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Nesi’s Notes: July 20

Ted Nesi

Happy Saturday! Here’s another edition of my weekend column for WPRI.com – as always, send your takes, tips and trial balloons to tnesi@wpri.com and follow @tednesi on Twitter.

A programming note: I will be off next week, so look for the next edition of Nesi’s Notes on Saturday, Aug. 3. Thank you, as always, for reading!

1. Rhode Island’s return to last place on the new CNBC list has focused attention once again on how the state compares with its peers. So it’s worth taking a look at another list, the Boston-based Beacon Hill Institute’s Annual State Competitiveness Report, which says it “goes beyond tax policy and regulatory analyses to establish more comprehensive ranking categories.” Massachusetts earns the top spot on the Beacon Hill Institute list, followed by North Dakota, Utah, Nebraska and Minnesota. Rhode Island again ranks far behind Massachusetts, but not last, placing 35th. It’s instructive to compare how Beacon Hill rates Massachusetts and Rhode Island in order to see what holds the Ocean State back compared with its neighbor. Not the culprit: infrastructure, fiscal policy or security; the two states score nearly identically in those categories. By far the biggest gap between them is in the business incubation category, which incorporates the number of new enterprises founded, as well as education-adjusted labor costs and tort liability; Massachusetts ranks 11th in that category, while Rhode Island is stuck at 45th. Nowhere else in Beacon Hill’s examination is the chasm between the two states as large. The next biggest gaps, much smaller but still noteworthy, are on environmental policy (notably pollution); human resources (including but not limited to education); technology (think R&D and patents); and openness (including on trade). As for Rhode Island’s other neighbor, Connecticut fares even worse by Beacon Hill’s estimation, ranking 43rd. And in last place? Sorry, New Jersey.

2. Something to always keep in mind when comparing Rhode Island to Massachusetts (and Connecticut): Rhode Island is considerably poorer. As the Niskanen Center’s Josh McCabe noted recently, “The amount of goods and services governments can provide is very much limited by the size of their revenue base.” Rhode Island has roughly $65,000 in taxable resources per resident, but Massachusetts and Connecticut have more than $80,000. Another way of looking at it: Connecticut is the nation’s richest state, and Massachusetts is its fourth richest, per McCabe’s math; Rhode Island is 19th. That means it takes more “fiscal effort” for Rhode Island to try and keep up. Right now Rhode Island’s public sector uses about 13% of the state’s taxable resources but still can’t match its richer neighbors, even though Massachusetts uses barely 12% and Connecticut only about 11%. “In other words, any given Rhode Island taxpayer can expect tax savings by moving to Connecticut or Massachusetts, where he or she can also expect more generous government services,” Josh Barro wrote in 2012. “As such, it’s really hard for Rhode Island to stay competitive. Trying to match its neighbors on service delivery will mean having an outsized tax burden, and trying to match their tax rates means providing a lot less government.” (And no, it wasn’t always this way: Rhode Islanders earned slightly more than Bay Staters as late as 1947, and the states were fairly even until the 1980s.)

3. Secretary Pryor offered his take on the CNBC list, and defended Rhode Island’s broader economic trajectory under his stewardship, in this letter sent to business leaders on Monday (pdf).

3. The ribbon-cutting at the Wexford Innovation Campus marked a milestone for the old I-195 land, putting in place a linchpin of the governor’s economic development strategy. Yet New York Times economics columnist Eduardo Porter offered a timely caution this week in an article examining another major Wexford project, the 1.1-million square foot Wake Forest Innovation Quarter in North Carolina. He found that while the development has spurred high hopes and shown some promise, it’s no silver bullet. And he returned with a sobering conclusion for cities like Providence: “Winston-Salem’s predicament reflects a larger social and economic challenge: the widening gap between a limited set of successful cities — which draw both highly educated workers seeking well-paid jobs and high-tech companies that want to employ them — and pretty much everywhere else. This new pattern of economic development amounts to a fundamental break from the decades after World War II, when poorer and generally smaller cities were catching up with richer, bigger places. In recent years, this convergence stopped. Many midsize cities and small towns that found manufacturing-based prosperity in the 20th century have lost their footing in the tech-heavy economy of the 21st. … The companies now leading the economy gravitate toward big cities where they can find clusters of highly educated workers and attract more.”

4. Back to the drawing board: Care New England’s decision to pull out of merger talks with Lifespan (and Brown) makes the future of the state’s hospital sector even more uncertain. Here’s our look at what may happen next.

5. The three Southern New England governors — Gina Raimondo, Charlie Baker and Ned Lamont — met Tuesday in Connecticut for a bit of a summit. The substance of their discussions was overshadowed locally by the hospital news, but State House News Service has a solid roundup here. Raimondo says she will host the trio’s next meeting this fall in Providence.

6. Here’s a dispatch out of Warwick from WPRI’s Eli Sherman: “State officials tell me Warwick is on track this week to file its long-overdue financial audit for fiscal year 2017-18. The deadline for the financial statements, originally due Dec. 31, has been repeatedly extended, as city and school leaders continue to grapple with their finances. Filing the audit is part of the solution, as it provides the building blocks for current and future budgets, and helps the state calculate how much it should provide in municipal aid. ‘We will be expecting the audit sometime next week and will continue to be engaged with the city,’ said R.I. Auditor General Dennis Hoyle, whose office met with Warwick leaders last week. The city, which is dealing with a structural deficit, is now expected to appropriate an additional $4 million to the school budget to help fund after-school programs including sports, although it’s not entirely clear yet where the funding will come from. ‘We will be watching that with interest,’ Hoyle told me. Nonetheless, submitting the audit will mark a positive, albeit delayed, step forward for the city.”

7. Eli Sherman and Steph Machado look at what Lawrence and Camden may reveal about the state’s looming takeover of Providence schools. On this week’s Newsmakers, congressman and former Providence mayor David Cicilline told Tim White, “I think all the adults in the system from me on owe the children an apology. We have a whole generation of kids who have lost opportunities because of the quality of the system.”

8. NYT politics sage Jonathan Martin flags Governor Raimondo’s worries about the Democratic presidential field.

9. Speaking of the governor, here she is on the @realDonaldTrump Twitter feed. And her job approval fell to 38% in the quarterly Morning Consult survey.

10. A split in the local House delegation this week, as David Cicilline and Joe Kennedy III voted to pursue an impeachment inquiry against President Trump while Jim Langevin and Bill Keating voted to block it. Langevin’s vote led state Sen. Sam Bell to muse on Twitter about primarying the 2nd District Democrat, while Brown’s Stephen Kinzer was already using his Globe column to urge a progressive challenge against Keating.

11. Somebody keeps stealing $15,000 from local pols’ campaign accounts.

12. One of the high-profile bills that failed to clear the General Assembly before recess was the so-called parentage bill, a top priority for Senate Judiciary Chairwoman Erin Lynch Prata. From Kim Kalunian, a look at the plight of one couple affected by the issue.

13. Senator Reed visited the Texas border on Friday — here’s what he saw.

14. If you follow East Providence Mayor Bob DaSilva on social media, you may have seen him posting photos from some beautiful locales in Portgual alongside fellow Townie Dems Rep. Gregg Amore, Rep. Joe Serodio and Sen. Val Lawson. DaSilva spokesperson Patricia Resende reports the mayor is on a weeklong personal trip with his family to São Miguel Island in the Azores. “During his vacation he is also visiting with officials from East Providence’s Sister City, Ribeira Grande, to present them with a key to the city, a copy of a resolution that was sponsored by Councilwoman Sousa and approved by the City Council, and a replica of a street sign that was recently placed on Taunton Avenue,” Resende said in an email. “Taunton Avenue was given the honorary name Avenida de Ribeira Grande, just as the City of East Providence has a street named after it in Ribeira Grande.” Mayor DaSilva is expected back at City Hall on Monday.

15. Check out the first of installment of our new monthly “12 on 12” digital documentary series Wednesday, when Steve Nielsen will present “The Cold Case Cards: All In.” It’s timely, too, following this week’s unexpected arrest in a 30-year-old Pawtucket cold case.

16. If you watch WPRI 12 over the air, mark your calendar for Friday, August 2. That’s when we are changing our broadcast frequency as part of the FCC’s nationwide spectrum repack. Back in May our engineering team installed a new 80-foot-plus broadcast tower, weighing more than 8,500 pounds, at our transmitter out in Rehoboth. After 12:30 p.m. on August 2, you’ll need to rescan your TV to find WPRI (and all other available local channels). Don’t worry, though: we’ll still be Channel 12 on your set.

17. The Newport Jazz Festival, one of Rhode Island’s great contributions to American culture, is coming up Aug. 2 to 4 — get your tickets here.

18. Set your DVRs: This week on NewsmakersCongressman Cicilline. Watch Sunday at 10 a.m. on Fox Providence. This week on Executive SuiteMark Hellendrung, owner/president, Narragansett Beer, and Jeremy Duffy, co-founder, Isle Brewers Guild; Mike Kelly, president/CEO, Nelipak Corp. Watch Saturday at 10:30 p.m. or Sunday at 8 p.m. on myRITV (also Sunday at 6:30 a.m. on Fox or 7:30 a.m. on The CW). Podcast lovers, you can subscribe to both shows on iTunes — get the Newsmakers podcast here and the Executive Suite podcast here — and radio listeners can catch them back-to-back Sundays at 6 p.m. on WPRO-AM 630 and WEAN-FM 99.7. See you back here next Saturday morning.

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He is a weekly panelist on Newsmakers and hosts Executive Suite. Follow him on Twitter and Facebook

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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