Education path to economic growth in R.I.

ALL IN: The 32-year-old grandson of a former U.S. senator, Clay Pell decided to enter the family business of politics by running for Rhode Island governor. His economic platform focuses on workforce-training and education initiatives. / PBN PHOTO/MICHAEL SALERNO
ALL IN: The 32-year-old grandson of a former U.S. senator, Clay Pell decided to enter the family business of politics by running for Rhode Island governor. His economic platform focuses on workforce-training and education initiatives. / PBN PHOTO/MICHAEL SALERNO

(Editor’s note: This is the third in a series of articles focused on the 2014 gubernatorial candidates and their plans for economic development.)

Just last fall, Clay Pell was finishing up a six-month stint as “language czar” in the U.S. Department of Education, the highest-profile job of his young career.
Now the 32-year-old grandson of late U.S. Sen. Claiborne Pell hopes to educate Rhode Island out of its economic doldrums as its next governor.
In his first-ever campaign for public office, Pell offers an economic platform centered on workforce training and collaboration between educators and employers.
Education and workforce training feature heavily in the platforms of all three major Democratic candidates, but only Pell leads off his economic plan with an education-related initiative on top of a separate 19-page schools agenda.
“I think we need to do a much better job of equipping our students with the skills they need to compete in the global economy,” Pell said in a recent interview at his Providence campaign headquarters. “That means computer science and language, but it also means we need students to get the practical experiences that will be helpful to them to look for jobs. So when they do get to a job interview and are asked about their experience, they have an answer.”
The initiative leading off Pell’s economic plan is the creation of a statewide internship program, managed by each local school district, and providing every high school student the opportunity to participate in an internship at a local company.
The state would contribute $2.5 million to Pell’s “Hope Internships” to get them up and running with the help of nonprofits and to provide tax incentives for businesses to provide opportunities for students.
But it’s unclear whether an internship program, even if popular, is unique or substantial enough to distinguish Pell from his two well-established Democratic primary opponents, General Treasurer Gina M. Raimondo and Providence Mayor Angel Taveras.
Indeed, the platforms of all three Democrats share a number of similarities, such as:
• Borrowing to repair roads and bridges.
• New workforce-training programs.
• More aggressive state-level tourism promotion.
• Creating a Massachusetts-style school-construction authority.
• Raising the minimum wage.
• Promoting the manufacturing sector.
• Building new university-industry partnerships. And on some of the most contentious issues of the day, the three candidates share support for paying back the 38 Studios bonds, not holding a constitutional convention and not spending state money on retrofitting the Industrial Trust Tower.
So as the least-known candidate in a three-way race, Pell has tried to challenge his opponents more than they have him.
He’s promised to try to raise the state minimum wage to $10.10 immediately – instead of gradually – joined his union backers in opposition to teacher-evaluation proposals and, also with public-sector unions, attacked Raimondo over the state pension overhaul.
Pell’s economic plan does have some unique initiatives, however, and perhaps diverges most clearly from his major primary opponents on business incentives for job creation.
Since the collapse of 38 Studios in 2012, leaders from both parties, including Gov. Lincoln D. Chafee, have distanced themselves from most state financing programs for businesses.
While he shares an aversion for large bets on individual companies, Pell sees a role for the state in helping startups find capital to grow.
“38 Studios has been an enormous tragedy for this state, but I do not believe the lesson from it should be that we cannot afford to invest,” Pell said. “To build the future of this state we have to make some smart investments – I don’t mean they have to be huge investments – they should be diversified, rooted in areas where we are strong. They should be rooted in our people.”
The Pell plan includes $3 million to establish a state micro-finance program run by the R.I. Commerce Corporation for making loans of $50,000 or less to businesses.
It would also double the current annual appropriation, to $1 million, for the Innovate Small Business Fund, a program created last year to help startups apply for federal research and technology-transfer grants.
And Pell would allocate $5 million to be split between the Slater Technology Fund and the R.I. Small Business Loan Fund.
Increasing funding for Slater, a historically state-backed venture-capital firm that has been moving toward private funding, splits specifically with Raimondo, who supports keeping the state out of venture investing entirely.
Unlike many who have called for the elimination of the R.I. Commerce Corporation, Pell would give the quasi-state agency an expanded role in sponsoring the Rhode Island Business Plan Competition, working with municipalities to locate buildable marine industrial sites, support manufacturing career education, lead a two-year trade mission to promote exports, market the health care sector and coordinate tourism promotion, among other things. Like his Democratic competitors, Pell would make a sizable direct investment in the state’s transportation infrastructure, in his case $200 million in two separate $100 million bond referendums to pay for road, bridge, transit, port and railway improvements.
Exactly how much of that would be dedicated to highway spending and how much to the other categories is not defined.
The Pell plan includes support for public transportation, even if it does not commit to funding any specific projects. Pell said he supports new commuter-rail stations in Rhode Island and more frequent service to existing stops.
To encourage state employees to use public transportation, the Pell plan would include a bus and train pass system for state employees, though it does not include a cost estimate.
Encouraging mass-transit use by public workers would be a departure from the Chafee administration, which has focused on building and expanding parking around the Statehouse.
Asked about Providence’s proposal to build a streetcar system, which has competed with state highway projects for the past two years, Pell said it was a city issue he wouldn’t get involved with.
All told, Pell estimates that his economic, education and transportation plans would cost an additional $35 million in their first full fiscal year.
That includes $25 million for education, only some of which would be recurring in succeeding years, and $10 million for economic programs, at least $5 million of which would not be recurring. It does not include the between $8 million and $9 million in annual debt service from each $100 million, 20-year infrastructure bond, the first of which would start in fiscal 2017 and the second 2019.
Like the agendas of primary opponents, Pell’s plan does not offer any specifics on tax policy.
Much of the additional spending he proposes would be covered through borrowing and the rest, he said, could be manageably absorbed by the annual budget.
“Where I think Rhode Island has often gone wrong is looking at one-off solutions and suggesting a tax change in one direction or another as its economic- development strategy,” Pell said. “I believe we need a comprehensive approach and as part of that we need to be fair and competitive with our taxes.” •

No posts to display