38 STUDIOS JOINT STATEMENT: Chairwoman MacBeth Hopeful; Groups Congratulate Public for Early Victories

JOINT STATEMENT; FOR IMMEDIATE RELEASE
October 22, 2015


Public Pressure Turns Tide in General Assembly; Governor Challenged; MacBeth Expects New Powers

Providence, RI – Having achieved many of its key demands – with court documents released, with House Oversight Committee hearings scheduled to resume next week, and with the Speaker of the House now publicly inching closer to allowing full subpoena power – the coalition of the five good-government groups that are demanding re-invigorated 38 Studios investigations today renew their challenge to the Governor about its remaining unfulfilled demand to appoint an independent investigator.

These sentiments were largely echoed by Representative Karen MacBeth, chair of the committee, in a discussion this morning with a representative of the multi-partisan coalition. MacBeth, who is hopeful that leadership will now empower her committee with the tools and freedom it needs to find out who knew what and when, indicated that her committee will focus on the political and ethical aspects of the insider 38 Studios deal. The chairwoman also expressed that, equally important, a separate and simultaneous non-political investigation should also be conducted to look into potential criminal wrong-doing and all other aspects of the scandal, which eventually could waste up to $100 million in taxpayer funds.

With very little information made public about the State Police investigation, the coalition believes that an investigative effort, completely independent of Rhode Island’s political sphere, is also necessary.

“Clearly, the pressure our coalition has put on legislative leaders has had an impact in the General Assembly,” commented Ken Block of Watchdog RI, one of the group’s leaders. “Now it is time for the Governor to do her part to fulfill her campaign obligation; she needs to recognize that the people of Rhode Island are owed this independent investigation.”

“We believe that all relevant witnesses should be required to testify without preconditions,” stressed Randall Rose of Occupy Providence.

“The voice of the people does make a difference and is being heard on Smith Hill,” added Mike Stenhouse, CEO for the RI Center for Freedom of Prosperity.

The group congratulates Representative MacBeth for resuming hearings; expresses gratitude to the over the 1100 Rhode Islanders who signed the online petition or sent emails to their representatives; and thanks the dozens of legislators who publicly supported investigations (Investigate38StudiosNow.org).

The good government groups behind Investigate38StudiosNow.org continue to ask every sitting Rhode Island legislator to take a stand and go on the record in support, or not, of each of these paths. Lawmakers are still requested to send an email from their official state email address to info@Investigate38StudiosNow.org stating whether they “Support” or “Not Support” each of these two questions. Over 3 dozen lawmakers have already responded with their positions.

Media Contacts:
Mike Stenhouse, CEO, RI Center for Freedom & Prosperity
401.429.6115 | info@rifreedom.org

About the Center
The nonpartisan RI Center for Freedom & Prosperity is Rhode Island’s premiere free-enterprise research and advocacy organization. The mission of the 501-C-3 nonprofit organization is to return government to the people by opposing special-interest politics and advancing proven free-market solutions that can transform lives by restoring economic competitiveness, increasing educational opportunities, and protecting individual freedoms.

Rhode Island Employment Snapshot, September 2015: Growth Stops in Employment and Jobs

[Click here for the printable one-page PDF of this post.]

 

Once again, Rhode Island’s unemployment rate dropped, from 5.7% in August, to 5.4% in September, according to data from the federal Bureau of Labor Statistics (BLS). That was, however, a silver lining built on an entirely dark cloud. Employment actually dropped by 521 people, but 1,860 Rhode Islanders gave up looking. At the same time, the number of jobs based in the state fell by 1,800 — for a total drop of 3,700 from July.

The first chart below shows that this dip follows a long increase in employment and labor force. However, the number of jobs based in the state has been relatively stagnant, suggesting that the employment numbers will be revised downward at the end of the year. Employment data is based on a phone survey that the BLS conducts in each state and heavily adjusts according to benchmarks and assumptions about seasonal changes.

In the second chart, both Massachusetts and Connecticut are down from last month’s results. Still, Rhode Island alone remains well below its employment and labor force as of January 2007.

The third chart is the most illustrative of the skepticism that readers should have when watching the unemployment rate. The red line shows what the curve would have been if the labor force had not shrunk since January 2007. In that case, the unemployment rate would still be 8.1% and would have begun edging back up, in September.

RI-laborforceandemp-0107-0915

RIMACT-laborforceandemp-0915perc0107

RI-unemploymentrate-steadyLF-0107-0915

STATEMENT: Speaker Mattiello’s Deliberative Process on Tolls Did Not Include the P3 Delivery Concept

STATEMENT
October 20, 2015

Speaker’s Support of Tolls Fails to Consider Lower-Cost P3 Delivery Model
State can still enjoy benefits of jobs and economic development at lower cost and risk

Providence, RI — No response or curiosity was expressed by the Speaker’s office after it received an advanced copy of the P3 policy paper released last week by the RI Center for Freedom & Prosperity that could deliver the Governor’s ambitious bridge and road upgrade project in a safer, timelier, and less costly manner, and with less debt and risk under a proven model that has been successfully deployed in many other states.

“The Speaker indicated on the radio today that he conducted a deliberative process before agreeing to accept some version of the Governor’s toll scheme,” commented Mike Stenhouse, CEO for the Center. That deliberative process apparently did not include consideration of the potentially significant alternative that the Center put forth. “Our Center maintains, that if the Speaker’s and the Governor’s policy teams were to honestly evaluate the benefits of a P3 delivery model, that the significantly lower funding requirements would likely preclude the perceived need for establishing a costly new tolling infrastructure.”

Under a P3 delivery model, a private sector partner who wins an open bidding process, would self-finance and deliver all specified construction upgrades and maintenance services in exchange for a guaranteed revenue flow from the state over a defined period of time.

Combined with a PayGo funding approach, and based on a case study for a similar bridge repair project in Pennsylvania, Ocean State drivers and taxpayers could potentially realize significant benefits, including:

  • Elimination of the risk of Rhode Islanders bearing the burden potential cost overruns by transferring 100% of such risk to the private sector partner
  • Elimination of the need and related costs to impose tolls on truckers or any other RI driver
  • Delivery of the necessary upgrades in a timelier and safer manner
  • Up to $165 million, or a 33% savings in base program costs, derived from private sector efficiencies in innovation, execution, and procurement
  • Up to $67 million, or a 20% savings in program costs, via exemptions from costly state laws mandating Project Labor Agreements and prevailing wages
  • Savings of $43 million in gantry substructure costs
  • Up to $286 million in financing cost savings due to lower bond face-value from lower program costs

The Center urges lawmakers to conduct the due diligence necessary in the coming months to properly evaluate whether or not the P3 model can deliver some or all of the above potential benefits and become a viable alternative to certain aspects of the Governor’s plan that ‘s now on the table.

The full report and other related information can be found on the Center’s P3 homepage at RIFreedom.org/P3.

Media Contact:
Mike Stenhouse, CEO
401.429.6115 | info@rifreedom.org

About the Center
The nonpartisan RI Center for Freedom & Prosperity is Rhode Island’s premiere free-enterprise research and advocacy organization. The mission of the 501-C-3 nonprofit organization is to return government to the people by opposing special-interest politics and advancing proven free-market solutions that can transform lives by restoring economic competitiveness, increasing educational opportunities, and protecting individual freedoms.

P3 PayGo Model for RhodeWorks

[button url=”http://rifreedom.org/wp-content/uploads/RICFP-P3-PayGo-101515.pdf” target=”http://rifreedom.org/wp-content/uploads/RICFP-P3-PayGo-101515.pdf” size=”medium” style=”royalblue” ]Click for full “P3 PayGo Model” report[/button]

Beginning this spring, Rhode Island Governor Gina Raimondo proposed a controversial RhodeWorks program to implement a toll system for commercial trucks as the foundation for a massive revenue bond that would not require voter approval. RhodeWorks is the governor’s strategy for repairing and maintaining a statewide road and bridge system that is undeniably in poor condition.

Despite a report from an insider government vendor, many are concerned that the governor’s plan would place yet another tax on Rhode Islanders — in the guise of highway tolls — putting unnecessary downward pressure on an already depressed state economy and placing taxpayers and drivers at further risk for inevitable cost overruns.

More recently, to address this concern, a Republican Policy Group (RPG) of state lawmakers has proposed a pay-as-you-go (PayGo) alternative that would find an annual sum of money derived from cuts and reform to existing state expenditures in order to fund the annual cost.

The mission of the Rhode Island Center for Freedom and Prosperity is to advance market-based solutions for the Ocean State through a rigorous exchange of ideas, as well as to provide alternative perspectives in the debate about important public policy issues. We agree with the priority on infrastructure established by the governor and the RPG’s directive to fund and build a sustainable repair and maintenance program within the state’s already high tax and fee regime. However, with Rhode Island’s infrastructure in such bad condition, a large up-front investment of money may be unavoidable.

The Center proposes an out-of-the-box concept for “delivery” of this massive public works project utilizing a proven model utilized in many other states for similar projects.  Lawmakers should conduct the detailed due diligence necessary to properly consider a public-private-partnership (P3) delivery model, with a pay-as-you-go (PayGo) funding foundation.

All combined this approach would fund much needed infrastructure upgrades largely from existing general revenue, yet would offload the debt, risk, and delivery of the project to a private sector partner.

The P3 PayGo model would preclude the need for tolling and would  provide substantial benefits for Rhode Island taxpayers and drivers by:

  • Removing the risk of taxpayers’ or ratepayers’ bearing the burden of likely cost overruns
  • Requiring no major new revenue streams, such as tolls, taxes, or fees
  • Removing project management from the RI Department of Transportation (RIDOT), which has recently come under intense public criticism for ongoing internal inefficiencies
  • Delivering bridge and road repairs in a more timely manner
  • Potentially saving hundreds of millions of dollars in overall project costs

Compiling this paper, the Center found the potential cost savings of a P3 PayGo project to be massive, reducing project costs by nearly half and potentially reducing annual costs to nearly one-third of the proposed spending. However, the primary goals of this proposal are to allow an upfront infusion of money without the need for tolls or other new revenue or long-term general obligation debt and to mitigate the risk associated with a project of this size. We therefore consider cost savings to be a secondary benefit, with the expectation that the numbers will become clearer as the public debate proceeds. At the very least, it is clear that, like the state’s bloated budget, P3 PayGo has plenty of slack to make the proposal feasible.

Important note: The term “public private partnership” is often used to describe government subsidies arbitrarily handed out to private ventures, such as 38 Studios. The P3 described in this paper is very different, with delivery of a vital public works project farmed out to a private sector partner in order to achieve market-based efficiencies and risk management not usually available to the government.

[button url=”http://rifreedom.org/wp-content/uploads/RICFP-P3-PayGo-101515.pdf” target=”http://rifreedom.org/wp-content/uploads/RICFP-P3-PayGo-101515.pdf” size=”medium” style=”royalblue” ]Click for full “P3 PayGo Model” report[/button]

MEDIA RELEASE: P3 Delivery Model Bypasses RI DOT to Conduct Infrastructure Upgrades

FOR IMMEDIATE RELEASE
October 16, 2015

P3 Delivery Model for Infrastructure Upgrades Has Multiple Benefits for Rhode Islanders
Private Sector Partner Would Deliver Governor’s Project Goals More Efficiently than RI DOT

Providence, RI — The Governor’s ambitious bridge and road upgrade project can be delivered in a safer, timelier, and less costly manner, and with less debt and risk under a public-private-partnership model; similar “P3” models have been successfully deployed in many other states, according to a new policy paper released today by the Rhode Island Center for Freedom & Prosperity.

Under a P3 delivery model, a private sector partner who wins an open bidding process, would self-finance and deliver all specified construction upgrades and maintenance services in exchange for a guaranteed revenue flow from the state over a defined period of time.

“To execute this vital infrastructure project, we have great concerns about the wasteful spending, insider politics, and other inefficiencies if we continue to follow the status quo process by handing-over half-a-billion dollars or more to the troubled RI Department of Transportation,” commented Mike Stenhouse, CEO for the Center. “Other states have greatly benefited from similar P3 arrangements, and we trust that Rhode Island’s political leaders will show enough intellectual curiosity to want to know more about how taxpayers might bear less of a burden in completing this important public works project.”

Former state budget director, Gary Sasse, concurred, saying “lawmakers should remember that Rhode Island’s transportation funding crisis evolved primarily from debt-driven financing practices. In order to serve the best interests of Rhode Island taxpayers and drivers, the General Assembly should take the time to fully evaluate this P3 model and all other options, with no stone left unturned.” Sasse’s full statement can be viewed here.

Combined with a PayGo funding approach, and based on a case study for a similar bridge repair project in Pennsylvania, Ocean State drivers and taxpayers could potentially realize significant benefits, including:

  • Elimination of the risk of Rhode Islanders bearing the burden potential cost overruns by transferring 100% of such risk to the private sector partner
  • Elimination of the need and related costs to impose tolls on truckers or any other RI driver
    Delivery of the necessary upgrades in a timelier and safer manner
  • Up to $165 million, or a 33% savings in base program costs, derived from private sector efficiencies in innovation, execution, and procurement
  • Up to $67 million, or a 20% savings in program costs, via exemptions from costly state laws mandating Project Labor Agreements and prevailing wages
  • Savings of $43 million in gantry substructure costs
  • Up to $286 million in financing cost savings due to lower bond face-value from lower program costs

The Center urges lawmakers to conduct the due diligence necessary in the coming months to properly evaluate whether or not the P3 model can deliver some or all of the above potential benefits.

The full report and other related information can be found on the Center’s P3 homepage at RIFreedom.org/P3.

Media Contact:
Mike Stenhouse, CEO
401.429.6115 | info@rifreedom.org

About the Center
The nonpartisan RI Center for Freedom & Prosperity is Rhode Island’s premiere free-enterprise research and advocacy organization. The mission of the 501-C-3 nonprofit organization is to return government to the people by opposing special-interest politics and advancing proven free-market solutions that can transform lives by restoring economic competitiveness, increasing educational opportunities, and protecting individual freedoms.

P3: a Compelling Delivery Model for Governor’s Proposed Infrastructure Upgrades

A P3 Model would bypass the troubled RI DOT and enable a private sector partner to deliver vital bridge and road repairs in a timelier, safer, and less costly manner. WOULD REMOVE ALL RISK OF COST OVER-RUNS FROM RHODE ISLANDERS!

[button url=”http://www.rifreedom.org/p3/” target=”_self” size=”small” style=”royalblue” ] Read the Policy Report [/button]

Gary Sasse on RhodeWorks: Leaving No Stone Left Unturned

State Leaders Should Remember that Rhode Island’s Transportation Funding Crisis Evolved Primarily From Debt- Driven Financing Practices

Statement from Gary Sasse:

A recent Hassenfeld Institute public opinion survey found that 76% of Rhode Islanders felt the State was  spending too little on road and bridge maintenance. This finding is consistent with the bipartisan agreement that Rhode Island’s bridges urgently need to be improved.

The key question that the General Assembly will need to address is what would represent the most efficient, economically neutral and fairest way to finance and deliver a bridge safety and improvement initiative. To answer this question the General Assembly has four optional approaches it may choose to consider.

The first is the Governor’s plan that is financed by borrowing backed by truck toll revenues. The second is a PAYGO plan that has been recommended by House Republicans. This plan would be financed by reallocating existing resources, and would not contain new tolls, fees or taxes. The third option, put forward by the Rhode Island Center for Freedom and Prosperity, constitutes a P3 public-private partnership between the State and private partner. The private partner, in exchange for pre-determined revenue guarantees, would finance, repair and maintain bridges for an agreed upon time. The final option is a hybrid PAYGO- debt plan would be based on some additional public debt, but also the use of current general revenues.

In studying these options state leaders should remember that Rhode Island’s transportation funding crisis evolved primarily from debt -driven financing practices. These practices have served to inhibit the state’s ability to properly maintain its roads and bridges. Therefore, in considering the best way to finance and deliver a bridge improvement program, the General Assembly should remember that borrowing is expensive. The most costly public debt may occur when there is a limited history with a new revenue source and any debt financing should be designed to avoid the carrying charges of issuing a large bond upfront.

While the REMI study provided additional information about the economics of the Governor’s truck toll proposal, questions remain regarding the impact of this proposal on sectors of the Rhode Island economy and operationalizing the tolling system.

In order to serve the best interests of the Rhode Island taxpayer, the General Assembly should take the time to fully evaluate all four options, leaving no stone left unturned.

About the Author:

Gary Sasse is the director of Bryant University’s Institute for Public Leadership. He is a former executive director of the Rhode Island Public Expenditure Council, and for several years directed the state’s Department of Revenue and Department of Administration during the Carcieri administration.

 

STATEMENT: Center Supports GOP Policy Group Infrastructure Strategy

FOR IMMEDIATE RELEASE

October 7, 2015

Legislators Should Not be Rewarded for Their Past Negligence

Tough Budget Priorities Must be Made

Providence, RI – Having put forth its own Pay-As-You-Go concept earlier this year, the nonpartisan RI Center for Freedom & Prosperity supports the general approach put forth by the RI Republican policy group earlier today to fund necessary infrastructure upgrades – without tolls and without an overly costly bond as proposed by the Governor.

“If fixing our bridges and roads is a top policy priority, as it should be, then that priority should be reflected in our existing state budget, without new revenues being extracted from our struggling state economy,” suggested Mike Stenhouse, CEO for the Center. “Legislators should not be rewarded for their past negligence of this issue; it is now time to make the tough budget decisions necessary to fund upgrades to our bridges and roads largely out of existing revenues.”

The Center plans to release a third funding model next week, a hybrid plan that incorporates a PayGo funding approach and that also removes direct management of this major public works project from the inefficient RI Department of Transportation.

Media Contacts:
Mike Stenhouse, CEO, RI Center for Freedom & Prosperity
401.429.6115 | info@rifreedom.org

About the Center:

The nonpartisan RI Center for Freedom & Prosperity is Rhode Island’s premiere free-enterprise research and advocacy organization. The mission of the 501-C-3 nonprofit organization is to return government to the people by opposing special-interest politics and advancing proven free-market solutions that can transform lives by restoring economic competitiveness, increasing educational opportunities, and protecting individual freedoms.

JOINT STATEMENT: Legislators Challenged to Take Position on 38 Studios Investigations

JOINT STATEMENT; FOR IMMEDIATE RELEASE

October 6, 2015

Good Government Groups Demand 38 Studios Accountability; Ask Lawmakers to Take a Position
Over Two Dozen Lawmakers Already on Record

Providence, RI – The five good government groups who banded together to push for complete and thorough investigations of the 38 Studios debacle (the Rhode Island Center for Freedom & Prosperity, WatchdogRI, RI Taxpayers, Operation Clean Government and Occupy Providence) today released the following joint statement regarding the document release from the State’s civil lawsuit:

It is now beyond apparent that the documents released by the courts will not provide Rhode Islanders with a complete accounting of the 38 Studios debacle. Because both sides in this lawsuit were not interested in fully accounting for the disaster, but, rather, were interested in simply winning their case, many leads were not adequately pursued.

What Rhode Island voters need and demand is accountability and the full story of how the scam went down. We want to know how this bad deal managed to sail through every existing check and balance in our government, so that we can implement reforms to prevent future failures.

To get the answers to these questions, two investigatory paths must be pursued. First, the Governor must initiate a truly independent investigation into potential criminal activity and how Rhode Island government’s process failed to protect the taxpayer. Second, legislative Oversight Committee hearings must reconvene with the support of leadership, and with subpoena powers as necessary, in order to determine if any political manipulation or ethical wrongdoing occurred.

The good government groups behind www.Investigate38StudiosNow.org now ask every sitting Rhode Island legislator to take a stand and go on the record in support, or not, of each of these paths.

The two questions being posed to legislators are:

  • Do you SUPPORT or NOT SUPPORT publicly open and unfettered legislative Oversight Committee hearings – now – including the granting of all subpoena powers requested by said committees, that will look into potential manipulation of the political and governmental process that led to the 38 Studios affair?
  • Do you SUPPORT or NOT SUPPORT a call to the Governor to appoint an outside, independent investigator – now – with subpoena powers to produce to a report on any potential criminal or ethical wrongdoing with regard to the 38 Studios affair?

Lawmakers are requested to send an email from their official state email address to info@Investigate38StudiosNow.org stating whether they “Support” or “Not Support” each of these two questions. About 2 dozen lawmakers have already responded with their positions.

We are not accepting as a positive answer to the Governor’s investigation a state police probe, since the state police would be looking for criminal activity only.

Rhode Islanders will not tolerate any further delay in obtaining a full explanation of this scandal. We will vigorously pursue getting answers from every legislator to our questions, and will post those results on our website. Responses from Representatives can be found here: www.Investigate38StudiosNow.org/Representatives.php and responses from Senators here: www.investigate38studiosnow.org/senators.php.

Media Contacts:
Mike Stenhouse, CEO, RI Center for Freedom & Prosperity
401.429.6115 | info@rifreedom.org

About the Center
The nonpartisan RI Center for Freedom & Prosperity is Rhode Island’s premiere free-enterprise research and advocacy organization. The mission of the 501-C-3 nonprofit organization is to return government to the people by opposing special-interest politics and advancing proven free-market solutions that can transform lives by restoring economic competitiveness, increasing educational opportunities, and protecting individual freedoms.