Facing a potential roadblock in the House to his job-creation package, Gov. Don Carcieri recently urged some of Rhode Island’s most powerful business leaders to ramp up the pressure on key lawmakers.
“My concern is that the House leadership is nodding their heads, but delivering (the proposals) through the (House Finance) Committee and getting the votes, I don’t know,” Carcieri told about 15 business and academic leaders at a June 6 meeting of the Rhode Island Economic Policy Council.
Carcieri said he still is “cautiously optimistic” that the $11 million needed for his multifaceted plan to create 20,000 new jobs by 2007 will ultimately find its way into the state’s budget for fiscal year 2004, despite a potential $225-million budget hole.
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But he urged EPC members to “continue to work on” House leaders who Carcieri sees as holding the keys to the funding for his growth plan. Carcieri specifically mentioned House Majority Leader Gordon D. Fox, House Speaker William J. Murphy, House Finance Committee Chairman Paul V. Sherlock and Rep. Stephen Costantino, deputy chairman of the finance committee.
No members of the House attended the EPC meeting, even though Murphy is a council member and Fox was on the agenda to provide an update on the governor’s jobs plan. House leaders also were conspicuously absent from a well-attended State House gathering of businesspeople May 20, organized by Carcieri to marshal support for his economic agenda.
“I’m frustrated that we continue to not have House representation on this (Economic Policy Council),” Paul J. Choquette, president and CEO of Gilbane Building Co. and co-chairman of the council, said at the June 6 meeting. “They just won’t come, and it’s a shame.”
The EPC is a 23-member group of representatives from business, government and higher education with the mission of sketching a long-term strategy for the Rhode Island economy.
Larry Berman, spokesman for the House leadership, said last week that Fox was not aware that he was scheduled to brief the EPC. But Berman said Fox still is “placing high priority” on the jobs agenda, adding that he is the main sponsor of a number of Carcieri’s pet business-related bills in the House.
“Obviously, his sponsorship of three major bills shows his commitment to the job-creation package,” Berman said. “But how much money will be in the budget for it still is a matter of ongoing negotiations.”
Key measures still pending
Among the key proposals in the governor’s business-spending plan that have yet to be settled in the House budget include:
• A doubling of the Samuel Slater Technology fund, to $5 million. Since its creation in 1998, the state-run fund has invested more than $100 million in nearly 60 startup companies, helping foment more than 300 jobs.
• $300,000 for initial design of a proposed $50-million biotechnology and molecular bio-sciences center at the University of Rhode Island. The center, which would focus on plant, marine and environmental sciences, would require voter approval through a statewide referendum in 2004.
• Another $300,000 to fund conceptual design for a bio-manufacturing training institute, a pilot facility that would offer hands-on training to workers for employment at large drug makers such as Amgen Inc. and Dow Chemical Co.
• An adjustment in the formula used by the state to calculate manufacturers’ corporate income tax, putting less weight on in-state employment. Manufacturers long have complained that the current formula deters investment in new facilities and workers in Rhode Island.
Other measures are tied up in various committees, including an extension of the Jobs Development Act, which allows companies to trim income taxes by adding jobs. That bill was in the House Finance Committee as of last week.
Another bill that would allow URI faculty to more easily spin off research into private ventures has passed both houses and is back before committees. State law prevents commercialization of academic research at public universities, which business leaders say stifles innovation.
“It’s peanuts in the whole scheme,” Carcieri said of the overall package, contrasting its $11-million price tag to his $5.63-billion spending plan. “It’s critical to keep this intact, because it sends a message that we’re trying to create the right environment here. I’m hopeful we can hold it together.”
Berman said that while House leaders generally favor Carcieri’s job initiatives, they are concerned about the state’s ability to fund the programs in future years.
“If we start funding Governor Carcieri’s initiatives, the question becomes, will that money be there not just next year, but down the road? That’s what they’re looking at right now, the long-term sustainability of these programs.”
Berman said the House Finance Committee plans to approve the budget by the end of this week. The House likely would vote on the budget June 27, he said, which is the last day of the legislative session.
Targeting biotechnology, defense
Michael McMahon, director of the Rhode Island Economic Development Corporation and an EPC member, provided the council with a rough outline of how the state plans to generate 20,000 new jobs.
The state will target biotechnology and medical research as the state’s No. 1 growth sector, McMahon said, followed by defense and naval contracting; financial services; marine technology; and tourism.
The state expects about 7,000 of those jobs to come from large companies (1,000 or more workers) that already have a presence here, while 2,500 presumably would come by attracting new large employers to the state.
Medium-sized companies would generate 4,000 new jobs under the plan, and 1,000 would come from new mid-sized businesses. And 5,000 new jobs would be added by small businesses, while 500 jobs would come from new, startup companies.
McMahon called Carcieri’s spending plan for fiscal year 2004 a “good first step” toward achieving the 20,000-job target over four years.
Among the council members who attended the recent EPC meeting were Tom Ryan, president CEO of CVS Corp; Daniel L. Smith, vice president and general manager of Raytheon Electronic Systems; George Vecchione, president and CEO of Lifespan health system; and Ann Szostak, president and CEO of Fleet Rhode Island.
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