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1. The dramatic swings on Wall Street this week have refocused attention on the fact that the current economic recovery, now the third-longest on record, will someday end with a new recession. Most analysts seem to doubt that day is upon us: corporate earnings are robust, job growth is steady, wages are rising. But how prepared is Rhode Island’s state government for when the inevitable downturn arrives? Evan Horowitz recently noted in The Boston Globe, “At this stage of an economic recovery – with statewide unemployment under 4% and tax collections beating expectations – Massachusetts should be running a significant budget surplus.” Though the economy isn’t as strong in Rhode Island as in Massachusetts, the same point holds: at $204 million, the state’s projected deficit for 2018-19 is actually the largest in at least five years. If that’s the shortfall in a good economy, how big will it get in a bad one? A recent stress test by Moody’s found that depending on the severity of the recession, the “fiscal shock” to Rhode Island’s budget could range from $385 million to as high as $614 million. To put those numbers in perspective, the state only has about $200 million in its rainy-day fund. Moody’s said its findings are a warning to policymakers: “Continuation of current policies in many states risks a repeat of the lackluster recovery that followed the Great Recession and is not conducive to long-term economic growth.”
2. That budget gap could grow if state workers win raises in their new contracts.
3. Democratic Congressman David Cicilline plans to kick off his re-election campaign March 11 with a fundraiser at the Providence Biltmore headlined by the other three members of the delegation. (Tickets will start at $150.) Cicilline has no announced opponents for re-election – though the filing deadline is still nearly five months away – and he had nearly $1.1 million in his campaign account at the end of last year. On the western side of the state, Democratic Congressman Jim Langevin also says he’ll seek another term in November, and he had $868,000 in his campaign account on Dec. 31. Langevin represents the more conservative of the two House districts, and he has at least one opponent already – Republican Sal Caiozzo, who’s been sending a steady steam of news releases criticizing the incumbent. Caiozzo has not filed any campaign-finance reports yet, but told me he’s received “tremendous” feedback from voters. (Don’t forget: this could be the penultimate election before one of the two House seats disappears.)
4. David Cicilline was also the lone member of Rhode Island’s congressional delegation to vote against the bipartisan budget deal that passed Thursday night, though his cross-border colleague Joe Kennedy III joined him in opposition. Cicilline said the bill “did not strike the right balance” between military and domestic spending, and noted Speaker Ryan has not committed to a DACA vote. Sheldon Whitehouse, by contrast, declared the deal “a win for Rhode Island,” saying it will boost spending in areas such as opioid treatment, infrastructure and medical research.
5. State Sen. Nick Kettle is still weighing his political future after last month’s still-murky revelation that he is the subject of a state police investigation, apparently involving a dispute with a former significant other. “I’m just taking it one day at a time,” the Coventry Republican told me Tuesday. He said he will make a decision about whether to seek re-election in Senate District 21 down the road after talking it over with his family. Kettle declined to offer any new insight into the investigation itself.
6. Nellie Gorbea wants to move Rhode Island’s primary to August.
7. Our weekly dispatch from WPRI.com’s Dan McGowan: “There’s a good chance you heard about Mayor Elorza’s State of the City address on Tuesday, but close to 1,000 protesters made it so there’s little chance you actually heard very much of the 3,400-word speech. So what does Elorza see as the top accomplishments of his first term in office? Despite a contract dispute with teachers, he highlighted some of the smaller changes he’s made – hiring school culture coordinators and implementing a culturally-responsive curriculum – to improve the school climate while also touting a plan to borrow hundreds of millions of dollars for school repairs over the next decade. On the public safety front, he praised the acting Rescue Chief Zach Kenyon for leading the effort to open safe stations for drug addicts before singling out Col. Hugh Clements as the ‘best police chief I’ve ever known.’ And he again pledged to find a ‘once-and-for-all solution’ to the city’s billion-dollar pension problem. All in all, it was exactly the type of speech one would expect a mayor running for re-election to deliver: highlight the good, promise to fix the bad. What’s unclear is how the mayor is going to handle the teachers, who surprised him and his staff with such a forceful showing Tuesday. He fired back with a request for a ‘transformational contract,’ but he has offered few details about what that actually means. Don’t expect union members to budge much. Remember, they have an election later this year too.”
8. Also from Dan McGowan, don’t miss his must-read explainer on the current state of Providence’s finances.
9. Quite a week for Providence Democratic City Committee Chairman Patrick Ward. On Monday, he announced a novel fundraising arrangement with Governor Raimondo’s campaign that drew criticism from Republicans. By Friday, he had resigned.
10. Rhode Island’s General Assembly contains so many Democrats that the party label isn’t a very good guide to where a lawmaker falls on the political spectrum, with the caucus ranging from Edie Ajello and Aaron Regunberg on the left to Doc Corvese and Jared Nunes on the right. So how many of the House’s 64 Democrats lean progressive? One good proxy is the number who sign onto the “Fair Shot Agenda” legislative package – this year it has 33 co-sponsors, or slightly more than half the Democratic caucus. (The highest-ranking Democrat to sign on: Deputy Majority Whip Chris Blazejewski.) This year’s package calls for “a budget that protects our neighbors,” a big school-repairs bond, a $15 minimum wage by 2023, and improvements to long-term care and lower prescription prices.
11. Former Rhode Island Republican Party Chairman Mark Smiley is looking to revive the Rhode Island Republican Assembly, a dormant group that aims to be the home for conservatives in the party. Smiley is holding a meeting at state GOP headquarters today to gauge interest in the idea. “There needs to be a group that says, we’re conservatives and we want to talk to conservative candidates and we want to put money into their campaigns and that sort of thing,” he said. “Whereas the party’s going to support everybody across the board.” The group’s sister organization in Massachusetts has been a thorn in the side of Republican Gov. Charlie Baker, and Smiley acknowledged RIRA’s relationship with the state party in Rhode Island also used to be “very belligerent.” But he said that’s not the plan this time. “The whole ‘we’re going to take over the party, we’re going to fight everybody’ – there’s no reason for that,” said Smiley, who’s backing Allan Fung for governor.
12. Care New England President and CEO Dr. James Fanale is this week’s guest on Newsmakers, where he responds to questions about his proposed merger with Partners HealthCare from Brown University’s president and other critics. Fanale said he hopes a final deal with Partners will be inked within 60 to 90 days, which will then kick off the regulatory review process. But while he expressed confidence the Partners transaction will be approved, he downplayed the impact on Care New England if it isn’t. “We are better than breakeven. We’ll continue that performance throughout the year,” Fanale said. “If for some reason the deal didn’t happen – and we feel very strongly it will – we’re going to be OK.”
13. The departure of CVS executive Helena Foulkes is a noteworthy development, not only because she was widely seen as a potential successor to CEO Larry Merlo but because it removes a Rhode Island native with deep local ties from the company’s senior leadership. Separately this week, CVS announced its annual revenue now totals nearly $185 billion.
14. Brown University’s most eminent historian, Gordon Wood, was The Wall Street Journal’s Weekend Interview subject last week. “History is consoling,” the 84-year-old says, because it “takes you off the roller-coaster of emotions that this is the best of times or the worst of times.”
15. What a great quote from Super Bowl MVP Nick Foles (via ProFootballTalk): “I think the big thing is don’t be afraid to fail. I think in our society today — Instagram and Twitter — it’s a highlight reel. It’s all the good things, and then when you look at it, you think like, ‘Wow.’ When you have a rough day or your life’s not as good as that, you’re failing. Failure’s a part of life. That’s a part of building character and growing. Like without failure, who would you be? I wouldn’t be up here if I hadn’t fallen thousands of times, made mistakes. We all are human. We all have weaknesses. And I think throughout this, just being able to share that and be transparent, I know when I listen to people speak and they share their weaknesses, I’m listening, because I can resonate. So I’m not perfect. I’m not Superman. I might be in the NFL, and we might’ve just won the Super Bowl, but hey, we still have daily struggles. I still have daily struggles. But that’s where my faith comes in; that’s where my family comes in. And I think when you look at a struggle in your life, just know that that’s just an opportunity for your character to grow.”
16. Also on the topic of sports and perseverance, loved this tweet from departing Projo Red Sox beat writer Tim Britton: “I am forever grateful to @mikemcdermott76 for taking a shot on a 24-year-old with no experience in New England to cover the Red Sox. It was the 96th job I’d applied to over 14 months, and it was SO much better than the other 95. (I was about to start working 2 am to 10 am overnight shifts for MLB.)”
19. Set your DVRs: This week on Newsmakers – Care New England President and CEO Dr. James Fanale; a roundtable on health care with RIPR’s Lynn Arditi. This week on Executive Suite – Pat Sabatino and Dan Reilly of the Rhode Island Coalition of Entrepreneurs. 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.