LINCOLN – On the day the state learned that its adjusted unemployment rate for last December had dropped to 9.9 percent – the first time it fell below 10 percent in 47 months – an upbeat Gov. Lincoln Chafee told a roomful of businessmen and women that “better days are ahead.”
The governor told a Northern Rhode Island Chamber of Commerce Eggs and Issues Breakfast Thursday that with sales and income tax revenues rising, and employment going down, all the metrics are headed in the right direction. That is an indication, Chafee said, “that we are managing the state well.”
“I’m not naïve about our challenges,” Chafee told The Call after the event, “but we’re going in the right direction.”
“There is a lot of criticism out there – Where’s the plan? There’s no action – but the metrics don’t support it,” he said. The unemployment rate for January will be announced later today.
Meanwhile, Chafee was buttonholed at the end of the breakfast by Woonsocket City Council President John Ward and said afterward that the state has no desire to take Woonsocket into receivership and bankruptcy.
“No, of course not,” he added, “we’re working hard, patiently,” to avoid that. “They have a five-year plan to get back into black ink. We’ve been very methodical and patient about letting Woonsocket solve their own challenges.
“It’s always shared sacrifice between retirees, existing employees and taxpayers, but it leads to solvency,” Chafee said, adding that those involved know “that state intervention could happen at any time, further than it already has, beyond the budget commission. It’s not in the abstract, they’ve seen it nearby in Central Falls.
“There’s a new word, ‘Flanderized’” Chafee said, referring to the combination of painful pension reductions, budget cuts and supplemental taxes imposed by former Central Falls Receiver Robert Flanders to bring that city through its 2011-2012 bankruptcy.
Ward said after the session that whether the state-appointed budget commission helps right Woonsocket’s financial ship and does not escalate into receivership and bankruptcy depends on the city’s legislative delegation supporting supplemental tax increase on vehicles and homesteads.
Ward said he wanted to make sure the governor knows that, “the initial reaction from our delegation seems cautious if not negative. I think we need to call a special meeting with our delegation so we can go over every aspect of the supplemental bill so we are all on the same page when we walk out of the room.
“We could afford to have the supplemental bill shot down last year because we had not gone into state oversight, but now that we are in state oversight, if we fail to do one major component of our solution now, it will automatically put us into receivership and possibly into the bankruptcy court.
“I don’t think that is in the best interests of the city of Woonsocket or the state of Rhode Island for that matter,” Ward asserted. “As the economy is slowly improving, the last thing we need is for another community to fall further downward. It would not be good for promoting the state; it would not be good for promoting Woonsocket.”
Chafee boasted to the business audience that his proposed budget for the coming year includes no tax or fee increases and would actually lower the corporate tax from 9 percent to 7 percent.
Not only that, he said, but “we are putting our money where our mouth is,” by finding priorities such as education, infrastructure, workforce development and cities and towns.
What could have been an awkward moment was handled gracefully by both men when the first person to rise from the audience with a question was former Auditor General Ernest Almonte, so far the first candidate to officially announce he will challenge Chafee for the governor’s seat in 2014.
Almonte asked about filling positions at the troubled Economic Development Corp. that Chafee chairs. Chafee used the opportunity to once again criticize the $75 million loan guarantee to former Red Sox pitcher Curt Shilling.
He then went on to say, “the newspapers want to write that (EDC) is in disarray; I can’t help what they want to write, but it is not true. We still have a Board of Directors, we have a quorum, we are doing our work.”
Chafee said that because the Senate adjourned last year without confirming his nominations to the EDC, “we went all fall with a smaller board which, frankly, I liked.” The board with fewer members was “productive and efficient,” the governor said.