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Raimondo’s playbook for R.I. economy includes spending $200 million on small businesses, job training, and housing

Rhode Island Gov. Gina Raimondo sits during a news conference Monday, June 22, 2020, in Providence, R.I., where she announced that she has signed an executive order to remove the phrase "Providence Plantations" in the state's formal name from some official documents and executive agency websites. (AP Photo/David Goldman)
Rhode Island Gov. Gina Raimondo sits during a news conference Monday, June 22, 2020, in Providence, R.I., where she announced that she has signed an executive order to remove the phrase "Providence Plantations" in the state's formal name from some official documents and executive agency websites. (AP Photo/David Goldman)David Goldman/Associated Press

PROVIDENCE – Governor Gina Raimondo wants to spend $200 million of Rhode Island’s federal coronavirus relief funding to support small businesses and invest in job training programs as part of what she calls a plan to build a “better, fairer, more inclusive, more equal economy.”

In a telephone interview with the Globe on Monday, Raimondo also said she wants voters to consider an even larger affordable housing bond than the $25 million proposal that she put forward in January, and said she might create a new incentive program to recruit manufacturing businesses to Rhode Island.

In the short-term, Raimondo sees the $200 million as a “down payment” on boosting the economy and lowering the unemployment rate, but her broader goal is clear: If the coronavirus is the defining event of her political career, her success or failure in preparing Rhode Island for a post-pandemic world will determine her legacy.

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“I’m excited to take the playbook that we had before, but make it better,” Raimondo said, referring to an economic development strategy that combined generous incentives for businesses with education and job training programs to helped Rhode Island reduce its unemployment rate from 6.6 percent the month she took office in 2015 to 3.4 percent in February, before the virus changed everything.

Raimondo said she intends to roll out a series of ambitious proposals in the coming weeks, beginning Wednesday when she unveils a plan to help small businesses since the state was largely shut down in mid-March.

The General Assembly has largely given Raimondo the unilateral authority to spend the $1.25 billion it has receieved as part of the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, but any bond questions or budget changes would require legislative approval.

Raimondo has been reluctant to spend the bulk of that money as she waits for Congress to approve another relief package for states, in part because Rhode Island faces a $600 million deficit for the fiscal year that started July 1. CARES Act funds cannot currently be used for those purposes, but many governors are seeking guidance on whether the federal government will change the rules - or provide more money - to allow states to plug budget holes.

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Raimondo is planning to propose using a significant portion of the $200 million for helping small businesses, including providing direct cash grants to companies that have been hardest hit by the coronavirus. Lieutenant Governor Dan McKee, a fellow Democrat, has called on Raimondo to earmark $125 million for small businesses, but Raimondo’s office declined to say how much they want to spend.

While Raimondo agrees that some businesses are in need of a one-time infusion of money, she said the state needs to both “stand back up” the economy and make investments over the long-term.

Governors across the country shut down most of their state’s economies in March and April as they tried to contain the contagious virus, which sent unemployment rates soaring. In Rhode Island, nearly 300,000 unemployment claims have been filed since March 9, and the unemployment rate reached 18.1 percent in April.

The virus also highlighted wide disparities in the economy and health care, as low-wage workers either lost their jobs or were forced to work despite dangerous conditions, and the infection rate among Latino and Black residents were disproportionatley higher than it was for white residents.

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Raimondo said she will set aside millions of dollars for new job training programs, especially in sectors that were struggling long before the coronavirus hit Rhode Island. She said she expects to see fewer jobs at brick and mortar retailers and in the hospitality in the coming years, “so it’s my job to make sure they have the training.”

Although she has faced criticism throughout her two terms as governor for supporting tax breaks to woo businesses to the state, Raimondo those incentives will be “part of the playbook” going forward. She said incentives helped Rhode Island generate more than $1 billion in commercial real estate construction in 2019, compared to $84 million in 2013.

On housing, Raimondo already proposed a $25 million affordable housing bond to go on the November ballot, but she said she intends to ask lawmakers to increase the bond – potentially to $50 million. The General Assembly is back in session this week, but it’s unclear when they’ll take up bond questions.

“It’s time to go big,” Raimondo said. “It’s clearer than ever that we need to do more on housing.” And as she tries to recruit new companies, Raimondo said housing will be a significant part of her pitch.

Raimondo said the pandemic has proved that many employees can work from home, and while companies will always enjoy being headquartered in large cities, she indicated that she is going to make that case that Rhode Island is an affordable place to live, with low crime and little traffic.

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Raimondo has largely brushed off questions about her national political ambitions in recent months, but wasn’t shy about prescribing how the country should respond to the pandemic. After the Great Depression and World War II, she said investments infrastructure and manufacturing as well as programs like the G.I. Bill “set the table for decades of economic growth and shared prosperity.”

But she said a new national plan to rebuild the economy would need to be more inclusive to ensure that Black and Latino people are treated fairly.

“We need to do something like that, contextualized for 2020,” Raimondo said.


Dan McGowan can be reached at dan.mcgowan@globe.com. Follow him on Twitter at @danmcgowan.