“We don’t take the possibility of a strike lightly but the workers who make Boston and New England strong are ready to do what it takes to protect their families,” said Roxana Rivera, vice president of 32BJ SEIU.
Eugenio H. Villasante, an organizer with 32BJ SEIU said there are about 500 SEIU janitors in Rhode Island – Fidelity: 60+; Providence College: 60; TF Green: 32; CVS: 25; Bank of America Center (100 Westminster St., owned by Joe Paolino): 19; Bank of America: 10; One Financial Plaza building (downtown Providence): 16.
“These workers clean key pillars of the Rhode Island economy,” said the news release. “The mostly immigrant workforce has a long history of fighting for good jobs in the area.”
According to the news release, “SEIU and the cleaning contractors still remain far apart on any new agreement involving wages and workload issues.”
Boston Mayor Marty Walsh “said he would not cross the picket line into some of Boston’s most iconic buildings if Boston janitors decide to strike,” according to the Boston Herald. Governor Gina Raimondo and Providence Mayor Jorge Elorza have been asked by RI Future if they would honor the potential picket lines. Neither could immediately be reached for comment.
CORRECTION: According to Providence College, their custodial staff is organized under a different branch of the SEIU and is not a part of 32BJ SEIU contract negotiations. “Our cleaning contractor has a contract with a different SEIU Local (615 CTW) which represents only the custodians on our campus,” said PC spokesman Steven Maurano. “That contract does not expire for another several months.”
Rhode Island gave away more than $30 million to 18 companies in 2015, according to a new report from the state Division of Taxation. This is almost twice the $14.8 million it gave away in 2014, according to an analysis of that report by the Economic Progress Institute.
The new Division of Taxation report is not a complete list of tax subsidies the state offers. It “focuses on seven tax incentives that were created to help spur job creation and economic development – including sales tax exemptions, corporate tax rate reductions, and motion picture production tax credits,” wrote David Sullivan, the state tax administrator, in the report.
More than 60 percent of the lost revenue identified in the report went to CVS, which enjoys a $19 million “Jobs Development” tax break from the state. CVS also received more than $4 million in additional tax breaks not analyzed specifically in the report. The Jobs Development Act is the biggest corporate subsidy the state offers. In total, it accounted for 76 percent of the lost revenue, or $23 million.
Citizens Bank is the second largest beneficiary of the Jobs Development subsidy, saving $2,978,686 in taxes. A subsidiary of Citizens Bank, Citizens Security, which lists the same address as the bank, also received a $393,038 tax break under Jobs Development Act, which offers a discount to companies with more than 100 employees for every 50 new jobs that last for at least three years.
Fidelity, a Smithfield-based investment firm, received $4,083,791 in tax breaks from Rhode Island, according to the report, and Electric Boat received more than $3,277,000. Woody Allen’s Manhattan-based production company, Perdido Productions, received $3,214,346.63 in film tax credits. Allen filmed his new movie “Irrational Man” in Newport and Jamestown.
The Economic Progress Institute says the report leaves out valuable information for analyzing the data that is required by law.
“While the information provided in the report is important, it tells us nothing about whether these tax incentives have been effective tools for growing our state’s economy. That was supposed to change this year,” according to the EPI press release. “Two years ago, lawmakers recognized the need to understand whether tax incentives are benefiting the economy and enacted the Rhode Island Economic Development Tax Incentives Evaluation Act of 2013. The law requires state analysts to conduct cost-benefit analyses of several of the state’s economic development tax incentives, including the Jobs Development Act and Motion Picture Tax Credit. The law requires the Governor to include recommendations for continuing, modifying, or terminating recently evaluated incentives in her proposed budget. The first set of evaluations were scheduled to be produced by the Office of Revenue Analysis by June 30, 2015 but to date have not been issued.”
The report mentions this as well. “This report is not intended to provide an analysis as to the effectiveness of this or any other tax credit or incentive,” wrote Sullivan in the introduction.
]]>This all makes sense and I can appreciate the importance. Fundamentally, when local dollars are spent locally, they recirculate in the economy. Or to put it conversely, every dollar that is spent outside of the state is a net loss of overall wealth for Rhode Island. Similarly, every dollar spent at a national chain (even if local) suffers from leakage as our economic system peels off layers of surplus value to pay shareholders, CEOs, advertising, etc. that drains wealth from a community. You get the picture.
While I support the whole concept of buy local, it is really low impact and based more on the individual consumer’s purchasing decisions. “Should I get my tools and supplies at Mt. Pleasant Hardware, or should I go to Home Depot? Should I get my copy of Debtors’ Prison: The Politics of Austerity Versus Possibility at Symposium Books downtown, or should I just order it from Amazon?” Many people choose the latter in these scenarios. With limited take-up of “buy local,” the benefits remain small.
What can work much better is strategic sourcing from large local institutions. This can include universities, hospitals, large corporations (I’m looking at you CVS, Fidelity, and GTECH), and city and state governments. [Note: it’s important to remember that all this can be done without a local purchasing preference policy which Rhode Island policymakers rejected a few years ago at the request of large contractors due to the danger of reciprocity in other states.]
A lot of my work involves strategic sourcing and when done right the results are hugely beneficial for local, small, minority, and women owned businesses. And it benefits the state too as more purchasing done locally = more tax revenue. It’s not easy to do (nothing is), but if one looks at a hospital (or system like Lifespan), the amount of money they spend in any given year is huge, similarly for universities, for city governments, and for corporations.
The state can be a partner in the strategic sourcing process by helping identify local businesses that can serve as vendors for large institutions that currently buy large quantities of goods and services out of state or overseas. Imagine if the RIEDC RI Commerce Corporation convened a roundtable of all the executive leadership from each of the state’s hospitals, sought to understand their purchasing needs, identified mutual pain points, and proactively identified, recruited, and scaled local businesses to serve the needs of these institutions. Linking local suppliers to local buyers is a low cost way to boost the economy.
Sounds far-fetched, but I do this often at work. Recently, I assisted with Johns Hopkins University’s initiative to increase their local spend by 10% in Baltimore, developed a local sourcing plan for a Los Angeles Hospital, and analyzed the success of Source Detroit, a program to transfer a portion of the $1.6 billion dollars spent annually by Wayne State University, the Detroit Medical Center, and the Henry Ford Health System to locally owned businesses.
The process is basically to find out what an institution buys and then identify local businesses that can supply it instead. There are challenges, however. First and most importantly, you need commitment and buy-in from the senior executive leadership at the institutions. There are lots of good ideas out there and quick-win solutions that would boost the state’s economy, but without the commitment, nothing is going to happen.
Second, not everything can be sourced locally so you need to be selective. This is the fundamental difference between a generic buy local campaign and strategic sourcing. Identifying the high-spend categories that are available in the local market is important and will make the process flow smoother. Not everything is made here, and if it’s not made here, it can’t be purchased here. Luckily though, Rhode Island still makes a lot of stuff.
Third, you have to overcome the existing practices of the purchasing managers. Relationships take time to build, and switching to a new vendor can involve some risks. These risks can be partially alleviated by starting slow and by identifying quality local supplies used by other institutions. There is a process that works to change the purchasing habits and long-standing relationships, but it takes time.
Fourth, sometimes local suppliers don’t have the cheapest per product cost. When businesses operate with a shortsighted focus on low prices, local suppliers lose even though they may still have the lowest overall cost. There are many hard and soft procurement costs that are often ignored such as transportation fees, legal fees, late deliveries, damaged product, etc. that would not accrue from local vendors.
Finally, many small businesses need help building their capacity to be able to handle the procurement needs of a large institution. Here is another role for the state and partners to play to ensure that the local businesses can effectively provide the goods and services needed by large institutions. Small business support organizations like the Small Business Development Center and SCORE can offer the training and resources needed.
Why is strategic sourcing important for the state? There are three key reasons.
If I was a Mayor or Governor, I would create a position in my administration specifically tasked with building and supporting these relationships. There is a net benefit to the state with the minimal cost of an FTE position in the budget. The benefit to a city is less, although new business expansion would provide additional property tax revenue. To do it right, you need someone competent who can facilitate these connections, hold conferences and convenings, and identify the local businesses that can act as vendors.
Alternatively, this could be done outside of government by any trusted third-party (i.e. RI Foundation, Chamber of Commerce, RI Black Business Association, etc.).
This is the 2nd in my ongoing economic development series called “Rebuilding Rhode Island’s Economy.”
]]>How about a downtown museum, library or art gallery? Or maybe even the Columbus Theater on Broadway, the poster child in Providence for the potential to expand our arts economy?
Instead, the charrette will be held at Fidelity’s campus in Smithfield. It’s scheduled to run from 4 to 6:30 p.m. – perhaps a more convenient time for bankers to make than artists.
So, the effort isn’t perfect … it’s still a good idea, and I’m glad it’s on state’s radar. If we spent a fraction of the time building up the arts economy as we do complaining about CNBC rankings, we’d probably be able to solve both issues at once!
Issues being discussed include:
If these topics matter to you, you should show up and have your voice be heard … assuming you can get out of work early enough to get up to Smithfield. If not, drop them off next week when Rhode Island hosts a forum on how to attract more investment bankers to the state at AS220. (just kidding)
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