Nothing could better explain the current state of Rhode Island’s business incentives than High Rock Development’s recent announcement that it has finally found the right cronies in the right election year to pay the nine-figure ransom under which it has been holding the Industrial Trust Building.
The McKee administration has proudly declared that the state’s $25 million share would come from three programs: $5 million taken from the critically-underfunded Rhode Island Housing, which has to rely on volunteer labor to power its rent-relief clinics; $15 million from Rhode Island Commerce Corporation’s RebuildRI credits, which the state itself recently found to be ineffective; and a record-shattering $5 million from the First Wave fund, an obscure grant available only to those invited by Commerce to apply.
These three tranches of funding represent perfectly the worst of Commerce’s current operating framework: taken from those in need, used wastefully, and offered through backroom deals exclusively.
Rhode Island Commerce Corporation surely has a role to play in revitalizing our economy, but as a candidate for governor, I believe we’re failing to use its power for the good of all Rhode Islanders. Through enabling legislation proposed by the governor, supported by the Executive Office of Commerce, we can reform the Rhode Island Commerce Corporation to ensure that it is no longer used to pander to the wealthy and well connected over small and microbusiness owners who deserve support. These are tools that will enable us to change the way we do business in Rhode Island, and as governor, I will use these tools to effect programmatic changes that will strengthen local economies.
First and foremost, we must consider ways to allow Commerce to pilot a supplemental livable-wage program for local small and microbusiness, creating a rising tide that will lift all boats. Rather than placing the financial burden on local businesses by solely focusing on raising the minimum wage, we can use our federal American Rescue Plan Act funds to supplement small businesses’ wages through grants that will let them offer wages as high as $35 an hour for in-demand positions without increasing their payroll. That will allow local businesses to hire the best talent, give the Rhode Islanders working for them a wage they can raise a family on, and force national chains, who can afford it, to raise their wages to compete. Large corporations like CVS should be demonstrating an accelerated path towards a livable wage.
We must also reorient Commerce’s work to focus on incentivizing the training and retraining of workers, not simply job creation. I support expanding the Rhode Island Promise scholarship to adult learners; Commerce can integrate job training programs with this expanded academic opportunity to give every Rhode Islander a pathway to success. I would also deploy Commerce, along with other state education and employment agencies and local business leaders, to create professional certification standards to assess the effectiveness of all job training programs offered through the state or through an entity receiving state funds.
We should also use Commerce to help offer structured relief on regressive municipal taxes in the same way the state has worked to phase out the car tax. The tangible asset tax, which taxes every physical item a business owns, disproportionately affects small businesses for whom even a single piece of equipment can be a major investment. A compromise between municipalities, small businesses and the legislature must prioritize a more fair taxation structure, including the elimination of this tax.
From 38 Studios to the Superman Building, the Commerce Corporation’s history has been defined by bad deals with big business, but it doesn’t have to be that way. We can redesign it and start anew, but only if we all join together to show the state’s power brokers that we will no longer stand for insider dealing. I hope you’ll join me in demanding a government that works for the people and businesses of Rhode Island.
Dr. Luis Daniel Muñoz is a public health activist and community organizer running for the Democratic nomination for governor of Rhode Island.