The 2021 legislative session is shaping up to be another severe departure from the norm, with a temporary change of venue for both chambers, uncertainty surrounding the COVID-19 pandemic, new House leadership and a new group of progressive lawmakers looking to exert their influence.
Even some issues the General Assembly grapples with annually – such as a gaping budget deficit – may have a higher degree of difficulty because of coronavirus-related problems that include an overwhelmed health care system, faltering businesses, high unemployment and a growing number of struggling Rhode Islanders.
It was only last month that legislators passed a “skinny” $12.75 billion state budget for the current fiscal year – an action that was delayed six months because of the social and economic upheaval touched off by the coronavirus crisis.
Now the General Assembly has moved quickly into a new session, prepared to hash over a budget proposal for the next fiscal year and to take on contentious matters that had been tabled last year after the pandemic hit, including whether to legalize recreational marijuana and award a controversial 20-year lottery contract.
Those deliberations are taking place in different surroundings this year. Both the House and Senate have decided to vacate the confines of their Statehouse chambers, choosing for now to meet in venues that will allow for better social distancing – the House at Veterans Memorial Auditorium in Providence, the Senate at Rhode Island College.
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SETTLING IN: House Speaker K. Joseph Shekarchi gives the thumbs-up to a technician helping him during a session at the Veterans Memorial Auditorium last month when lawmakers met to approve the current fiscal year budget. Shekarchi didn’t officially become speaker until the Jan. 5 House session. / PBN PHOTO/MICHAEL SALERNO[/caption]
Another big change came immediately on the opening day of the 2021 session on Jan. 5: House lawmakers elected Rep. K. Joseph Shekarchi, D-Warwick, the new House speaker.
Even before the formal vote, Shekarchi was asserting his new power with the relocation of the House to Veterans Auditorium, saying it is a good short-term solution for “30 to 60 days” where lawmakers have more space and feel safer.
Rental of the auditorium for the House vote on the budget in December cost about $8,000, which Shekarchi said is reimbursable through coronavirus relief money. The House has agreed to rent the auditorium at between $20,000 and $58,000 a month, depending on the amount of use. The agreement reserves the auditorium until June 30, but House leaders can cancel at any time.
For additional safety, Shekarchi said he would also like to do away with the requirement that the General Assembly meet in person, allowing for legislative votes to take place remotely when needed.
Meanwhile, the Senate is convening in Sapinsley Hall at RIC until it is deemed safe to return to the Statehouse. The anticipated charges, including for maintenance and catering, will total $523,800 through June 30.
Senate President Dominick J. Ruggerio, D-Providence, told PBN on Dec. 21 that these funds will be eligible for federal reimbursement.
“I don’t see us coming back to the Statehouse [in the 2021 session],” Ruggerio said. “Priority one for me is not only the safety of my colleagues in the Senate but also the Senate staff.”
Typically, the governor is required to submit a budget proposal to the General Assembly in January – a massive document that defines the administration’s priorities for the coming fiscal year. But in yet another departure from the norm, lawmakers have given Gov. Gina M. Raimondo an extension until March 11 to complete a proposal that will need to account for a deficit that administration officials estimate to be between $350 million and $500 million.
“It’s too soon to say what next year’s budget will look like,” Raimondo spokesman Josh Block said in late December. “Housing has been a top priority for the governor, and investments in affordable housing are more important than ever right now.”
It also remains to be seen how the change in House leadership will play out and what it will mean for the business community.
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CHANGING VIEWS: Senate President Dominick J. Ruggerio, D-Providence, has said he’s more open to considering a measure to legalize recreational marijuana. / PBN PHOTO/MICHAEL SALERNO[/caption]
Shekarchi replaces Speaker Nicholas A. Mattiello, a Democrat who was often at odds with Raimondo on budgetary priorities and policy decisions. Wounded by several controversies during his six-year tenure, Mattiello was unseated in his Cranston district by Republican challenger Barbara Ann Fenton-Fung in November.
Some political observers say Shekarchi’s rise to the top House position might spark a more cooperative spirit between the legislature and the Raimondo administration. Shekarchi is known to be affable and approachable, and he has accumulated few enemies in his eight years in the General Assembly.
Raimondo acknowledged his different management style in a recent interview with PBN, calling Shekarchi a “can-do person.”
“It’s time to sit down and solve problems,” she said. “And that’s what Joe likes to do.”
Also fueling a shift in political dynamics: both Shekarchi and Ruggerio now see more progressive lawmakers among their ranks this session. Newly sworn-in progressives say they’re focusing on issues such as raising the minimum wage, instituting a state minimum resident-to-staff ratio for nursing homes and getting hazard pay for essential workers.
“The progressives have a very distinct agenda,” said Maureen Moakley, a political commentor and professor emeritus of political science at the University of Rhode Island. “But the interesting thing is that many of the things that they are advocating are already, in some ways, part of the new budget and [the leadership’s] agenda.”
Indeed, seemingly in a nod to the recent progressive successes at the ballot box, Ruggerio and Senate Majority Leader Michael J. McCaffrey, D-Warwick have already indicated that they’ll support a move toward a $15-an-hour minimum wage, the legalization of recreational marijuana and a potential income-tax hike for the wealthiest Rhode Islanders.
One proposal last year from a union-backed coalition called for raising the tax rate from 5.99% to 8.99% on adjusted gross income above $475,000. The coalition, Revenue for Rhode Island, said such a move would affect about 5,000 tax filers and could generate about $128.2 million in new revenue.
Shekarchi and Raimondo haven’t gone so far as to throw their backing behind a higher tax rate for Rhode Island’s wealthy, each saying such a move might be unnecessary for the state to close a budget shortfall. Neither have ruled it out, either.
As far as closing any budgetary shortfall, Shekarchi told PBN: “Everything is on the table.”
What legislative matters will draw the attention in the business community over the next six months? Here are a few likely candidates:
MARIJUANA
Last year, Raimondo’s proposal to tax and regulate recreational marijuana appeared to be going nowhere after both Ruggerio and Mattiello publicly opposed it, in part because of concerns over the way the medical-marijuana system was being managed by the state.
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NEW DYNAMIC: Gov. Gina M. Raimondo calls new House Speaker K. Joseph Shekarchi a “can-do person” who likes to solve problems. / PBN FILE PHOTO/MICHAEL SALERNO[/caption]
What a difference a year makes. Ruggerio recently told PBN that he is receptive to the idea. He wants the state to have more regulation on who would be allowed to grow and sell marijuana, but he would like private companies involved instead of a state-run system.
For his part, Shekarchi said he is looking to create a marijuana task force to examine the issue.
Marijuana legalization has garnered support among some new legislators.
“This should not be a controversial issue, especially for Democrats,” said freshman Rep. David Morales, D-Providence. “While cannabis should be urgently legalized, it needs to be [done] correctly with an intentional focus on justice.”
Morales said a measure to legalize cannabis should include expungement for cannabis-related nonviolent crimes, a fair sales tax, clear language that directs tax revenue toward education and social programs, and resources that allow communities of color to enter the industry as entrepreneurs.
The business community has long expressed worries about worker safety.
Laurie White, president of the Greater Providence Chamber of Commerce, said if recreational cannabis is legalized, businesses should have the ability to set appropriate workplace guidelines, and that any legislation should include language in which employers are not required to allow its use, the sale, or the possession of marijuana in the workplace.
Moakley said she believes it’s inevitable that legalization of recreational marijuana will pass this year, it’s just a question of what the legislation will look like. A delay in getting a measure passed could be costly, she added.
“The longer they wait, the more revenue they lose,” she said.
LOTTERY CONTRACT
When International Game Technology PLC and Twin River Worldwide Holdings Inc. – now called Bally’s Corp. – ended their bitter fight over a state lottery contract last January and reached an agreement to create a new company to manage gaming-machine offerings, it appeared that IGT might finally get state leaders to approve the 20-year deal.
The process was put on hold amid the COVID-19 pandemic, and now Shekarchi is raising a host of questions about the no-bid contract. What’s on the line is a proposal by IGT that it will provide 1,000 local jobs in exchange for a $1 billion contract from the state.
“I think that we should have a full, transparent hearing,” Shekarchi said recently. “If it’s a good deal, then it should be able to withstand public scrutiny.”
Raimondo’s administration sought the extension of the contract with IGT, and the governor publicly supported the company, whose North American headquarters are based in Providence. IGT employs more than 1,000 people locally.
However, many of the terms of the contract were written prior to the pandemic and the lengthy shutdown at the state’s two casinos, which cut deeply into R.I. Lottery revenue. In the fiscal year that ended June 30, the Lottery brought $283.9 million into the state’s General Fund, a decrease of $113.4 million from the year before.
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SETTING UP HOUSE: State representatives are meeting at the Veterans Memorial Auditorium in Providence, at least for the opening weeks of the 2021 legislative session, to allow for social distancing. / PBN PHOTO/MICHAEL SALERNO[/caption]
“That regularity is gone as most people’s disposable income has also disappeared or is being smartly placed in reserve due to this pandemic and its devastating impact on our state’s economy,” said House Minority Whip Rep. Michael Chippendale, R-Coventry, who has been outspoken in his opposition to the IGT contract.
He added, “Rhode Island is seeking to balance its books on the backs of people’s bad habits.”
Rep. Liana Cassar, D-Barrington, who has a background in health care information technology, said she has objections about the length of the proposed deal, particularly because it involves information technology.
“Security is a rapidly changing field. I understand the need for stability from the company’s point of view, but as a state, I think we need to be more nimble,” said Cassar. “I’m a big supporter of a competitive market, and we reduce the ability to have competition in this area [with such a contract].”
HOUSING DEVELOPMENT
The $12.75 billion 2020-2021 state budget enacted last month included a request to borrow $65 million for affordable housing. That bond issue will be put before voters in March as part of $400 million worth of bond issues that will be on the ballot.
Brenda Clement, director of HousingWorks RI at Roger Williams University, said $65 million would be a good “down payment” but added that the state needs to invest more into affordable housing.
Clement noted that 37% of Rhode Islanders are living in homes that they can’t afford, with rent or mortgage payments that are more than one-third of their income. “Even before our current health crisis, the need to increase the supply of affordable units was critical. That need has continued to grow,” she said.
Last year, Raimondo’s budget proposal included the creation of a dedicated funding source for affordable and workforce housing through an additional tax on real estate sales in excess of $500,000.
While that idea fell by the wayside when the pandemic hit, Clement hopes it will be included in the governor’s budget plan.
Shekarchi told PBN that addressing the shortage of affordable housing in Rhode Island is a priority for him this session, but he’s not willing to rubberstamp Raimondo’s dedicated funding stream plan if it reappears.
“I won’t pass anything just because somebody writes it,” said Shekarchi. “But this House and this leadership team [are] absolutely committed to address the housing inequities and issues in our state.”
Sen. Tiara Mack, D-Providence, a progressive who ousted longtime incumbent Sen. Harold Metts, recently told PBN she believes that Rhode Island needs to build 25,000 affordable units to keep pace with the projected demand by 2025.
“The money to do this is in our state now in the form of a tax structure that requires the wealthiest Rhode Islanders to pay their fair share,” said Mack.
MINIMUM WAGE
Rhode Island’s minimum wage climbed from $10.50 an hour to $11.50 on Oct. 1, and the push is on for another increase. Legislative leaders have expressed support for putting a stepped increased to $15 an hour.
“We need to get on a path to $15 an hour because everyone else around [us] is getting there,” said Shekarchi, referring to neighboring states. “The question is how fast of a path will it be and how do we get there?”
Connecticut’s minimum wage rose to $12 an hour in September, part of a five-year stepped increase that will top out at $15 an hour in 2023. Massachusetts’ minimum wage stands at $12.75 an hour and will climb incrementally to $15 by 2023.
Some Republicans have previously opposed increasing the minimum wage, saying the rising wages threaten to hurt some employers and could lead to job losses.
At the Greater Providence Chamber, White said the organization will advocate for a predictable minimum wage rate. At the same time, she said, the Chamber will lobby for a phaseout of the “premium-pay” law requiring ™companies to pay their workers at a time-and-a-half rate when they work on Sundays and holidays.
