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1. Americans woke up today under the leadership of President Trump for the first time. The pomp of Friday’s inauguration will be followed by mass protests, a vivid reminder of how divided the country is and how high the stakes appear to many. For Rhode Island leaders, the financial stakes are high, too. Federal money makes up 33% of the $9.3-billion budget Governor Raimondo just proposed, up from 28% the last time Republicans controlled both ends of Pennsylvania Avenue; one estimate of how much the state could lose under a GOP Medicaid overhaul ran to half a billion dollars. Raimondo’s budget has no contingency plans for such a major drop in federal spending, a decision Speaker Mattiello defended Thursday. “I’ve been saying that I think speculating about what may or may not happen in the future is probably not a productive use of our time,” he said. “You certainly could not address that in the budget right now without knowing what the federal government is going to do. We will see what they do and address it as it comes.” As Ross Douthat notes, one of the big questions now is who really ends up charting the course at the federal level, Trump or Paul Ryan. Trump isn’t a movement conservative, and he’s never seemed enthusiastic about the major spending cuts Ryan has proposed in the past. Yet he’s also appointed a quite conservative cabinet, and there’s pent-up demand from Republicans in Congress to enact the policies they couldn’t pass during the Obama years. The outlook is unusually uncertain.
3. Senate President Teresa Paiva Weed knows she faces an uphill battle politically as the most resistant of the state’s Big Three when it comes to tackling the car tax. The problem, she argued on this week’s Newsmakers, is that the issue is being looked at “in a vacuum.” While elected officials always like to cut taxes, Paiva Weed isn’t convinced lawmakers should use state money to replace all the revenue communities currently get from the tax. “We can’t simply reward those cities and towns that have high tax rates, or else maybe Newport or Middletown or Jamestown from my end of the state should have raised their car taxes high,” she said, adding: “I really am concerned about rewarding the cities and towns who have simply had a high tax rate, without any requirement for fiscal accountability.” She noted that municipalities are already receiving rising state aid thanks to the growing K-12 budget, the PILOT program, and the formula for relief for distressed communities. “It comes a point at which we have to say, we are funding these municipalities – what kind of strings, what kind of conditions are we putting on this money?” she said. “Are we just simply going to keep giving them money with the hope that they do the right thing?” Paiva Weed did suggest lawmakers should review the concerns raised by the ACLU related to how cars are valued for the tax, noting that those rules are set by state law.
4. Paiva Weed on her future: “At some point in time, even if I did decide two years from now not to run again, I feel very confident that we have a good strong Senate leadership team.”
5. We have three dispatches this week from WPRI.com’s Dan McGowan. Here’s the first: “Governor Raimondo’s top aides say her proposal to provide two years of free college tuition to new Rhode Island high school graduates has been met with favorable reviews, but it’s hardly going to be a slam dunk in the General Assembly. Start with the cost. Republicans, like House Minority Leader Patricia Morgan and Cranston Mayor Allan Fung, have quickly jumped on the projected $30-million price tag for the program once it’s fully implemented in the 2020-21 school year. Supporters say $30 million is a drop in the bucket with a $9.3-billion budget, but Raimondo’s staff is going to need to convince House Finance Committee members that this is a promise the state can keep 10 and 20 years down the line without letting the cost get out of hand. Then there’s the timing issue. Anyone with children who are currently of college age won’t benefit from the scholarship. While the argument is that the high school class of 2017 is natural cutoff point, no state lawmaker wants to return to their constituents with that explanation. And then there’s the merit factor. The scholarship requires students to maintain a 2.0 GPA, which has some critics suggesting is too low to give students much incentive to excel. Then again, there are worries that raising the GPA requirement could disproportionately affect low-income kids and limit the amount of advanced courses students take. The silver lining for the governor’s aides: if they can convince the General Assembly that the plan isn’t too expensive, the other concerns are more negotiable.”
6. And here’s item #2 from Dan McGowan: “It’s worth noting that the Brookings Institution has some additional concerns about free college tuition programs. In a paper published this week that focuses on New York Gov. Andrew Cuomo’s pledge to provide four years of tuition at state colleges to students whose families earn less than $125,000, Judith Scott-Clayton highlighted a study that suggests increasing institutional expenditures is a better way of improving outcomes than reducing the sticker price. Scott-Clayton recommends New York establish reasonable cost estimates for its program, lowering the $125,000 and increasing support for institutions as much as they increase support for students. Supporters of Rhode Island’s plan will note Raimondo’s proposal sets aside millions of dollars in its first two years for investments at the three public colleges while the program is being phased in, but there has been less talk about further investments once it’s at scale. By year four, the state is projecting nearly all of its $30 million will go directly toward scholarships.”
7. Governor Raimondo is calling her free college proposal Rhode Island’s Promise. There are similarly named programs in Pennsylvania and Connecticut: The Pittsburgh Promise was funded with $100 million from the nonprofit University of Pittsburgh Medical Center, while the New Haven Promise is funded by Yale University. Some lawmakers may look at those examples and wonder if Rhode Island’s tax-exempt colleges and hospitals should be contributing cash to fund Raimondo’s idea.
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8. And here’s item #3 from Dan McGowan: “The headlines focused on Governor Raimondo’s plan for higher education, but her proposed budget continues the state’s recent trend of increasing support for elementary and secondary education. The governor sets aside another $45 million in the school funding formula for cities and towns. (Note that 2018 will be the final year of exponential growth in the funding formula – which is already a cause for concern in some communities.) The urban districts are particularly pleased with the governor’s proposal to make permanent funding for English language learners (ELLs). State lawmakers approved one year of funding for ELLs last year, but some of the more conservative legislators were less willing to make the program permanent. The budgets also includes $200,000 for a Kindergarten entry profile, which is designed to help Kindergarten teachers better understand the strengths and weaknesses of their students. When those investments are combined with the already-approved expansion of Achievement First, Raimondo has a lot to brag about when it comes to her education priorities.”
9. What if, as expected, there’s more money available when lawmakers are finishing the budget come May? In her letter to lawmakers Thursday, Governor Raimondo offered seven suggestions for what they should do: increase K-12 funding for specific categories like special needs; increase the Earned Income Tax Credit again; drop her proposed “scoops” from quasi-public agencies; buy more voting equipment, including e-poll books; add funding for home visits to support young families; increase funding for quality incentives for child care providers; and give even bigger raises to care workers than the $11 million worth she already put forward.
10. A grim stat from IHS Markit: Rhode Islanders’ personal income growth is expected to rank dead last among the 50 states over the next eight quarters.
11. So far there have been three weeks in 2017, and so far two of those three weeks have seen a former Rhode Island lawmaker arrested. As one wag remarked, at this rate current lawmakers may have to build a new wing of the ACI just to house their incarcerated ex-colleagues. The cases have put Attorney General (and former Rep.) Peter Kilmartin front and center; he even showed up in person for the arraignment of John Carnevale. “Political corruption has a corrosive effect on our state. … Rhode Islanders have seen too much and are rightly tired of it,” Kilmartin said Friday. He also announced he will introduce, for a seventh time, a trio of bills targeting public corruption – one on crimes against the public trust, one on pay-to-play, and one to create a white-collar crime unit in his office. All three have died every year in the House and Senate Judiciary Committees – except in 2011, when then-House Speaker Gordon Fox of all people allowed passage of the white-collar crime bill.
12. Don’t forget: the Ray Gallison case is still unresolved, too.
13. Mike Stenhouse’s Rhode Island Center for Freedom and Prosperity doesn’t usually have much good to say about the state’s ruling Democrats, so it turned heads last week when the conservative group announced its support for Senate Judiciary Chairman Michael McCaffrey’s criminal justice reform bills, which died in the House in the waning hours of last year’s session. “Whether it is criminal justice reform, taxation, or education, if we are to improve our state’s dismal 48th place ranking in overall family prosperity, we must make helping families the focus of our public policy and private advocacy,” Stenhouse said. (He made the announcement during a Bryant University forum the center organized, attended by McCaffrey, where Governor Raimondo was criticized for providing tax breaks to specific businesses.) A right-left coalition for the criminal justice legislation could give the proposals a better chance at passage this year, since they also continue to have strong support from the governor, too.
14. Congratulations to Joe Baker, who recently retired after more than 30 years at the Newport Daily News, many of them as a fixture at the State House. Senate President Paiva Weed sponsored a Senate resolution in Baker’s honor that passed this week, hailing him for his “eloquent and informative journalism.” Well put. Best wishes to Joe and his wife, Patricia.
15. An improving economy, yet Rhode Island is building fewer homes.
16. Ouch – Westerly’s Ocean House hotel got a brutal review in Barron’s.
18. A group of Nobel laureates have ideas for improving the U.S. economy.
20. Set your DVRs: This week on Newsmakers – Senate President M. Teresa Paiva Weed. Watch Sunday at 5:30 a.m. on WPRI 12 or 10 a.m. on Fox Providence. This week on Executive Suite – WaterRower President and CEO Peter King; Greycork founder and CEO John Humphrey. 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.
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