Wednesday was the 2019 Greater Providence Chamber of Commerce (GPCC) Luncheon, where the Providence area business community invited members of our General Assembly to listen to their concerns and ideas.
Laurie White, President of the GPCC, estimated that over 70 state legislators were in attendance, including Senate President Dominick Ruggerio (Democrat, District 4, Providence), Senate Majority Leader Michael McCaffrey (Democrat, District 29, Warwick), Senate Minority Leader Dennis Algiere ( District 38, Westerly, Charlestown), Speaker of the House Nicholas Mattiello (Democrat, District 15, Cranston), House Majority Leader Joseph Shekarchi (Democrat, District 23, Warwick) and House Minority Leader Blake Filippi (Republican, District 36, Charlestown, New Shoreham, South Kingstown, Westerly).
“We played a much more aggressive role in supporting some General Assembly candidates in tight races…”
The event began with some words from GPCC President Laurie White, who began by thanking the companies that sponsored the luncheon, including Bank of America, Beacon Mutual Insurance, Blue Cross/Blue Shield of Rhode Island, Cox Business, CVS Health, LifeSpan, and more. She gave special recognition “to our friends in Build Rhode Island and the Building Trades,” specifically Michael Sabitoni and Greg Mancini.
“If you’ve been following the news you know that there are a ton of issues out there percolating,” said White. “Just to name a few…”
- The budget: “always the centerpiece of any legislative year that occupies a lot of space and time” and “many of the issues that businesses are interested in actually emanate from the budget;”
- mobile sports betting;
- public education: expanded pre-K and free college expansion;
- recreational marijuana legislation and how employers are going to deal with that;
- potential of taxation on a whole portfolio of services, like Netflix;
- some new health care mandates and new health care assessments;
- a proposed ban on plastic bags; and
- minimum wage and “the issue around predictability;”
White spoke about “a couple of things that we are really proud of that we worked on last year,” including:
- the issuance of bonds to improve our school buildings;
- the reinstatement and rebuilding of economic tools in the toolbox. “We were very pleased with those discussions;”
- “We continued to work on a fair and equitable tax system that promotes growth and helps make Rhode Island more competitive;”
- “Working to articulate the position of the business community relative to some onerous business mandates around workforce and employment;” and
- “We played a much more aggressive role in supporting some General Assembly candidates in tight races,” said White. “A lot of our members were eager to donate to our Providence Chamber PAC.
John Taylor, Chief Executive Officer of GameLogic, which owns Twin Rivers Casino, spoke.
“…their employees are in fact on Medicaid and a burden on the citizens of the State of Rhode Island…”
“My initial reaction is one of caution,” said Speaker Mattiello, when asked about Governor Gina Raimondo‘s plan to expand free college and universal pre-K. “The Governor’s focus is in the right direction. I do agree with her on education … New programming may be problematic this year.”
As for the new fees Raimondo inserted throughout her budget, Mattiello said, “My default is that I don’t like new taxes.”
Laurie White brought up the fact that Mattiello was recognized by the Tax Foundation for his leadership on tax reform. But we all know that the right wing Tax Foundation peddles pseudoscience and ideological nonsense, right?1
Asked about Raimondo’s proposed tax on employers of 300 or more who are on Medicaid, Mattiello chose some unfortunate words:
“I start off from the same position I always do: I don’t like new taxes. However, I just spoke to the RIPEC2 Board yesterday morning and asked a lot of business leaders if it offends them that you impose a fee upon an employer that is not paying their employees adequately and their employees are in fact on Medicaid and a burden on the citizens of the State of Rhode Island,” said Mattiello. [emphasis mine]
“The tax certainly doesn’t offend me. It’s intended to either help the state carry the burden when the employer shifts the burden to the state.”
White suggested that many employers with part time employees don’t know if their employees are on Medicaid or not.
Senate President Ruggerio speaks about mobile sports betting.
A question to Mattiello about the performance of Rhode Island’s K-12 schools.
“No one likes giving corporations a tax break, but we have to…”
Representative Shekarchi talked about the Qualified Jobs Tax Credit program he pioneered years ago. Shekarchi is proud of the program, which has produced over 3000 jobs, for which companies receive tax credits. The program does not grant a tax credit until the job is created. It’s revenue neutral, claims Shekarchi.
“We need to continue that, in my opinion. In terms of tax credits: No one likes giving corporations a tax break, but we have to,” said Shekarchi. “We have to for one simple reason: Our competitors are. If we don’t do it we are in essence unilaterally disarming ourselves as a state…
“We can’t be fearful of 38 Studios.”
A question to Senate President Ruggerio on the I-195 land and the proposed Fane Tower.
A question to Senator McCaffrey on the legalization of marijuana.
Senate Minority Leader Algiere with the Republican view on marijuana legalization and the Governor’s budget proposal.
“Thank you, Mr Fane…”
House Minority Leader Representative Filippi was very critical of Raimondo’s budget, saying it was “setting the state up for calamity.” He was critical of the scoops and sales tax increase.
As for Shekarchi’s corporate incentive program, “I personally believe that government intervention in the marketplace is wrong. And it doesn’t create the widespread economic growth we need. And I understand the perspective that our neighboring states do this, so let’s petition our federal delegation to pass a law that says that states can’t offer incentives to lure businesses across state lines.”
“As to the Fane Tower,” said Filippi, “I think we need to say, ‘Thank you, Mr Fane for wanting to invest $300 million in the State of Rhode Island.’ This treatment of those who want to invest in our state must stop. ‘Thank you, Mr Fane.'”
As for taxing services like Netflix, Filippi sees this as a tax increase. “Extending it to your downloads? I mean, they’re saying that they’re not raising your taxes but who goes to Blockbuster these days?”
When Filippi finished, he earned a round of applause from many in the audience.
Algiere pleads with business leaders to contact their representatives or to come to the State House to testify.
“This group is one of the brighter groups that comes together…”
“We need participation during the electoral process and during our legislative terms,” said Mattiello, wrapping things up. He told the business leaders in the room to, “Let us know what you’re thinking.”
“This group,” said Mattiello, referring to the Greater Providence Chamber of Commerce, “is one of the brighter groups that comes together. We have most of our business leaders here.
“I wish your voice was a lot louder, to be quite frank with you. I’ve been begging for that for ten or twelve years, continued Speaker Mattiello. “The business community needs to have a bigger voice…
“Let your voice be heard. Let’s all collaborate, communicate and do what’s best for the citizens of Rhode Island and the business community. You are the engine that fuels everything that goes on in government. We need you to be strong. We need our economy to be strong, so we need to hear from you.”
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- State rankings are bullshit, and Speaker Mattiello, as well as GPCC President Laurie White, should know better.
In 2016, in response to a Tax Foundation report, Economist Douglas Hall, then the Director of Economic and Fiscal Policy at the Economic Progress Institute, wrote an oped explaining why these rankings are worse than meaningless and actually quite harmful.
Hall wrote, “The collective hand-wringing brought on by Rhode Island’s placing on the latest Tax Foundation’s ‘State Business Tax Climate’ is misguided at best, and at worst points to public policy choices that could undermine, rather than facilitate the Ocean State’s economic growth and recovery.”
State rankings are useless and dangerous. Grading the States, a website that tackles the issue of these rankings and exposes their serious flaws, is a great resource to learn more about this problem. Their one line analysis of the Tax Foundation’s business ranking?
“Combining more than 115 features of state tax law into a single index number produces a state ranking that turns out to bear very little relationship to what businesses actually pay in one state vs another.”
- Rhode Island Public Expenditures Council