Raimondo: More Jobs Are the Only Solution to RI's Economic Blues

Feb 18, 2015

Credit Ian Donnis / RIPR

Governor Gina Raimondo outlined a series of troubling indicators Wednesday to underscore her argument that adding jobs -- rather than cutting spending or raising taxes -- is the only way to heal Rhode Island's under-performing economy.

During a State Room news conference crowded with state officials, Raimondo used a slide presentation similar in spirit to the "Truth in Numbers" report that shaped the political landscape for the overhaul of the state pension system she spearheaded in 2011. The 28-minute presentation was headlined, "Stop the Decline. Spark the Comeback."

"I'm just telling you the facts," Raimondo said. "You don't have to agree with my solution. You just have to confront the reality."

Here are some of the indicators cited by the governor:

-- A disproportionate share of Rhode Island's jobs are in low-growth industries;

-- Almost 20 percent of Rhode Islanders' income comes from aid, assistance and benefits;

-- Rhode Island's manufacturing sector has lost 80,000 jobs since the 1980s. Middle class jobs have been replaced with lower wage jobs.

This is one of the slides shown by the governor in outlying RI's economic problems.
Credit Ian Donnis / RIPR

-- The state's structural deficit is projected to reach just under $500 million by fiscal 2019. In addition, Raimondo said, Rhode Island has the second-highest Medicaid spending per enrollee in the country, the second-highest fire safety costs per $1000 of personal income, and the third-highest public employee compensation.

"We have an aging population, a relatively low skilled population, and we're not creating jobs," Raimondo said, "and I would say that is our single-biggest problem that we need to face. We need to position ourselves for industries that are growing. And those are what some people call 'advanced industries.' They're industries that are marked by globalization, innovation, technology."

As it stands, the governor said, Rhode Island gets only $47 million in federal research and development contracts, in comparison to the $3 billion in contracts landed by neighboring Massachusetts.

Raimondo said Rhode Island can't cut or tax its way to prosperity. She said the state won't thrive unless it does a better job in providing skills to workers.

"We have to thread a needle. We have to thread a needle of keeping costs down where we can, investing in what creates jobs, and keeping our regulatory environment, our tax environment, reasonable. And that's going to be hard. And that's why I've invited you all here today, because I want to get your buy-in for this. I have come to the conclusion that there is no way forward for the state other than to create thousands of middle class jobs. It's the way to create revenue, it's the way to create opportunity, it's the way to invest."

The news conference continues a sting of recent media events by Raimondo, who took office January 6. Last week, she held a news conference on aiding cities and towns, and she followed up earlier this week with one on regulatory reform. In terms of attempts to boost Rhode Island's economy, she has previously made many of the same points.

Raimondo -- whose first budget is expected March 12 -- said her administration will produce "strategic cuts in areas where I think we're out of whack, but then calls for investment."

The governor said the state needs to spend more on tourism promotion and economic development, as part of a strategic realignment on how Rhode Island spends money. Raimondo said no one thing will spur more jobs, and that her administration's approach will include strategic investment, spending on school construction, attempts to cut costs for programs like Medicaid, and regulatory reform.

"If we create 6,000 jobs over the next few years, 6,000 more jobs than we're planning on, and the majority of those jobs are good jobs -- $60,000 and above -- it's $137 million of additional revenue for the state," the governor said. "That is the way I believe we need to move forward."

Raimondo called the future state of Rhode Island's economy a matter of choice. "This is an everybody moment," she said. "It's really the opportunity to say, 'you know, holy cow, it is bad, and it doesn't have to be.' So let's finally get out of our comfort zone and do it a little differently."

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