Minority-owned businesses
We suspect that the Rhode Island Housing and Mortgage Finance Corporation is correct in assuming that there are more minority-owned businesses in the state than the 136 that have received state certification.
We also applaud RIHMFC – a quasi state agency – for its decision to hire a consultant who will develop ways to increase the number of minority-owned businesses registered as MBEs (Minority-Owned Business Enterprises) with the state.
RIHMFC plans to ask its consultant to specifically identify the types and volume of work that would be most suitable for recruiting MBEs. The agency will also ask the consultant to identify contractors on the state list of certified MBEs whose services most closely match the work of RIHMFC.
This kind of proactive approach is refreshing, and frankly, we wonder why the state itself did not issue a similar request for proposals sooner. That being said, we hope the state will follow RIHMFC’s program closely. Perhaps it can serve as a model for a larger, more encompassing effort to increase the number of businesses registered as MBEs.
We are puzzled that more aren’t taking the time to get certified. Charles C. Newton, administrator of the state’s Minority Business Enterprise, fully supports RIHMFC’s efforts.
Newton would like nothing more than to see growth in MBE certifications. He believes that part of the reason for the low number of certifications is that the process itself is perceived to be long and tedious. That is unfortunate.
The certification process is an 18-page application, an on-site review of the business, and an interview. Newton also asks applicants for some attachments, like company bylaws, the most recent tax return, financial statements, and resumes on key individuals in the company.
Newton doesn’t consider it to be a tedious procedure – and we agree. It’s not a matter of being burdensome, but rather of being thorough. We are well aware of situations where a company may actually be operated by a husband, but is put in the wife’s name because she may qualify as an MBE.
We would like to see more minority-owned businesses step forward and make themselves a part of the process. And we’d like to see the state do whatever it can to encourage those businesses to do just that.
Renaissance zone
The General Assembly is currently considering legislation to create a Renaissance Development Zone in Coventry that will provide a developer with a five-year moratorium on sales tax, and five more years to phase in the sales tax.
Universal Properties of West Warwick, the developer, argues that if given the tax break on its 480-acre project, it will be able to develop the property faster – in three years, rather than seven. According to a consultant’s report, commissioned by the developer, while the state may initially lose more than $18 million in revenue, it will over a 10-year period, gain more than $11 million because of other taxes it will collect sooner because of the speed-up in development.
The developer has already received substantial tax advantages from Coventry, and notes that Providence Place and Fidelity Investments and other developments around the state are benefiting from special tax situations that communities and the state government seem all too ready to give.
It wasn’t that many years ago that state economic development officials rejected the notion of making separate special deals for individual companies or projects. They expressed concerns about the perception of taking care of an elite few companies, while never addressing overall aspects of developing a business friendly environment that would impact all Rhode Island businesses.
While we understand there are special circumstances that may require special arrangements, we remain concerned that basing an economy upon legislation or tax breaks for individual companies is far less productive than developing an overall policy and environment that by its very nature attracts companies to the area.
In reviewing this legislation we urge the General Assembly to do more than rely on a company-sponsored consultant’s report and to truly understand whether passage of this new Renaissance Development Zone will create a situation that might hurt other retailers who cannot take advantage of a tax moratorium. We would much prefer to see legislation that maintains a level playing field for all Rhode Island retailers.
