Economists: No end in sight for RI's economic troubles
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PROVIDENCE -- If there was any good news to come out of the State House this morning, it's that Rhode Island isn't the only New England state in recession. "Misery loves company. And Rhode Island has plenty of it," said Andres Carbacho-Burgos, an economist with Moody's Economy.com and one of a handful of independent analysts who testified during this morning's opening day of the fall Revenue & Caseload Estimating Conference. At the spring meeting of the same group, Moody's noted that Rhode Island was the only New England state in recession. "You could say Rhode Island has sort of set the trend for the United States," Carbacho-Burgos said. Indeed, the economist said that Maine joins Rhode Island in recession status. And he expects Connecticut's economy to reach that level by the end of the year. Even Massachusetts, which is currently listed as having an economy in "expansion," is expected to be "at risk" in the coming months, Carbacho-Burgos said. But today's testimony offered few bright spots for state officials trying to determine how much money the State of Rhode Island can spend in the coming fiscal year. "The worst is not over by any means," said Mike Lynch, an analyst with the firm Global Insight. "We see little cause for any optimism." Global Insight predicts that Rhode Island's unemployment rate will exceed 7 percent through the end of next year, among the highest in the nation. The Ocean State's real estate markets wil "continue their period of free-fall well into 2009." And Global Insight predicts it will take another five years before Rhode Island sees employment levels matching "pre-2007 peak employement levels." To make matters worse, the economists who testified this morning acknowledged that their forecasts may be too rosy, given that they were based on data that's almost a month old. The firms agreed to return to the House Finance Committee room in the State House basement -- the site of today's hearing -- on Nov. 7 to provide updated reports. The Revenue & Caseload Estimating Conference is really a series of meetings in which the fiscal leaders of the House, Senate and governor's budget office convene to determine the economic health of the state. The bi-annual tradition begins with economic forecasts. But state officials will hear testimony from several other players as well over the next two weeks, including those with information on tax credit programs and social welfare programs. "They've indicated that we have obvious need to be concerned," Kevin Madigan, the interim head of the Senate fiscal office, said of today's testimony. "We continue to drop in a lot of indicators with no real good sense of when - they mentioned hitting the bottom frequently - when that will happen." The weakened state economy will ultimately mean there is less money for social service programs, the state's personnel costs, infrastructure projects, and state-sponsored services like public safety, public transportation and the Department of Motor Vehicles. "Whatever the revenues turn out to be, the budget pressure will be immense," said Russell Dannecker, the recently-retired Senate fiscal advisor who attended today's proceedings representing Rhode Island College's Poverty Institute. "There are only so many places they can cut." Representatives from the business-backed Rhode Island Public Expenditure Council were also in attendance. He acknowledged there would be increased pressure in state government to look at tax increases during this weak economic period. "How do you increase taxes when you have businesses that are shrinking?" asked John Simmons, RIPEC's executive director. "What would that do to the economy?" 
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Unfortunately the apparently emotionally assembled demonstration described in PROJO today must still believe in the tooth fairy?
May I offer some FYI 101 on the unique RI economy situation for the demonstrators? Yes, a situation that I fear some national POLS are just now promoting to deploy across the entire nation, if elected November 04, 2008. I suggest that they all look at RI prior to such a grievous mistake in judgment.
The Governor of RI Don Carcieri seems to be logically stimulating early discussions towards the compelling need for RI to understand the problem and need for its correction. Second the range of solutions and their subsequent implementation. Such dialog must continue with even wider participation of all citizens. Clearly we must all become agents for correcting the present situation in RI.
The first step is to make the RI General ASSEMBLY BECOME MUCH MORE RESPONSIVE e.g. A PARTNER WITH THE GOVERNOR IN REALIZING A SOLUTION RATHER THAN CONTINUING AS A PART OF THE PROBLEM.
Last, we have the equal opportunity to engage and participate e.g. WORK, CONTRIBUTING to the extent of our ability. We do not have right to an entitlement or guaranteed outcome.
Last weekend even the NYT depicted the plight of RI but unfortunately stopped short of connecting the dots e.g. they described the present state dilemma less the cause and or range of solutions required to correct the present negative opportunity.
YES, RI IS AT THE BOTTOM OF THE PILE OF ALL 50 STATES. You need to understand Why that is.
Why - - RI has a tax policy that is based on seizing any and all wealth regardless of origin. Subsequently a redistribution of any and all seized wealth into an entrenched very expensive entitlement system. The resulting costly state bureaucracy and its entrenched clients all depend on sustaining this unproductive relationship to continue business as usual.. We have all read PROJO reports of the very partisan grievances that have developed along with a continued passive aggressive behaviors exhibited!
Today how do we break this 70 YEAR CYCLE of DECREASING opportunity for RI citizens?
First please understand that ALL Business & skilled employees votes with its feet when exposed to an environment that seizes undue amounts of its wealth / money from owners and its workers alike.
Hence the available wealth to seize and redistribute is drastically reduced. THAT MEANS IN THE END NO FREE LUNCH CAN BE CONTINUED FOR EVER.
ALL small & large businesses is based on making a profit e.g. creating wealth by adding value, when successful, results in opportunity and good paying jobs. This means expanding opportunity to even more people. The pie gets larger for everyone.
The present RI entrenched system of generational legacy liberal largeness does not create an environment that generates wealth and adds value. Such is REQUIRED to increased opportunity. . Rather a sustained pseudo socialism mind set destroys opportunity. Yes, opportunity to engage, participate work and contribute with an expectation of recognition and reward..
We require a complete overhaul of how we deliver government services and the structure of the local and state government for this small city State where we live. The companion task is to redesign how we citizens (again no free lunch) pay for those services and the hopefully new streamlined and smaller resulting government. Yes, REFORM e.g. consolidation restructure and redefinition to a much more agile and leaner system is required to create the necessary climate for small and large business to once again prosper.
The time is short and the task is large. Our governor seems to have a grasp of the situation and some level of expertise to assemble the necessary knowledgeable citizens of good character that ultimately must define, assemble and implement the new RI long after our Governors last term has ended. Only we can individually and collectively make the choice to collaborate and contribute or continue the negative and unproductive passive aggressive behaviors of the past.
The choices are very clear and the reward and or continued penalties are as well hopefully understood by all citizens.
Finally the time is short.
October 30, 2008
Wfh Middletown, RI
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