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Do we really want to give Chafee the keys to EDC?
My take on the news
Lonnie Barham

GOVERNOR CHAFEE NEEDS LEARNER’S PERMIT: Governor Chafee is disturbed that bills are moving forward in both the House and the Senate that would reorganize state oversight of economic development. Both bills’ final versions would likely eliminate or overhaul the current Economic Development Corporation, which Chafee heads. Chafee declared that he now has his “hands on the steering wheel” at the EDC, a reference to his perceived lack of control during his early years in office because former governor Don Carcieri’s appointees dominated the board. Chafee says, “I want to be given the chance to drive.”  

Do Rhode Islanders really want Linc Chafee to have the keys to our economic development vehicle? His record on most economic issues is weak. From his failure to help 38 Studios succeed to his proposed sales tax hikes to his proposed pay increase for senior administrators, he has shown little mastery of how to “drive” our economy. A shining exception is his thus far unsuccessful proposal to lower the corporate income tax rate. At best, it appears our governor qualifies for a learner’s permit, not a full-fledged driver’s license for our economic clunker. Perhaps one of the bills in the General Assembly will give him that learner’s permit.     

 

UNION HIRES BIASED FUND INVESTIGATOR: The state’s largest public employees union, Council 94, AFSCME, has hired a “pension fund investigator” to look over General Treasurer Gina Raimondo’s shoulder to “make certain everything is going all right.” The problem: the investigator is none other than Edward “Ted” Siedle, the pension fund critic who has written articles that excoriate Raimondo for investing in hedge funds. Does anyone think Siedle can be at all objective? He has already made numerous derogatory statements about how our pension fund is managed. He can’t now come up with a different opinion without making himself look like a vacillating fool. The union wants the “investigation” to result in further criticism of Raimondo’s management; the union has ensured this result by hiring a clearly biased “investigator.” Let’s hope Rhode Islanders are smart enough to see through this subterfuge. 

 

TAVERAS FINDS OFFENSE IS GOOD DEFENSE: Providence Mayor Angel Taveras has announced that he wants the Providence Board of Investment Commissioners to explore alternative investments that would get the city’s pension investments out of the hedge fund market. Since he clearly plans to run for governor in 2014 and he sees the criticism being levied against General Treasurer Gina Raimondo for investing 15 percent of the state pension fund in hedges, Taveras is taking the offensive in hopes of defending his investment record. The fact is, his investment record is very similar to Raimondo’s.

Taveras chairs the city’s investment board. Since he became mayor in 2010, the board has increased from 12 percent to 19 percent the amount of pension money it invests in hedge funds. Isn’t it strange that what has looked like a good investment to Taveras for the past three years is suddenly a bad investment? It looks like Taveras is no different than any other politician; when the political winds shift, he bends – especially when his union supporters are busy fanning those winds.  

 

STATE AND UNION NEGOTIATIONS: The governor’s office and Rhode Island state employee unions have begun negotiations for a new labor contract. The unions are pushing for an across-the-board pay increase, using for justification the fact they have had no increase since 2011. With projected state revenue falling sharply by more than $50 million, the governor has no money for pay raises. The burning question: Do state employees deserve a pay raise when private businesses are still struggling and most of their employees who still have jobs haven’t had a raise in years?

State employees’ wages have increased 27 percent through across-the-board raises since 2002. That’s an average 2.5 percent raise every year, even during the economic disaster years when private employers were laying off workers and giving no pay increases to those lucky to retain their jobs. Coincidentally, the average annual inflation rate for the past 12 years is 2.5 percent. So, the unions will say they have had no actual pay increase since 2002. The taxpayers who fund state salaries, however, will point to the fact that state employees have been able to keep up with inflation while private employees have, for the most part, fallen behind.  

The answer to this dilemma seems obvious. State employees are holding their own against inflation while most other Rhode Islanders are not faring quite so well. State employees need to join their privately-employed neighbors and suffer through another year or two without raises. Otherwise, our economy may never recover. 

 

WARWICK MAYOR VS. COUNCIL: After the Warwick City Council approved several amendments to Mayor Scott Avedisian’s 2014 budget, amendments submitted by Councilor Joe Solomon that “cut some of the fat” from the city’s operating revenue and resulted in $435,000 shifted to the school department, Avedisian said he will not sign the budget because he will now have to transfer money between city departments to keep the city afloat.

What does the mayor think the school department will have to do to stay afloat? Does he worry about students at all? What exactly is fair about the city of Warwick increasing local taxes by $35 million in the past few years and awarding only about a half million of that to the school department?

Because it implemented major cost-cutting measures, the school department increased its health insurance costs by only $600,000 in the past nine years, while the city’s health insurance costs have skyrocketed by almost $10 million during the same timeframe. And the school department has been far better than the city at reducing its number of personnel. Yet, the city has kept $34.4 million of the increased tax revenue while giving the schools only $600,000. How can anyone say this is not cheating Warwick students?

Councilor Solomon unsuccessfully sought to delay budget approval so he could come up with “…more cost-cutting suggestions.” Councilor Steve Merolla summed up the shortchanging of the schools, “I don’t know how we on the municipal side, when we look at these numbers, can even look at ourselves in the mirror.”  

 

QUOTE OF THE WEEK: “Here’s how terrorism really works: Slaughter people on national TV, and watch a nation that prides itself on freedom as it shackles itself ... It’s as if a terrorist set off a dirty bomb that is slowly spreading tyranny instead of radiation ... It is time for patriots to reconsider the Patriot Act before the terrorists win.” Al Lewis, a columnist for the Wall Street Journal, speaking about the NSA’s pervasive surveillance of law-abiding Americans’ private lives.


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