Paiva Weed offers ideas for turning around RI economy

PROVIDENCE, R.I. (WPRI) - Senate President M. Teresa Paiva Weed on Tuesday pledged to spend the next few months pushing policies to improve Rhode Island's economy as state leaders continue to grapple with its disappointing failure to recover from the recession.

"It's not easy to come before you today and say we have not done as good a job as we should have in some of these areas," Paiva Weed, D-Newport, told reporters during a State House news conference. Rhode Island's unemployment rate was 10.4% in November, the second-worst rate in the country.

"We have tried in the past to address the issues that have been raised," she said. "I don't think we've done it in a comprehensive fashion, and clearly the national perception is we haven't done it well enough."

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Paiva Weed's comments coincided with the release of "Moving the Needle," a study of the state's "economic vitality" that was prepared at the Senate president's request by the Senate Police Office and the Rhode Island Public Expenditure Council (RIPEC), a business-backed private think tank.

The report was released as Paiva Weed, Gov. Lincoln Chafee and House Speaker Gordon Fox face growing pressure from the business community to improve Rhode Island's poor showing in national business rankings and jump start its lagging economy.

"This session we need to approach the economy with a renewed sense of urgency," Paiva Weed, who became Senate president in November 2008, said. She added: "The economy is the Senate's paramount concern, and this report is going to form the basis for legislative initiatives in the 2013 session." She reiterated her wariness about raising income taxes on higher-income Rhode Islanders.

The report offers a laundry list of proposals that the General Assembly could take, from adding funding for universal full-day kindergarten and additional road repairs to reducing taxes on businesses and finding a way to track when projects go over their budgets. It also proposes tax breaks for redeveloping historic buildings and promoting arts districts.

Pressed to single out specific ideas she will act on quickly, Paiva Weed pointed to bringing back the historic tax credit as a policy that has widespread support on Smith Hill. She also said the report's most important suggestion was for Rhode Island to start putting together a strategic plan updated on a regular basis, as Massachusetts does.

"I see this as a kickoff," Paiva Weed said. "I see this as a beginning."

More broadly, the report suggests Rhode Island needs to work on "proactive reputation management" - doing a better job of promoting itself positively both outside the state and inside.

"It is meant to be a starting point - a recognition that action is needed," Paiva Weed said. "I can't understate that. We need to recognize that action is needed." She said specific legislation will be rolled out based on the recommendations in the next few weeks.

The report also features 21 indicators in five categories to quantify how Rhode Island's situation compares to other states. The measurements are based on others used in Washington state and Providence. John Simmons, RIPEC's executive director, said the report was meant to be updated on a regular basis to keep tabs on whether progress is being made.

Laurie White, president of the Greater Providence Chamber of Commerce, praised Paiva Weed for ordering the economic report, which she described as a major milestone for policymakers. "It's monumental, and it's something that collectively we can all get behind and feel really good about," White said.

"This is not a defensive document," she said. "This is really an honest, frank assessment of areas where in fact we're doing well and more importantly, the areas where we need to do a heck of a lot better."

The report's 21 indicators offer a somewhat more nuanced picture of Rhode Island than the one that sometimes gets painted.

For example, Rhode Islanders' personal income amounted to $43,875 per person in 2011. On the plus side, that ranked 15th-highest in the nation; on the other hand, it was far below per-capita personal income in Massachusetts ($53,471) or Connecticut ($57,902), the two richest states in the country.

To take another example, Rhode Island's gross domestic product - the value of all goods and services produced in the state's economy - totaled $41,532 per resident in 2011, which ranked 27th in the country and was slightly below the national average of $42,070.

Rhode Island has the third-worst roads in the nation, with nearly 68% in poor or mediocre condition, and the fourth-worst bridges, with almost 22% of them classified as structurally deficient, according to the study. The digital infrastructure is in better shape: Rhode Islanders have the third-fastest Internet speeds in the country. The state also has a low crime rate and healthier-than-average residents.

Other problems identified in the report were more arcane.

"Despite an obvious overlap in jurisdiction and responsibilities, many seemingly common terms within the state’s Elevator Code, Fire Code, and Building Codes have different, and sometimes conflicting, definitions, which lead to confusion, unnecessary costs and frustration in the business community," the report said. It suggested a commission should be formed to harmonize the various codes.

"Our overriding theme has to be, this [legislative] session, the economy, the economy, jobs, jobs - what steps are we taking?" Paiva Weed said. "Every bill we pass, every policy we enact, that has to be our focus and that needs to be our theme for this session. ... We cannot continue as a state to move in the direction we've been moving."

The Senate report's release starts a busy week on the economic policy agenda in Rhode Island. Governor Chafee announced Tuesday a new research partnership involving all the state's colleges, and he'll unveil his proposed 2013-14 budget on Wednesday night. The House of Representatives will hold an economic summit on Thursday.

Ted Nesi ( tnesi@wpri.com ) covers politics and the economy for WPRI.com and writes the Nesi's Notes blog. Follow him on Twitter: @tednesi