Nesi’s Notes: Jan. 7

The Saturday Morning Post | Quick hits on politics and more in RI

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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.

1. Relationships matter in politics, so it’s no surprise talk of a rift between Governor Raimondo and Speaker Mattiello has been getting some attention. The chatter picked up after Tuesday’s swearing-in ceremonies, when Raimondo spoke to the Senate from the rostrum but didn’t address the House, leading to some back-and-forth between their spokesmen in the Journal. On this week’s Newsmakers, however, Mattiello maintained that talk of a deterioration in their relationship is “false.” He went on, “The governor and I have a fine relationship – we don’t always agree, and that’s good for the system.” Joe Shekarchi, who has close ties to both and joined Mattiello on the show, attributed the speculation to “a media frenzy.” Tension between the two most powerful individuals on Smith Hill is almost inevitable, perhaps even more so when they belong to the same party, and Mattiello and Raimondo have never had a warm personal bond. (Among other flashpoints, his team is unhappy one of her closest political allies worked to unseat Cale Keable last fall, while hers was frustrated by his actions on truck tolls.) Yet they’ve also managed to work together on some major policy initiatives, notably two budgets and the toll law, so substantively it may not matter much if they never become Ronald Reagan and Tip O’Neill. Keep an eye on the dynamic between them as the new General Assembly session unfolds.

2. Speaker Mattiello doesn’t have much time for critics of his vision for phasing out the car tax. “Do I expect this to be easy? No,” he said on Newsmakers. “A lot of folks want to say no, and there’s probably 1,000 good reasons to say no,” he added. “But there’s really a great reason to say yes and to get it done, and that’s to be fair to our constituents.” Mattiello’s vision is straightforward: take the roughly $215 million municipalities currently collect in car taxes, divide it into five increments of roughly $40 million, and replace all the local revenue lost with state money in chunks over five years. “Every municipality is going to collect exactly what they are today,” he said. One huge challenge is the fact that budget deficits are projected to grow, not fall, over that period. The shortfall in 2020-21 is currently pegged at roughly $300 million – add the car tax phaseout and it jumps to roughly $460 million. Mattiello said he’s banking on economic growth to cover that gap, which isn’t out of the question but is optimistic to say the least. Senate President Teresa Paiva Weed has also pointed out municipalities with higher car taxes will get more benefit from the new phaseout program than those who’ve managed to hold them down. Mattiello dismissed that as well, saying: “Some communities have higher tax rates, but that was in effect the last time we tried to phase it out, and I’m pretty sure the Senate president was in the Senate at that time.” He added: “It was designed poorly from the very beginning, so the solution’s not going to be perfect.” Governor Raimondo will likely include some new policy on the car tax in her budget proposal later this month, but it may not be what Mattiello has laid out.

3. Another reason to keep an eye on the fiscal ball when it comes to the car tax debate – it’s not the only tax cut Speaker Mattiello is pushing this year. His opening address also called for additional increases in the tax exemptions for retirement income and estates.

4. Roger Williams University tried to advance the cause of driver’s licenses for undocumented immigrants this week with a study laying out what its experts say are the upsides of such a policy. But advocates clearly have a long way to go before to get traction in the General Assembly. Speaker Mattiello, who campaigned on his opposition to licenses last fall, argues his position is no outlier in the House, saying representatives “overwhelmingly” want him to “stay away from the issue” and the votes aren’t there even if he brought a bill to the floor and voted against it himself. “If you polled that room today, absolutely – overwhelmingly – it would not have the votes, and that’s because the representation in the House, and the Senate for that matter, reflects the will of the people of the state of Rhode Island,” Mattiello said on Newsmakers. Majority Leader Joe Shekarchi also noted that the incoming Trump administration is set to take a much tougher line on immigration, further complicating the situation. Advocates of licenses may be facing the same dynamic as with same-sex marriage a few years ago, when legislative leaders weren’t willing to call a vote until a grassroots campaign had won over their rank-and-file, in part by organizing in their districts.

5. Speaking of licenses, here’s why all the new ones say “UNK” for hair color.

6. It’s now been a full decade since the Republican Party controlled at least 20 seats in the General Assembly, with this year’s GOP contingent of 16 being the third-smallest in modern history. (There are 97 Democrats.) The new House minority leader, Patricia Morgan, will play a prominent role in deciding how legislative Republicans position themselves over the next two years. The West Warwick lawmaker is up for the challenge, but she also thinks some of the commentary about her so far has been off the mark. “People keep calling me a bomb-thrower – I’m not a bomb-thrower,” Morgan told me Tuesday. “I am feisty. I am going to strongly advocate for things that Republicans believe will move our state forward. I’m not here to say ‘yes’ – right? – if I don’t believe that that’s the best path for Rhode Island to go down.” She continued, “I think there will be contrast. I think it’s inevitable. Rhode Island’s just got to approach government from a different perspective. We think that sometimes government is fine, but too much government hurts. And when you have 340,000 Rhode Islanders receiving welfare benefits, something is broken here. We’re not that prosperous state that has opportunities for all of our graduates. … Rhode Island needs to be better.”

7. Former Rep. John Carnevale, laying the groundwork for a comeback?

8. Annie Lowrey has a smart Atlantic piece looking at how regional economies are diverging even as statistics show a national-level recovery, with big winners like San Francisco or Boston and other places lagging behind. You can see the evidence locally – Boston ranked in the top half of large metro areas for job growth over the past year, while Providence ranked in the bottom third. No surprise, then, that leaders in places like Rhode Island are hoping to replicate the success of the hot spots. But it’s no sure thing. Noted economist Enrico Moretti warned three years ago, “I haven’t found one example of an innovation hub in the U.S. that has been created by deliberate policy that says, ‘We’re going to create an innovation hub here.’ … Picking the next big thing is very hard for the venture capitalist. It’s virtually impossible for the government worker.”

9. Peter Kilmartin and Cale Keable spar over increasing DUI penalties.

10. Our weekly dispatch from WPRI.com’s Dan McGowan: “We now know which lawmakers will be asked to carry the city’s water at the State House this year. The Providence delegation in the General Assembly decided to keep Rep. Joe Almeida as a co-chair and replace former Rep. John Carnevale with Reps. Edith Ajello and Ray Hull. The triumvirate represents three very different parts of the city – Almeida on the South Side, Ajello on the East Side and Hull in Mount Pleasant – but none are seen as especially close friends of Mayor Elorza. Hull, who made a late push to become a co-chair, is even seen as a possible challenger to Elorza in 2018. It will be worth watching to see if the group can agree on policy initiatives that would benefit the city. For example, if the city continues pushing for more school funding because of the Achievement First expansion, Hull, one of the most vocal school choice supporters in the House, may stand in Elorza’s way. For his part, the mayor is again trying to make inroads with other local lawmakers, particularly in the Senate. Without former House Majority Leader John DeSimone not around to help the city, look for Elorza to try build a relationship with Senate Majority Leader Dominick Ruggerio.”

11. Dan McGowan has a deep dive into how the fire union dispute got resolved.

12. Enrollment in private insurance plans sold through HealthSource RI is down considerably versus a year ago. The agency says 22,000 people paid for a January premium as of Dec. 31, down from 27,000 a year earlier, a drop of almost 20%. Spokeswoman Kyrie Perry cites Rhode Island’s declining uninsured rate and a decrease in auto-enrollment because of eligibility changes and UnitedHealthcare’s departure from the marketplace. (HealthSource also refused to sell two low-cost plans Neighborhood wanted to offer.) The reduced sign-ups mean there could be fewer people to share the cost of running HealthSource RI, which is paid by a 3.5% fee based on total enrollment and average premium, depending on how the rest of open enrollment goes before it ends Jan. 31.

13. Meanwhile, HealthSource RI’s entire future is up in the air as Republicans in Congress push Obamacare repeal, though some conservative wonks are warning about the perils of a “repeal and delay” strategy. (And while we’re talking federal health policy, other wonks are warning Rhode Island could lose a massive amount of Medicaid funding.)

14. Anyone who’s followed some of the high-profile litigation involving Rhode Island government in recent years – the pension challenges, the 38 Studios civil suit, the Providence firefighters dispute – has probably noticed the aggressive efforts by judges to settle those cases without going to a trial. James Ruggieri, a partner at the law firm Higgins, Cavanagh & Cooney and member of the Roger Williams law school board, says that’s part of a broader change over the past quarter-century in how litigation is conducted in Rhode Island, thanks to the rise of alternative dispute resolution (think mediation or arbitration). Attorneys were initially very reluctant to go along, as “defense lawyers worried about tipping our hand,” Ruggieri said on this week’s Executive Suite. Now, though, he thinks it’s a great development. “The longer a case stays open, the more it costs,” he noted. “So that’s a really big change in just the way litigation is handled as opposed to, say, 15 or 20 years ago.”

15. A wild tale from Tim White: one of the Wyatt escapee’s fellow prisoners used a similar method to escape 20 years earlier.

16. Maine’s new speaker of the House, Sara Gideon, is a Rhode Island native who got her start in politics interning for the late Claiborne Pell.

17. Why were some of the state polls so wrong in 2016?

18. Some former proponents have second thoughts on the rise of 401(k)s.

19. The 20 most commonly misused words in the English language.

20. A nurse reveals the top five regrets people express on their deathbeds.

21. I’ll be out of town next week, so this column will be left in the very capable hands of Dan McGowan. I’ll be back the following week, when the governor is scheduled to deliver her State of the State speech (Jan. 17) and release her proposed 2017-18 budget (Jan. 19).

22. Set your DVRs: This week on Newsmakers – House Speaker Nicholas Mattiello and House Majority Leader Joe Shekarchi. This week on Executive Suite – Virgin Pulse executives David Osborne and Rajiv Kumar; attorneys James Ruggieri and Jame Hornstein of Higgins, Cavanagh . Watch Saturday at 10:30 p.m. or Sunday at 8 p.m. on myRITV (or Sunday at 6 a.m. on Fox). Catch both shows back-to-back on your radio Sundays at 6 p.m. on WPRO-AM 630 and WEAN-FM 99.7. And you can subscribe to both shows as iTunes podcasts – click here for Executive Suite and click here for Newsmakers. See you back here next Saturday morning.

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He writes Nesi’s Notes on Saturdays and hosts Executive Suite. Follow him on Twitter, Facebook and Instagram

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