Chafee, business leaders at odds on view of economy

By Patrick Anderson
PBN Staff Writer

Gov. Lincoln D. Chafee’s latest idea for repairing the Rhode Island economy may be his most controversial. More

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ECONOMY

Chafee, business leaders at odds on view of economy

By Patrick Anderson
PBN Staff Writer

Posted 12/10/12

Gov. Lincoln D. Chafee’s latest idea for repairing the Rhode Island economy may be his most controversial.

The drive to boosting state commerce by reforming the R.I. Economic Development Corporation has driven inquiry and debate in Rhode Island since the collapse of 38 Studios LLC last spring.

But in defending his decision to reshuffle, instead of restructure the EDC, Chafee rejected the premise that radical change is needed on the basis that the current structure is already working.

“For all the handwringing and ‘woe is us’ – it’s just not accurate,” Chafee told the EDC board of directors last month after nominating William J. Parsons, a 37-year veteran EDC staffer to lead the organization going forward. “We don’t believe that the EDC is broken; we don’t accept that. It might have been making bad decisions, but the structure itself can work and is working.”

Chafee described an “irrational negativity” in Rhode Island he attributed to the press and “group-think,” which he defined as seeking to “minimize conflict and reach consensus without sufficiently testing ideas.”

Members of the EDC board, which the governor chairs, accepted the analysis without questions.

Along with choosing institutional knowledge over change in the EDC leadership, Chafee passed on plans to subsume the quasi-state agency within a new secretariat as recommended by the Rhode Island Public Expenditure Council in a post-38 Studios economic analysis.

Chafee, who commissioned the RIPEC report, has acted on several less central conclusions of the report.

In making his case that the economy, although not fully cured, is healing, Chafee pointed to rising state revenue collections, a recent analysis of the state’s tax burden and a favorable September jobs report.

The September job numbers showed, for the first time since August 2006, five different monthly measurements moving in a positive direction: the unemployment rate, the number of unemployed residents, the number of employed residents, the size of the labor force and the total number of Rhode Island-based jobs.

The revenue projections showed property tax receipts growing from approximately $1.1 billion last year to $1.25 billion by fiscal 2018.

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