03/07/2014
PROVIDENCE, R.I. — The goal was to get ideas, and House members picked up a number of them Thursday — some from a senior vice president at one of the state’s largest employers and some from an analyst who specializes in urban settings.
Each had his own suggestions on how Rhode Island can fix its economy, but they agreed on one thing: The state needs to weigh its options before embarking on a strategy.
John Kennedy, a senior vice president at CVS Caremark, offered perspective on what the Woonsocket-based company looks for when it thinks about expanding into a new state.
The company considers four factors, he said:
The state’s fiscal stability, which touches on employment and housing price trends and long-term budget projections.
The cost of doing business in the state, which depends upon “the regulatory environment,” the “totality of the tax burden” and the cost of energy.
The quality of the work force and how much the state invests in education and job training.
The available infrastructure, meaning roads and highways and the digital communication options.
“Those are the four pillars,” he told lawmakers in the House lounge.
Kennedy, who oversees tax risk management at the company, said he believes CVS Caremark is “quite happy with the benefits that we get from Rhode Island.” But his list had some lawmakers wondering what the company likes about the state when it fails to meet some of those needs.
Kennedy said the company, which employs some 220,000, including 6,000 in Rhode Island, has deep ties to the state because it was founded here. But he acknowledged that in his experience as a tax consultant before coming to CVS Caremark, Rhode Island was rarely a factor “in the places they were looking to do business.
“People just weren’t thinking about Rhode Island,” he said.
He urged the lawmakers to “look at all the options” as they review the state’s tax structure, and he also encouraged them to think about the state’s regulations.
“We don’t expect to be regulation free,” he said. “But regulation, in our judgment, has to be clear, transparent, predictable, I’ll use the word, stable.”
The other speaker at the House economic workshop was Aaron M. Renn, an analyst who urged lawmakers to take several specific steps, among them: eliminate the minimum corporate tax, waive all permit fees for new businesses during their first year, eliminate the requirement that employers offer temporary disability insurance and reform an unemployment insurance program that has been called the most expensive in the country.
Renn also urged lawmakers to look “for other regulations” where the state is “clearly an outlier” and suggested they rethink the Deepwater Wind plan to put a wind farm off the state’s coast, contending it will only raise electric rates that are already the 10th highest in the country.
House Speaker Gordon Fox said the workshop offered “food for thought” on a number of fronts and will fuel discussions as the 2014 legislative session continues.
“You could see the looks on the faces, those ‘aha’ moments,” he said.
Fox said one thing he took out of the meeting is that “we have to come up with a plan and stick to that plan.”
Rhode Island’s average unemployment rate last year was 9.5 percent, second only to Nevada’s, which was 9.8 percent, according to figures from the U.S. Bureau of Labor Statistics.
The national unemployment rate for the year was 7.4 percent.
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