“Raimondo presents herself as a tough mother, in order to make her cuts to popular programs seem inevitable and shield unpopular policy proposals from opposition. Groups in Rhode Island are already assembling to fight for a humane budget. The governor could choose austerity, but she could also choose to join them.“
Last week, Governor Gina Raimondo told Rhode Islanders that the state’s upcoming budget was “going to be brutal.” While delivering her daily press briefing, Raimondo remarked, “Everyone’s going to be unhappy. Everything is on the table. Everything.” Referring to projected revenue losses due to the pandemic, she added, “I don’t know where we’re going to find $800 million.”
Raimondo’s promise that everyone would be “unhappy” and statement that she didn’t know where the state would find lost revenue (never mind the obvious answer that critics quickly pointed out: repealing the 2006 tax cuts on wealthy Rhode Islanders could help) suggest that her solution to the crisis will be austerity.
While Raimondo didn’t offer details, “everything” might include: Medicaid funding, public schools, salaries for state employees, money to cities, and more. Indeed, one only needs to look back a decade to see what budget cuts have done to Rhode Island during times of crisis.
At the same time, the governor didn’t mention other options the state has, framing austerity as an unfortunate inevitability rather than her chosen response to the revenue shortfall. While cuts to public programs would, indeed, be brutal, such cuts are not the only way forward.
In a state where the highest earners pay the lowest tax rates, putting “everything on the table” would protect the wealth of a small minority while threatening the basic needs of the rest. Meanwhile, a proposal released by the Rhode Island Political Coop earlier this year projected that restoring the pre-2006 tax rates on just the state’s 1% would produce a projected $170 million in annual revenue. Raimondo’s push for austerity suggests that keeping low tax rates for the wealthiest Rhode Islanders is a higher priority than preserving funding for public programs and institutions.
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Public employees rely on their jobs and pensions to feed their families; about one-quarter of the state’s population relies on Medicaid for healthcare; young people rely on schools to provide food and an education; and many of us will rely on the social safety net as thousands of Rhode Islanders become unemployed daily. Laying off state workers––the one specific policy that Raimondo has announced she is considering in regard to the budget––will only compound fundamental economic problems created by the pandemic.
The forthcoming budget debate mirrors the last time Raimondo faced a revenue shortfall.
In 2011, while she was state treasurer, Raimondo made an exceptional move: she closed the state pension gap by cutting existing retiree pensions. During her 2014 bid for governor, the Providence Journal’s Tom Mooney reported that Raimondo was using the pension overhaul as an example of her “guts.” Raimondo told the Journal that she had “made some enemies” but that she had “done the right thing.” As the Wall Street Journal pointed out: her enemies came in the form of unions and retirees. Meanwhile, she won an award from the far-right Manhattan Institute for the cuts.
Many mainstream news outlets took her word for it and framed the pension overhaul as a victory. In September 2015, the New York Times published an article under the headline, “Rhode Island Averts Pension Disaster Without Raising Taxes.” The story has been repeated, in one form or another, numerous times: Raimondo saved the state from bankruptcy by ending cost-of-living increases in state pension plans and replacing traditional pensions with 401(k) benefits.
However, the balanced budget didn’t tell the whole story.
Part of Raimondo’s plan had involved investing a portion of the state’s pension fund into “alternative investments”––hedge funds and private equity firms. The agreements that Raimondo had drawn paid atypically high fees to these funds while delivering lower returns to Rhode Island pensioners than comparable pension funds across the country, shorting the state’s coffers $372 million in unrealized returns.
It was no coincidence that Raimondo’s pension plan lined the pockets of financiers. The securities and investment industries contributed more to Raimondo’s 2010 treasurer campaign––nearly $150,000––than almost any other candidate in Rhode Island history. Raimondo’s pockets were full too: as of 2018, the state’s pension fund had paid her own private equity firm, Point Judith Capital, more than $1.3 million in fees and expenses since it first invested in her fund in 2006. And her successor, Seth Magaziner, has been unable to pull the state’s money from Point Judith.
Raimondo is once again positioning herself as the messenger of unfortunate truths at a time of crisis. The catchphrase that Raimondo coined for this pandemic, “knock it off,” frames Raimondo as the strict mother to her constituents. Raimondo said as much to New York Times columnist Frank Bruni: “knock it off” is a reprimand that she frequently received from her own mother.
As the virus devastated New York City and Boston, Raimondo kept the disease under control, delivering some of the highest testing rates per capita in the nation and successfully flattening the curve. (Many activists have correctly pointed out that this message does not extend to the state’s incarcerated populations, at the ACI and the Wyatt Detention Center, where outbreaks have already happened and threaten to take the lives of people who are trapped inside.)
Her governance stands in stark contrast to President Donald Trump’s incompetence at the national level. Trump has responded to the pandemic by promoting drugs that do not work for treatment, approving billion dollar corporate debt buyouts, and enabling companies to risk their employees’ lives to reopen. His presence in the Oval Office, backed up by the Republican Senate, makes Raimondo’s competence seem praiseworthy.
Bruni said, in the same column, that his friends in Rhode Island “praise [Raimondo] for her manner — sometimes tough, other times tender, almost always candid — at the daily news briefings that she, like Cuomo, holds. They say that she’s more popular than ever.” The daily briefings send a message that the governor had never delivered before: Rhode Islanders, I care about you and I am fighting for you.
But her tenderness or candidness on TV should not conceal the reality of her budget proposals. Raimondo presents herself as a tough mother, in order to make her cuts to popular programs seem inevitable and shield unpopular policy proposals from opposition. Groups in Rhode Island are already assembling to fight for a humane budget. The governor could choose austerity, but she could also choose to join them.