Rhode Island has been hit with some disappointing economic news lately. But RIPR political analyst Scott MacKay says things can be turned around by partnering, rather than competing, with Massachusetts.
The news that the retail discount chain Benny’s is closing, and the departure of drug maker Alexion from Rhode Island and Connecticut to Boston, sparked a round of hand-wringing in the Ocean State.
The two firms had little in common, but when word dribbled out, the departures became a political football, with Republican State Chairman Brandon Bell blaming Democratic Gov. Gina Raimondo and her administration.
Bell hammered Raimondo for spending state money to lure companies from outside Rhode Island, while failing to forge a better business and tax climate for firms that already call the Ocean State home.
Benny’s was a beloved local institution. But the company’s closing is more about changes in the retailing landscape – competition from big box chains such as Walmart with national advertising reach. And customers' affinity for buying everything from books to baseball bats online.
Which brings us to Amazon, the giant Internet retailer that is seeking a new headquarters to complement its Seattle installation. Amazon plans a $5 billion second headquarters in North America that, over time, will employ 50,000 people at well-paying jobs. From Toronto to Austin and everywhere in between, politicians are salivating over the prospects of luring this company.
Amazon has established a list of requirements, which include good public schools, an international airport, a well-educated workforce, good public transportation and a cluster of colleges and universities. All that and a population of more than a million people, and the expectation that state and city leaders will kick in financial incentives to attract the company.
Rhode Island’s economy isn’t big enough to shower Amazon with the millions in incentives that larger states can offer. It’s beyond unfair that wealthy companies pit states against each other in these spending competitions. There isn’t a way for the Ocean State to match what Massachusetts or New York can offer.
The old Boston political adage – if you can’t beat ‘em, join em – should apply here. It’s long past time for Rhode Island to partner with Massachusetts in pitches for large projects. Amazon ought to be exhibit A. Boston Mayor Marty Walsh says he is “laser-focused” on trying to land Amazon. And the Raimondo administration is putting together a proposal.
It is encouraging that Raimondo’s team is considering linking up with Boston in making an Amazon pitch, according to sources close to the governor. Providence has decent train service to Boston, and it should be upgraded. Rhode Island has many fine colleges that draw students from around the world.
Rhode Island politicians ought to end the parochial thinking that has long held the state back. There was a time when Providence Mayor Joe Paolino put up bill boards in Boston encouraging companies to move to Providence. Later, mayor David Cicilline spoke about competing for business with Boston. That didn’t work either. Boston is a world-class city, one of the few places on the planet where new ideas are conceived. Let’s acknowledge that.
The costs of doing business are cheaper in Rhode Island, particularly housing and office rentals. Sales and income tax rates are pretty close, while corporate taxes are less in the Ocean State than in Massachusetts. Boston and Providence both have the educational and cultural assets that smart young people demand.
From the governor on down, Rhode Islanders have to shed such outdated notions as the often-heard complaint that the educated young have to move to Boston to get jobs. So what?
Rhode Island was founded in the 17th century by religious dissenters who couldn’t abide the theocrats who led Massachusetts. It’s way past time that competition between the two states is relegated to where it belongs – to the spirited college sports landscape that pits Providence College versus Boston College and Boston University, and the University of Rhode Island against the University of Massachusetts.
Scott MacKay’s commentary can be heard every Monday on Morning Edition at 6:45 and 8:45 and on All Things Considered at 5:44. You can also follow his political reporting and commentary at our “On Politics” blog at RIPR.org