Restoring Competitiveness to Rhode Island

Our RI Center for Freedom & Prosperity has a bold, new vision to restore greatness to the Ocean State by making it the most dramatic turn-around state in the nation. In the coming months, our Center for Freedom will release a detailed “Prosperity Agenda” for Rhode Island: a game-changing, new agenda that will return competitiveness to our economic and educational institutions, backed by insightful research.

Commentary by Mike Stenhouse

Rhode Island is a last place team. Remember earlier this year when the Red Sox were in the cellar? In Rhode Island many of our citizens are resigned to doom. In contrast, Red Sox nation was outraged.

If only RI citizens were like Red Sox fans.In the competition for people, wealth and business, our Ocean State simply is not competitive with other states. Yet we find little leadership from our public officials to try to improve our lot and far too few jeers from the public. Many reform advocates debate less important issues. Nobody seems to be focused on winning!

With the recent budget debate and with the current pension debate, we can clearly see why RI never improves its standing.

The recently passed state budget and the pension solutions currently being discussed will only serve to make Rhode Island LESS competitive. We debated balancing our budget and how to raise enough revenues to do so. Now we are debating how to raise enough revenues to pay off our massive unfunded pension liabilities. We debate the merits of trading this tax for that tax. We debate how to keep funding our past promises or how to pass on costs to this group or that group. We keep debating each issue as a one-off item, yet no one is talking about improving our state’s competitiveness, and actually winning again.

And, predictably, we always seem to end up in the same place … last place. Yet there are many who defend the status quo and resist reform.

WE NEED A WINNING STRATEGY. For Rhode Island, that strategy must include a dramatic reduction in taxes along with dramatic reductions in spending. There is no other way to remain competitive.

We all know that RI ranks at or near the bottom in far too many areas when it comes to education and the economy. Our perpetually poor rankings prove the utter failure of the status quo. Yet, we cling to what we know, we put the same players back on the field with the same rules, and we seem pleased with ourselves if we can just figure out how not to appear to worsen the situation.

But we are indeed worsening the situation. We know now that our current oppressive tax and regulatory structure is driving people and wealth out of our state. Recent headlines about our education are equally disturbing. To build a sustainable economy, we need educated, productive citizens and capital. To successfully compete with other states, we need more of both. Maintaining the status quo only means we will continue to hemorrhage even more of these valuable resources.

How would raising taxes on the rich, or on property owners, as many suggest, grow our struggling economy?

Even the Governor half-agreed, stating that raising taxes on the wealthy would cause them to move. True. But we also know that middle-class Rhode Islanders will also migrate to other states if they are over taxed. It’s the same, I would guess, with businesses and consumer purchasing.

Raising taxes – any taxes – in order to balance our budget or pay off unfunded debts will only serve to make us LESS competitive! We will continue to lose citizens and money; and we will squander yet another opportunity to improve our chance of winning. Balancing the budget and paying off debt is the wrong game.

THE GAME SHOULD BE ABOUT HOW TO IMPROVE OUR STATE’S COMPETIVENESS AND HOW TO WIN BACK PEOPLE AND WEALTH!

Were Red Sox fans silent when their team was in last place? Would they be mollified if the team bragged that it balanced its books? Would they really care how much players were paid? Would they be satisfied if we merely shuffled the same old lineup? Would they accept increased ticket prices for a perpetual last place team? These wouldn’t matter much if the team was winning. But this is exactly what our public officials want us to accept … pay more money to remain in the cellar.

In RI, little else should matter unless we grow the economy and reform education for the prosperity of our citizens and the future of our children. The primary standard should be whether or not we are improving our competiveness with other states … not balancing the budget.

As long as we continue to play by rules that decrease our competitiveness and without a clear winning vision from our leadership, RI will continue to be a cellar-dweller. Even if our economy recovers to some small degree, it is likely that other states’ economies will improve even more.

In the sports world, where competition and free market principles mainly prevail, a last place team will embark on a “rebuilding” strategy, where it’s “out with the old” and “in with the new”. This may mean a few years of potential struggle while the “new” strategy takes hold, but when it does, if the plan is designed properly, the situation will improve dramatically.

Trouble is, in Rhode Island, we don’t seem to have many strategic thinkers with the courage to admit that long term reform can only happen with some near term pain. And you won’t hear much from our state’s fans (we the citizens). Nor do we find cutting commentary from the media demanding a better team or an improved standing. Imagine the Boston Globe endorsing a perennial last place Red Sox team that refused make wholesale changes.

Red Sox nation demanded a winner and the Red Sox successfully broke its “curse” by winning two world championships! It took the vision of a young and talented GM. The state of RI must do the same … but we are left to wonder where we will find that kind leadership and that kind of public outrage.

If only we could bring out the Red Sox fan inside each of us!

Our RI Center for Freedom and Prosperity is a “fan” of the state of Rhode Island. We hope you will join in us in refusing to remain silent. Not only do we demand a bold, new ‘winning’ strategy for our state, but we intend to map out the initial cornerstone reforms that should be part of that strategy.

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