Dan Yorke had URI Professor Dr. Ed Mazze on yesterday (podcast and related column here), who sketched out how we got in this mess (sub-prime collapse and overall housing problem in RI was the leading cause of recession in the state; 6000 jobs lost since January). Such things contribute to a simultaneous lack of consumer and business confidence in RI’s economic future. His colleague, URI Economics Professor Leonard Lardaro has been sounding the warning bells on this too.
Mazze also explained that, since at the end of day its about getting better paying jobs that can lead to higher tax revenue, we are in a bad spot because people, talented people, are leaving the state. So how do we keep them here? Well, stop being one of the highest taxed states, for one.
We also need to get focused on attracting businesses to the state. Mark Higgins, Dean of the College of Business Administration at URI, was recently on A Lively Experiment and emphasized that the State needs to focus on aid to higher education because an educated work force attracts employers, etc. Further, Higgins also noted that we don’t have an overall economic strategy and instead rely on ad-hoc incentives to different businesses (like movie studios). The smart thing would be to focus on making the state attractive to a few key industries. Instead, we have a Legislature that wants to immediately spend “new” casino money (from 24 hr gambling) instead of finding a way to strategically invest it.
For his part, Mazze believes that health care and oceanography would be fruitful areas for RI to focus on. The latter makes sense given Bob Ballard’s presence at URI and the proximity of Raytheon and other maritime related businesses in our state.
Mazze stated we had to be realistic about size of state and the size of government. There are too many superintendents and fire & police chiefs: top dollar jobs. He thinks a centralized school system and a 5 county system would help. He believes that the Governor has done what he can, but too many cuts, which will result in top level, experienced people leaving to take buyouts, will affect the quality of state government services. Higgins echoes this concern, noting that Democrats haven’t taken action and that cuts across the board weaken everything. Further, Higgins agrees that legislators should be asked to sacrifice (health care, pensions) like the private and portions of the public sector already have. (Not sure if he’s keen on revoking free tuition for the progeny of college professors, though.)
Mazze is not in favor of raising taxes, but isn’t sure if we can get out of this situation without raising taxes. He fully expects to see tax hikes after the November elections. There is simply no other way to raise revenue, shortsighted though it may be. In short, we’ve lost too many people (taxpayers) and the revenue they generate. Those of us left behind will have to pay more. Of course, we could also demand that we shrink government!
Finally, Mazze said he was “freaking out” because he hears talk from our elected officials, but sees very little action.