Nesi’s Notes: Dec. 23

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. In Rhode Island, the political battle lines on the new tax law are clear: Republicans mostly like it, Democrats definitely don’t. While the measure’s poll numbers are currently mixed at best, supporters say they think that will change once its provisions start to go into effect next year. For now, multiple companies have quickly announced special employee bonuses since the bill’s passage. So what do Rhode Island’s biggest employers have to say? CVS Health cited comments last month by its CFO, David Denton, who told investors that lower taxes would allow for “a lot of investments that we think we can make that can more rapidly expand our business model across the country.” The Woonsocket company has long paid more than many big companies because of its domestic-focused operations; in fact, CVS estimates it paid nearly 1% of all corporate taxes paid in the U.S. last year. Citizens Bank’s CEO also expressed optimism about the tax changes in a recent interview with American Banker. Most other major local employers said they had no comment on the tax law, but one that did was Amica Mutual Insurance. “Predominantly most of the existing industry tax requirements were maintained, and the current maximum tax rate was changed to a rate that is now competitive with most other industrialized nations,” Amica spokesman Brendan Dowding reports. “For Amica, a lower tax rate will support our continued capital investments in technology and help fund our growth initiatives, which we expect will create job growth within our company.”

2. Will Rhode Island have only one congressman after 2022?

3. One story likely to keep making headlines in 2018 is the crisis over the St. Joseph’s (Fatima Hospital) pension plan. The plan was severed from the hospital in a 2014 transaction, leaving it with no source of revenue, and now its thousands of members are facing the possibility of deep cuts in their benefits. The court-appointed receiver, Stephen Del Sesto, says he is holding off on those cuts until February as he and Max Wistow, a special counsel, investigate what went wrong; the two sides were back in court this week. The Catholic Church created the pension plan and ran Fatima until it merged with other entities over the last decade, but Bishop Tobin insists the Providence diocese bears no responsibility. “The church did not cause this, and there is nothing the church can do to fix this,” Tobin said on this week’s Newsmakers, blaming “fake news” for pensioners’ frustration with the diocese. One of Tobin’s top aides continues to serve on the board of the corporation that oversees the pension plan, but Tobin suggested that individual’s role is limited to religious matters, not fiduciary ones. Tobin’s comments so far have failed to mollify pensioners or the nurses union, which is running tough radio ads criticizing him over the situation. This could be in the courts for a while.

4. David Cruise, the former state senator who is one of Governor Raimondo’s most influential aides, confirmed Friday he’s leaving his job as her senior adviser. Cruise will start as counsel at the law firm Nixon Peabody LLP in February.

5. Our weekly dispatch from WPRI.com’s Dan McGowan: “The stalemate over who should be Providence City Council president was finally broken this week when Councilman David Salvatore put together – and then held for 72 hours – the eight votes he needed to grab the gavel. So how did it happen and can his leadership team work? Salvatore always had about five votes in his pocket, but he struggled for months to find the remaining three. At the same time, acting President Sabina Matos never came close to hitting her magic number to become the permanent leader either. Then there was Councilman John Igliozzi, who appeared content with remaining Finance Committee chairman and having Matos finish the term as acting president. But something changed in Igliozzi recently and he agreed to back Salvatore – and bring Councilors Terry Hassett and Jo-Ann Ryan with him – in exchange for becoming majority leader. It’s unclear why Igliozzi had a change of heart, but don’t underestimate a few factors: he’s been a deal-maker for his entire career and this was the best offer, even if he doesn’t get along with Salvatore. Matos also angered some councilors – including Igliozzi – when she publicly called for attorney and lobbyist Nicholas Hemond to resign as president of the school board because he has represented a troubled club in front of the Providence Board of Licenses. Many of them consider Hemond a friend and thought Matos was overreaching. As for the outlook for the next year, Salvatore is considered a smart and ethical guy who enjoys a policy conversation just as much as he likes talking politics. He has a strong relationship with Michael Solomon, who served as council president and is now a top aide to Mayor Elorza. That should result in more trust between the second and third floors in City Hall. He also needs next year to go well in order to remain president in 2019, so it would be surprising to see him clash with members of his own team – even Igliozzi. But he needs to improve his relationship with the six councilors who did not support his presidency. Part of that happens through deal making. But he also needs to show the black and Hispanic members of the council that he’s as serious about helping their neighborhoods as he claims to be. Elorza is fond of saying ‘change happens at the speed of trust.’ Salvatore may want to take that to heart.”

6. Mazel tov to Mayor Elorza and Stephanie Gonzalez.

7. Remember Buddy Cianci’s old house at 33 Power Street on the East Side? You can now rent it for $7,500 a month.

8. Rhode Island’s unemployment rate was 4.3% in November, up a tick from the prior month but down from 5% a year earlier. Arguably, though, what a 4.3% jobless rate says about the population has changed. When the unemployment rate was 4.3% back in 1989, 68% of Rhode Islanders ages 16 and older were in the workforce and 65.1% were employed. When it was 4.3% in 2001, 66.6% were in the workforce and 63.7% were employed. Today’s 4.3% represents only 64.4% workforce participation and 61.6% employed. Some of that is likely attributable to demographics, since the state population is continuing to get older. But even when you zero in only on Rhode Islanders ages 25 to 54, the share who have a job was only 75.6% as of the middle of this year, down from 79% a decade ago – and the unemployment rate was actually higher then.

9. LinkedIn data shows the Providence and Hartford regions losing workers faster than any other major metropolitan areas in the country. Providence ranked first in the nation for net outflows in January, with Hartford No. 2, but as of last month they had switched places. (Note that “Providence” in this case would encompass all of Rhode Island as well as part of Southeastern Massachusetts.) On the plus side, LinkedIn says Providence’s net outflows have fallen 19% since the start of the year, while Hartford’s have grown 5%.

10. Rhode Island’s increasingly crowded 2018 gubernatorial field has raised the prospect that the state could once again wind up with a leader who received less than 50% of the vote. House Republican Whip Blake Filippi thinks he has the answer. Filippi said this week he plans to reintroduce legislation to amend the state constitution and establish a system of instant runoff voting in Rhode Island. How it works: instead of choosing one candidate on the ballot as you do currently, a voter would mark their first and second choices. “If a voter’s first-choice candidate is not among the initial top two vote earners, their vote in the runoff will be cast for their second choice,” Filippi explains.

11. Rhode Islanders and visitors apparently did a lot of dining out this summer: the Department of Revenue reports tax revenue from meal and beverage sales was up more than 10% from July through September compared with last year, totaling $8.7 million.

12. Vishal Khetpal, a Brown medical student, makes the case in Slate that the CVS-Aetna merger could help the country make better use of pharmacists.

13. The Miriam Hospital is feeling the effects of Memorial’s closure.

14. Uh oh: “Working while receiving e-mails and phone calls reduces a worker’s IQ by about 10 points relative to working uninterrupted.”

15. A beautiful story of love, loss and resilience.

16. What message is Bob Dylan sending with his holiday lights?

17. The history of Nat King Cole and “The Christmas Song.”

18. And finally, a personal reflection on Christmas Week by yours truly. I wish all of you and your families a very happy holiday!

19. Set your DVRs: This week on NewsmakersBishop Tobin. This week on Executive Suite – Wheaton College President Dennis Hanno. 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 and Facebook

An earlier version of this post inverted Rhode Island’s current workforce participation and employment-to-population statistics.