1. Rep. Joe Shekarchi’s bill to give a tax break to employers who hire more workers is already a big political winner. More than half of Shekarchi’s colleagues have signed on as co-sponsors – and Speaker Mattiello, whose nod can decide which initiatives live and die, says it’s a top priority. The next step is a closer look at the policy itself. Shekarchi proposes reducing a large company’s income tax rate by 0.25 percentage points for every 50 high-wage jobs it adds, and reducing a small family-owned company’s personal income tax rate by the same amount when 10 high-wage jobs are added. The underlying idea is compelling: Rhode Island needs jobs, so companies that provide them should be rewarded (and, perhaps, incentivized). The mechanism, though, is worth scrutinizing. For one thing, a company isn’t going to add new workers to get a small tax break unless the business demand is there – and if the demand is already there, it’s possible they’d add the jobs even without the tax break. The bill also has the potential to be costly: the tax break is permanent, so a small company that adds 10 workers now will get to pay that lower tax rate forever, even if it grows into a much larger enterprise. (Think of CVS’s permanent JDA cut.) Also, while a medium-sized local company that’s stayed in Rhode Island for many years but isn’t growing its payroll won’t get the tax break, one of its out-of-state competitors could do so by moving to Rhode Island, because its jobs would be classified as new. In short, there’s lots to look at as Shekarchi’s bill moved through committee – nobody said good tax policy is easy.
2. Shekarchi’s bill isn’t the only interesting idea to emerge this week. Rep. Chris Blazejewski and Sen. Ryan Pearson came out Thursday with a proposal to give college graduates a tax break on their student loan payments. Their so-called “Stay Invested in Rhode Island Tax Credit” would be a generous incentive to get young people to stay in (or move to) the state: not only would the credit be equal to a graduate’s full loan payment, not just the interest, but it also would be fully refundable, meaning a worker with a low tax liability could wind up getting a big refund check. Pearson says he’s not aware of any other states that offer a similar credit, which he thinks could make it a competitive advantage for Rhode Island (as well as for local businesses looking to attract Millennial workers). Unsurprisingly, most of the Assembly’s other young lawmakers – including Republican Nick Kettle and Democrats Katie Kazarian, Aaron Regunberg, Joe Solomon and Shelby Maldonado – have lined up as co-sponsors. It will be interesting to see whether a tax break for younger Rhode Islanders can garner the same level of interest as the much-discussed tax cut for retirees.
3. Good news for Rhode Island’s budget-writers: general revenue is running $44 million ahead of forecasts as of December. Revenue Director Rose Gallogly suggested Friday a further uptick could be ahead, because “we don’t think the full benefit of the fall in gas prices has been realized yet in our sales and use tax revenues.”
4. Stephen Foley, the Financial Times’ U.S. investment correspondent, had an article in the pink paper this week that should be required reading for every state and local leader in Rhode Island. “It is possible economic historians will look back on this era with harsh criticism of how the US missed a once-in-a-lifetime opportunity to upgrade its crumbling roads, pitiful public transport and failing schools,” Foley argued. “Capital markets have never been as accommodating, nor have interest rates ever been as low or investors so keen to snap up long-term debt with above-Treasuries yields. … Happily,” he added, “muni bond market dynamics suggest that there is still an opportunity for local governments to step in and make up for lost time.” Financially struggling jurisdictions obviously should not be going on a borrowing spree. But to the extent the state and various local governments have already identified projects they’ll need to borrow for, and they can afford the payments, they should probably take advantage of near-zero rates while they’re still on offer.
5. Religion News Service’s Mark Silk looks at why Christianity has declined so much in Southern New England. He pins much of the blame on the Catholic Church’s sexual abuse crisis.
6. Our weekly Saturday Morning Post dispatch from Dan McGowan: “If you want to assess how Mayor Elorza is adjusting to his new job, you might as well wait until July. By then we’ll know if he’s moved forward with the privatization of city bus monitors, a streamlined tax-stabilization process (particularly for the I-195 land), and his lofty promise not to raise taxes in his first year in office. But those are just the top-of-mind issues facing Providence right now. Here are some other issues worth paying attention to: 1) Don’t forget, the city’s teachers’ union contract expired last August and there has been little movement on the proposed deal since it fell to pieces around the same time Angel Taveras lost the Democratic primary for governor. 2) The teachers aren’t the only union negotiating a contract. Local 1033 – which represents, among other groups, the bus monitors – has a deal that expires June 30. That means Mayor Elorza is going to be spending a lot of time around the leaders of two groups who strongly supported Buddy Cianci in the general election. 3) While Elorza’s aides are quick to say they hope the mayor and Council President Luis Aponte can have the same relationship as Taveras and former Council President Michael Solomon, they should remember that the majority of the council – including Aponte – actually disliked how much attention the administration paid to Solomon and Councilman Seth Yurdin. And if Elorza can’t convince the council play nice, navigating a potential deficit of between $10 million and $24 million will get awfully painful. Add it all together – and throw in the state budget for good measure – and the Elorza administration is going to have a pretty busy first six months on the job.”
7. Be sure to read Margaret Talbot’s 8,000-word New Yorker article on Providence Talks, Angel Taveras’s Bloomberg-backed pilot program for city parents. The piece is one of the richest examinations of anything in Rhode Island published in a long time.
8. State leaders are apparently taking seriously the possibility that a new group of PawSox owners could move the team out of Pawtucket. Congressman David Cicilline, whose district includes Pawtucket, said on this week’s Newsmakers he’s reached out to Governor Raimondo to offer his help in keeping the team in Rhode Island, and he noted Pawtucket Mayor Don Grebien has done the same. “They’re a treasured asset of this state, and we should all be prepared to do what we can to make sure they stay here,” Cicilline said. He added: “If you remember, the state had to do some things to McCoy one time in the past; I think we need to think about what we can do to strengthen that relationship. But it’s important to the economy, it’s important to lots and lots of families who enjoy those games, and we have to work hard to make sure they don’t leave Rhode Island.”
9. Jack Reed thinks he can bring home more bacon for Rhode Island from his new post as the top Democrat on the Senate Appropriations Committee’s Transportation, Housing and Urban Development Subcommittee. With the state’s well-known infrastructure needs in mind, Reed says his model will be the successful effort to attract federal dollars to expand T.F. Green Airport, which he’s bullish about. “We have a national need to renovate, renew, and expand our highway system, and that requires resources, and the committee that I will be the ranking member of allocates those resources,” Reed said on this week’s Newsmakers. Reed is particularly hopeful because the panel’s new chairwoman is Susan Collins, the moderate Maine Republican with whom he’s had a long working relationship. “There’s no state in this union that doesn’t need better highways, better improvements, repairs – Rhode Island is no exception,” he said. “So I’ll hopefully be able to help.”
11. Do you know a regular citizen who’s shown “tenacity and bravery” in trying to obtain information from government agencies? Then you should nominate him or her for the New England First Amendment Coalition’s annual Orfield Citizenship Award. Tim White has all the details here.
12. Campaigns & Elections is out with its annual Reed Award nominees, and three Rhode Island political campaigns made the cut – with five of the six nominations for work done in Spanish. NGP VAN, the big Democratic consulting firm, got a nod for Gina Raimondo’s campaign website. Ohio’s Strategy Group Company got two nominations for the Spanish radio version of Allan Fung’s “American Dream” ad. And two consultants got nominated due to their work for Jorge Elorza: Propel Political, a division of Providence Journal parent GateHouse Media, for his Spanish-language online targeting efforts, and Solidarity Strategies, a Washington firm, for a Spanish-language mail piece critical of Buddy Cianci.
15. Don’t miss Bill Simmons on the twilight of the Brady/Belichick era.
16. Set your DVRs: This week on Newsmakers – U.S. Sen. Jack Reed and Congressman David Cicilline. Watch Sunday at 10 a.m. on Fox Providence. This week on Executive Suite – Brown University’s Marc Dunkelman, author of “The Vanishing Neighbor: The Transformation of American Community.” Watch Saturday at 10:30 p.m. or Sunday at 6 p.m. on myRITV (or Sunday at 6 a.m. on Fox). See you back here next Saturday morning.