(via Wikipedia)
Rhode Island is hyperfocused on Curt Schilling. But unlike eight years ago when he heroically hurled us to a World Series victory, this time we have to rely on his business – not athletic – acumen. His video game company, 38 Studios, was given a taxpayer guaranteed $75 million loan to move from Massachusetts to the Ocean State. But already he’s missed a $1.125 payment to the state.
It seems as if both liberals and conservatives opposed the deal as it was being rushed through at the tail end of the Carcieri Administration. Colleen Conley, of local Tea Party fame, told me she opposed it and told the governor as much. And certainly Rhode Island progressives didn’t like the idea of providing such a giant corporate welfare check to just one company.
So who supported it, other than the former governor? It’s hard to tell.
Funding for the program that granted Schilling his loan was rushed through the State House in a supplemental budget proposal submitted by the governor in April of 2010. Legislators say they asked if the money was wired for a specific recipient and were told it wasn’t, though some doubt that now. In the House, all but six voted for the expenditure. They were Reps. Driver, Ehrhardt, Jacquard, Lima, Newberry and Watson.
One person who sure did is Chafee and Carcieri’s economic development director Keith Stokes. In a letter to the local business community dated August 2010, he wrote:
“Many community leaders, like you, have inquired about why the RIEDC would offer so much credit enhancement to one company. Simply put, our extensive due diligence revealed that while 38 Studios could raise venture equity and stay in their current location, its investors and management team are willing to relocate the company and the related opportunities for Rhode Island if we provide an alternative to their equity dilution.
The RIEDC board is comprised of Rhode Island’s top CEOs, university, hospital and industry executives, heads of small businesses and labor. Members used their considerable business expertise to thoroughly assess the opportunities and risks associated with this transaction. They asked all the hard questions the media and the public have asked, and more.”
Gov. Chafee has called an emergency meeting of the EDC this morning to discuss the matter. We’ll keep you posted.
It is long past time to put an end to the misguided idea that there is any role at all for government in picking which companies should be the winners.
The legitimate job of government in economic development is to make and enforce fair rules and to create a regulatory environment that encourages investment and business development – low taxes, fast efficient regulatory reviews, and market focused incentives that encourage competition. That is what will make Rhode Island attractive and encourage people to develop businesses here. Legitimate economic development in a market friendly environment doesn’t require the kind of outright bribery that all the EDC grant and loan programs represent.
The role and function of EDC needs to be completely reconsidered. The Governor should put an immediate ban on all EDC grants, loans and other such efforts. The priority for government economic development efforts should be on making Rhode Island a fair, competitive and business friendly environment for all businesses.
Its time to focus on the hard work of serious reform of our government. That is the one thing that will actually work in economic development.
Glad to see my rep Bob Jacquard did not fall for this one. Unfortunately not all of our legislators are so shrewd.
“And certainly Rhode Island progressives didn’t like the idea of providing such a giant corporate welfare check to just one company.”
Except for two RIFuture blog contributors and various RIFuture progressive commenters, who justified the actions of the EDC over multiple posts and were supportive of the loan.
But who remembers that far back?
Well, now you’re just fibbing. Brian specifically said he had reservations (“I, for one, was concerned about the tepid clawback provisions in the deal”). Oddly that post seems to have been taken down (Bob?). I’ve already said that imho Frymaster was generally supportive (and speaking about his client when that decision was made).
As for commenters, note that we’re not all about marching in lockstep over here. I’m proud we progessives had a debate back then and now on the deal.
I’ll pipe in. That post was taken down. Sometime in the afternoon yesterday. But the internet is a cruel mistress. And Google Cache remembers just like Pepperidge Farms.
bit.ly/JMcOSh
Qualified support is still support. All investments are inherently risky and come with reservations. The point is that saying “progressives didn’t like the idea” is revisionist history. A number of the progressives here were “for” this loan (as opposed to “against”) on the basis that it could create jobs and stimulate the local economy. In fact, it was the free market blogging crowd who unanimously opposed this loan and predicted this result from the beginning.
Well, true enough. But when you remove those qualifications you’re fibibing a bit (chose “fib” intentionally to describe it).
Note also that he also said “one of the most important things the state needs to remember is that cluster development takes a long time to form and grow.” A few years down the road, perhaps he’ll have been proven right. Start-ups aren’t for the faint of heart.
Curt Shilling is not the guilty party. He is simply the beneficiary of a rigged system. Carcieri, Stokes, Fox, Paiva-Weed and everyone who was lead by this quartet to vote for this abomination of a deal are the guilty ones. I hope people follow Mr. Stokes lead and resign their positions. $102 million dollars that could have gone to helping the 142,000 people living at or below poverty, that could have saved people homes, that could have launched 100′s of small buinesses, that could have fixed our bridges and cleaned our bay. Instead? Shilling asking for more money via film tax credits, unemployment, and our young and educated bolting for less corrupt pastures. Good job, Carcieri et al – your business experience sure came through on this one.