State of the State
Thursday, January 30, 1997, 7 pm
Majority Leader Kelly
Members of the General Assembly
Lieutenant Governor Appointee Jackvony
Secretary of State Langevin
Attorney General Pine
General Treasurer Mayer
Honorable Members of the Judiciary
College and University Presidents
Mayors, Town Administrators, and Town Managers
Cabinet Members, and
My Fellow Rhode Islanders
A week ago tonight, I met with the Majority Leader and the Speaker to discuss the pending nomination of Margaret Curran to the Supreme Court.
At that time, I told the Majority Leader, in rather severe tone, that if Margaret Curran's nomination to the Court was rejected for political reasons, I would not present this State of the State address in this chamber tonight.
Since the rejection of the Curran nomination Tuesday night, I have thought long and hard about my comment to the Majority Leader.
In considering whether to present my State of the State in this chamber, I recalled a statement I made when I declared my candidacy for Governor in November of 1993.
Standing directly outside this chamber in the Rotunda on that day I said, and I quote, "I will work with others in Government to effectuate change, but I will not hesitate to go directly to the people."
I decided to present my address in this Chamber tonight, because while I may be speaking in person to 150 legislators, our judiciary, and a host of other officials, I really am speaking directly to the people.
And so with that, let me speak plainly about what we have accomplished as a State over the past two years, and where I want to lead us as we look to the next century.
Since I became Governor in January of 1995, 21,000 more Rhode Islanders are working and our unemployment rate has dropped by nearly 30 percent - That's Great News!
Last year Rhode Island led the nation in per capital income growth. That's Great News!
Many of you were with us 13 months ago when we announced that Fidelity Investments was coming to Rhode Island -- this is the largest economic development project our State has seen in twenty years.
Construction at their major regional center in Smithfield is well underway.
In the first phase alone, there will be 2,500 high paying jobs, and the second phase is on the drawing board. That's a significant step forward.
Last year the State welcomed the news that Citizens Bank would be adding more than 300 new jobs, and just last week I was pleased to announce that Hospital Trust was adding 300 new jobs in Rhode Island.
The investment by Citizens, Fidelity, and Hospital Trust in Rhode Island is proof that the actions we took together to make Rhode Island the most competitive state in America for the financial services industry have paid off big time.
That's good news for all Rhode Islanders.
Our new state-of-the-art T.F. Green Airport just recorded its best year ever -- due in a large part to the addition of Southwest Airlines and the low fares offered by them and competing airlines.
This year, with a full year of low fares, the news should be even better.
These low fares are making that family trip to Disney World a reality for some while at the same time lowering costs for frequent business travelers.
For the frequent traveler - it's like a tax cut - more money in your pocket.
I want to express my appreciation, on behalf of every Rhode Islander, to former Governor Sundlun for his vision to advance this project.
And for the hard work of Executive Director Elaine Roberts and Chairperson Carol Grant and the Airport Corporation for their hard work and vision.
It has paid handsome dividends for our state. Let's give them all a round of applause.
We have not only a smaller government but a more open government.
We have a new Lottery Director, and a working lottery commission. We privatized and have an efficient Department of Economic Development.
We have re-organized, or are revamping, many cabinet departments and other agencies. In all, we've eliminated four cabinet level departments and a number of smaller agencies.
Today, we have 760 fewer state employees than when I took office.
We've succeeded in downsizing our State government without adversely effecting needed services to our citizens.
And I'll be looking to continue downsizing and streamlining state government to make it more efficient.
Clearly, we are moving in the right direction. Rebuilding Rhode Island is a work in progress.
We still have a ways to go to build our economy, cement our gains in open government, improve our education system, and to protect our more vulnerable citizens in the State.
These are the challenges facing Rhode Island, and tonight I am challenging you to join with me to take the steps needed to continue to move forward.
I challenge you to join me in doing what's needed to build on our success.
Let's work together to make sure that all the good news I have cited is just the beginning of a long series of successes for our State and our people.
We need to invest our limited resources to grow our economy. That helps everyone and assures a sound and lasting prosperity.
I'm a lawyer by training - not an economist - but I'm smart enough to know that if I don't have the answer to a question, I'd better find someone who does. And I do listen.
Economic Policy Council
Well, that's exactly what I did when I formed the Economic Policy Council, a first in Rhode Island- a public private partnership charged with gathering the facts about the economy and coming up with recommendations to help make it grow. No more studies - an action agenda.
I am very proud of having created the Economic Policy Council which I Co-Chair with Larry Fish of Citizens Bank.
The Council includes representatives from Business, Labor, our Universities and Government, including myself as Co-Chairman and Speaker Harwood and Majority Leader Kelly.
I have empowered them to help Rebuild Rhode Island.
The Council has worked very hard over the past year, reaching out to the community, gathering hard facts about our economy. And we have done this in one short year.
The Council has talked with hundreds of people from business, labor, education, and government to learn what we must do to improve our economy as we compete against other states.
One very important thing the Policy Council did was to point out the weaknesses in Rhode Island's economy.
They said Rhode Island businesses fall way short when it comes to investment.
Our companies need to be doing much more when it comes to investing in new technology and new products.
To address this problem, the Council put forth the following recommendation which I believe should be enacted this year:
Tax Legislation re: EPC
Adoption of an investment tax credit and a research and development credit. I will recommend the most aggressive R&D Tax credit in the Nation.
These recommendations are performance based. Investment first - help follows.
If you wondering how important these measures are, just take a look at a perfect example in our own backyard of what can happen when a company doesn't invest in new technology.
I'm talking about Balfour. It's a Massachusetts company but we had a number of Rhode Islanders working there. Balfour got swallowed up by a larger, Texas company that invested in equipment and technology.
We've got to do everything we can in Rhode Island to make sure we don't face a Balfour ourselves.
The fact is we have some shining examples of companies that are doing the right things in Rhode Island. I'd like to share one of these examples with you.
The name of the company is Excell - a jewelry manufacturer based in Warwick, headed by a man named Howard Kilguss.
During the last five years alone, they have doubled their employment to 160 and have grown 10 to 15 percent each year.
What is their secret for success?
Their employees are paid well and receive above average benefits. They enjoy a nice work environment, and are given a real opportunity to make a difference.
They're also given the latest technology to create innovative products for their clients.
And there are others, such as, C.W. Costello. Phillips Components.
Let's not only congratulate these companies. Let's be proud of them and give them the help they need.
Passing the investment tax credit and the R&D tax credit will make it easier for RI companies to follow the lead of Excell and make the right investments.
It will also make Rhode Island the most competitive state in the nation when it comes to these tax credits.
I urge this Assembly to celebrate our economic success and accept my challenge to make these laws a reality.
Income Tax Cut
Let me issue another challenge.
Right now, the Rhode Island State Income Tax is too high, and even worse, we are perceived as a State that has a much higher tax than we actually do. Too often, perception is reality.
We have to make Rhode Island more competitive with other states whose tax burdens are lower than ours. Many states have cut or are cutting their income tax.
That is why my budget will include a reduction in the State Income Tax by more than 9% over a four-year period if our economy holds, and sooner if we can.
Lowering the income tax will also put more money in the pockets of Rhode Island families - to spend or save as they see fit. It will make our State more competitive and help attract new businesses to Rhode Island.
Before I issue the next challenge, let me just say, as Governor, I am extremely proud when Rhode Island is the first or best in the nation.
I am proud that last year Rhode Island led the nation in per capita income growth. And I am proud that we're the most competitive state in the nation on financial services. I am proud that we have begun to invest in our long term future.
But let me also say that I am not proud when Rhode Island has the distinction of being last -- or next to the last -- in the nation.
Unfortunately, when it comes to our roads and highways, too often we find ourselves at the bottom of the list.
Too often we are penny wise and pound foolish.
Just look at the Washington Bridge and now Route 24 on Aquidneck Island.
I think most Rhode Island motorists would agree that our roads and highways are in terrible shape. They don't deserve this.
It doesn't have to be that way. We must invest the money our citizens provide us.
Today I challenge this General Assembly to accept a proposal I will offer to transfer one penny on the gas tax each year to its intended purpose - fixing our roads and highways - not paying for loan interest or paper clips or the salaries of State employees.
This means that over the next five years, more than $20 million in additional funds can go directly into maintaining our roads and highways. This helps our economy big time.
But let's not kid ourselves. Investing another $20 million in our roads and highways isn't going to be the only answer to solving our transportation problems in Rhode Island.
I have challenged the Department of Transportation to better manage our limited resources and give Rhode Islanders the roads they deserve and want.
Voters made it clear last November their willingness to invest in our roads and highways when they approved an $81 million transportation bond. We appreciate the support. Let's return the favor.
Anyone who has driven Route 95 north from the Connecticut border can attest to the fact that Route 95 is in very good shape all the way to the Pawtucket S Curves.
We are going to finish that project soon so that Route 95 can be in top shape from the Connecticut line to the Massachusetts line. We must also do more to beautify our highways and roads.
There are good people working at DOT, under the direction of newly named Director Bill Ankner, and they have done good work with their limited resources, but there is no doubt that the department needs to be restructured.
I call on the General Assembly to become full partners with me in that process. We must provide more money for maintenance, construction, beautification, mass transit and bike paths.
I talked a moment ago about the transportation bond approved by the voters.
The one bond the voters rejected last November was an asset protection bond.
The voters said loud and clear that they did not want the State to borrow money to pay for maintenance we should have been doing all along.
I am embarrassed that there are crumbling building foundations at URI.
And I am embarrassed that the Medical Examiner's Office can't do the work it needs to do.
Tonight, I challenge this Assembly to accept my forthcoming capital protection plan that calls for $90 million of investment in our infrastructure and buildings over the next five years from general revenue - not bonds.
I've spoken a lot about jobs, transportation and economic infrastructure. I have talked about capital investment and competitiveness.
I now want to talk about the most important investment -- our children.
I challenge this General Assembly to join me in making the proper investments in our educational system.
More than ever.. we are seeing how critical the link is between how well we educate our children... and the success of our economy. It is critical.
We must work together to ensure that when Rhode Island students leave high school, they will have the tools necessary to successfully move on to higher education... or any endeavor they choose to pursue.
I am a strong believer in local control of school districts, but it is the State that has the ultimate responsibility to educate our young people.
As the recent Education Week study indicated, although our spending is comparatively high, achievement is not where it should be.
The Goals 2000 panel, which I formed, has given us an excellent road map to improve our education system, but we need to learn more about our successes and failures. And we need to hold school systems more accountable.
I have -- and will continue to -- support our Board of Regents recommendation to implement statewide assessments.
You and I have known for years that our school funding formula has to change to provide adequate funding for our more needy, urban districts.
For many of you, this will be difficult.
But you are here to decide not only what's best for your district, but what is best for the State, which has the ultimate responsibility to educate our young people.
An equal education is the business of all of us. I will take the lead. I ask you to join me.
I will propose a new formula to direct more state funding, next year and over time, to urban school districts.
I understand that there is a similar proposal already underway in the Legislature and I look forward to working with you on this issue. Let's do what's right.
As a condition of receiving State aid, we also will be requiring school districts to submit improvement plans.
We need to foster innovation in education.
I support expanding the Metropolitan Career Technology School in Providence and will be introducing legislation to make it easier for charter schools to be started by parents, teachers, and other groups.
We need experimentation, innovation and choice. Pass a real charter school bill and provide start-up money for new charter schools.
Furthermore, I will be proposing funds specifically targeted for improvements in computer technology in schools.
As a result of a large federal grant, we will be greatly expanding our programs to move students from school-to-work.
School to work programs are excellent. We have a great opportunity because we have received $9.5 million from the federal government. I challenge the business community to get involved and make it work.
Despite the $125 million deficit we faced in 1995, we made certain that the funding for higher education was not cut.
In 1996 and '97, we've increased funding for higher education... And we will continue that trend in FY 98.
Last November I fought very hard for the over $70 million in higher education bond issues that we put before the voters, and I was very pleased to see the confidence of Rhode Islanders in approving those bonds. They represent the kind of investment we must continue to make in higher education.
I think it is perhaps government's greatest responsibility.. and our greatest challenge... to ensure that we provide the private sector... with a reliable source of well educated, qualified workers.
When we talk about creating a pool of qualified workers, we can't forget about the more than 22,000 welfare recipients who need a firm but helping hand in joining the workforce.
Last year you and I worked together to develop a proposal that would move people into the workforce and give them the opportunity for a brighter future.
I commend the businesses community for their commitment to help welfare recipients find work and lead better lives. Let's do more.
We must continue our efforts to strengthen our economy to provide better job opportunities, not just for people already in the workforce, but for those who will take the first step toward self sufficiency.
Welfare reform passed by Congress last year will help end the cycle of dependency that has trapped many struggling families; the legislation, however, went too far in the area of legal immigrants.
Last fall during a visit to the Pawtucket Portuguese Social Club, a young man came up to me.
His father came to this country years ago, worked hard for over nine years and now relies on SSI (Supplemental Security Income and food stamps) for his living expenses. After April 1 he won't be about to continue receiving SSI and food stamps because, according to the new welfare law, he didn't work long enough to qualify -- he was just a few months shy.
That is just not right. His children and grandchildren are U.S. citizens.
I believe we have an obligation to help immigrants who have not yet obtained citizenship.
We can't forget that Rhode Island is a state of immigrants. This Governor is a second generation immigrant.
That is why I announced earlier this year that the State will continue to provide health care coverage, cash assistance, and certain social services for qualified legal immigrants who currently reside in the State.
And for those who no longer will be eligible for Medicaid coverage, we are exploring ways so we can continue providing assistance.
I am pleased that we were successful in securing a federal waiver which will allow more than 2,200 Rhode Islanders to continue receiving food stamps this year.
But a food stamp waiver to keep food stamps for the Portuguese immigrant I previously spoke of is only a temporary fix - we need a long term solution.
After April 1, the welfare of legal immigrants is no longer a concern of the federal government -- States alone will be left to provide assistance, yet many states, including Rhode Island, can't afford to continue the level of services currently being provided.
I recently met in Washington with the congressional leadership to urge their help so we can continue providing for our vulnerable populations -- our elderly and disabled.
I am still hopeful and will continue working on this issue.
I know government alone cannot solve this problem, which is why I will continue to reach out to those in the private sector -- we need your help.
As we continue to work to provide health care for our legal immigrants, we also must face the radical changes in our health care system. Our most daunting issue this year will be dealing with the possible entry of for-profit hospitals.
Our goal must be to ensure that all Rhode Islanders continue to have access to quality care provided by our hospitals, whether they are for-profit or not-for-profit.
I plan to establish a "Governor's Commission on Health Care" to study and make recommendations to address all the changes occurring in the health care arena.
Another pressing health care issues is providing greater opportunity for our seniors in their later years.
Nursing home care should not be the only option for seniors in need of assistance. In fact, many of the services provided in a nursing home can be performed just as well at home and for considerably less cost.
I propose to extend the ban on new nursing home beds enacted by the General Assembly last year, and will again be proposing to increase the rates for home health care providers.
We must encourage the use of more home health care services and other alternatives that will give our seniors greater independence.
Juvenile Justice Task Force
As government addresses the needs of those in their later years, we must also help those troubled children who have made bad choices that have led to a dramatic increase in juvenile crime in the State. It is a major problem.
Last year I appointed a Juvenile Justice Task Force to determine how best to change the behavior of children who break the laws.
The Task Force is working with families and schools to prevent violence in the first place. Their report is due this summer.
We must change the way we deal with at risk children.
We also can't forget the 850 foster children under the care of the State. The State cannot be a parent to these children.
We have reached out to the business community, encouraging them to offer benefits to their workers who adopt or become foster parents.
The Families First initiative will help ensure that our children grow up in good homes with caring parents.
Alan Hassenfeld of Hasbro has been instrumental in moving the Families First program forward.
Private Sector Involvement
In fact, one of the more gratifying experiences during my time as Governor has been the willingness of people outside of government to step up to the plate.
When I asked Larry Fish of Citizens Bank to co-chair the Economic Policy Council, he said yes.
When I asked Tom Skala of Fleet to head the Dredging Commission, he said yes.
To all of you who are at bat, thank you from me and all Rhode Islanders.
I have highlighted many important areas that need our attention, and there are more that we will discuss this year.
Clearly, there is much to be done. You and I -- we -- have had our differences over the past two years.
I know you better today. You know me better today. You know I'm not partisan when it comes to the welfare of this State and you know I'm not about patronage.
I'm about change and getting the job done for the people of Rhode Island.
So tonight I'm not challenging you to a fight -- I'm challenging you to a partnership.
And I know we can do it because we have done it before. We did it on welfare - we did it on electricity restructuring - and we can succeed on anything when we put our minds to it.
Creating jobs is not a Republican or Democratic thing. Rescuing someone from welfare is not a Republican or Democrat thing.
I know people in this chamber are up to the task of Rebuilding Rhode Island.
And I also know that the citizens of Rhode Island are willing to join us in making the needed investments to continue Rebuilding Rhode Island.
Tomorrow, let's get to work.
I know you want to help.
Thank you and good night.