Raimondo to business community: ‘Stay committed and seize the momentum’

LAURIE WHITE, president of the Greater Providence Chamber of Commerce, addresses the crowd at the Economic Outlook Breakfast held by Santander Bank and the Chamber of Commerce at the Omni Providence Hotel on Tuesday. / PBN PHOTO/ELI SHERMAN
LAURIE WHITE, president of the Greater Providence Chamber of Commerce, addresses the crowd at the Economic Outlook Breakfast held by Santander Bank and the Chamber of Commerce at the Omni Providence Hotel on Tuesday. / PBN PHOTO/ELI SHERMAN

PROVIDENCE – Gov. Gina M. Raimondo is asking the business community to “double down” its investment into the Ocean State economy, saying the state has garnered momentum and indicators are beginning to point in the right direction.
But there was some tempered optimism among the 300-or-so business leaders who attended Tuesday’s 2016 Economic Outlook Breakfast held by Santander Bank and the Greater Providence Chamber of Commerce at the Omni Providence Hotel.
According to a real-time survey, 59.7 percent of attendees believe the Rhode Island economy will do somewhat or much better in the next year, representing a gain of 6.6 percentage points compared with 2015. At the same time, however, optimism about the U.S. economy at-large has slipped 12.6 percentage points to 51.2 percent compared with the prior year period.
The fading optimism could have something to do with a high-level of concern regarding the upcoming presidential election, as 72 percent of participants believe the election will have an impact on their businesses. And while the survey isn’t totally scientific, Executive Vice President Michael A. Lee, managing director of commercial real estate at Santander, and Chamber President Laurie White agree it has been “directionally correct” for the past decade in terms of predicting the following year.
There was also a slight decrease – 6.5 percentage points – in the number of respondents who thought their businesses would do better in the next year.
Regardless, Raimondo feels the state is heading in the right direction, as the unemployment rate dropped to 5.4 percent in February, which is still higher than the national level of 4.9 percent, but a far way off from its peak of 11.3 percent during the height of the Great Recession. Year-over-year gains of 7,400 new jobs is another promising sign, although concerns linger about the shrinking civilian labor force, which fell to 552,100 in February compared with 555,100 in February 2015.
“The key recipe is making it easier and cheaper to do business in Rhode Island and encourage innovation so we can have higher-wage, higher-skilled jobs,” Raimondo told the crowd. “As we like to say, ‘[develop] the skills that matter, so people can get jobs that pay.’”
Lee and Raimondo point to some promising gains realized through new public policy measures, including last year’s reduction of the income tax, the elimination of the commercial sales tax on energy and the decrease of the corporate minimum tax from $500 to $450.
“All of those items will help spur our economy into more job growth,” Lee said.
In her proposed fiscal 2017 budget, Raimondo has a request to reduce the unemployment insurance tax, which she says is a point of some contention in the business community.
“I have heard loudly and clearly from every member of the business community from the smallest business to the biggest that we’re uncompetitive as it relates to our unemployment insurance tax,” Raimondo said. “I’d love to see that happen, so in a short period of time we’ll have reduced some core business taxes, each bringing us one step toward [becoming] more competitive.”
For long-term economic growth strategies, Raimondo says she’s focused on growing the talent pool in Rhode Island, which was identified by the largest group of survey respondents – 18.9 percent – as the top challenge facing their businesses. Growing a competent talent pool is also among the top priorities of the event’s keynote speaker, Meghan Hughes, the new president of the Community College of Rhode Island.
“I’m not a believer in churning out students for entry-level jobs at dead-end jobs,” she said.
Hughes, who served as executive director of the nonprofit Year Up Providence from 2009 to 2015 before taking the position at CCRI two months ago, says she’s focused on keeping students in school, making sure they complete, and then have the skillset to attend a four-year college or enter as an effective member of the labor force.
The strategy could bode well for those looking to hire in the next year, which accounted for nearly half of the survey respondents. Positive results down the road, however, will largely depend on synergies across sectors, according to Mayor Jorge O. Elorza.
“We can’t do it alone in government,” he said. “It has to be a partnership – a private-public partnership.”
Raimondo also recognizes that cross-sector partnerships are integral to the future success of the state, asking the business community to “dig in and keep going.
“Stay committed and seize the momentum,” she added. “Let’s just recommit ourselves and double down, because we’re on a roll and the state is terrific and if we stay at this together we’re just going to keep on going.”

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