Bond referendum is urged for economic development

If economic development is truly a pressing need in a state with double-digit unemployment, then it should be identified as such to voters in the form of a bond referendum, says Keith W. Stokes, executive director of the Newport County Chamber of Commerce.
Offering ideas to a Senate task force he said are “outside of the box,” Stokes called for a bond referendum of up to $50 million solely devoted to economic development.
“Economic development as a public function in this state has been largely fragmented and undercapitalized,” Stokes told the Senate Task Force on Small Business Growth and Development on Dec. 16. He has worked with three governors and numerous state economic-development directors in his 20 years leading the Aquidneck Island Chamber. Stokes currently is treasurer of the R.I. Economic Development Corporation board of directors.
Addressing what he called “the 800-pound gorilla” in the room, Stokes noted that the major problem facing small business is a lack of capital.
In order to recapitalize such state programs as the Small Business Loan Fund, administered by the EDC, he suggested the state put before voters in November 2010 a bond referendum of up to $50 million.
Stokes pointed out that the state has proposed and voters have approved bond issues in the past for many other pressing needs, including housing, transportation, historic preservation, education and the environment, but never solely for economic development in the state as a whole.
With the proceeds of a bond, Stokes said, the state could “leverage federal funding” and “jump-start” the economy by devoting funds to those critical state agencies that provide, for example, financial backing to small business, job training and support services. He said the Small Business Loan Fund at EDC, down to a balance of $2 million, has not been recapitalized since 1988. Members of the task force reserved judgment on Stokes’ idea, but it will be considered for the proposals that Task Force Chairwoman Sen. Erin P. Lynch, D-Warwick, said the panel will prepare for introduction to the General Assembly. “We will be putting together a legislative package, based on what we have heard in the last several months,” she told Providence Business News.
The task force was created this year by Senate President M. Teresa Paiva Weed to address small-business problems. Besides Stokes, others who gave testimony Dec. 16 included other representatives of chambers of commerce around the state, representatives of the R.I. Public Transit Authority and the state fire marshal.
Asked what she thought of a bond issue, Lynch said it is an idea that needs to be “researched more thoroughly” so the “pros and cons” can be fully considered. She said she is not closed to the idea and observed, “I don’t think anybody is closed to anything right now. It is our responsibility to look at every opportunity,” Lynch said.
Laurie White, president of the Greater Providence Chamber of Commerce, called a bond referendum for economic development “an interesting idea,” especially because as Stokes noted, state voters have approved similar measures in many other areas. “I think it has great merit,” White said.
The bond referendum was one of several ideas Stokes offered to the task force. Others included:
&#8226 Amend the job-creation program so smaller businesses could take advantage of the tax credits. Stokes said the current threshold, which requires the creation of at least 100 jobs to qualify, could be lowered to even one or two jobs so smaller companies could take part.
&#8226 Set up a small-business energy investment fund at the EDC to help small businesses reduce energy costs by working with utilities such as National Grid on needed capital improvements. A new roof, for instance, or new windows could help a small business save on energy, he noted. &#8226 Invest in Main Streets across the state. Stokes noted that every community has a Main Street made up mostly of small businesses. More than 20 other states are investing in Main Streets, he said, and he suggested that a Main Street program be established in Rhode Island, using federal Community Development Block Grants (CDBG) to fund it. “We have no statewide strategy on how these funds are used,” he said.
&#8226 Create a small-business subcommittee as part of the existing Governor’s Workforce Board Rhode Island, whose work Stokes praised, but he said its programs right now are not necessarily geared to help small business.
&#8226 With 32,450 acres in the state zoned for industrial use, Stokes said, only about 11,000 acres offer “pad-ready” sites equipped with the necessary roads and utilities. The rest, Stokes said, is wooded and untouched, and he suggested steps be taken to develop this acreage so there would be basic pad-ready parcels ready for industries that want to move to the state.
&#8226 The state needs to do more to help small business capture lucrative federal contracts, Stokes said, noting that the EDC office devoted to this purpose is staffed by only one full-time employee and one half-time worker. He called the office “underutilized and understaffed.”
In particular, Stokes said more minority-owned businesses should be recruited for federal work. If the state does not have a sufficient roster of minority-owned enterprises to fulfill federal requirements, he said, those contracts end up going to companies in Massachusetts and Connecticut. &#8226