Economic Development

October 26, 2016

Providence’s parkway proposal: the essence of community development

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Please join me in giving a round of applause to Mayor Elorza and the Providence Department of Planning and Development for their hard work and due diligence every step of the way during the 6/10 Connector’s community engagement process.

The city has been extremely transparent and open, taking the public’s input into consideration while drafting their design for the future of the 6/10 Connector. It is reassuring to know that the mayor and the planning department are actively listening to the needs and wants of the community. By taking a bottom-up approach, the City of Providence is conveying that its interests align with that of its communities, and appreciates the ideas and solutions that its residents bring to the table. Who else knows what’s best for the City of Providence other than the residents that live, work, and thrive here.

On Monday, October 3, the City released their draft plans for the future of the 6/10 Corridor at a public forum held at the Doorley Jr. Municipal Building in downtown Providence. While the City’s plans do not call for a surface boulevard that I and other community members would have liked to see presented, I can tolerate the parkway design. The parkway concept addresses the concerns of both sides about the looming question, “What should the future of the 6/10 Connector look like?” The plan addresses the need to fast-track the reconstruction of the structurally deficient Huntington Viaduct, out of concern that the structure might collapse. The plan appeases auto-interests as well as those citizens who want to see a concept that is more pedestrian and bike friendly, although we would much prefer a pure boulevard instead of a parkway.

The proposed parkway plan frees up land for development (approximately 50 acres), expands the footprint of DePasquale Square, adds two new off-street bike paths, creates a new exit to West Exchange Street, adds additional connections to the existing street grid, and reconnects parts of Olneyville to the urban fabric of Providence, among other things as well. The proposed “halo” elevated rotary where Route 6 merges with Route 10 allows for the potential to incorporate boulevard elements into sections of the route further down the line. While the entire length of the 6/10 Connector isn’t the pure boulevard that many of us had envisioned, the two-phased parkway plan allows the City and State to revisit the compelling arguments made in favor of an intermodal boulevard.

The most important aspect of the plan isn’t the plan itself. Rather, it is culmination of everything that has led to the plan being drafted in the first place. It is the countless hours spent by engaged citizens, who took it upon themselves to get involved, speak out, and voice their opinions about the project; citizens who persevered even when things weren’t going their way because they knew that this is a critical, once-in-a-lifetime opportunity to turn the 6/10 Connector into something truly special. Without vocal citizens and lots of vigorous discussions, RIDOT would probably have elected to refurbish the highway a long time ago, and that wouldn’t have worked for motorists, bicyclists, pedestrians, and city residents alike.

The future of the 6/10 Connector will single-handedly change the physical, social, and economic makeup of the city for generations to come. It is up to us as citizens to decide whether or not we want to make Providence a more livable community for our children, our children’s children, and ourselves. Or, if we want to sit idle, content with the current economic conditions in our Capital City. The choice is ours. RIDOT has the final say about the project’s design, and I strongly encourage my fellow Rhode Islanders to continue to be actively involved in the process, and vocal about the future we envision for a livable, thriving city for decades to come.

October 18, 2016October 24, 2016

David Dooley on why RI should invest in URI this election

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There are two University of Rhode Island projects that would benefit if voters pass Question 4 on the statewide ballot this November.

One is a $25.5 million upgrade to Bliss Hall, a prominent classroom building on the Quadrangle at the center of campus that was built in 1929, and “hasn’t really been renovated since then,” said URI President David Dooley in a recent interview with RI Future.

“The exterior will look exactly the same except the air conditioners won’t be sticking out the window any more because we will have state-of-the-art HVAC,” Dooley explained, “and there will be an addition on the back facing all the new engineering construction that will be going on behind Bliss Hall starting next year.”

The Bliss Hall renovation is part of an overall $150 million project, started under Governor Chafee, to upgrade the engineering program and its facilities, which Dooley described as a major area of growth at URI.

“We know it is one of our fastest growing colleges,” he said, noting there are more than 30 local businesses started by graduates of URI’s engineering school. “We know that every year we have more applications to the College of Engineering than we did the year before. We know we can’t accommodate all the qualified applicants that want to come here to become engineers.”

The second part of Question 4 would direct $20 million to fund “innovation campuses” – or partnerships with the private sector.

“We want to do things that broadly build a robust and successful economy in this state and in the nation,” Dooley told me. “I do think we know enough about the importance of innovation and growing the American economy and keeping America competitive in an increasingly competitive global economy and we know enough about how innovation can fuel not just economic prosperity but also enhance the social fabric of the state and the nation to know that these kind of centers – which are well-precedented, and there are a wealth of success stories out there – can work, can be a magnate for investment in Rhode Island and can attract new talent into Rhode Island as well as create a wealth of new opportunities for the Rhode Islanders that are already here.”

Companies would apply in a public process, that has yet to be defined, and provide matching funds. The $20 million could go to several companies, or just one. “We know that they are going be selected on the basis of what looks like a good return on Rhode Island’s investment in terms of new jobs, new businesses and economic growth,” Dooley said. “How those get translated into very specific points is yet yet to be determined. We certainly expect to play a role in that because we think we have a lot of expertise to share in those areas.”

URI already has such partnerships with companies such as Amgen, Hasbro, Ratheon and Schneider Electric.

“We’ve already got some examples of companies that have come to Rhode Island specifically because they wanted to work closely with URI,” Dooley said, mentioning Navatek in Wakefield. “They are a Hawaii-based company. They opened up their second office right here in proximity to URI just so they could work with URI faculty and students on ocean engineering.”

Dooley said he was comfortable, both professionally and personally, if a defense contractor started an innovation campus with URI.

“To a degree, I can be comfortable with that because I do think we have a responsibility as the world’s leading democracy to provide leadership and in our 21st Century world that continues to mean that in addition to all the robust diplomatic efforts you can mount, you have to have the military capability to say this is what needs to happen or to intervene, if necessary,” he said. “That’s how I think about it individually, as the president I think about it as our responsibility is really to serve all the people of Rhode Island and therefore that includes individuals who are working in the defense industry here in Rhode Island.”

Dooley said he doesn’t worry that the matching funds will incentivize the university to educate for the market, rather than for enlightenment. He said URI’s general education requirements guarantee that can’t happen.

“It is the kind of investment that I think Rhode Island needs to continue to make in order to build not just an economy but a society that is robust and vibrant,” he said. “It’s about driving education, driving research forward and driving innovation. Because that nexus of innovation, the research, development transfer component of innovation been such a source of growth for the American economy ever since World War II, frankly.”

October 15, 2016

Millions in tax credits earn Pawtucket’s Hope Artiste Village a protest

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David Norton one of the leaders of the coalition that fought to keep the PawSox in Pawtucket and recently lost a Democratic primary election to unseat Pawtucket Representative David Coughlin, lead a protest outside Hope Artiste Village against Lance Robbins, controversial founder of Urban Smart Growth. As the ProJo reported, “Last month, the [R.I. Commerce Corporation] board authorized $3.6 million in Rebuild RI tax credits and $800,000 in sales-tax exemptions on construction material for developer Urban Smart Growth’s $38.9-million residential project at 200 Esten Ave., Pawtucket, just south of Hope Artiste Village.”

The downside, as reported extensively in GoLocal.com, is that Robbins has a reputation as “the worst slumlord in L.A. history, ” and his local reputation, with some business owners, is no better. Three of those business owners, Rosinha Benros, Phyllis Arffa and John Arcaro, spoke at the protest, and their stories are troubling. Each claim that their businesses were destroyed by the actions of their landlord, Lance Robbins.

Also speaking at the protest were Independent candidate for Mayor of Pawtucket John Arcaro and Independent candidate for State Rep Lori Barden.

September 17, 2016

Disruption and evolution at energy meeting

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The Consumer Liaison Group (CLG) Meeting happens four times a year and its a chance for ISO-NE to exchange information with electricity consumers in New England. ISO-NE is the group that regulates our electricity markets and keeps the lights on by coordinating electricity generation and transmission. They run billion dollar markets and interact with companies like Spectra Energy, Invenergy, National Grid and Deepwater Wind. Pretty much every aspect of the process of getting electricity to your television is touched upon by ISO-NE in some way.

The latest meeting of the CLG, in Providence on Thursday, featured a panel discussion with representatives from the four companies mentioned above. The panel was pulled together with the help of Douglas Gablinske, executive director of The Energy Council of Rhode Island (TEC-RI) an advocacy group for energy company concerns. Readers of RI Future may remember that Gablinske was a vocal opponent of Cale Keable’s bill to reform the Energy Facilities Siting Board (EFSB). He was also the only speaker at the RI Public Utilities Commission (RIPUC) to speak in favor of the pipeline tariff.

Gablinske surprised me by asking if I knew about any planned protests or disruptions. I said I didn’t. He asked me specifically about the FANG Collective. I had no idea of what plans they have, if any, I said. Then Gablinske said that he noticed Mary Pendergast on the list of people who had signed up to attend. Pendergast was sitting in the room, and he soon went over to introduce himself to her.

2016-09-15 ISON-NE PVD 001 — As the meeting ended, protesters unfurled a banner

During the course of the presentation there was a disruption. As Invenergy’s John Niland gave his presentation to the room, Mary Pendergast stood and display a small sign that said, “No fracked gas Power plant.” Her protest was silent but it did seem to throw Niland off a bit, as his delivery seemed somewhat distracted.

It was during the third presentation that the disruptions became more pronounced. As Richard Kruse, vice president at Spectra Energy spoke glowingly about the need for bigger and better pipelines in our fracked gas infrastructure future, Kathy Martley of BASE (Burrillville Against Spectra Expansion), Keith Clougherty of the FANG Collective and Sally Mendzela stood up.

“Spectra Energy, Energy for Death,” said Martley as I headed for my camera. “Say no to Invenergy and tell Invenergy to go home,” Martley continued.

As the protest continued, Gablinske took the podium and said, “You have a right to be here but not be disruptive” as Clougherty continued to speak.

Lennette Boiselle, an ally of Geblinske and a lobbyist for the Northern Rhode Island Chamber of Commerce got up and left the room, presumably in search of security. Readers might remember Boiselle as the person arguing against democracy at the public comment hearing concerning Cale Keable’s EFSB bill.

“The political correctness, of not allowing other people to talk is sweeping through this country,” said Geblinske, “It’s an incorrect assumption, this gentlemen has the right to speak…”

“We’ve been listening to you our whole lives, Pal,” interrupted Sally Mendzela.

Gablinske ultimately offered to set up a forum where “both sides” could be heard but it is unknown if this will actually happen. The protesters took their seats, no one was ejected from the forum, and Kruse finished his talk.

Amazingly, though, that wasn’t the end. During a brief question and answer period at the end of the presentations, Gablinske called on Clougherty to ask a question!

“I would ask for a question, not a speech or a statement,” said Gablinske, when he realized who he had called upon.

Clougherty then asked Niland, Kruse and Bill Malee, a National Grid VP, “Do your companies have any money set aside for restitution for the millions of people who are going to be displaced and killed by the infrastructure projects you all are proposing?”

There is no good answer representatives from these companies can give, yet Niland attempted one. As expected, it was not good.

I found the most interesting talk of the day came from Mary Louise “Weezie” Nuara, External Affairs Representative for ISO-NE.

“The region’s competitive wholesale electricity markets are really designed to maintain reliability through the selection of the most economically efficient set of resources,” said Nuara, but the states “have environmental and renewable energy goals that are beyond the objectives of the wholesale electricity markets.”

What’s happening is that states are setting goals to increase renewables and reduce greenhouse gas emissions (like the goals set out in ResilientRI, but all the New England states have some version of this idea.) ISO-NE is designed to deliver energy as reliably and cheaply as possible. As a market, it cannot deliver renewables or reduce emissions unless those options are cheaper and cleaner. In August, NEPOOL (which represents the interest of the New England states when dealing with ISO-NE) began looking into how to adjust wholesale electricity markets to accommodate the goals of the states. It is NEPOOL’s goal to develop a “framework document” by December 2 to provide guidance to ISO-NE regarding potential changes. (A kind of advisory opinion, if you will.)

What makes this interesting, to my mind, is that if ISO-NE starts taking the climate change concerns of the states into account, plants like the one Invenergy is planning for Burrillville will have a harder time selling their energy into the markets.

ISO-NE is a little over a decade old, but already it’s finding that its systems are in need of being updated over concerns of climate change. By contrast, the EFSB here in Rhode Island was established thirty years ago, in 1986. The RI General Assembly has shown little inclination towards revising the EFSB’s mandate in lieu of climate change.

Below please find all the video from the CLg meeting except for the closing comments.

Rebecca Tepper, chair of the CLG Coordinating Committee and chief of the Energy & Telecommunications Division of the Massachusetts Attorney General’s office introduced keynote speaker Rhode Island General Treasurer Seth Magaziner.

Douglas Gablinske, executive director, The Energy Council of Rhode Island

Jeffrey Grybowski, chief executive officer, Deepwater Wind

John Niland, director of business development, Invenergy

Richard Kruse, vice president and regulatory & FERC compliance officer for Spectra Energy

Bill Malee, vice president of regulatory affairs, for National Grid

ISO-NE Q&A

September 7, 2016September 7, 2016

Amid emergency repairs, Raimondo, Elorza disagree on feasability of 6/10 boulevard

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Governor Gina Raimondo and Providence Mayor Jorge Elorza disagree on whether emergency repairs needed for bridges across the 6/10 connector means the grassroots idea of turning the highway connector into a boulevard is now off the table.

At a news conference today, Raimondo said the boulevard idea is dead because emergency repairs to seven of nine bridges over the 6/10 connector need to be fast-tracked. But Providence Mayor Jorge Elorza disagrees, according to his new communications director Emily Crowell.

“Not at all,” Crowell said when asked if the mayor agrees with the governor that the boulevard idea is unfeasible because of the emergency repairs the announced today. “We’re not abandoning the idea to make the 6/10 connector multi-modal.”

Raimondo and Department of Transportation Executive Director Peter Alviti announced that the 6/10 connector needs emergency repairs. Those emergency repairs, they both said, effectively take off the table the grassroots idea to turn the 6/10 connector into a boulevard instead of repairing it. The repairs to the Huntington Avenue bridge need to be finalized in 60 days.

Elorza spoke at the State House event today.

“We can invest these dollars in a way that ensures the public safety of this roadway and also enhances the livability of this entire corridor,” he said. “It’s our responsibility to advocate for the smartest investment of these dollars to move the city and the state forward and that is what we will be doing at the table alongside RIDOT and the governor’s office to advance this project.”

Raimondo and Alviti were unequivocal that the emergency repairs means the boulevard idea is off the table.

“We have to move immediately, so some options are closed” said Raimondo, when asked about the boulevard idea. “The time is out for debate. It’s time for action. I would love to be able to take a longer process but I don’t have that option.”

Alviti said, “Hypothetical plans or other scenarios could be explored in the world of theory but in the world of reality we are facing we now need to address this structurally deficient problem.”

Raimondo added that just because the boulevard idea can’t be done doesn’t mean some smart growth measures are off the table for the highway that cuts through the west side of Providence. “We’re going to take the next couple months to listen and if there are opportunities to put in a bike lane, we will listen.”

Raimondo and Alviti said that seven of the nine bridges over the 6/10 connector are “structurally deficient.” Because the problem is more severe than initially thought, these repairs are being fast-tracked.

“Not only is the bridge defunct,” said Alviti, “but the plan to fix the bridge is defunct.” He said the 6/10 connector bridge repair have been in the works for 30 years, but they have also been without funding for 30 years.

Simultaneously, a grassroots effort to replace the 6/10 highway connector with a boulevard was gaining momentum. James Kennedy, a regular RI Future contributor who has been covering the 6/10 boulevard idea, took to Twitter to criticize the announcement.

September 1, 2016October 4, 2016

Raimondo’s office must take 6/10 position

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https://twitter.com/TransportPVD/status/770773009380638720?ref_src=twsrc%5Etfw

The assembled crowd of 200 people at Tuesday night’s 6/10 Connector community meeting were unequivocal: no highway should be rebuilt along the corridor. It found a receptive if demur audience in Providence Planning Department and Mayor Jorge Elorza. RIDOT and Governor Gina Raimondo’s Office appear to be the only agencies backing the highway rebuild after the loss of a federal grant for the billion dollar project.

https://twitter.com/TransportPVD/status/770769768815132672

RI Future has been among several area publications that have called on Mayor Elorza to take a more direct stance on the project. While the mayor’s office has clearly favored a boulevard approach to 6/10, it hasn’t yet sought direct conflict with RIDOT or Governor Raimondo’s office. Following the rejection of a federal grant RIDOT intended to use towards part of the 6/10 corridor, statements from the agency have focused on the dire need to complete the highway rebuild with a minimum of public input. Read past coverage Tear It Down: Pictures of Our Potential 6/10 Future The Drivers’ Argument for the Boulevard On Tuesday night, Mayor Elorza did not seek direct conflict with the agency, but did refer to the 6/10 Connector as “really a Disconnector”, a sign of his preferences. In a Projo report leading up to the Providence meeting, RIDOT spokesperson Charles St. Martin bristled in his emailed response to questions on the project:

As we stated before, we cannot continue to postpone this work,” wrote DOT spokesman Charles St. Martin in an email. “Thanks to the passage of Rhodeworks, Rhode Island has $400 million in committed state and federal funding to draw from to address the Route 6-10 interchange. RIDOT is evaluating its options to tackle this problem and will soon present a recommendation for next steps. No decisions have been made at this time.”

This brings us to an important question: When is Gov. Raimondo’s office going to see the writing on the wall and redirect the agencies under her charge to better priorities? The assembled crowd was almost unanimous in its priorities. The process sat small groups at tables to outline ideas and present them. Each group, to the one, came up with some form or other of the following priorities:

New housing
Non-displacement of current residents while bringing in new residents
Better outreach & a more welcoming process for Latino residents
A full and complete bike and pedestrian network
More green space
Rapid transit to connect Providence within and without its city borders
No highway

The groups varied in how they phrased these goals, but each group essentially outlined the same things. Notable about the meeting was the presence of individuals from communities like Cranston, Pawtucket, and Central Falls, whose citizens might have been more inclined to favor a highway than those having one built next to them. But those from outside Providence also favored the boulevard option. Among the attendees was Cranston at-large city council candidate Kate Aubin, who has made removing the 6/10 Connector a central tenet of her candidacy.

https://twitter.com/TransportPVD/status/770764144735838208

While Aubin is running on a progressive ticket, conservative Rhode Islanders also attended, questioning the priority of rebuilding 6/10 as-is. Rhode Island Center for Freedom & Prosperity’s Lawrence Gilheeney tweeted:

also, here's some pictures of last nights forum pic.twitter.com/mx3FGwvePa

— Larry Gillheeney (@LGillheeney) August 31, 2016

More pointedly, Brian Bishop, of the taxpayers’ rights group OSTPA spoke to the unnecessary waste of rebuilding the highway, drawing the night’s first laughter and applause:

https://twitter.com/TransportPVD/status/770775028090613760

Bishop, who owns properties on the East Side as well as a farm in Coventry, said that he was a “car person” and that others “can handle the bikes,” a friendly jab at non-OSTPA member Hugo Bruggeman, who held the table’s priority list and spoke to bike infrastructure like his home in the Netherlands. Bishop described the highway “hybrid” that RIDOT has been pushing over the Providence Planning-preferred boulevard as “brought to you by the same people who want to rebuild it again.” The audience roared with laughter at RIDOT’s expense.

With federal grants figured into the mix, RIDOT’s hybrid-highway proposal would have cost upwards of 80% of toll funds. Without that funding, it’s quite possible that rebuilding the highway as-is could put all other state projects on the back burner. Conservatives like Bishop and liberals like Aubin equally question the validity of this priority, despite living outside the city.

Which brings us back to a pointed question: Who exactly does favor the 6/10 Connector as a highway, other than RIDOT and Gov. Raimondo’s office? As a more politically diverse coalition coalesces around opposition to the plan, Gov. Raimondo is going to have to make some decisions soon.

~~~~

Correction: A previous version of this article erroneously named Lawrence Gilheeney’s group the Rhode Island Center for Freedom & Progress. It is the Rhode Island Center for Freedom & Prosperity. No doubt a liberal Freudian slip on my part. . . :-) Corrected.

August 9, 2016

Noise, air pollution from proposed power plant would ruin Burrillville

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OER fudges reality and ignores impact of escaping methane—see disclaimer in lower-left corner.

On Tuesday August 9, the Rhode Island Department of health (RIDOH) will hold a hearing on Invenergy’s proposed gigawatt fossil fuel power plant in Burrillville, aka the Clear River Energy Center (CREC). The meeting will start at 5:30 pm at Burrillville HighSchool, 425 East Avenue, Harrisville, Rhode Island 02830.

As part of the process, RIDOH issued an advisory opinion. Even a cursory reading of the document reveals issues so serious that they should prevent the construction of CREC. Yet another Rhode Island administrative body that lacks enthusiasm for the project!

RIDOH identifies serious negative health impacts of noise:

According to the WHO [World Health Organization], sleep disturbance, one of the most common complaints raised by noise-exposed populations, can have a major impact on health and quality of life. People can recognize and react to sounds, even when asleep. Those reactions, including wakening and changes in sleep stage, are associated with daytime after-effects, such as sleepiness, reduced cognitive and motor performance, and impairment of cardiovascular function.

The RIDOH opinion also quotes written testimony of Julia O’Rourke, who lives on Wallum Lake Road in Burrillville:

Specifically, in the past year, I have experienced excessive noise and vibrations coming from the Algonquin Compressor Station site which this project will be located next to. The noise and vibrations emanating from this site are extremely disruptive and negatively impacting our health and we are unable to sleep or enjoy the peace and quiet of our home. I am concerned that the noise levels and vibration are only going to increase during the construction and operational phase of this project.

Clearly, the neighborhood around the CREC site and Spectra Energy’s compressor station will become unlivable. RIDOH suggests, if the plant were to be built, that Spectra Energy and Invenergy install sound proofing and buy “properties subject to noise levels that cause serious annoyance and/or sleep disruption.”

RIDOH’s opinion mentions that questions have also been raised as to whether National Ambient Air Quality Standards (NAAQS) of the Environmental Protection Agency adequately protect public health. We, and probably others, indeed raised those questions—those and quite a few others—in this public comment. The federal standards fail to account for short-lived pollution spikes which are typical for the operation of compressor stations and power plants. Nitrous oxides are are highly problematic in this respect. In addition, there are lots of other problems with “data” Invenergy’s submitted to the Energy Facility Siting Board.

Sure, we could go ahead with the construction of the power plant and turn Burrillville into a major air pollution dump. Is that justified simply to create a couple of jobs and export electricity to the Northeast? Can we justify that simply because “no states have promulgated a short-term NO₂ standard that is more stringent than the NAAQS and the process for adopting such standards is arduous?”

Interestingly, RIDOH is much more advanced in its understanding of the effect of the proposed power plant than the Rhode Island Office of Energy Resources. RIDOH states:

The burning of fossil fuels and the extraction of fossil fuels by “fracking” both contribute to climate change by emitting various greenhouse gases to the atmosphere, most notably carbon dioxide and methane. Both have the effect of harming the health of Rhode Islanders now and in the future.

Of course, most of the methane problem occurs long before the fracked gas reaches Rhode Island. Information in a recent presentation of Rhode Island’s Office of Energy Resources shows that the office explicitly ignores such effects.

Not only does the office ignore basic science, it is also out of sync with federal guidelines on how the effects of greenhouse gas emissions on climate change should be taken into account. Those guidelines, issued last week, explicitly call for:

Taking into account reasonably foreseeable direct, indirect, and cumulative GHG emissions and climate effects;
Consideration of reasonable alternatives and the short- and long-term effects and benefits in the analysis of alternatives and mitigation

Unless we change course, Rhode Island will be doing neither. RIDOH writes:

We cannot measure the direct contribution of the proposed plant, or of any single facility, to public health by means of climate change.

Sure, but if we forge ahead without understanding what we do, we are in violation of the precautionary principle of the Rio Declaration, an international treaty signed and ratified by the U.S. This is the supreme law of the land:

Principle 15

In order to protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.

How about we cannot “measure the direct contribution” of the plant to global warming? True enough, but we can easily estimate the impact of the national policy of which construction of the plant is part. Because natural gas is worse for the climate than oil and coal, the conclusion is simple: given the rate at which natural gas escapes unburned, and before the use of methane starts paying off, we’ll be dead, leaving an uninhabitable planet for future generations.

August 9, 2016

Not enough water for proposed power plant and future growth

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On August 9, the Harrisville Fire District in its monthly meeting will discuss how to respond to Invenergy’s request for the supply of water for its proposed power plant in Burrillville, the Clear River Energy Center (CREC). For time and place follow this link.

Future water shortages caused by CREC have been a topic of discussion and speculation for many months. That indeed there is a serious risk is clear from information contained in documents obtained from several Rhode Island departments in response to Fossil Free RI‘s request made under the Access to Public Records Act.

As a reminder, the following is worth quoting from a previous post based on documents supplied by the RI Department of Health:

According to a presentation at a meeting about CREC attended by several state agencies, 0.18 MGD (million of gallons of water per day) will be left for growth if the power plant is built. June Swallow of the Center for Drinking Water Quality at the Rhode Island Department of Health attended the meeting. Her longhand notes show that Harrisville and Pascoag each are expected to need 0.12 MGD for growth. This suggests a deficit of 0.24 MGD – 0.18 MGD = 0.06 MGD.

Also documents supplied by the RI Department of Environmental Management raise concern. There is, for example, the following email exchange between Alisa Richardson of RIDEM and Ken Burke formerly of the Rhode Island Water Resources Board:

Thanks Alisa,
I think we should talk about having the Town acknowledge that with low flow conditions and high energy demands, that the Town is effectively pledging most (if not all) of its available water to this development. This local decision is theirs to make. Will someone from the Town also be at this meeting?
Thank you,
Kenneth J. Burke, P.E.MBA
General Manager/Treasurer

This email (my emphasis) appears on page 50 of this document. There is more of interest, but the conclusion is the same; search the document for “Alisa” and “Ken.”

Also Stephanie Sloman, a retired environmental engineer who worked for a large electroplating plant in Massachusetts, weighed in. She submitted a thorough and detailed testimony to the Invenergy docket of the Energy Facility Siting Board.

Her conclusion is that, no matter how you look at it, there is not enough water for future growth in Burrillville and the other towns that draw from the same source.

Clearly, the RI departments of Environmental Management and Health, and the Water Resources Board are aware of the looming water supply problem. As Stephanie Sloman explains, anyone capable of elementary arithmetic can check this. As she points out, Invenergy is apparently is not one of those.

Recently, Gina Raimondo mentioned that she would withdraw her support for the CREC project if there were any issues. Of course, trouble with the water supply is only one of a myriad of issues each single one of which should suffice for her to make good on that promise.

August 9, 2016August 9, 2016

Develop a land tax to replace TSAs

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RI Future’s recent coverage of a tax stabilization agreement (or TSA) for Rising Sun Mills admirably pursues the idea of a fair tax system for all Providence residents. There’s a lot I agree with about this approach. At its roots, TSAs are an insider deal. But the logic behind TSAs makes a lot more sense than is obvious at a first glance. The goal for the city should be to establish a tax system that mirrors some of the features of TSAs, rather than carve out special agreements for the well-connected.

What is a TSA?

To begin with, what is a TSA? Tax stabilization can take many forms, but they’re usually agreements that require the owner of a property to pay the same taxes that were previously paid, though not more, in return for the property owner adding a new building or refurbishing an endangered one. (thus, a tax “stabilization”).

On the face of things, that arrangement sounds really unfair, but it makes more sense if you look at the costs that a building owner is supposed to cover with their taxes and think about how those costs change (or stay the same) after the refurbishment. An infill or renovation project in a city does not require a new sewer extension, but can be hooked up to existing lines. It does not require new streets. If it receives transit service, it’s usually on an existing line, and the new building will add ridership rather than adding miles of service area. A building being occupied may actually help to lower crime without more policing, and in any case it will be built within an existing police precinct. A building covered by an urban TSA will often be a solid building, perhaps even a historic renovation, that is intended to last a long time.

Contrast that to the typical suburban sprawl* project, like a Walmart. It will require acres of new land, and to function will need a sewer extension, gigantic new roads, or road and interchange expansions. It will add greatly to the surface runoff costs of the sewer system as well, with gigantic parking lots. Big box projects like Walmarts often demand transit service for their low-wage workers, but design everything about their facilities in order to defeat the efficiency of that service– after all, the customers and managers drive– delivering a transit service that costs a lot and delivers very little. Sometimes a single project will be the size of a small urban neighborhood, adding tremendous strain to traffic, and requiring a new police or fire precinct. For all the investment that is put into such a deal, the buildings the big box brings are meant to have a thirty year life cycle at most, and often the big box company will require land covenants that disallow competitors to move in if they should happen to leave the building (they often do leave the building, repeating this process).

Suburban projects look like a good deal because politicians won’t pay for all the additional costs that these projects bring. Those costs will accrue decades from now.

Urban and suburban communities both compete with each other to give away tax deals, and to be fair, urban TSAs are an insider deal just like any other. The politicians that prepare these deals don’t necessarily think about all the economic logic I presented above. The way they see it, the deal is about jobs for their ward. They care very little about the long-term effects. Urban TSAs happen to be a much better deal, but that’s not by design.

Fixing the TSA

Instead of creating TSAs for individual projects, we should make our tax system look a bit more like what a TSA tries to accomplish, but for everyone. A land tax should be a component of our tax system, used to offset a lower property tax. This isn’t exactly the same as a TSA. Under this arrangement, creating improvements to a property– adding buildings, fixing a roof– would still raise the value of the property and kick in more tax revenue from the property tax part of the tax model. But the land tax would stay the same– tied to the amount of land used and the resources consumed by that parcel.

Equity is a big concern under TSAs, not only for the fact that some can get a TSA and some can’t, but also because of the particular services that suffer in a city when not enough tax revenue is present. I would propose that the services paid for by the land and property tax sections of the tax code by bifurcated carefully. The land tax should pay for the things that resemble “pay for what you use” items– roads, sewers, transit, etc. The property tax should pay for things that we conceive of as “each according to their ability” services– libraries, schools, and other social services. By separating the budgets in this way, we ensure that when we tax a more valuable property, we’re tying that taxation to our ideal of sharing, rather than creating a slush fund to allow for wasteful infrastructure extensions.

Land taxes already exist in many places– my home state of Pennsylvania is one. They’re not a magic cure-all, and in order to fix our cities, we’re also going to have to stop subsidizing sprawl. Part of why I react to the criticism of TSAs is that the overwhelming nature of our subsidy mix is to ever-expanding consumption of undeveloped land for new strip malls or big boxes, cul-de-sacs and highways. The Rising Sun Mills project lost a tenant to Johnston because all the advantages of being in the suburbs– parking, big roads, etc.– are pre-paid features of life in America– while all the advantages of living in the city– walkability, community, and so on– are privatized goods to be bought and sold. We have to break that pattern. A land tax could be one step towards that.

~~~~

*”Suburban” is an ambiguous term, but here I mean suburbs that are totally car-oriented, cul-de-sac driven, post-1950s-style suburbs, rather than suburbs that have the form basically of a small walkable town that extends out from a city. Think Warwick or Johnston, rather than Bristol or Warren.

August 2, 2016August 3, 2016

PVD City Council extends tax break for Valley St. development

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The Providence City Council extended a tax break for the developers of a mixed use project on Valley Street because an anchor tenant relocated to Johnston.

“Do we really need another vacant or foreclosed property in our city,” said Council President Luis Aponte, who voted for the so-called tax stabilization agreement, after the meeting. He said the developers could have attained an administrative TSA for a smaller redevelopment had the council not awarded the tax break and that the city negotiated a good deal for residents by working with the developers.

Councilor Carmen Castillo was the only member of the elected board to vote against the TSA.

“We’re not a bank,” she said. “The neighborhood I represent never gets a tax break. We pay a lot in property taxes too.”

Councilor Sabina Matos said she supported the TSA because the council approved TSAs for downtown businesses so it was only fair that it do so for businesses in her district too. “We set a precedent,” she said. “We can’t give them to some developers and not others.”

Abacus Technology paid $1.8 million annually to rent 100,000 square feet of space in the Rising Sun Mills development on Valley Street but the company has decided to move to Johnston, said the developers.

“There’s no benefit to having Rising Sun Mills go dark,” said BJ Dupre, one of the developers, after the favorable decision from the Council. When asked if that would have happened if they didn’t get the tax break, another of the developers, Mark Van Noppen said it was a “distinct possibility.”

Aponte said the developers plan to reconfigure the commercial space into smaller offices. He said the TSA is void if they don’t pull all the requisite permits in 180 days.

“It’s hard to tell,” Aponte said when asked how much money the city budget would lose by extending the TSA to the Rising Sun Mills project. But, he added, “They are paying more than if they would have got a 5 year extension” as a result of the negotiations with city officials.

July 14, 2016

CNBC’s state rankings flawed and anti-middle class

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From the headlines, you would think that CNBC is the gold standard economic authority. After the cable news network released its 10th annual “America’s Top States for Business 2016” listing, in which Rhode Island was ranked dead last, local corporate media raced to bring the bad news to readers and viewers. CNBC ranks R.I. worst state for business, CNBC: Rhode Island ranked ‘Bottom State for Business‘, and RI back to dead last in new CNBC rankings are typical examples from the Projo, Channel 10 and Channel 12 respectively.

Missing from the Cassandra-like coverage is any hint that the rankings are meaningless and based on metrics that rate our state on how well our policies kowtow to the whims of business, not on how well they benefit the poor and middle class. Only Ted Nesi even approaches this angle in his coverage, but he did so through the lens of competing political discourse. But what about the economics of the report? Does it hold up under scrutiny? I’ve tackled the subject of economic rankings before, here and here, trying to bring some sort of real economic analysis to bear.

I asked Doctor of Economics Douglas Hall, Director of Economic and Fiscal Policy at the Economic Progress Institute, for some insights. Hall said that many of CNBC’s economic indicators “have a lot of merit and point to the need to address matters via public policy, such as repairing the state’s crumbling infrastructure and the need to help Rhode Islanders improve their educational attainment. But when you deconstruct their aggregate groupings,” said Hall, “many of the categories are deeply flawed and point to policies that would severely undermine the well-being and quality of life of working families in Rhode Island.”

One indicator the report uses is “union membership and the states’ right to work laws.” Low union membership and strong anti-union right to work laws contribute to a higher economic ranking for a state in CNBC’s report, yet Hall says that “research clearly shows that as unionization rates have gone down, the well-being of the American middle class has gone down.” In Hall’s view, this metric “taints the entire aggregate measure.”

Another metric, the CNBC aggregate category for the cost of doing business, considers the cost of paying wages and presumably, says Hall, “a state in which every employee worked for sub-poverty wages would get a very high grade in this category, while those paying living wages that can sustain a family and support a viable business community through demand for goods and services, would get a low grade in this category.”

It seems clear that these rankings of states by various business interests, including corporate entities such as CNBC, puppet organizations such as ALEC and members of the State Policy Network (which includes the RI Center for Freedom and Prosperity) and various Chambers of Commerce are are not objective measures of a state’s economic well-being, but are tools crafted to shape public policy to the advantage of large business interests and to the detriment of the poor and middle class.

The most sensible tactic in dealing with such garbage is to file it accordingly.

June 5, 2016June 7, 2016

Business versus democracy in Rhode Island

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When describing what she sees as the problem of convincing millennials that they need financial literacy, Abigail Johnson, the CEO who runs the company that runs Fidelity Investments, said that not only do millennials not understand that they need to save money for retirement, but they “don’t have the money to save anyway, so what’s the point?” (See video below, starting at the 23m mark)

Johnson was making a joke, one that Governor Gina Raimondo laughed at along with most of the attendees of the Greater Providence Chamber of Commerce 2016 “Economic Outlook Luncheon.” She was answering Chamber president Laurie White’s question about the difficulties of channeling millennials into the workforce of the future.

Johnson hoped that millennials, even those who don’t go to college, might one day learn the “concepts” and “basics” of financial planning. She estimated that perhaps 14 percent of Rhode Islanders have their retirement funds invested in her company, the not-so-subtle subtext being that she sees millennials, the “workforce of the future,” as essential to her company’s future profits.

White, Johnson and Raimondo were talking about people as commodities, defined purely by their economic value.

This is the promise of “neoliberalism,” ostensibly a view that markets, when left alone, will govern themselves fairly and equitably. But Wendy Brown, a political scientist at UC Berkeley, wanted to explore what neoliberalism has done “to political life, to social life and to the human being.”

Neoliberalism seeks to expand markets to every part of life, including democracy, human social life, education, social services and more. “The idea,” says Brown, “is not to just let free markets have their way, but to produce everything in the image of the free market.”

Brown calls this the “stealth revolution,” the transformation of the human being into nothing more than their economic value and the devaluation of democracy in the face of market forces and the will of the billionaire class.

What we lose by turning our government into a business determined by markets instead of democracy is the idea of equality as a fundamental principle, the unraveling of shared power, and the undermining of the people’s ability to determine a societies values and policies, says Brown.

Under this view, says Brown, there is “no space for democracy anymore… everything should be understood as markets…”

This brings me to Lenette Boiselle, representing the Northern RI Chamber of Commerce at a RI House Environmental committee meeting last week. Boiselle was at the hearing to oppose “one specific part” of a bill that, if passed, would give the voters of Burrillville the power to approve or reject any tax deals made by their town council with power plant companies.

“The Chamber of Commerce has a history of opposing any type of referendum,” said Boiselle, “whether it be a voter initiative or a referendum on a mall, a casino… as a fundamental principle, the Chamber of Commerce believes that these types of issues are extremely complicated…” When issues like this are decided by referendum, said Boiselle, “those who spend the most money usually win.”

Representative Aaron Regunberg then asked, “Money plays a big role in every election. Do you think we shouldn’t have any elections?” [4m55s]

Boiselle seemed to understand that saying democracy doesn’t work might be a bad move, so instead she told a story that sought to undermine democracy’s legitimacy. She gave an example of what she saw as the problems of voter referendums she worked on in Massachusetts.

Earlier that day Boiselle was at the Northern RI Chamber of Commerce breakfast that featured Invenerg’s director of development, John Niland, as the the speaker. Questions at this breakfast were written down by attendees on idea cards and submitted in writing to Boiselle, who carefully went through them to make sure that Niland was not hit with any questions that he was unprepared to answer.

This is the kind of protection from scrutiny private business concerns routinely employ. When we run our government like a business, we shouldn’t be surprised when our elected officials try to employ the same methods to protect themselves from scrutiny. This is why Governor Raimondo doesn’t want to go to Burrillville and talk directly to the people. This is why she goes denies APRA requests. This is why she makes trips to New York, or plans trips to Switzerland, but won’t say who she is talking to or why.

I’ll leave this with one final thought.

“Modernity brought us the idea that human beings, rather than nature, rather than Gods, and rather than tradition… could be in charge of their own lives, their own future, and could exercise freedom in coming together with others and deciding individually, how to live,” said Wendy Brown, “That was the promise of modernity.”

Let’s work together to forge a democracy that does not forget this.

May 28, 2016September 16, 2016

Video: House testimony on Keable’s power plant bill

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The testimony on Cale Keable’s bill, H8240, which if passed will give voters in Burrillville the ability to approve or reject any tax treaty with potential power plants in their town, pitted town residents and environmental activists against business and labor concerns. In all 56 people testified on the bill during the five hours of testimony, 43 in favor and 13 in opposition.

Below is all the testimony, in order, separated by speaker.

01 Representative Cale Keable, who represents Burrillville, introduced the bill.

02 Jeremy Bailey, Burrillville resident

03 Lenette F. Boisselle, representing the Northern RI Chamber of Commerce, opposes the bill. Earlier in the day, Loiselle was at the Kirkbrae Country Club for the Northern RI Chamber of Commerce breakfest. At that event, all the questions for guest speaker John Niland, director of development for Invenergy, the company that wants to build the power plant in Burrillville, were submitted in writing. It was Boiselle who carefully sorted the questions, allowing Niland to only answer softball questions.

Boiselle took some tough questions regarding her opposition to the bill. The Chamber of Commerce, says Boiselle, “has a history of opposing any type of referendum… as a fundamental principle, the Chamber of Commerce believes that these types of issues are extremely complicated, that’s why we elect people to be in a position to be able to take the time to study the pros and the cons and determine whats in the best interest of whether it be the town or whether it be the state.”

Boiselle said that the Chamber has “no position on the power plant one way or another” and that if this bill is passed, whoever spends the most amount of money to advertise their positions will likely win.

The legislation, said Boiselle, in response to a question from Representative Michael Marcello, “could kill [a project] just by making it wait” until the next general election for the voters to decide.

Representative John Lombardi asked “what would be wrong with the town and the council having the last say in this. Is there a problem with that? You say you oppose that?”

Boiselle said that the time it takes to understand the pros and cons of complex issues is too great for voters. That’s why we elect representatives.

“I think its always good to engage the people,” said Lombardi.”It’s supposed to be a representative government, but sometimes it doesn’t end up that way. They don’t seak on the behalf of the people. I think this is a good process.”

“I’m just curious,” asked Representative Aaron Regunberg, “Money plays a big role in pretty much every election, do you think we shouldn’t have any elections?”

04 Jerry Elmer, senior attorney at the Conservation Law Foundation is strongly in favor of the bill.

05 Mike Ryan of National Grid opposes the bill, at least in part. They have no position on the part of the bill concerning voter approval of negotiated tax treaties.

06 Meg Kerr, of the Audubon Society, is for the bill.

07 Elizabeth Suever representing the Greater Providence Chamber of Commerce opposes the bill. She seems to think that granting more democracy to Burrillville might make other municipalities want more democracy as well, which may slow down growth. Of course, Suever never uses the word democracy, because that would make her argument sound anti-American.

08 Paul Bolduc is a Burrillville resident.

09 Greg Mancini – Build RI

10 Paul Beaudette – Environmental Council of RI

11 Michael Sabitoni -Building Trades Council

12 Lynn Clark

13 Scott Duhamel – Building Trades

14 Peter Nightingale – Fossil Free RI

15 Roy Coulombe – Building Trades

16 Adam Lupino – Laborers of NE

17 Catherine

18 Paul McDonald – Providence Central Labor Council

19 Paul Lefebvre

20 George Nee AFL-CIO

21 Jan Luby

22 Richard Sinapi – NE Mechanical Contractors Association

24 Doug Gablinske Tech RI, The Energy Council

May 23, 2016

How would you spend $5.6 billion on transportation in RI?

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The $5.6 billion is the total expected spending over 10 years in a draft Transportation Improvement Plan (TIP) for highways and transit going to public hearings on Thursday, May 26 (2pm and 6:30pm in the DOA Building on Smith St.) The draft documents have about 500 pages so it is not easy to review, but is online at RI Statewide Planning.

Spending is much higher than usual because of revenue projected from the new truck tolls, the borrowing of $300 million in so-called “GARVEE” bonds (paid back from future Federal highway appropriations so no voter approval is deemed necessary) and some increased support from the new Federal transportation law.

Most concerning for me, the draft calls for allocating $195 million to the 6-10 project this year, 2016, even though its design – expressway or boulevard – is still being discussed and the city is investigating alternative visions for the corridor. The draft calls for $3 million of public money for a new I-295 interchange in Johnston to subsidize the Citizens Bank move to a new “campus” even though that is contrary to all our land use goals. $38 million is proposed to implement the truck tolls. An additional $50 million or so is proposed to widen I-95 northbound through Providence when the northbound viaduct is replaced, adding to the huge gashes highways make in central Providence. But some highway projects are deferred, such as a full Route 4/I-95 west interchange, new Route 403 ramps, and an overpass to avoid the one traffic light on Route 146. Much money will go to repairing deficient bridges all over the state, with the intent to start as soon as possible before it gets even more expensive to do so, and a lot of state roads will be resurfaced, they are all listed.

On the transit side, it continues some slow progress toward re-establishing a commuter rail stop in Pawtucket, a little new funding for some RIPTA bus service to supplement our commuter rail, seed money to see if someone will operate seasonal ferry service, but no sign of any other rail service expansion. $17 million is allocated for an “enhanced” 6 stop bus corridor where the Providence streetcar would have gone, though it doesn’t even promise any signal priority on that route. The $35 million bus hub bonds that voters approved in 2014 is listed as 2016 revenue for a Providence Station Transit Center. The bond actually could fund bus hubs anywhere in RI, and now may be needed in Pawtucket which is apparently losing its existing Visitors Center bus hub, though there is now no project being considered. Otherwise it is largely business as usual for RIPTA with continued bus and paratransit van replacements.

Our bike path network will grow slowly, especially slowly in the first five years, largely limited to extending the Blackstone Bikeway in Woonsocket plus some progress on finishing the South County path. A “City Walk” proposal in Providence is recommended for funding.

My overall take is that beyond really going after improving the bridges there is no game-changer here, not even in light of climate change considerations. For example, there is no sign of any interest in electrifying our commuter rail in the 10 year period (contrast with huge subsidies available for electrifying the auto fleet) nor much sign of attempting to reduce vehicle-miles traveled, or promote more energy efficient urban core redevelopment.

I do hope some in the Rifuture community will investigate this issue which involves our transportation future and so much of our money. Consider testifying at the hearings. I think Statewide Planning, RIDOT and RIPTA would be willing to help provide more information, but you can also contact me (bschiller@localnet.com) if you like, I do have a print copy of the documents.

May 17, 2016May 17, 2016

EnergizeRI responds to Heartland Institute attacks

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EnergizeRI and our carbon pricing proposal have recently come under attack from the Heartland Institute. We are taking this opportunity to reach out, set the record straight and shed some light on the work and reputation of this group as you consider their comments on carbon pricing legislation here in Rhode Island.

The Heartland Institute claims it was created to “discover, develop, and promote free-market solutions to social and economic problems”. However, upon review of the organization’s body of work, it is clear they operate on a platform of climate change denial. In fact, the organization is well known as one of the nation’s leading climate change deniers.

They are funded by groups such as the Koch Brothers, Big Tobacco, and Exxon Mobile. The only thing that Heartland seems to promote is misinformation.

This is the same group that included scientists on a list of “climate deniers” even after they claimed they were being misrepresented and asked to be removed. This is the same group that to this day denies the link between secondhand smoke and cancer, claiming “smoking in moderation has few, if any, adverse health effects“. This is the same group that erected a billboard of the Unabomber with the caption “I still believe in global warming, do you?” and called it a success.

Heartland’s interest is clearly not in “finding and promoting ideas that empower people” as they claim but instead to allow their funders to manipulate credible sources and scientific facts. They manipulate the public to their own benefit and operate without repercussions.

To be very clear, we here at EnergizeRI are proud to have a group like the Heartland Institute as a critic. We are even prouder to share that distinction with people like Pope Francis and President Obama.

There are legitimate debates to be had about the best way to address climate change, but pretending it isn’t happening or that we are powerless to stop it helps no one. We are already seeing the effects of climate change here in our state. No Rhode Islander will deny the damage that was caused by Hurricane Sandy in Westerly and Charlestown. No one can deny the damage caused by the microbursts in Cranston or the severe flooding witnessed in Warwick. All over the state Rhode Islanders are dealing with the fallout and leading climate scientists believe it will only get worse. Climate change denial is no longer part of the national conversation and it should not be part of the policy debate here in Rhode Island.

All studies completed on our proposal to this point have shown that Carbon Pricing would create, not reduce jobs. The EnergizeRI Act is projected to add about 2,000 new jobs in the first few years alone and about 4,000 in total. The reasons for this are fairly simple. Rhode Islanders spend about three billion dollars a year to import the fossil fuels we use for our energy needs. The reality is that, every year, Rhode Islanders’ money is being sent to strengthen someone else’s economy. Think about that missed opportunity – three billion dollars that could be circulating in our local communities, that could be spent in our stores, that could be invested in our homes, that could create revenue for our state.

The EnergizeRI Act would create a new “Clean Energy and Jobs Fund” to make renewable energy and energy efficiency installations cheaper and more accessible to small businesses and low-income homes. By focusing more on energy efficiency and local renewable energy production, Rhode Island could keep a greater portion of those three billion dollars from flying off to Texas or Saudi Arabia and instead put those dollars to work strengthening our local economy. The choice between a strong economy and a safe environment is a false one. We can have both.

Finally, carbon pricing is recognized worldwide as one of the most effective emissions reductions tools. Seventy-four countries, 23 subnational jurisdictions, and more than 1,000 companies and investors expressed support for a price on carbon ahead of the UN Secretary-General’s Climate Summit. Locally, the REMI study estimates that carbon pricing, as proposed in the EnergizeRI Act, would get us halfway to the Resilient RI goals all on its own. Carbon pricing is an effective tool at both saving our environmental and strengthening our economy.

That’s why it’s so crucial that groups like Heartland not be allowed to control our future. We only have a small window to commit to bold action to fight climate change. Every minute that we spend listening to their misinformation just slows down our government taking the necessary steps and makes the consequences of our inaction more severe. We can’t allow that to happen.

Right now Heartland is requesting private meetings with our representatives. It’s important that they know the truth about who they are dealing with. Sign the petition and tell our elected officials that groups like Heartland have no place in conversations about our future.

Additional information about the EnergizeRI Act is available at EnergizeRI.org

May 11, 2016

State estate taxes are vital tools for broadly shared prosperity

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A new report released this morning by the Center on Budget and Policy Priorities (CBPP) emphasizes the importance of state estate taxes as tools for broadly shared prosperity and as a means to ensure that the very wealthy don’t avoid taxes by sheltering their wealth.

This report comes at an opportune time for Rhode Island, just a week after learning that policymakers are considering increasing Rhode Island’s estate tax exemption from the current $1.5 million to $2 million, a move that would benefit the heirs of fewer than 100 estates.[1] As seen in Figure 1, the increase in the estate tax exemption enacted two years ago already has significant negative impact on state revenues.

As Rachel Flum, Executive Director of the Economic Progress Institute, notes, “We face a choice: we can either invest in the things that help our communities thrive and all of us prosper, or hand yet another tax break to a few of our state’s wealthiest people.” Changes to our estate tax have already compromised our ability to make critical investments in the Ocean State. Increasing the estate tax exemption from $1.0 million to $1.5 million in the 2014 General Assembly depleted revenues by $8.4 million in 2015 and by $6.1 million already in 2016, according to the Department of Revenue.[2]

The CBPP report, State Estate Taxes: A Key Tool for Broadly Shared Prosperity, calls on states that have repealed their estate taxes to reinstate them, and suggests that the eighteen states that have estate taxes in place (including every state in the Northeast except New Hampshire) consider improving them. At $1.5 million, the Rhode Island estate tax exemption falls midway between the $1.0 million exemption in Massachusetts, and the $2.0 million in Connecticut.

The CBPP report emphasizes three compelling public policy purposes that result from estate taxes:

Providing revenue for investments that promote a strong economy. Estate tax revenue supports services that make a state an attractive place to do business and live.
Reducing inequality. The vast majority of taxpayers would never owe estate taxes. These taxes are paid by a small share of very wealthy families — those most able to afford them.
Taxing income that would otherwise escape state taxation. Without an estate tax, many unrealized capital gains go untaxed at the state level. This happens when an asset that has increased in value is not sold during the owner’s lifetime, leaving the heirs to gain the profit.

Report author, Elizabeth McNichol, emphasizes the price we pay when we erode state revenues:

You can’t get something for nothing. States that have reduced or eliminated their estate taxes have less money for public investments, so they are seeing higher tuition at public colleges; cutbacks in teachers at K-12 schools; and deteriorating roads, bridges, water treatment facilities, and other public infrastructure.”

Important investments in tens of thousands of Rhode Island’s low- and middle-income working families – such as increasing the state earned income tax credit to 20 percent of the federal credit, and helping families pay for child care–should take priority over tax breaks for a few dozen of our wealthiest families. These investments are particularly important given Rhode Island’s overall tax system, which is “upside down”. The more money you make the smaller share of your income you pay in state and local taxes. A robust estate tax helps to reverse that upside-down tax system, as do changes at the lower end, such as increasing the state EITC.

Douglas Hall, Director of Economic and Fiscal Policy at the Economic Progress Institute notes that “Preserving the estate tax at its current levels gives us revenues needed to give Rhode Island working families a boost, strengthen our economy, and invest in education and infrastructure, while making our tax structure more fair, and preventing those most able to pay from avoiding taxes on their accumulated assets.”

[1] Based on the most recently available data, after reducing by more than half the number of estates subject to the estate tax via changes adopted in 2014, only about 86 filers would remain, 39 of which would see their estate tax completely disappear if we were to raise the exemption to $2.0 million

[2] Revenue projections from the estate tax, seen in Figure 1, incorporate the revenue impact from changing the exemption level, but also reflect the number of estate tax filings, which vary from year to year.

May 10, 2016

Grim Wisdom Podcast #11

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Hello RI Future! Here’s a podcast I recorded recently with Sam Bell. I’ve been doing this weekly for a few months now and have finally caved to public pressure to make it available here to all of you! I hope you enjoy it! New podcasts will be up every week. Just so you know, the overarching theme of the podcast is that we’re going to give you insights into the nature of existence that will depress you. As it happens, we seem to spend a lot of time talking about RI politics, because it’s such an insightful and depressing topic. Set your expectations accordingly…

May 9, 2016May 9, 2016

Rhode Island’s economy needs a workers’ agenda

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This is a really important video.

The Economic Progress Institute‘s Douglas Hall does four things in the video below. First he gives us a basic, overall big picture economic context, then he “drills down further” into the economy of Rhode Island. Then we’ll see, in big pieces, what a “workers’ agenda” might look like before finally recapping some of the good things done in our state towards advancing a workers’ agenda.

Hall gave the talk as an introduction to The State of Working Rhode Island: Workers of Color, that “highlights the many challenges facing Rhode Island workers, showing the many areas where workers of color fare less well than others.” For more info see here.

Douglas Hall, Ph.D, is the Director of Economic and Fiscal Policy at the Economic Progress Institute. The video was prepared from the talk Hall gave at the 8th Annual Policy and Budget Conference on April 26, 2016, and the Powerpoint slides he prepared.

May 4, 2016

Legislators should prioritize Rhode Island workers

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On Friday it was reported in the Providence Journal that Speaker Mattiello’s budget priorities include reducing the estate tax by increasing the threshold for paying the tax from $1.5 to $2 million at an estimated cost of $4.3 million, as well reducing the corporate minimum tax from $450 to $400 at an estimated cost of $3.2 million. Reducing the estate tax and corporate minimum tax will provide little benefit to the overwhelming majority of Rhode Islanders and are not a good use of public funds.

“We hope that lawmakers will not reduce state revenues by over $7 million for tax changes that would benefit a handful of Rhode Islanders and businesses,” said Rachel Flum, Executive Director. “There are many wiser ways to use $6 million to support thousands of working Rhode Islander and to ensure that businesses have the workforce they need to succeed.”

The state increased the estate tax threshold in 2014 effective January 2015, essentially increasing estates exempt from paying the tax from $1 million to $1.5 million and reducing the tax on higher income estates. The estimated revenue from the estate tax in 2014 was $43.6 million, dropping to $34.2 million in 2015, a 20% loss of revenue after the change.

Further increasing the exemption to $2 million would benefit approximately 100 estates, of which 35 would not have to pay any tax at all.

In stark contrast, increasing the EITC to 15% of the federal credit, as proposed in the governor’s budget would put $4.4 million into the pockets of 83,000 working Rhode Islanders. Increasing it to 20% as proposed by bills pending in the house and senate would provide an additional economic boost of $8 million to the direct care workers, servers, salespeople and other Rhode Islanders who earn low to moderate wages. These state investments are then recycled directly into local economies.

“The estate tax is a vital tool for broadly shared prosperity,” added Douglas Hall, Director of Economic and Fiscal Policy at the Institute. “Our analysis shows there is no good public policy reason to reduce state revenue by reducing the tax that is paid by only a small number of heirs of large estates. The state’s priority should be to help struggling working families.”

One such priority is to help working families pay for child care assistance so they can enroll their young children in quality early learning programs and know that their older children are in a safe place after school. A pilot program allowing working families who are receiving child care assistance (income below 180% FPL) to remain eligible as their income rises to over twice the poverty level is set to expire in September, 2016.

As of March 2016, just over 400 children are enrolled in the pilot. Trend data since the onset of the program in October 2013 shows that the pilot has allowed parents to have a glide path to earning higher wages since around half of the families have income between 200 and 225% FPL and half have income between 180 and 200% FPL. It is estimated that making this “exit income” permanent would cost $1.6 million for FY 2016, an investment that not only helps working families but supports the child care sector. And with the lowest eligibility limit for child care assistance in New England, policymakers should also consider increasing the “entry income limit” from 180% FPL to at least 200%.

Just as there are far wiser ways to invest in our workforce, there are wiser ways to help businesses. The Statistics of Income for 2014 shows that 91% of Rhode Island businesses paid the minimum corporate tax, including 8,000 companies with gross receipts that total more than $10 million. Last year companies were given a break – a reduction of the minimum corporate tax by $50, from $500 to $450, taking revenue the state needed to pay for the public services and infrastructure that businesses use and rely on. Another $50 reduction is unlikely to significantly impact individual businesses, while a $3 million investment in workforce training for the 83,000 Rhode Islanders who lack a high school diploma and/or are in need of English language services would benefit all businesses who are looking for workers with basic skills.

April 21, 2016April 21, 2016

Invest in ending poverty with Capital Good Fund

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The Capital Good Fund is proving investors will support efforts that promote economic justice. The non-profit lending agency that focuses on helping people out of poverty has raised $650,000 since October through a Direct Public Offering.

“We are thrilled by the response to this social impact investing model,” said Andy Posner, the founder and CEO of Capital Good Fund. “It was our hypothesis that people would be inspired by the opportunity to connect their capital with their conscience, and the past few months have borne that out.”

Posner’s beleif is that people will invest in things that help the community. That’s what the Capital Good Fund does, from the bottom up. CGF gives financial coaching to low-income Rhode Islanders and is perhaps best-known for offering a non-predatory alternative to payday loans.

It “provides small personal loans that range from $300 to $15,000 and unbiased financial advice to poor and low-income Rhode Islanders who would normally only have access to capital through fringe and predatory lenders such as payday lenders, pawnshops, and rent-to-own stores,” according to a news release.

The Providence-based “social change organization” is trying to raise $4.25 million to issue 17,000 loans and create 60 jobs in Rhode Island in the next five years, Posner said. Since 2009, Capital Good Fund has made more than 1,000 loans and for more than $1million, with a payback rate of 90.4 percent. “Our financial coaching covers the basics of finances and health, so things like creating a budget, reviewing credit, managing debt, and eating well on a budget,” Posner said.

The first $500,000 raised is already helping Posner create new jobs in Rhode Island. It’s helped put Capital Good Fund in a position to hire several new employees. The news release says there are “five open positions in loan origination, loan servicing, and systems development. The Fund expects to hire five more positions in the third quarter of 2016. Interest applicants can learn more at www.goodfund.us/jobs.”

The Direct Public Offering (DPO) is like an Initial Public Offering (IPO) with a different name. “Because we are a nonprofit we cannot issue stock or shares, however we can issue debt,” Posner said. Investors, he said, can earn 6 percent interest on a $1,000 loan. And that investment helps CGF lift working class Rhode Islanders out of the cycle of poverty.

“Capital Good Fund is using a market-based solution that has the potential for dramatic scale and impact,” said Randy Rice, Capital Good Fund’s board chair who is also the communications director at Trillium Asset Management. “I invested in the DPO because I believe that if we are to solve pressing social and environmental challenges such as poverty, income inequality, and climate change, we need to take advantage of new approaches.”

Potential investors can learn more at www.socialcapitalfund.org or by contacting Andy Posner, Founder & CEO, at andy@capitalgoodfund.org.

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