1. If Governor Raimondo gets her proposed toll through the General Assembly, large commercial trucks will have to pay around $40 each time they take I-95 through Rhode Island. “We don’t have an option,” Raimondo argued on this week’s Newsmakers. “I can’t as governor let bridges fall down and people get hurt.” With a state budget of nearly $9 billion, plenty of people think she should find other options – but Raimondo’s aides are adamant there’s no way they could fund the amount of infrastructure work required just by constraining spending elsewhere. (And it will be even harder if the Assembly waters down her Medicaid proposals.) With the announcement coming so close to the end of the legislative session and both Assembly leaders on board, the trucking industry is at a clear lobbying disadvantage, particularly since there are constitutional concerns around charging local trucks a lower fee; one option may be to convince lawmakers to levy the toll on fewer classes of trucks. Oddly, there seems to be a basic factual dispute between Raimondo and the industry about which trucks will have to pay. “It is the biggest trucks,” she said. “It isn’t the small trucks, it isn’t the dump trucks, it isn’t the Cardi’s trucks – it’s the biggest trucks.” (Check the graphic and judge for yourself.) When it comes to out-of-state companies, the proposal is arguably an example of Rhode Island capitalizing on its geographic sweet spot – a lot of trucks travel between New York and Boston, and a lot of them are going to fork over the money to Rhode Island rather than take a different route. (Remember the Pawtucket bridge fines?) And if fewer of those trucks take I-95, well, that may just mean the roads and bridges don’t wear out as fast.
2. My colleague Susan Campbell spoke with Ocean State Job Lot CEO Marc Perlman on Friday about the toll proposal, and he struck a conciliatory note. “I have a lot of respect for our governor,” Perlman told Susan. “I’m confident she’s trying to run this state in the most efficient way possible. We’d love to have the opportunity to express our knowledge of the field so that she can make the best decision for the people that live in our state.” He said repeatedly that Job Lot wants “a level playing field” as it competes with big out-of-state chains like Home Depot, Lowe’s and Wal-Mart, and noted that 85% of its business is outside Rhode Island. “So it’s important to make sure that we do not have a competitive disadvantage in supplying states outside of Rhode Island,” he said. “Many of the people we compete against, they’re not distributing from Rhode Island.” He added: “If it was done fairly, it wouldn’t be more challenging. If it was done in a clumsy fashion, I think it would add to the challenges that we face in Rhode Island.”
3. The tolls are the foundation for Governor Raimondo’s $4.8-billion RhodeWorks infrastructure-funding plan, which her aides estimate would reduce the percentage of structurally deficient bridges in Rhode Island from 23% now to 10% in 2025; under the existing funding plan, RIDOT estimates 47% of the bridges will be deficient by then. Raimondo said RIDOT has shovel-ready projects that will begin this summer if lawmakers approve the truck toll. “Once we have the security that we can do the user fee, then we can automatically start rerouting some of the money and start fixing our highways,” she said on Newsmakers.
4. Barring a snafu, look for lawmakers to unveil the final state budget deal next week. [Update: They’re going to wait one more week.]
5. My conversation Wednesday with PawSox Chairman Larry Lucchino ended up long on questions but short on answers. The Red Sox CEO seemed downbeat and, like the late Jim Skeffington, a bit miffed at how coldly the team’s initial request was received. “We’ll try to be flexible,” Lucchino told me. “We also need the state to be flexible. This is a public/private partnership.” So, I asked Governor Raimondo on Newsmakers, are the team owners putting their money where their mouths are? “They’re beginning to show flexibility,” she replied, curtly – and didn’t elaborate. She scoffed at the original request, though, saying: “The initial proposal asked the taxpayers to put up all the money to build the owners a ballpark. I’m not interested in that.” So what is she considering? “If the state’s going to put up money, then we need to own the ballpark, we need maybe to have a revenue share.” The latter idea – a revenue-sharing deal – is something Lucchino said he’s looking at, too, though he didn’t seem too happy about it. (He made sure I knew there are “very few” examples of teams having to share revenue when I brought it up.) Either way, Raimondo and Speaker Mattiello are now downplaying the possibility a deal will be struck before lawmakers leave town. “That seems unlikely, because the legislative session seems to be moving toward being wrapped up,” the governor said.
6. A few interesting links on the world of sports economics … Brookings warns taxpayers about bidding wars for teams … Patriots owner Robert Kraft wants Boston to help him build a soccer stadium there … Goldman Sachs is cornering the market on stadium financing … and a new Wall Street Journal series examines waning interest in baseball. (I asked Larry Lucchino about the WSJ’s argument: “I think anyone in baseball has to be concerned about it,” he said. But he went on to add: “It isn’t in decline in Rhode Island, in my opinion. It isn’t in decline in New England. … You’ve got to be careful when you compare trends from around the country to the Northeast, where baseball has always had its hotbed. Its history really started up here.”)
7. If Governor Raimondo is so excited about the big Wexford-CV proposal for a life-sciences complex on the 195 land, why didn’t she hold a press conference? “It’s early going,” she said on Newsmakers. “Once we get a few tenants lined up, I think that will be a more appropriate time.” Those tenants could include at least two state entities, she confirmed: a URI neuroscience center and/or a new R.I. Department of Health lab. Raimondo, who’s been meeting with Wexford for months, said her vision for the complex is “a multi-use, multi-tenant combination of commercial – corporate – with a research university, which could be Brown, could be URI, could be Brown Medical School – combined with companies that want access to the talent coming out of those labs.” She also confirmed Wexford would be eligible to get the money from the $25 million I-195 Development Fund, as well as the Rebuild Rhode Island real-estate tax credits, that are in her budget proposal.
9. That I-195 Development Fund and the Rebuild Rhode Island tax credits are all part of budget Article 29, which contains Governor Raimondo’s suite of proposed economic-development programs. Speaker Mattiello indicated Thursday most of those are likely to get passed, and her first priority if they do will be to spur real-estate development. Specifically, she said on Newsmakers she wants to use the Rebuild Rhode Island credits in tandem with Rep. Shekarchi’s proposed tax credit for job creation to incentivize, among other things, warehouses. “Rhode Island is desperate for new warehouses,” she said. “We lost that Amazon deal – a lot of reasons we lost it – we don’t have new warehouses. So we need those tax credits to get that going, and then that’s going to work together with the jobs credit to say, OK, build a building and then let’s incentivize a company to fill it with employees.” The Superman building is also likely to be eligible for Rebuild Rhode Island credits – which are supposed to only be used on projects with a demonstrable financing gap – “but it’s not teed up for that building,” she said.
10. Speaking of real estate, did you know CV Properties has yet to secure financing for the South Street Power Station nursing school project? Dick Galvin remains optimistic, though; site mobilization began this week.
11. Our weekly Saturday Morning Post dispatch from WPRI.com’s Dan McGowan: “If you think Senate Majority Leader Dominick Ruggerio’s bill to establish a tax-break policy for developers on the former I-195 land is a way to publicly show his frustration with the Elorza administration, you wouldn’t be off base. (More on the politics at play in a second.) But there’s a reason no one in state or city government is completely dismissing Ruggerio’s proposal. First, you have to understand that no one in any leadership position – from Governor Raimondo all the way to City Council President Luis Aponte – believes significant development can happen in Providence without the city offering tax-stabilization plans. You can blame the city’s $36.75-per-$1,000 commercial tax rate for that. And while both Elorza and Aponte have long said they’re committed to crafting a formal policy for tax breaks, nothing kicking around City Hall has been quite as generous or definitive as Ruggerio’s plan, which will give 20-year deals to any for-profit organization building on the I-195 land. Ruggerio’s message is fairly clear. He doesn’t trust that the city is going to put forth a reasonable policy that will kick-start projects on the vacant former highway land and he wasn’t pleased that Elorza asked lawmakers to pass a bill that would reimburse the city for tax breaks without having a policy in place. Then there’s the behind-the-scenes politics. The Senate never quite hit it off with Elorza, particularly when No. 3 Senate Democrat Maryellen Goodwin was returned to her lower-paid job in the city planning department after briefly serving as Angel Taveras’s deputy chief of staff; Goodwin is now co-sponsoring Ruggerio’s bill. Couple that with the mayor’s decision to restructure the city’s fire department and Ruggerio’s fondness for labor unions and you can see why the majority leader didn’t bother calling Elorza before he introduced the legislation.”
12. With lawmakers set to add a more generous Social Security tax break for retirees to the final budget, here’s a 2012 National Tax Journal study I found on the topic: “Over the last 40 years, state income tax breaks targeting the elderly have grown, often justified by arguments that the elderly move across state lines in response to such tax preferences. … Our results are overwhelming in their failure to reveal any consistent effect of state income tax breaks on elderly interstate migration.”
13. Rep. Patricia Morgan is out with a stinging indictment of the Rhode Island Convention Center Authority.
14. HealthSource RI executive director Anya Rader Wallack is my guest on this week’s Executive Suite. A few interesting nuggets from our conversation: Rhode Island would not have to reimburse the federal government for the more than $100 million the feds spent to built HealthSource if the state switches to the federal website, she’s been told. … HealthSource is looking at joint contracting with Connecticut’s exchange, AccessHealth CT, but there are no plans for a full-blown merger of the two. … Wallack is enthusiastic about having state employees buy their insurance through HealthSource, and the Raimondo administration is taking a look at the possibility.
16. This insight from J.P. Morgan economists seems very relevant to Rhode Island: “Within the next several months, the economy is very likely to be near full-employment, and very likely to exhibit growth rates that are disappointingly slow. As this occurs, the terms of the debate surrounding the economy will increasingly focus on micro issues: how best to stimulate labor force growth and skills acquisition, how to encourage business formation, and how best to foster investment, both public and private, in tangible and intangible capital.”
17. Bravo, Bob Schieffer – the decline of local journalism is a huge problem that should worry everyone.
20. Set your DVRs: This week on Newsmakers – Governor Raimondo. Watch Sunday at 10 a.m. on Fox Providence. This week on Executive Suite – HealthSource RI executive director Anya Rader Wallack. Watch Saturday at 10:30 p.m. or Sunday at 6 p.m. on myRITV (or Sunday at 6 a.m. on Fox). You can catch both shows back-to-back on your radio, too, Sunday nights at 6 on WPRO-AM 630 and WEAN-FM 99.7. See you back here next Saturday morning.Ted Nesi ( firstname.lastname@example.org ) covers politics and the economy for WPRI.com and writes the Nesi’s Notes blog. Follow him on Twitter: @tednesiAn earlier version of this post incorrectly said the governor’s economic-development tools are contained in budget Article 28; they are in Article 29.