Business leaders pleased with progress made on many fronts
The 2006 legislative season didn’t look promising at the start, with a $200 million deficit and an election coming up that some feared would keep state leaders from doing anything bold.
Beyond Cash Donations: How New Forms of Giving Are Transforming Not-for-Profit Accounting
Evolving Funding Landscape for Not-for-Profits Not-for-profit organizations are being asked to do more with less,…
Learn More
Plus, there were big distractions – the Harrah’s casino proposal, the Beacon Mutual Insurance Co. scandal.
Still, Rhode Island’s business interests pushed hard for their priorities: affordable health care, lower taxes, containment of energy costs, medical malpractice reform. And they fought hard against proposed new layers of regulation and cuts to the historic-preservation tax credit.
Overall, it turned out pretty well, local business leaders said.
“We are extremely pleased that the [R.I.] House and Senate overwhelmingly adopted the optional flat-tax initiative,” said Laurie White, president of the Greater Providence Chamber of Commerce, which worked with House leaders to develop a tax-relief plan. “We think it’s a vitally important economic-development tool that will reduce poverty and create jobs.”
“As far as we’re concerned, this was an excellent legislative session,” said David R. Carlin III, vice president of legislative services for the Northern Rhode Island Chamber of Commerce.
Carlin said his group’s “number-one legislative priority” was property-tax reform. The Chamber and the business-backed Rhode Island Public Expenditure Council had sought a constitutional amendment to limit state and local spending growth, but when the state Senate leadership offered up a package of property-tax reforms, they embraced the smaller victory.
For small employers seeking affordable health-care options, there were triumphs and lost causes.
The General Assembly approved a six-part package that will create a new kind of lower-cost plans, focused on preventive care, and set the stage for future subsidies for businesses employing low-income workers.
The legislation also requires insurers, providers and regulators to work together to develop a system that will enable patients to know how much specific services will cost them – a crucial aspect of consumer-driven health care.
Edward J. Quinlan, president of the Hospital Association of Rhode Island, said that although only limited progress was made, legislators began “a very, very important conversation” that could bear more fruit later on.
“I think the Chamber of Commerce, with its success with the flat-tax initiative, showed that,” Quinlan said. “They began discussions, publicly and privately, over a year ago. I think, when you are looking to move major public policy initiatives, it often takes a concerted effort over a lengthy period of time. You can’t expect to do it during the session. You’re competing with so many other issues.”
Quinlan said he was pleased legislators had provided extra money for nursing-school faculty at Rhode Island’s public colleges, because a shortage of teachers has been making it difficult to train new nurses to fill vacancies.
He said hospitals and others in the industry were “disappointed,” however, by the General Assembly’s inaction on medical malpractice insurance reform – “an issue that is of increasing concern to hospitals and physicians, and an increasing cost to the system.”
Business leaders also had hoped to reduce Rhode Island’s extensive health-insurance coverage mandates, which include many services they don’t believe are essential. That effort didn’t get anywhere.
But the Fair Share Health Care bill – which would have required employers with more than 1,000 workers to spend a minimum share of their revenues on health coverage, and to report in detail what they spent – never got a Senate vote, even after a substantial revision.
That, White said, was a victory for businesses; several groups across the state had come together to fight the measure, though some business owners supported it.
On energy issues, there was also progress.
Legislators passed measures to create a new Office of Energy Resources, a new Energy Efficiency and Resource Management Council, with funding, and a new Permanent Joint Legislative Committee on Energy.
They extended the “standard offer” for electricity – a price-controlled system – through the year 2020. That was an “important” move, said John Farley, executive director of The Energy Council – Rhode Island, because it will keep the electric-distribution companies, such as National Grid, fighting to keep prices low for consumers.
TEC-RI, an alliance of major energy consumers, also was pleased to see legislation requiring that utilities obtain electricity from the “least-cost” and most-efficient sources available, Farley said. Also good will be a new demand-side management program for natural gas, an affordable energy program for the needy, and a new public education program.
“We still have more to do,” Farley said. “Rhode Island is in a very difficult situation when it comes to energy. More needs to be done to increase our supplies, to reduce our dependence on natural gas and oil, to lower our peak demands, and to foster a thriving, competitive market.”
For developers, the biggest victory wasn’t what the General Assembly did, but what it didn’t do: it didn’t cut or alter the state’s 30-percent historic-preservation tax credit, which many had feared would be a victim of the big deficit.
On that front, business got plenty of help from Grow Smart Rhode Island, which led a 55-member Coalition for Neighborhood and Economic Renewal to save the tax credit.
Despite concerns about the credit’s growing impact on state revenues, Grow Smart says it has been “enormously successful in stimulating new jobs, new tax revenue and new economic vitality” across Rhode Island, especially in the oldest communities.
