Watching the Wheels Go Fruitlessly Around

Is it me, or does neither Allan Tear’s list of necessary attributes to grow RI’s economy nor the differently emphasized suggestions of John Simmons leave much room for optimism? Here’s Tear’s list, with my brief thoughts:

  • “Access to talent.” It’s long been known among RI’s young that they must leave the state to find opportunity.
  • “Quality and costs associated with public education.” We were making some advances in this area, but our new governor was in some sense elected to end them, and he appears to be complying with that mandate.
  • “Personal taxes.” The last fiscal year ended with a bit of reshuffling that disguised the fact that Rhode Island’s been backsliding on income tax reform for several years.
  • “Effective government.” No comment necessary.
  • “Indirect costs, known as the ‘hassle factor’.” I’d characterize this as one of Rhode Island’s specialities (in a bad way), particularly in the way the government spreads around bureaucracy so as create pools of political power.

Simmons is a bit more traditionalist in the list of things that RI does badly:

John Simmons, executive director of the Rhode Island Public Expenditure Council, rattled off Rhode Island’s rankings: 44th by the Tax Foundation; 45th by the Small Business and Entrepreneurship Council; 49th by CNBC; 50th by Forbes, which another presenter said had moved the state up to 49th in its most recent ranking; and 39th by Chief Executive Magazine. The business-backed RIPEC monitors government spending.
Those rankings take into account property taxes, unemployment taxes, a state’s regulatory environment, economic climate and transportation, Simmons said. However, Tear said the traditional barriers to doing business here — energy and labor costs, site availability and permitting — aren’t barriers for the kinds of businesses he’s helping grow.

Rhode Island’s only hope for real recovery is for the economy to grow so healthily across the rest of the country that our little backwater can’t do otherwise than follow it. Unfortunately (though predictably), national policies aren’t conducive to healthy growth of anything but government, and (less predictably) international events are ensuring that there’s very little margin for economic error.

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mangeek
mangeek
13 years ago

“Rhode Island’s only hope for real recovery is for the economy to grow so healthily across the rest of the country that our little backwater can’t do otherwise than follow it”
And the improvement, through osmosis, from ‘horrible’ to just ‘bad’ will further solidify the hold of the one-party system.

Ken
Ken
13 years ago

Justin,
One of the things I’ve noticed in RI is more and more private for profit business have encroached into state and local government as expert consultants as to how government (break-even entity) should operate while at the same time lobbying for special interest tax breaks from the General Assembly.
Money and weak ethics laws breed disaster in government especially when private business are touted more knowledgeable than a state employee that has been operating the same breakeven system for 20 years. I have seen this happen many times during my tenure with the State of RI as a federal employee.
State and local government is chartered to operate at breakeven costs while private businesses are designed to make a profit.
You really can’t mix the two because there are two very different operating models and to take one operating model and impose it on the other does a disservice.

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