SIGN UP: Get Nesi’s Notes by Email
1. Hurricane Jose wasn’t the only reason for storm clouds over the State House this week – a series of recent developments has darkened the state’s budget outlook. First there was the 2017-18 budget, belatedly enacted in August, which came with a built-in hole of $25 million that Governor Raimondo has to plug through still-unspecified savings. Then the State Budget Office released a new deficit projection for 2018-19 that pegs the gap at $237 million, the largest shortfall in a number of years – and that doesn’t include the “significant” penalty for overpayment of food stamps federal officials are warning about because of UHIP. Now comes word that in July, the first month of the new fiscal year, state revenue came in $11 million short of expectations despite a record job count and a booming stock market. Senate Finance Committee Chairman Bill Conley looked somber as he totaled it all up Thursday. “I know we’re going to have challenges both in the supplemental [budget] and in the new budget year,” Conley told me, adding: “I expect it to be a difficult year.” The numbers pose an obvious problem for the governor, not only as a manager who needs to find solutions but as a politician wanting to paint a positive picture when she runs for re-election. “A lot of that is because of choices we’re making,” Raimondo said on this week’s Newsmakers. “We’re choosing to eliminate the car tax. We chose to reduce unemployment insurance tax. We’re choosing to cut business taxes.” She pinned the weak revenue in large part on uncertainty caused by Washington’s tax reform debate, noting Massachusetts is also missing its forecasts, and cited statistics that show Rhode Island’s economic health improving. “I think our long-term picture is a whole lot better than it was, but we have to cut expenses. … We have to tighten our belts everywhere,” she said.
2. One of the bigger surprises of this week’s General Assembly cleanup session was Democratic leaders’ decision not to override Governor Raimondo’s veto of the municipal union contracts bill. The issue has become a game of chicken between the two chambers, with the Senate saying the House needs to vote first because Raimondo vetoed a House bill, but the House saying the Senate first needs to pass its own version and get that vetoed, too. (Got that straight?) While labor leaders are frustrated, teacher’s union chief Bob Walsh told me he hasn’t given up hope for an override. “Since there is the possibility that other bills may be vetoed by the governor, that other legislation could be passed during another special session before the end of the year, and vetoes can be overridden at any time before the next session of the Assembly is convened in January (including on the first day of that session before it is officially convened), the issue is still very much alive, especially considering the overwhelming support it received in both chambers,” Walsh said in an email. Asked about Walsh’s comments, a Senate spokesman reiterated that there will be no override unless the House votes. A House spokesman declined to comment, but there’s little indication Speaker Mattiello is inclined to call a vote.
3. The end of the legislative session is always a frantic time. A classic example: at 7:44 p.m. Tuesday, the House Corporations Committee posted notice that a vote had been scheduled for 7:45 – one minute later. The bill in question, sponsored by Rep. Stephen Ucci, is the same one mentioned in this space back on June 17 that would increase what insurers have to pay on rental cars; former state Sen. Christopher Maselli testified in favor of it. But House spokesman Larry Berman insisted the 60 seconds of notice was not a sign of last-minute shenanigans. “That was a bill that previously had been heard and debated by the committee at a public hearing in May, and then was debated on the House floor and passed in June,” he said. “The Senate amended it, so the committee decided to meet to hear about the change before it was brought to the floor for a second time. The bill had a long and public history.”
5. East Providence will elect a mayor for the first time ever next year, after voters approved a change in the structure of the city government. Two candidates – former state Rep. Bob DaSilva and Rhode Island Partnership for Home Care executive director Nicholas Oliver – have already announced plans to run. Another prominent EP pol is also considering jumping into the race: former state Rep. Helio Melo, who rose to the rank of House Finance chairman during 12 years in the Assembly before he retired last year. “I am seriously considering it,” Melo told me Friday. “I haven’t made a full decision on it as to whether or not I’m going to go through with it, but you know something, there’s still time. … There are a lot of things I need to weigh.” Melo said if he decides to run, he could make an announcement before the beginning of next year. Veteran East Providence Sen. Dan DaPonte is among those urging him to do it.
6. Senate Finance Chairman Bill Conley took some flack for his committee’s seven-hour opening hearing on the PawSox proposal, mainly because stadium supporters held the floor for the first four hours. “I take constructive criticism to heart,” Conley said. But he has no plans to make major changes for the five remaining PawSox hearings, the next of which is Tuesday night at Tolman High. “I think what’s happening is that people are so used to the one-and-done mindset that they didn’t realize that that was the very beginning of the process,” Conley said. “I think both the proponents and those against all felt the need to sort of get everything out on the table at the first hearing. And like a baseball season, this set of hearings is not a sprint, it’s a marathon. The Senate made a promise, we’re going to keep the promise – to be open, deliberative – and I think that people weren’t focused on the deliberative part.”
7. Want a job where you can make an impact? The Rhode Island Senate is looking for a new policy director. The position has been open since Marie Ganim left to become health-insurance commissioner.
8. United Technology Corp., the Connecticut-based Fortune 50 parent of Pratt & Whitney, has no presence in Rhode Island. So it was a surprise when CEO Gregory Hayes praised the state’s job-training efforts at a summit in New York this week. “There’s actually a great story here in the U.S., in Rhode Island, the smallest state in our country,” Hayes said. He went on to praise how the Raimondo administration’s Real Jobs Rhode Island program is being used by Electric Boat. “Every year, they’re going to have 500 welders come out of the community college because that’s how she keeps this business in her state,” Hayes said. “Those are the kind of public-private partnerships we need.” Asked how the state got on Hayes’ radar screen, Raimondo said she cold-called him earlier this year as part of an ongoing effort to reach out to Connecticut business leaders to encourage them to consider Rhode Island in light of the Nutmeg State’s fiscal mess. She said Hayes listened politely but noncommittally at the time, then called back a few weeks ago and scheduled a lunch to hear more of her pitch. Hayes’ company employs more than 200,000 workers, and 14,000 were in Connecticut as of 2015.
9. The long-awaited Wexford 195 groundbreaking will take place Monday morning, and Johnson & Johnson will indeed be one of the tenants.
SIGN UP: Get Nesi’s Notes by Email
10. Our weekly dispatch from WPRI.com’s Dan McGowan: “Rhode Island has formally submitted its plan for improving public schools to the U.S. Department of Education as is required under the Every Student Succeeds Act, the federal law that replaced No Child Left Behind. (If you haven’t heard ESSA, don’t worry; it’s not getting a lot of attention nationally either.) The two biggest things to keep an eye on in Rhode Island’s plan are the goals and the reform measures. The state is trying to hit 75% proficiency in math and English language arts by 2025, an ambitious goal considering the state isn’t even halfway there in math. Then again, most of the students who will be part of the 75% cohort haven’t entered school yet, so it’s probably too soon to say whether the state’s goal is realistic. When it comes to the state’s lowest-performing schools, the proposals are pretty similar to what Rhode Island has already been doing. Schools needing ‘comprehensive support and improvement’ will be identified beginning next year, and if they can’t raise achievement levels they’ll undergo some type of redesign that would dramatically change the way they’re managed. Judging by the way plans in other states – including Massachusetts – have been handled, it seems likely Education Secretary Betsy DeVos will approve Rhode Island’s proposal. The big question now is how much the Trump administration plans to spend helping states implement ESSA.”
11. Add Governor Raimondo to the list of Rhode Island Democrats warming to the idea of single-payer health insurance, which Bernie Sanders has been beating the drum for this month. “Look, what we have now doesn’t work,” Raimondo said on Newsmakers. “We spend way too much money on administration. There’s too many payers, and the payers have too much power in the system, and the level of coordination is poor, and all the money we spend on executive pay of insurance company execs and administrators – you know, I think in our health-care system now, in a particular hospital, it’s something like a dozen administrators for every doctor. So it doesn’t work. It’s not coordinated. And I do think moving to single-payer on a national level is the right answer.”
12. Speaking of health care, Senator Whitehouse left no doubt Friday about his feelings on the Graham-Cassidy Obamacare repeal bill currently before the Senate. “To me it’s like that movie scene where the dead zombie hand comes thrusting out of the dirt and the grave one more time,” Whitehouse told my colleague Eric Halperin. “I really can’t wait until this is done.” Among the Republicans running for governor and U.S. Senate next year, four did not respond to requests for comment Friday about whether they support the bill – Patricia Morgan, Allan Fung, Joe Trillo and Robert Flanders. U.S. Senate hopeful Bobby Nardolillo was the exception, saying in an email: “I’ve always felt strongly that returning the power to the states to decide what the best care would be for their citizens. Any workable health care plan will involve compromise, there isn’t a one size fits all approach. But no question, single payer coverage isn’t the answer. But as it stands the current formula doesn’t represent the best needs of my state. I wouldn’t be in support of the Graham-Cassidy bill until the formula is adjusted.”
13. Governor Raimondo got loads of national attention for her Monday announcement that more than $170,000 had been raised to pay for DACA recipients’ renewal fees before the program stops accepting applications early next month. But who actually provided the money? The lion’s share – $136,000 – came from The Rhode Island Foundation, whose CEO Neil Steinberg joined Raimondo at the announcement. United Way contributed another $14,850. And $20,000 was a grant from a local donor who wished to remain anonymous. “We’re very encouraged by this outpouring of support through so many different avenues and are hopeful it will continue beyond this critical period,” said John Willumsen-Friedman of the Center for Justice, which is helping to coordinate the effort.
14. Rhode Island’s ongoing tussles over expanding the supply of natural gas are unlikely to end anytime soon: ISO-NE, which operates the New England electric grid, estimates that natural gas now makes up 45% of the region’s generating capacity, and that amount is set to grow to 56% over the next decade.
15. Readers of Providence Monthly and its sister publications will notice some changes when the next editions hit doorsteps in the coming days and weeks. “We reduced the size somewhat but made them all gloss,” reports longtime publisher Barry Fain. The first new-style Providence Monthly and East Side Monthly issues arrived at the office Thursday, and Fain pronounced them “smashing.” And like any good proprietor, Fain offered this tease to drive you to your local newsstand: “Great support from advertisers – both Paolino Properties (2 pages) and Cornish (1 page) – celebrating with us as we give 20 interesting and unusual reasons why we’re so proud of Providence. With the closing of Benny’s, I think it’s something the collective psyche of the city and state could use right now.”
16. Dryvit is one of those Rhode Island companies that flies under the radar but keeps people employed – 85 full-time employees in Rhode Island currently, to be exact, among 350 total in North America. The 48-year-old West Warwick manufacturer makes insulation products, and is now rolling out a product called NewBrick with ads in The Wall Street Journal, The New York Times, the San Francisco Chronicle, the Dallas Morning News and other papers. Dryvit CEO Mike Murphy joined me on Executive Suite back in 2015.
17. Via the AP’s Michelle R. Smith, this amazing WPA film shows the devastating aftermath of the Hurricane of 1938.
18. A top Democratic pollster on the Clinton campaign’s 2016 “malpractice.”
21. Set your DVRs: This week on Newsmakers – Governor Raimondo. This week on Executive Suite – Amica Chairman, President and CEO Robert DiMuccio. 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.