Legislators say of pension dispute Assembly must ‘wait and see’

RHODE ISLAND legislative leaders addressed job growth, tax structure, pension reform and other economic issues at the Greater Providence Chamber of Commerce's 2014 Legislative Lunch on Wednesday. From left: House Minority Leader Brian C. Newberry, House Majority Leader Nicholas A. Mattiello, Speaker of the House Gordon D. Fox, Chamber President Laurie White, Senate President M. Teresa Paiva Weed, Senate Commerce Committee Chairman Roger Picard and Senate Minority Leader Dennis L. Algiere. / COURTESY GREATER PROVIDENCE CHAMBER OF COMMERCE/CONSTANCE BROWN PHOTOGRAPHER
RHODE ISLAND legislative leaders addressed job growth, tax structure, pension reform and other economic issues at the Greater Providence Chamber of Commerce's 2014 Legislative Lunch on Wednesday. From left: House Minority Leader Brian C. Newberry, House Majority Leader Nicholas A. Mattiello, Speaker of the House Gordon D. Fox, Chamber President Laurie White, Senate President M. Teresa Paiva Weed, Senate Commerce Committee Chairman Roger Picard and Senate Minority Leader Dennis L. Algiere. / COURTESY GREATER PROVIDENCE CHAMBER OF COMMERCE/CONSTANCE BROWN PHOTOGRAPHER

(Updated, 6:33 p.m.)

PROVIDENCE – Responding to the abrupt cancellation of a Wednesday press conference expected to announce details of a settlement in the state’s pension battle with public employee unions, Rhode Island legislative leaders said the only thing the General Assembly can do is “wait and see” how the settlement unfolds.

More than 600 state legislators and business leaders attended the Greater Providence Chamber of Commerce’s 2014 Annual Legislative Lunch on Wednesday, which included a panel discussion featuring Chamber President Laurie White, Speaker of the House Gordon D. Fox, Senate President M. Teresa Paiva Weed, House Majority Leader Nicholas A. Mattiello, Senate Commerce Committee Chairman Roger Picard, House Minority Leader Brian C. Newberry and Senate Minority Leader Dennis L. Algiere.

The luncheon was held only hours after a superior court judge set a trial date for the pension lawsuit following the press conference cancellation. White, who moderated the discussion, led off by asking Fox and Paiva Weed if mediation between state and union negotiators had broken down.

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“The honest answer is, I don’t know. We don’t know,” said Fox. “I can speculate all day about why a settlement would stall, or why a judge would set a court date … It could be any number of reasons.”

Fox and Paiva Weed emphasized that the General Assembly has not been included in the negotiations, even though Rhode Island’s lawmakers would be charged with approving any changes to the 2011 pension reform legislation brought about by a settlement deal, as well as replacing any savings lost in the budget as a result.

“People are speculating, and they’re looking at us, and we’re just as confused,” said Algiere.

While the lawmaker panelists were reluctant to broach the issue of how or under what circumstances the General Assembly would revisit the pension system overhaul – which is estimated to save the state and municipalities $250 million this year alone – Fox said in an interview after the luncheon that he has concerns about the financial strain that could be placed on municipalities if the terms of any settlement with the unions required a dramatic scaling back of the reform.

“We shouldn’t have to spend energy on this now,” said Newberry during the panel discussion. “We should be focusing on other things.”

Tackling the state’s tax structure, funding workforce training initiatives and making targeted investments in Rhode Island’s innovation economy were a few of the legislative priorities named during the luncheon session, as panelists reiterated the need to improve the perception of the state as a good place to do business.

“We have done Herculean work on this … and it’s frustrating that it’s not reflected in the unemployment numbers,” said Fox. “But you have to wonder where we would have been if we hadn’t done that.”

Fox cited the renaming of the Economic Development Corporation to the R.I. Commerce Corporation, the creation of the Office of Regulatory Reform, the marketing of former Interstate-195 land known as The Link for redevelopment, and the continued development of Rhode Island’s arts economy as examples of actions taken by the General Assembly in recent years to help pull the state out of the Great Recession.

Paiva Weed focused on the “Rhode to Work” action plan unveiled last month, which included a package of legislation Paiva Weed spearheaded to streamline Rhode Island’s workforce training system under the Governor’s Workforce Board, free up an additional $1.2 million for job training programs, and reimagine career and technical education in the state.

Mattiello said, though, that despite these initiatives the perception in the business community is that legislators haven’t done enough, as Rhode Island’s unemployment rate (9.1 percent in December) consistently ranks among the highest rates in the country.

“I am frustrated at being last in jobs,” said Mattiello. “We have to do better. We have to do more.”

Mattiello and the five other legislative leaders stressed regulation reform and tax restructuring to ensure that Rhode Island can compete with neighboring states Massachusetts and Connecticut. Last year, the Tax Foundation ranked Rhode Island 46th nationally for its business tax climate, and the Rhode Island Public Expenditure Council reported the state had the 14th highest overall tax burden as a share of personal income and 13th highest on a per capita basis.

Among the options offered by the panelists to improve the Ocean State’s competitiveness were eliminating the estate tax “cliff” and raising the exemption cutoff from $922,000 to $1 million or $2 million, lowering the corporate tax from its current 9 percent to 7 percent or 6 percent, and reducing the state’s 7 percent sales tax.

However, Fox reminded the business leaders gathered for the luncheon that the General Assembly – facing a budget “already stretched” – has to balance any consideration of tax cuts with the affect those cuts may have on the state’s infrastructural and economic investments.

“We need to have a discussion about which cut gives you the most ‘bang for your buck,’” said Fox. “Is it corporate, estate, sales or all of the above?”

The first step toward that process is a thorough evaluation of the fiscal year budget by the House finance committee, he said. In the meantime, Fox said he hoped Rhode Island business owners would be “willing to stay in the game” while legislators gather information to make an informed decision about updating the state’s tax policy.

Wrapping up the legislative luncheon, White asked the panelists’ thoughts on the announcement Monday that Massachusetts-based High Rock Development, owner of the “Superman Building” in downtown Providence, had renewed efforts to raise public support to convert the building into apartments.

Fox admitted that while the building was a “symbol of the state” for him when he was growing up, legislators have to ask at what point investing in the restoration of the building becomes impractical. Algiere, Newberry and Mattiello were more forthright in their comments, saying that they oppose putting any public money – excluding historic rehabilitation tax credits – into the project.

“The owner of the building should invest their own personal moneys and bring it up to where they need to bring it,” said Mattiello.

Last year, lawmakers shot down High Rock’s $114.7 million proposal, which included $39 million in state assistance plus a property tax stabilization agreement and a significant amount of historic rehabilitation tax credits.

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