With the state economy still underperforming its neighbors and the costs of the 38 Studios LLC failure being realized, lawmakers from all points on the ideological spectrum pitched plans to put the state on a better course.
But when this year’s economic-policy proposals are measured by their potential economic punch, few passed by the General Assembly last week appear poised to substantially boost growth or fundamentally improve the state’s business climate.
A $30 million revenue shortfall and the collective risk aversion caused by 38 Studios combined to produce a state budget for next year highlighted by modest initiatives and incremental steps forward.
“I don’t know what they have really done to change anything,” said Mark Higgins, dean of the University of Rhode Island’s College of Business Administration, about the budget and bills passed last week.
Compared with the $1.5 billion economic-incentive package approved in Connecticut this year, Rhode Island’s policies, even the good ones, may not have much noticeable impact, said Gary S. Sasse, director of Bryant University’s Institute for Public Leadership.
“I get the impression that the really big issues that have an impact of economic development – tax reform, support of higher education – the things that will really have a structural impact, have largely been ignored,” Sasse said. “That is unfortunate, because the states we compete with are not ignoring them.”
Although it may have lacked a signature economic measure, the 2013 legislative session was far from hostile to the business community.
Most of the new economic initiatives that moved forward did come from local industry leaders and, despite the budget crunch, there were no broad-based tax increases.
Greater Providence Chamber of Commerce President Laurie White said overall, lawmakers were heading in a “good direction” in 2013.
The Chamber championed several initiatives that passed or were near approval last week, including increased education funding, revival of the historic-tax-credit program, biweekly pay, state help to firms applying for federal Small Business Innovation Research grants and a state tax-code change allowing companies to front-load asset depreciation.
The measures still need to be signed by Gov. Lincoln D. Chafee and in some cases House and Senate versions need to be reconciled.