on 02-11-2009 03:17

By JIM BARON

PROVIDENCE - Gov. Donald Carcieri told a joint session of the General Assembly and a statewide television audience Tuesday that the state of the state is even more "fragile" and "perilous" than it was a year ago, when he likened it to a ship taking on water.

As he has for the last six years of reporting on the condition of the Ocean State, Carcieri concentrated on the need to squeeze out spending at the state and local levels and craft tax policies that will attract businesses and create jobs.
"Rhode Island has been increasing spending and taxes for decades. That's why we are so distressed now," the governor declared. "People have been voting with their feet, they're leaving." Quoting a statistic he says he finds "interesting," Carcieri said almost 4,500 retired state employees, 17 percent of the total, have their checks mailed out of state, 2,000 of them to Florida.
"I don't blame them," he said, "but it's indicative of the problem...What Rhode Island needs now is more taxpayers, not more taxes."
Once again, he called on public sector employees to shoulder a share of the burden.
"We need the unions to realize that our cities and towns cannot afford business as usual," Carcieri asserted, "they cannot afford the wages, the pensions, the health care and the work rules that were bargained for..I encourage every public employee union to sit down with the mayors, town managers, the city and town councils and the school committees to become a part of the solution. Help you communities get through this."
He laid some of the blame for the state's economic state at the feet of municipal leaders.
Over the last 20 years, Carcieri said, state government employment declined 25 percent, from 21,300 to 15,800 but cities and towns have increased the number of jobs from 27,500 to 38,000, a 38 percent increase.
"Ladies and gentlemen, that is why your property taxes are so high and keep rising," he said.
Attempting to set a tone of "what's possible when we make up our minds to do something positive," Carcieri introduced Olympic swimmer Liz Beisel of
North Kingstown, and two local National Guardsmen who recently returned from deployment in Afghanistan - Army Sgt. First Class Richard Gaudet of Coventry and Air Guard Staff Sergeant Gerald Hutchinson of Cranston.
Also on the bright side, he pointed to gains in public education, improvements in the infrastructure and growth at the Quonset Business Park, including 800 new "green collar jobs" created by Deep Water Wind, which is developing an offshore wind power project in Narragansett Bay.
As Congress continues to wrestle with President Barack Obama's proposed stimulus package, Carcieri announced that he signed an executive order Tuesday creating the Office of Economic Recovery to administer the stimulus funds coming from the federal government and to provide for "identifying, evaluating, tracking and auditing infrastructure improvement projects and other initiatives" connected to the stimulus.
"The immediate challenge in the next few months will be to use the anticipated federal stimulus money wisely and sensibly," he said. "We must use the additional funding to bridge the deficit, support tax relief and structural reforms, grow jobs and grow the economy.
"To squander this stimulus by avoiding the hard decisions would be an enormous shame, and a great opportunity lost," the governor  contends.
"What we must not do," he added, "is choose to ifnor the fundamental problems and maintain the status quo. And we must not rely on all the federal stimulus money as a crutch to avoid the hard decisions."
Peter Asen of Ocean State Action said decried the governor's stimulus stance.
"We are looking at the Obama administration throwing a lifeline to the state of Rhode Island and the governor seems to prefer having the state drown than to pick that up. The federal government recognizes the need for action and the governor says we don't want to use that help to solve the problems that we have."
Noting Carcieri's call for shared sacrifice, Asen said "it seems like he is always asking for sacrifice from middle income families and low income families and is pushing more tax cuts for people at the highest levels and corporations. I don't see how that is shared sacrifice."
Calling for "bold, business friendly tax reforms," Carcieri said, "I am firmly convinced that if we dramatically change our tax structure, our economy will produce jobs.
"I want to send a loud signal that Rhode Island is open for business," he stressed. "I want to see billboards at our state line proclaiming 'RI: The Ocean State. A Great Place to Build Your Business.'"
The second term Republican siad his goal is to submit a 2010 budget with a new tax plan that "brings income tax relief to Rhode Islanders, phases out the corporate tax and eventually eliminates the estate tax."
He bemoaned the loss of manufacturing jobs in the state, noting that those jobs represented 34 percent of the workforce in 1978, but only 10 percent today. That, he stated, is "why our state continues to be so vulnerable to economic downturns.
House Majority Leader Gordon Fox gave a lukewarm reaction to Carcieri's address, saying, "It was a speech.
"We know where we are; we know what we have to do," Fox said. "We don't have his budget yet, the 2010 budget - that's where the real substance is.

Senate President Teresa Paiva Weed said Carcieri "shared with Rhode Islanders optimism for the future and that is important, I think people need to hear that. I think he was really trying to show us some light at the end of the tunnel.
House Republican Leader Robert Watson praised Carcieri for being "consistent year in and year out and I hope his message remains the same. I hope he remains committed to holding the line on tax increases, up to and including vetoing" a bill the House will vote on today increasing the cigarette tax by $1 a pack along with other motor vehicle-related fee hikes. Even though Carcieri recommended those increases in his supplemental budget, Watson claims "those are (House Finance Committee Chairman) Steve Costantino's increases now. The governor proposed those increases inside a budget that also included cost saving initiatives" but they have since been separated into a stand-alone bill sponsored by Costantino.
Lincoln-Cumberland Rep. Rene Menard said some of the governor's proposals "have the potential to hurt the people I represent. If you want to look at tax structure, I think we have to be interested in middle class people. I see the potential for the middle class to be asked to pay more tax." 
Lincoln Sen. Ed O'Neil said "the signals are everywhere that we are in the worst economic crisis since the Great Depression. I don't think everyone has awakened to smell the coffee. Unemployment is rising exponentially. It's all around us. Everyone has to realize that everybody has to chip in or give up something. I don't think people have gotten that. Before this is over, it is going to be very, very ugly.
Woonsocket Rep. Lisa Baldelli Hunt said she had hoped to hear the governor say he would give back some of the revenue sharing he cut in the supplemental budget now working its way through the legislature. "I was disappointed to not hear that," she said.
"I don't think he said anything," said Rep. Timothy Williamson. "The economic impasse that hit last fall changed the direction of where we are coming from and where we are going to.
Williamson said he didn't hear anything in the governor's speech about, "what specifically does this mean for my communities, my district of West Warwick and Coventry. I didn't hear anything to help us.
Cumberland Mayor Daniel McKee said filling the budget hole with short term stimulus money is acceptable only if it is combined with longterm strategies for economic growth.
As he has in past years, Carcieri closed his speech with a group sing of God Bless America, led by his aide,  Aaron Guckian.