Showing posts with label unemployment. Show all posts
Showing posts with label unemployment. Show all posts

Monday, May 10, 2010

If you became Governor - what would you do?

A poll published online May 10, 2010 by The Providence Business News asks the question


What should be the new governor’s top priority upon taking office in January 2011?

Readers are asked to select from 5 options.

1. Balancing state and local budgets 12 votes (33%)

2. Economic development/job creation 15 votes (42%)

3. Improving elementary, secondary and post-secondary education 3 votes (8%)

4. Improving the state's tax environment 5 votes (14%)

5. Implementing a robust energy and environmental protection policy 1 vote (3%)



These are very early and preliminary votes but it does suggest what the mind of the public expect from a governor. and their ignorance of what a governor in Rhode Island can be expected to do.

1. Balancing the budget

Given the Rhode Island Constitution and despite the long overdue separations of powers act, balancing the state budget is a legislative function. The most the Governor can be expected to do is:

a. to recommend a balanced budget to the legislature,
b. to manage, after the fact, a budget that the legislature approves, and
c. to do so as effectively and efficiently as circumstances and the law allow.

As for the local budgets, these are up to the local legislative bodies (town councils, boards of education, etc.)to determine and beyond the Governor's control.

So while it might be desirable to have strong leadership in the Governor's office, institutionally there is little real power here to achieve this goal without a commitment of cooperation from the General Assembly.


2. Economic development/job creation

Rhode Island is a small state that tries to behave like a big state. Localities compete as aggressively with one another for new businesses and jobs as Rhode Island does with other states. The Governor can lead here by setting some clear priorities and goals for development and by promoting the state to out of state employers. But the governor can only sell what the state has to offer and what the General Assembly will fund. These two are not always in synch.

In "Meeting the Challenge of the New Economy", the 1997 Annual report from the Rhode Island Economic Development Council, the Council listed 8 myths about Rhode Island's economy. Myth # 5 is
"by creating jobs, state and local government employment helps the economy."

The report continues,
"The Reality: The right number of state and local employees allows government to accomplish the tasks it needs to ( e.g. maintain the roads, police protection). More than we need, however, eliminates even more jobs in the moderate term by removing purchasing power from consumers and raising taxes."

This is even truer today than back in 1997, yet little has changed in terms of the Governor's ability to change labor contracts and renegotiate the long term commitments to public employees. Management, the Governor's Office, requires the legal tools to enable it to make the management decisions that creates and maintains the right number of highly trained, skilled and experience government workers to do the tasks it needs to do.

The governor does not create jobs, nor should he/she. Instead, the Governor should help create a climate that fosters private sector employment opportunities. Here again, cooperation between the GA and the Governor will be required.

3. Improving elementary, secondary and post-post secondary education.

The Governor is the public's elected CEO. Here is where the Governor can have a real impact and where real change can be brought about. Education is the most critical step in an economic and social policy. Economic development does not occur overnight, anymore than educating a child to become a productive worker does. Both are long term processes. Changing the educational environment is a leadership and policy issue. Setting that policy, especially strategic policy, is the job of even a weak Governor.

a. The first step in building and supporting a viable and adaptable system to meet the needs of students, parents, communities and employers would be to set middle and long range goals and objectives for the state's educational system. These would be based on realistic assessments of the changing workforce needs, regional and global economic trends and local and state capacity to respond to these needs would be.

b. Next would be to create and carry through a realistic plan to achieve such goals. For the next Governor it would be follow through on the work done by Dr. Gist and those involved in planning and seeking federal support through the Race to the Top grant competition.

c. Next is to build on our strengths beginning with the best talent we have. The new Governor should avoid the temptation to replace the team now in place solely to reward friends and cronies. We have seen enough of this in recent years and even recent days in the state.

d. Support for individual teachers efforts to use and share their best practices even when these are contrary to arbitrary and/or out-modded contractual work rules or administrative policies is critical. By promoting and rewarding professionalism through public recognition and professional advancement for outstanding performance would demonstrate to all the state's commitment to quality education and a quality workforce.

e. Support for the state's post secondary institutions including the technical as well as professional post secondary education at a level competitive with the rest of the region and the world would put action behind the claim that we have the well trained workforce employers are seeking

f. The Governor should also push for full funding for the plan at all levels and through all available means and would re-enforce that commitment.

4. Improving the State's Tax environment.

I realize this may go against a lot of people's gut reaction but here goes. The State's tax environment is not, nor should it be, based simple on "pricing" considerations. By this I mean, it should be based on the true cost/benefit to me to live and work here, not on my tax bill. It should be based on the real or "true" value I receive for the taxes I pay.

For example, policies which focus on "lowering my tax bill" by not fixing the bridges and roads that support my business; or provide me with workers who can not read, write, do math or think critically; or impose inconsistent and onerous laws, regulations, processes that impede my ability to conduct my business competitively; or make it impossible for me respond to a new business opportunity in a timely and competitive manner, are the hidden taxes which really create a bad tax environment.

By the same token, the value of a reliable and efficient public works department, a dependable and accessible government permitting service, a clean and safe water supply, etc. should be considered when evaluating the value you receive from paying your tax bill. For example, what is the value of the state's response during the recent floods worth to you? Or, What is the value of the life that fireman saved? These are examples of the positive value we receive for the tax bills we pay. They would be sorely missed if they weren't there.

Here is where the Governor can have a impact. He should direct the administration's efforts to address the hidden taxes imposed by the General Assembly, especially when they fail to address these issues. One way to attack this problem is to change the dialogue from "government waste" to "government value." Former seeks only to cut costs without reference to quality. The latter exposes the "hidden taxes" of government uneffectiveness and inefficiency and shifts the focus to discovering the potential the value of government services deliver by those taxes.

A policy of greater transparency, i.e. "the good, the bad, and the ugly" should be the Governor's position. The new governor should use the bully pulpit of the office to expose the smoke and mirrors of backroom deals and magical thinking that we find in the GA.

The goal is to address Myth #4 from the 1997 report.
"If it is good for business (or labor) it has to be bad for labor (or business)."

The adversarial period of 20th century business/labor relations must end. If we are to improve the tax environment for everyone in the state and compete in a 21st century global economy, we need to change the way we think about who We and They are. Here the moral leadership of the Governor's Office must come into play.


5. Implementing a robust energy and environmental protection policy

In order to implement such policies, they must be sustainable and realistic in terms of overall needs and resources available to the State and localities. The Governor can provide guidance in balancing the state's economic, and social needs as reflected in the state's energy production and consumption practices weighed against the long term hidden tax of poor or inadequate environmental regulation and enforcement. Here the Governor can provide leadership to bring competing interests together for find solutions that serve the best interests of all and not the best interest of "favored" interests.

The job of the next Governor is to create a political climate where all parties feel that they have been dealt with in fairness. This will go a long way in creating a physical, economic, social and political environment that supports the public's and State's immediate and long terms interests.

Friday, December 11, 2009

Can we afford the best?

In a time of economic crisis, when unemployment is at 12.9%, the State of Rhode island threatened to lay off a 1,000 of employees back in September, and is still facing a $200 million deficit the State has decided to hire a new Executive Director for the RI Economic Development Corporation for 1.5 times the salary of the former Executive Director.

According to the Providence Business News story
The board voted to give Morfessis a three-year contract that will pay her $250,000 a year plus benefits. The state also will cover her relocation costs and provide her with an automobile.

And according to Providence Journal, when asked about the high salary Governor Carcieri is quoted as saying.

“You want to do a national search? You want to recruit the best candidate you can find? Then you’re going to have to pay for that,”

The Journal article points out that Rhode Island has recently hired several key senior level administrative personnel. These include the President of URI, Director of Education, and now the Director of EDC at a cost of well over $1 million in salary and benefits annually.

The trend seems to be to look beyond the State for talent to bring about "needed" changes in the way we operate the State government. The big question is

Will these highly paid experts actually be able to produce value for the tax payers of Rhode Island, or are we just hiring carpetbaggers to replace the state's more traditional bag men?


In 04-30-2003 the Governor's office issued the following press release

CARCIERI ADMINISTRATION MAKES CASE FOR REINING IN COST OF STATE GOVERNMENT Administration Official Testifies that Escalating State Benefit Package Costs "Out of Whack" with Private Sector & Neighboring States

Rhode Island government is NOT a private sector company, government is PUBLIC SERVICE not PRIVATE SERVICE. Government is supposed to do the "People's or the Stakeholder's business", not the private Stockholders.

Nor is Rhode Island like Massachusetts or Connecticut. Rhode Island is more like the city of Detroit, than it is like the state of Michigan to which we have been so often compared lately. If the State Benefit package is out of whack, how does paying higher private sector salaries and benefits to a select few change this?

Are we missing something here?

Cut costs by reducing the number of $5.00/hr employee who could produce (35 hr/wk x 3 workers) 105 person hours and replacing them with one $15.00/hr person who can only produce 35 hours of work seems counter-intuitive. Will those 35 hours create greater value for the tax payer's of Rhode Island? I wonder when we read that "R.I. to close jobless benefits call center some days to catch up on claims>"

Three workers pay three tax bills, live in three homes that are taxed by their communities, support three family/households in those communities.

The leaders of this state seem to think that if you drive a 2010 BMW rather than a 2000 FORD 150 somehow or other you can have a BMW life style.

I seriously pray (and that is the right word) that these new hired guns can produce the value their inflated (in RI terms) salary and benefit packages are costing the tax payers of Rhode Island.

Can we afford the best, or is what we really need the most competent?

Wednesday, July 1, 2009

UPDATE -- COLLATERAL DAMAGES

I had just posted the earlier article when I stopped by The Providence Business News and found this story. OVERSTOCK is following Amazon's actions


Posted July 1, 2009
retail
Overstock follows Amazon, drops R.I.
http://www.pbn.com/stories/43314.htm
By Ted Nesi
PBN Web Editor

OVERSTOCK.COM’S CEO BLAMED STATE LAWMAKERS for its decision to drop affiliates in Rhode Island and other states where “where counterproductive (and likely unconstitutional) laws are being passed.”


Related Stories
Amazon.com cuts R.I. partners over tax (June 29, 2009)

Tuesday, March 3, 2009

Rhode Island's Pride ????

The headline reads: The Economy in Crisis JOBLESS RATE: 10.3%
Subtitle: The number of unemployed in Rhode Island grows by 4,500 in a single month.

For some reason, most likely to sell papers and attract viewers, the local media seems to be taking pride in the fact that RI is nearly first in Unemployment. Its a race between RI and Michigan except that the points are scored by percentages as opposed to number of real people effected.

Certainly we need to be concerned in RI but lets face it, we are only the size of Detroit Population: 1,027,974. (Rhode Island 1,048,319 while Michigan is 10,095,643) Each unemployed person is worth counting and certainly worthy of concern. However when the press emphasizes the negative as something to be proud of it creates for a false picture of the down side. When the economy turns around RI will definitely grow faster than Michigan because there are fewer Rhode Islanders without jobs today.

In January RI lost 4,600 jobs while Michigan in December, 2008 lost 59,000 (latest figures I have at the moment)

I guess my point here is that with roughly 57,000 job seekers in Rhode Island and 519,000 unemployed in Michigan, Rhode Island is in a better position. we only need to find or create 1/10th of the jobs Michigan does to fully employ our work force.

While this is an oversimplified statement -- there are the discouraged workers who no longer show up in the unemployment estimates -- it does present a manageable problem, if the legislature and executive can get their act together to work on this problem.

Rhode Island is a small business state. If the tax and regulatory system were more inline with the needs of small business -- maybe we could over come our problem.

Data about the number of actual small businesses at any one moment are hard to come by.
However, the website SmallBusiness.com
http://www.smallbusiness.com/wiki/Rhode_Island_profile#Number_of_Businesses
carries this message.

Number of Businesses

There were an estimated 95,390 small businesses in Rhode Island in 2004. Of the 33,253 firms with employees, an estimated 96.5 percent, or 32,098, were small firms. In 2004, the estimated number of employer businesses increased by 2 percent. The number of self-employed persons (including incorporated) decreased overall by 2.6 percent, from 53,380 in 2003 to 52,004 in 2004. Non-employer businesses numbered 63,292 in 2002, an increase of 4.6 percent since 2001, based on the most recent data available.
(Sources: U.S. Dept. of Labor, Employment and Training Administration; U.S. Dept. of Commerce, Census Bureau; U.S. Dept of Labor, Bureau of Labor Statistics.)


If each of these 32,000 small businesses were to hire one person we could reduce the unemployment rate significantly. So what are we doing about --????


And where is the press -- isn't this a story?