Commentary: Time for Raimondo, General Assembly To Resolve Latest Embarrassment

Mar 16, 2018

Rhode Island Senate chambers
Credit Elisabeth Harrison / RIPR

It’s well past time for the Statehouse scofflaws –Governor Gina Raimondo’s administration and the General Leadership—to be held accountable for the latest embarrassment.

That would be a story that old friend Alex Nunes did earlier this week for Rhode Island Public Radio.

The gist of the story was simple, even if digging it up wasn’t. According to this report, your state government is ignoring a state law –one approved by that same government – to measure the effectiveness of taxpayer subsidies to business that are designed to create jobs and grow the economy.

Some history: Roll the tape back to 2013, during  the first blush of the Statehouse pols asserting that Rhode Island taxpayers won’t ever get snookered again by a Curt Schilling - 38 Studios style fiasco. At the time, the pols pledged that the state would conduct an annual assessment of the effectiveness of the tax incentives –some call them giveaways—given to businesses to gin up economic development.

This was a much ballyhooed law that the Assembly leadership claimed would make state taxpayer subsidy programs transparent and accountable. The press releases were written and backs in House and Senate were slapped.

Legislative leaders said that their constituents would know what the state was getting for the hundreds of millions of dollars given to businesses –some of them huge corporations such as pharmacy giant CVS and General Dynamics, the huge defense contractor.

Here’s the rub: The state has yet to produce a single evaluation as required under the law. The first report was due in June, nearly a year ago.

The analysis was slated to judge the incentives, using such measures as the economic impact of the business incentives, the extent to which the money actually stays in Rhode Island and whether such handouts to business are justified.

The report was also supposed to give recommendations about whether to keep or modify tax incentives. These tax subsidies come in several forms, according to the RIPR report. Some reduce the taxes owed by a company, while others lower taxable income. They can also exempt some investments and income from taxes. State officials use these subsidies to keep or bring in new businesses. Since 2008, Rhode Island has given out nearly $350 million in tax breaks.

A handful of huge companies have been the main beneficiaries of these subsidies. They include submarine builder Electric Boat, a division of General Dynamics and CVS, along with Fidelity Investments and Citizens Bank.  

Such evaluations aren’t new or novel. Thirty other states have similar laws. It’s difficult to blame Mark Furcolo, the director of the Department of Revenue, which is supposed to carry out the assessment. That’s because he’s new; Furcolo has only been in the job a few months.

He says the report is important and that his department will complete it as “soon as possible.”

A department spokesman said the department was low on staff and tied down in other duties. That’s fine, but why couldn’t this important analysis be farmed to a consulting firm with expertise in this area? State government has no problem hiring consultants. Not all state departments are  bloated, but every reporter in Rhode Island can tell you Governor Raimondo’s administration has enough public relations flacks to brand everything in the state cooler and warmer.

There never seems a shortage of state employees to churn out news releases on the governor’s latest grip and grin, or such Assembly nonsense as “This week at the General Assembly.” (Some week that will be an honest news release that says, “We went to each other’s fund raisers and talked about the outhouse bill.”)

Now we’re in election season. I don’t envy Furcolo this task, because there will obviously be enormous pressure to skew the report to make the governor and the incumbent Democratic Assembly leadership look good.

If citizens have to obey the law –and get nabbed by a camera for speeding in a school zone on a Saturday –why is the Smith Hill crowd allowed to get away with such contempt for a law they bragged about enacting? Time for voters and the state’s other media organizations to ask some hard questions.