July 5, 2018


Gina's Way  (DANIEL C. VOCK | JULY 2018, Governing)

It was in the midst of all that economic distress and political distrust that Raimondo introduced herself to Rhode Island voters. Her first step was to run for state treasurer, which fit her background as a venture capitalist. As a Rhodes scholar with an economics degree from Harvard and a law degree from Yale, she had impeccable credentials. But she also had authentic connections to blue-collar Rhode Island. Raimondo often relayed the story of her father being laid off from his job in Providence when the Bulova watch factory closed. She says she jumped into politics because libraries around the state were shutting down, a point that hit home for her because her grandfather learned English at his local public library.

Raimondo moves comfortably in these two worlds. But, inevitably, these worlds collide.

They certainly did after the Central Falls bankruptcy, in which Wall Street investors remained unscathed but retired city workers faced steep benefit cuts. "It broke my heart to see 75-year-old firefighters saying, 'I can't buy food. I can't buy my medicine. I can't stay in my house,'" Raimondo said in an interview with the podcast Freakonomics earlier this year. She worried the same thing would happen to teachers and other workers in the state pension funds, which were also dangerously underfunded. "I decided, I'm not going to do that. It's not about my politics, it's about shoring up the system. ... There are a lot of people in this system who need their pension to be there in 30 years, and it wasn't going to be. My tagline at the time was, 'This is math, not politics.'" 

She insisted that existing benefits had to be reduced, and said that if lawmakers didn't act, the system would be broke in 25 years. She proposed eliminating cost-of-living increases and moving recipients into a system that more resembled the riskier 401(k) plans used in the private sector. After Raimondo made her case around the state, lawmakers in 2011 passed her proposal by wide margins. Unions fought the deal unsuccessfully. They eventually reached a settlement with the state several years later, but resentment over the issue, particularly among teachers unions, has never really died away.

Raimondo's pension victory boosted her profile, setting up her campaign for governor in 2014. She narrowly won a three-way primary against two labor-friendly Democrats, then won the governorship in November in another three-way race. Raimondo didn't dwell on the pension fight during her campaign, although it galvanized support for her opponents. Instead, her message in that race was all about job creation. It still is.

During Raimondo's term as governor, she has appeared countless times touting one commitment or another by companies to bring or add jobs to Rhode Island. She joined the head of General Dynamics Electric Boat in May to tout the creation of 1,300 jobs. Electric Boat is expanding to build parts for a new class of nuclear submarines for the U.S. Navy. Raimondo has announced 500 new jobs from Infosys, an Indian tech company; 75 jobs at a tech center for Johnson & Johnson; 50 new positions for GE Digital; 300 additional jobs for Virgin Pulse, a health software company; and 700 jobs for Infinity Meat Solutions to package and process meat. And the list goes on.

But Raimondo has backed more controversial projects as well. She appeared with the CEO of Deepwater Wind in 2016, when the company started building the first offshore wind farm in the United States. Residents of nearby Block Island tried to fight the new development because it obstructed their view of the ocean, but the governor forged ahead anyway. This spring, she signed off on a deal to let the company construct a wind farm that would produce 13 times as much energy as its first project. Meanwhile, Raimondo backed an effort to build a $1 billion natural gas-fueled power plant in the northern part of the state, despite fierce objections from environmentalists and local residents. 

Laurie White, the president of the Greater Providence Chamber of Commerce, credits Raimondo for rebuilding the state's economic development agency, which had languished under previous governors. "There were zero tools in the toolbox," she says. "The state didn't even have marketing materials. This governor understands what a contemporary economic development agency must do today to be in the game in order to win."

The company officials who appear with Raimondo to announce new jobs often tout the tax incentive packages that the state has offered to lure them there. Most of those incentives were created under the Raimondo administration. "Massachusetts and nearly every other state in the Northeast still uses incentives. And they've been doing it for years," Raimondo explained in her State of the State address this year. "Until recently, though, our leaders didn't have a strategy and, because of that, Rhode Islanders got left behind. And the few times our past leaders did take action, they put all their eggs in one basket or chased special deals. Any way you slice it, Rhode Islanders got hurt."

The governor's supporters note that some of the biggest state tax credits companies can qualify for require them to actually create jobs before they get the tax subsidy. In the end, they argue, the jobs will bring in more than enough money to pay for the breaks that drew them to Rhode Island. But to the governor's opponents, especially the ones lining up to run against her this year, the tax breaks smack of "corporate welfare," gifts to out-of-state companies that won't change the fundamentals of a broken Rhode Island economy. 

Posted by at July 5, 2018 3:47 AM