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Rhode Island's Next Move

Can the Governor Raimondo's tech-minded solutions fix the state’s problems and innovate its future?

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Governor Gina Raimondo speaks in paragraphs. She advances an opinion for five sentences or so, then carefully considers its opposite for five more. “Innovation” comes up often. So does “upskilling” and “unbundling.” Close your eyes and you might think she’s a tech CEO giving a TED talk.

This is partly a side effect of her time in start-ups; post law school, Raimondo worked in venture capital and co-founded her own firm. “I spent my career working with entrepreneurs and I loved it, so I’m just inclined toward innovation and change,” she says. But she notes, returning to the steady “jobs” line of her first two years in office, that her technophilia is also about getting Rhode Islanders to work: in order to join the “new economy,” as she calls it, “you have to be computer literate, you have to have a degree past high school, you have to embrace technology to a certain degree, you have to be able to think creatively and do problem solving… You know the old phrase,” she says. “Change or die.”

Tech’s accelerating presence in cities across the country has kicked off difficult conversations around land, housing and whether its utopian, egalitarian promises can be made good. The way you feel about Raimondo’s leadership will have a lot to do with whether you think corporations, tech and otherwise, can remold a place for the better. “I want Rhode Islanders to get what they deserve,” Raimondo tells me, “which is an opportunity in this new economy.” Of course Rhode Islanders will say that yes, we want what we deserve. But the question is what this new economy is going to look like, and how much we’re willing to give to fit into it.

Before squeezing into the governor’s office with a 42 percent share of the three-way vote, State Treasurer Raimondo had just enacted a round of controversial changes to the state pension fund involving a raise to the minimum retirement age and removal of cost-of-living increases. The teachers were furious, the firefighters incensed. Rhode Island’s unemployment rate was 6.8 percent, the worst in New England and fourth worst in the country. Raimondo asserted, in her inaugural address, that three things were needed to “spark Rhode Island’s comeback”: build workers’ skills, attract investments and innovate, “including in our state government.” The fourth action item might as well have been “disrupt.”

These goals have played out, most visibly, in deals that have convinced companies to come to and stay in Rhode Island – 16 job growth or relocation deals and 24 real estate deals to date. General Electric Digital, Johnson & Johnson and Virgin Pulse have all agreed to create jobs in the state, lured by incentive packages that include the promise of connections to the area’s college students. This is evident in the Real Jobs RI Training program – “one of my favorite things that I’ve done since being governor,” Raimondo says. “It’s industry-based job training where we go to the companies and we say, tell us what skills you need people trained in, we develop the training criteria, and then they hire the people.” The Commerce Corporation has worked, often with the governor’s help, to pair companies with Rhode Island’s colleges to undertake curriculum development, molding students before they graduate for the jobs that await them.

Raimondo’s initiatives have received a mixed reception. The governor has been lauded nationally for Rhode Island’s economic recovery (including, most recently, a dip in the unemployment rate to 4.3 percent), with the New York Times listing the “string of successes” in her “frenzy of economic and job development” and the Chicago Tribune applauding her role in setting the state on “a path to economic stability and success.”

The specter of pension reform, however, along with the disastrous attempt to brand the state using an out-of-state marketing agency, continues to hover over the governor’s initiatives, casting her actions, for some, in a negative light. The problematic roll-out of the Unified Health Infrastructure Project (UHIP) benefits system, approved before it was functional, has kept thousands of families waiting for food stamps, emergency cash assistance and health benefits. A reduction in the rate of increase for Medicaid reimbursements, along with a new set of incentive programs that allow both hospitals and nursing homes to earn money back if their quality is good – with good quality tied, in part, to reducing readmissions – has also come across, to some, as callous.

This ambivalence around Raimondo’s motives may be the main drag on her approval ratings, which, though they’ve increased since last year, now hover just under 50 percent. Why the low numbers? “I don’t know,” she says quietly. “I’m not really a political prognosticator. I think it’s probably on the upswing because more people are working and I generally think these things are tied to how people feel about their economic security. And I think that as people feel more and more secure economically, they’re inclined to be more positive about their public leaders, especially the governor.”

Raimondo’s newest project, the $30-million Rhode Island Promise Scholarship, is designed to inspire just that sense of security. The scholarship would provide free tuition for the last two years of college at CCRI, URI and RIC – a “last-dollar scholarship” intended for students who have received federal funding or other scholarships and need an extra allotment to meet tuition costs and other fees. Students must be full-time and on track to graduate in four years. These aspects of the program, in addition to its availability to families across the economic spectrum, have incited debate. As Bob DeRobbio, former school superintendent in Providence and Lincoln, puts it, “I think that this is going to benefit the middle and the upper class,” who can afford to attend full-time and are much more likely than working-class students to complete their degree programs in four years. So why are these guidelines in place?

“We know that people who go full-time are much more likely to graduate,” Raimondo explains. “The whole point of this is to crank up the graduation rate.” Then the tech mind kicks in: “Now, I think you’re going to start to see almost an unbundling of the four-year degree. Not everyone needs the four-year degree to get a good job. So you can imagine going to college for two years, picking up a credential, going to work for five or ten years, going back to college. I could see over time, as the model changes, the scholarship changing.” She pauses and neatly wraps up the train of thought: “But I think that’s down the road.”

Camilo Viveiros is coordinator for the George Wiley Center, a group that lobbies for social and economic justice through changes to public policy.

The group has been laser-focused on utilities and their affordability for low-income people, and specifically on appointments to the Rhode Island Public Utilities Commission. Such administrative issues “might seem not as important as legislative policies” (like free college or jobs training), says Viveiros, “but for low-income Rhode Islanders, there’s a significant amount of agency that’s executed through different agencies.”

Raimondo has, to some extent, responded to the group’s concerns: she appointed Macky McCleary as administrator for the RI Division of Public Utilities, the first person of color to hold the position. This, Viveiros says, has changed the dialogue “considerably” – McCleary has been “open-minded and interested in policy,” had not worked for the utility industry before taking the position, and helped settle a lawsuit filed by the George Wiley Center against National Grid and the Division regarding their treatment of utility customers with medical conditions.

But “there needs to be a higher level of dialogue around some of the other agencies, including what we’ve seen at DHS” where layoffs have resulted in a “hard-hitting crisis for our members,” Viveiros says. The Center’s focus on these most basic services begs the question: Beyond free college, what is the governor doing to provide for those who are concentrated solely on keeping the lights on?

“Well you know that’s why we’re working so hard to create jobs. The way to keep the lights on is to have a good job,” Raimondo says. “That’s why we’re working hard to make sure people can have better wages. The path to better wages is more skills.” This “up skilling,” she says, means that “the economy does better, and then we have more money to put into social services and this, that and the other.” (A different strategy for better wages – raising the minimum wage from $9.60 to $15 an hour – is currently working its way through the General Assembly.)

The governor’s goal is not to fundamentally alter the structure of society: The events of Ferguson, she said in her inaugural address, remind us that “the challenge of our time is to simply get along a little better and to respect one another.” The answers she gives to questions about the financial insecurities of Rhode Island’s workers would not be out of place in a pitch to companies looking to invest in Rhode Island. Might we include a provision, in those incentive packages to companies, that they hire Rhode Island residents? No, she says, “because in general, you don’t want to limit the options of companies.”

She points to the Wavemaker Fellowship, “which companies love – that was a huge part of the reason Johnson & Johnson came to Rhode Island, for example.” The program “says, if you graduate from any Rhode Island college with a STEAM degree and you take a STEAM job in Rhode Island, we’ll pay back your student loans for up to four years. So, that’s an incentive to hire people coming out of our colleges.” The key is to “upskill our talent supply,” she says, so that companies “want to hire people.”

These incentive packages, a central strategy in Raimondo’s job creation efforts, have received particular scrutiny, cast by some as savvy economic stimuli and by others as capitulation to big business.

Companies are paid an amount equal to the state income tax generated by each new job created, and not until that tax is paid (a year after the job is created) and certain benchmarks are met (e.g., 50 jobs). The job must be located in Rhode Island, though again, the person occupying it does not need to be a Rhode Island resident. The salary must be greater than the median state wage ($39,042), and companies must keep the jobs in place for 20 percent longer than the tax incentive lasts (10-year tax credit deals require jobs that last at least 12).

“Honestly, you know, tax incentives, tax credits, grants, all these things that they’re working on, they have a place,” says House Minority Leader Patricia Morgan. “My problem with them is that they’re not big winners. They’re tiny: 100 jobs here and 100 jobs there, at enormous cost.”

“It adds up, you know,” Raimondo counters. “It’s more than 15,000 jobs that have been created since I’ve been governor. I also think it’s dangerous to just go whale-hunting.” Start small and invite companies to “plant the flag in Rhode Island,” she says.

Amid this flurry of innovation and up skilling, Viveiros, the community organizer, notes that “there’s still a significant digital divide” between people of different socioeconomic backgrounds. “It’s tempting for legislators to try and take shortcuts to minimize staffing and have technological fixes for social problems but some of these problems, there isn’t any shortcut other than face-to-face, phone-to-phone connections.” He’s heard, he says, “from some of the governor’s staff that she cares about data, but I would say data includes community engagement, not speaking just to experts with a bookish understanding of statistics. We’re talking about real people.”

In an era when Mark Zuckerberg is touring the country in what many have speculated is a presidential pre-campaign, and when billionaire investor Peter Thiel has the president’s ear, and when tech leaders are invited en masse to the White House to discuss jobs, this particular group of business leaders is likely to see their stake in government increase, regardless of the industry’s traditionally libertarian leanings.

Raimondo will be running again (“I haven’t announced and I won’t for a while but I do plan to”), and whether or not she winds up on the national stage, such connections cannot help but benefit her. “If we don’t innovate, we’re going to be left behind,” she says. “And I don’t want that for Rhode Island.” The question now is whether moving forward will benefit all of us.