May 3, 2008

A System of Scapegoats

Justin Katz

Although I haven't yet managed to get a handle on the realistic role and responsibilities of Rhode Island's Economic Development Corporation (EDC), I can't help but feel that a little outrage on the part of its president, Saul Kaplan in response to legislative hammering:

Lawmakers yesterday demanded answers from Rhode Island's Economic Development Corporation about why the agency has not done more to curtail job losses and bolster the state's flagging economy.

"Your feet are to the fire ... things are looking pretty bad," Rep. Elizabeth Dennigan, D-East Providence, told EDC officials at a hearing targeting the agency's economic growth plan.

Dennigan, chairwoman of the legislature's Joint Committee on Economic Development, chastised the organization for allowing the state to slip into what economists earlier this week called the Northeast's only recession.

The lawmakers' position was clear yesterday: the agency must commit itself to more daily hands-on work to try and reverse the state's economic forecast.

Kaplan's response might have been that there's only so much that a policy organization can do in the face of a take-away-and-give-away legislature. As with much else, in Rhode Island, the EDC appears to be yet another scapegoat whom those who've ultimately brought about calamity may blame.

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This is laughable. It's like a heavy inebriate who develops cirrhosis of the liver and then turns around and blames his doctor!

Posted by: Monique at May 3, 2008 7:58 AM

What can the EDC do but putter around. The state's governor seems more interested in protecting the millionaires yacht clubs and tennis courts then helping to develop the state's industrial base. Oh he'll make sure the jobs we're losing were filled by legal residents though.

Posted by: Phil at May 3, 2008 9:02 AM

Unfortunately, Saul Kaplan, head of the EDC has no balls. If he did, he would have come to this meeting with the voting records of such clowns as Rep. Elizabeth Dennigan, and then asked her, point blank, how in the world he can attract companies with high-paying jobs when idiots like her are passing legislation like a & b & c that runs counter to everything he is trying to accomplish.
Kaplan is a beaureucrat more interested in keeping his job than telling it like it is. In some not so small way that
is another part of this problem.

Posted by: Mike Cappelli at May 3, 2008 11:19 AM

I hope all of you are not suggesting Saul Kaplan actually left the luxurious EDC office space in the Westin Hotel with private elevator entrance and paid parking to give the GA’s Joint Committee on Economic Development the standard double talk answer he gives to everybody.

“But Kaplan played down the chairman’s concerns and those from the committee.”

“Finger pointing does none of us any good,” he said. “We have to be focused on what kind of economy we’re trying to create and get on with creating it with a laser-like focus. So we have to stay the course on our tax structure … we have to get our state budget in order and we at EDC need to aggressively implement our economic growth plan.”

I wonder if the $600 million in tax credits Kaplan handed out last year (which we the taxpayer have to pickup) has produced any jobs yet?

Posted by: Ken at May 3, 2008 5:06 PM


Handing out tax credits is the only way the EDC can overcome the enormous obstacles to businesses moving to RI created by (1) our poor public education system and labor force quality; (b) our poor roads and bridges; (c) our extremely generous support system for people making (in the case of daycare providers) 3x the poverty level income; (d) our very pro-union labor laws; (e) the anti-business attitude of the Democratic Party that has controlled Smith Hill for 70 plus years: (f) our corrupt, "ya gotta know a guy" political system; (g) massive unfunded liabilities for public sector pensions and post retirement health care benefits; (h) overstaffed, inefficient local government, as epitomized by our highest in the nation -- by far -- cost for fire protection; and (i) the extremely high taxes a business and its employees would have to pay in order to enjoy all of the above.

Frankly, Kaplan should have looked the committee in the eye and asked if they were kidding in asking the question, or did they merely have no shame?

Posted by: John at May 4, 2008 7:24 PM

All I would add to John's excellent comment is that the originating authority for the $600m in tax credits handed out by the EDC was the General Assembly. [Remember Steve "Pensions" Alves blocking Duie Pyle's tax credit?]

As Marc Comtois and others have correctly pointed out, tax credits are a poor way to bring business to the state. The business climate of the state including the corporate tax structure needs to be made far more conducive across the board and not be comprised solely of isolated, targeted bright spots. If a company somewhere in the US is thinking of where to relocate, when they get to Rhode Island on their list, they should automatically think, "Nice beaches. Good business climate", not "Damn. Do we have time to go and schmooze the right people to get the abatements we need to move here? Will we have to procure someone's services to close the deal? Suppose they pull the rug out from under us, like they did to that Johnston company?"

Posted by: Monique at May 4, 2008 9:34 PM
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