PROVIDENCE – On Tuesday, June 25, the Rhode Island Public Expenditure Council (RIPEC) released comments on the state’s considerations to reform economic development. This report provides an overview and status of the House and Senate economic development legislative packages, the General Assembly’s proposed FY 2014 budget, and summarizes other legislation with potential business climate impacts. Combined, the House and Senate economic development packages and proposed budget articles are focused on improving the state’s environment for business. However, to fundamentally shift the state’s business environment, systemic, structural state government reform is necessary. The full report is available here, and an addendum to the report is available here.
The House and Senate economic development legislative packages contain structural and programmatic reform proposals. Both packages aim to improve Rhode Island state government’s response to economic development, and to reform broader business climate issues. This is done through proposals to improve economic planning and analysis, enhance transparency at the quasi-public Rhode Island Economic Development Corporation, and elevate the responsibility and authority of commerce-related activities in state government. Moreover, both packages include broader business climate reforms relating to taxes, the regulatory environment, and workforce development. While there have been several hearings and votes on these bills, only four await the Governor’s signature.
Several proposals from the House economic development package and other related business climate reforms have been incorporated into the General Assembly’s FY 2014 budget proposal. In particular, articles 9, 15, 18, 20, 22, 23, 24, and 25 would have business climate impacts. Additional legislation, such as requirements on independent contractor definitions and apprenticeship programs has the potential to move the state’s business climate backwards and make the state less competitive.
The General Assembly has placed emphasis on economic development and commerce throughout this legislative session. Rhode Island’s weak economic condition calls for systemic, structural reform outcomes this session. Only then will the environment be created to allow for the state to promote long-term economic growth for Rhode Islanders.