they have every day. You've probably seen Senator Raptakis, with his Venus Pizza business, where he has 36 licenses and permits, just to open a Pizza business. If you let small businessmen run their business, they work hard, they can make a profit and they do create most of the jobs in this state. And I think I know the best of any of these candidates up here what small businessmen need, because, like I said, I've been working with them for the last 40 years.

John Robitaille: With all of the emphasis on small businesses, I thought for a moment I was at the wrong debate, that this was the Republican primary debate. It seems like everybody has gotten religion all of the sudden on what it's going to take to stimulate the economy and solve unemployment. It's an interesting comparison, if you look at New Hampshire versus Rhode Island, New Hampshire is one of the most tax-friendly states in the United States, with the least combined tax-burden, and their unemployment rate has dipped below seven percent. We are one of the highest combined, according to the Tax Foundation, and our unemployment rate is still over twelve percent, so there is a correlation between how heavy the tax burden is, and what the opportunities are in terms of economic development, so we have to work really hard, to get our taxes down and competitive. And let's face it, there's no more money. We are in very much a significant downturn for the next few years. We are going to have to become leaner, and to learn to do more with less.

Ken Block: I'm no Republican, but I am a small business owner. In fact, I have two businesses in this state, a software engineering business and a manufacturing business, and it was the high cost of doing business that led me to where I am sitting in front of you tonight, competing for your vote for governor. There is no quick fix, there is no magic bullet, there is no single answer to fixing our economy. It requires long term planning, long-term thought processes, a five-year plan, to get you from where we are now to success with a thriving economy. That's the only way you'll get it, and anyone who tries to sell you any different idea is selling you some snake oil. As far as affordable housing is concerned, I've lived in Barrington for 20 years, and I recently moved in the last 5 years. My former house was a quarter-mile from the Sweet Briar development in Barrington. It's a terrific development, it is a very nice place, it is affordable, and we need many more developments like that in this state. I believe government has a role in ensuring that there is affordable housing for everybody, and I am fully supportive of that.

Lincoln Chafee: I do believe that if our economy was robust, that affordable housing would take care of itself. We do have a rich stock of housing in this state. We need to get our people back to work, so that the housing can be affordable, and you're going to hear a lot of talk about taxes here, but the facts are that Rhode Island is about at the national average on income tax and sales tax. Where we are way out of whack with the national average is on property taxes. And there's only one candidate up here who has the experience as a councilman and mayor with dealing with property taxes. And I am as Governor going to be the champion of the property tax payer, and that affects not only homeowners but renters, if your landlord raises the rent, and also, of course, small businesses that have to pay their property taxes. So it is very, very important to have a champion for property tax payers, as we try to get Rhode Island back into the national average. We keep seeing the legislature and the governor passing down the state problems to the cities and towns, and forcing either not to invest in their pension funds, which is going to come back, or not investing in their schools which is not a wise investment, or raising property taxes and that's a very, very onerous tax to pay.

Todd Giroux: The small business owner in the state is the first one to take a chance on our economy. Most small business owners do put 30% down on their homes so they can get a no-document loan. Those folks, most of them have been in their homes for ten years, putting 30% down, they may be at 40% or 50% equity level. Now, we are at a point in our economy were folks need those 30 years to repay those mortgages now, and the timing of a few payments for the banks to swoop in and get the 30% to 50% equity in your home is simply unfair. My plan is to get a citizens bond and tax-freeze on the table, where folks can participate at the two-year level if their property taxes are $2,500 a year. They can put in $5,000 and get a tax-freeze on their property and also a tax-freeze on their personal income tax. It will raise money so we don't have to create a new tax so we can pay off the debt.

Frank Caprio: People are talking about taxes and small businesses. Let me say one more time: small businesses have said loud and clear, and I grew up in a small business family, working washing dishes in a family restaurant starting 30 years ago, and those two restaurants are still going today, owned by the same partners, and I ran my own small business, before I ran for State Treasurer, and showed a profit every year -- people do not want new taxes. I respect Mr. Chafee, and all he's done in his career, I thank him for the investment that he's made in the community, and things like community health centers, sponsoring those. But Senator Chafee, we cannot put another bill on working families' tables across our state. Your tax plan will add $400 to the average family of four's bill of buying groceries, prescriptions and other necessities, and we have a bad history in this state of when we add things to the sales tax, like when we went from 6% to 7% to pay for the banking crisis. That 7% is still there, and the banking crisis was paid for. We put 1% on the meals tax a few years ago, the state did. That didn't reduce property taxes...adding more taxes is not going to cut any property taxes, it's just going to add another bill to the kitchen tables.

Patrick Lynch: Again, this is all about priorities and the strength to lead. In terms of housing, any reference to a rich housing stock hasn't walked around this neighborhood, where houses are boarded up, people are struggling to stay in those houses. People who are in their houses have had to move three houses down, because they've been thrown out, because an absentee landlord holding three houses didn't warn them. We have to fight to protect people at every level. And what nobody answered are the other costs that have been thrust on small businesses, and I'll give you an example that people aren't thinking enough about: the Governor's sweetheart deal with Deepwater. What does it mean? If you want to talk about bills on the table, it means that every one of us, every citizen will have $15 more dollars to pay every year, energy costs will escalate, every small business will pay more, and jobs will leave this state. That's bad decision making. That interests everybody in this state, particularly the communities that you all care about, and that we need to turn our attention to, to move our state forward.