Rhode Island ranks well in “corporate welfare” accountability

State ranks 8^th in national report 

By Will Collette

Thanks in large part of the efforts of our local state Representatives Donna Walsh, Teresa Tanzi and Larry Valencia, Rhode Island recently enacted reforms to the way it gives corporations subsidies that made those companies more accountable to produce the jobs and benefits to the economy that they promised when they asked for the money.

“Corporate welfare” can be a very good thing when it stimulates the economy and helps to preserve and expand good jobs with good benefits.

One way to create jobs

One of Rhode Island’s big problems was that we rarely knew what we got for our money – i.e. whether a company that promised to create 100 jobs in return for $50 million in state aid actually created 100 jobs.

According to Good Jobs First, a Washington-based organization focused on monitoring the effectiveness of economic development programs, Rhode Island has moved into 8^th, place, tied with Florida, with a score of 58 out of 100. Obviously, the scoring is subject to a bell curve.

Good Jobs First’s report, “Money for Something, gives very high marks – bonus points even – to the state’s $14 million Corporate Income Tax Rate Reduction for Job Creation, while panning the $2.4 million Motion Picture Production Tax Credit

You can see the state’s Division of Taxation’s most recent report on what companies received economic development tax incentives during the past year by clicking here. 

Whether conservatives like it or not, government money DOES drive economy growth and jobs. Just ask yourselves where Rhode Island and its neighbors would be if Electric Boat, Raytheon, the Navy establishment in Newport, Textron and others lost their government contracts and funding.

And another

The recently increased Defense appropriation contains money to build two new Virginia-class submarines we really don't need. But it keeps our shipyards humming and workers working. One of the Westerly Sun's most prolific ultra-conservative letter writers, Phil Gingerella, works at Electric Boat. When he ran for the state House District 37 seat as a Republican/Tea Party candidate, he Assembly and wailed away at government jobs programs, he had no answer when confronted by the fact that he owes his job and pension to government funding of a submarine fleet designed to fight an enemy that no longer exists.

The more important question is whether we get what we pay for. Thanks to efforts led by Rep. Donna Walsh, accountability standards were inserted into the state budget last year, were passed by the General Assembly and signed by the Governor. 

Disclosure: over the course of ten years while I was in Washington, and in Rhode Island, I worked closely with Good Jobs First. They're not only great folks, but the country's top experts in their field of monitoring the effectiveness of economic development programs.