General Electric Impressed By Raimondo & RI's Pension Overhaul

Nov 16, 2015

Raimondo and Pryor speaking after an economic summit in December 2014.
Credit Ian Donnis/File Photo / RIPR

Rhode Island is gaining notice as a contender in the high-stakes battle over General Electric's possible relocation from Connecticut, thanks to the state pension overhaul spearheaded by Governor Gina Raimondo in 2011.

As the Hartford Courant reports, GE has said it will decide by the end of year whether to leave its longtime corporate headquarters in Fairfield, Connecticut, due to what the company calls an unfriendly business climate and the higher taxes in that state's most recent budget.

Republican state Rep. John Frey, described as having good sources inside GE, tells the Courant that Rhode Island is strongly in the running to attract the corporate behemoth, along with the likes of Atlanta, Texas, and New York. "Although Rhode Island has avoided the public spotlight in the search, Frey worries about the nation's smallest state as a candidate," the paper reports.

"Rhode Island wouldn't surprise me,'' Frey tells the Courant. "It's been expressed to me by a couple of people at GE that they've been impressed by what the governor has done with state employee liabilities."

Raimondo has been attempting to attract new businesses to Rhode Island since she took office last January, with modest results so far.

"The governor’s principal focus – as it has been for a year – is attracting companies to invest in Rhode Island and put people back to work here," said Raimondo's spokeswoman, Marie Aberger.

Aberger said Raimondo and Commerce Secretary Stefan Pryor "are continuously in conversations with companies in and outside Rhode Island regarding potential expansions and relocations, and are working aggressively to bring more jobs to the state. In fact, we recently announced that Lighting Science Group is moving here, and the Governor just returned on Friday from a trip to California focused on this mission."

Rhode Island's state pension fund under-performed its expected 7.5 percent rate of return in the last fiscal year -- a rate lowered with Raimondo's support in the run-up to the 2011 pension overhaul. The Ocean State has fared poorly for years in some national business-climate rankings.

Yet the overhaul spearheaded by Raimondo when she was state treasurer continues to draw favorable comparisons to efforts in Connecticut and other states. Connecticut's annual pension payments have climbed from $926 million in 2012 to $1.5 billion, and some observers believe the current figure could double within the decade.

Rhode Island attracted a major expansion, in Smithfield, by Boston-based Fidelity Investments in 1996. More recently, the state has been haunted by the failure of video game maker 38 Studios, which was attracted by a $75 million loan guaranty in 2010. The company went bankrupt two years later.