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Rhode Island’s taxpayers were hit with a couple major news stories within the last week, but in neither case should the state’s leaders be distracted from creating a positive economic-development climate in the Ocean State.
First the good news – the state’s budget officer is projecting a fiscal 2012 surplus of $102.7 million, a result of an increase in expected revenue and a decline in expected spending.
Despite this news, it is important that the governor and the legislature not lose sight of the importance of building a more sustainable model of government, else they fall back into the old ways of spending more than we, the taxpayer, can afford.
The bad news concerns 38 Studios LLC, the video game developer founded by former Boston Red Sox pitcher Curt Schilling. And while the story is still developing, it’s clear that the company, which received a $75 million loan guarantee from the state through the R.I. Economic Development Corporation, is in danger.
How much danger is not clear at the moment, although the deal has gone badly enough to cost Keith W. Stokes his job as EDC executive director. Developer Colin P. Kane, head of the I-195 Redevelopment Commission, last week was the leading candidate to succeed Stokes.
The worst-case scenario is not that 38 Studios goes under (and the state have to pay off the bonds that were floated for the company), but rather that the state retreat from economic-development programs altogether, especially those that call for investing in young companies.
The state must not walk away from efforts to lend a helping hand to the next generation of entrepreneurs. •