PROVIDENCE – From a special business ombudsman to a new state-sponsored fund for startups, state legislative leaders Friday had no shortage of new ideas to improve Rhode Island’s less-than-favorable business climate.
“This is the time to be courageous,” Rep. Steven Costantino, House Finance chairman, told nearly 600 local business leaders at the Greater Providence Chamber of Commerce’s Legislative Luncheon at the R.I. Convention Center. “The key for this state is … when the economy changes, when recovery actually hits this state, we do not miss that opportunity.”
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Responding to frequent complaints from the business community about time-consuming permitting procedures, Costantino, D-Providence, suggested that the state establish an ombudsman’s office that could shepherd businesses through the process of getting approvals from state and local agencies.
“It’s simple, pragmatic; let’s do it,” Costantino said.
Senate President M. Teresa Paiva Weed said her staff was working on a proposal to create a special fund to help finance startup businesses, a fund more extensive than the state-chartered nonprofit Slater Technology Fund Inc., which the state provides an annual appropriation of several million dollars.
Senate leaders are looking to see if the state could “combine some existing funds together with other funds to nurture these small businesses that we see growing in the knowledge economy,” Paiva Weed said.
Paiva Weed, D-Newport, told Providence Business News afterward that there was no dollar amount attached to the proposal yet, but she envisioned something like the $100 million Bay State Competitiveness Investment Fund in Massachusetts.
The luncheon came a day after Rep. Gordon D. Fox was sworn in as the new House speaker. Fox, D-Providence, appeared on the luncheon panel, offering words of praise for former House Speaker William J. Murphy, D-West Warwick, and new R.I. Economic Development Corporation Executive Director Keith Stokes, who was confirmed by the Senate Thursday.
“I have faith in Keith, and I’m going to expect a lot from Keith,” Fox said. “And I think he’s up for the job.”
Fox joined other luncheon attendees in praising U.S. Rep. Patrick J. Kennedy, who announced late Thursday that he would not seek re-election. Kennedy’s influence in Congress had benefited Rhode Island, Fox said.
“The loss of Patrick Kennedy on the [House] appropriations committee is something we’re going to have worry about,” Fox said.
The annual Chamber luncheon also comes as the General Assembly begins to grapple with fiscal year 2011’s projected deficit of more than $427 million, as well as an anticipated shortfall of more than $219 million this fiscal year.
Such financial woes have led to whispers that the General Assembly might consider backtracking on tax changes made in recent years, including eliminating or reducing the alternative flat tax.
Questions from Laurie White, the Chamber president, ranged from legislative support for the knowledge economy to streamlining permitting processes to pension reform to the future of the flax tax.
While Costantino said the flat tax appeared to be “on track,” he said state leaders should focus on improving economic development by slashing Rhode Island’s structural budget deficit. The Carcieri administration has already projected that the fiscal 2012 shortfall will be $362 million.
“I don’t care what kind of tax policies you have, what kind of incentives you have, if there’s a company looking [to relocate to] this state in the year 2012 and [it sees] this state is going have a $362 million deficit, [they are] not even going to go beyond that number to look at the tax policy,” Costantino said. “Because whatever that tax policy is, it will be threatened by that deficit.”
The legislative panel at the luncheon included: Fox, Paiva Weed, Costantino, Senate Majority Leader Daniel P. Connors, House Majority Leader Nicholas A. Mattiello and House Minority Leader Robert Watson.
