PROVIDENCE –– Governor Carcieri yesterday convened some of the state’s top business, education and legislative leaders to seek their advice about what state government should be doing to kick-start the economy and promote economic development.

“What I need is this community engaged in [questions such as] are we are on the right track?” the governor said. “Is the strategy that we’ve articulated understood? Are there aspects of this that we’re not really dealing with? What are the impediments?”

The meeting was the first gathering of the newly restructured Economic Policy Council, which the governor merged earlier this year with the Rhode Island Economic Development Corporation to consolidate the state’s economic development activities into one entity.

The governor is seeking advice at a challenging time for the state’s economy. So far this year, the state has lost 6,300 jobs, and its payroll employment has fallen to its lowest level since June 2003, according to the state Department of Labor and Training. Economists have said that Rhode Island has slid into a recession, the only New England state to do so.

Carcieri said he’s been through five recessions in Rhode Island over the course of his business career, and “it’s pretty clear we’re feeling this one really strongly.”

The state is “making some real progress,” he said, in making large investments in its infrastructure. He said that the relocation of Route 195, the rebuilding of the Washington Bridge, as well as other major projects amounts to a total investment of $5 billion to $6 billion over four to five years.

“The truth is, there are a lot of things to celebrate in a lot of different fronts that are making progress.” But that progress, he said, is not coming fast enough.

One of the big problems the state faces, said Jack Partridge, senior counsel of the law firm Partridge, Snow & Hahn, is that no one is telling the world the good things that are happening in Rhode Island, such as the recent decision by American Power Conversion to keep its U.S. headquarters in the state.

Paul Cronin, vice president/regional manager, Cox Communications, said that outside of the state, business owners do not perceive Rhode Island as being pro-business.

State and local taxes are still the fourth highest in the country, he said. “The downside is all the corruption on the front page, the labor strife is on the front page, people outside protesting the [Greater] Providence Chamber of Commerce … that image gets out beyond here.”

Robert Carothers, president of the University of Rhode Island, suggested that some of the negative perceptions of Rhode Island are based on a lack of investment in higher education.

“You can’t cover up bad news,” Carothers said. “In reality, people find that. … Last year, we were 50th in the nation in investment and research. We were the only state in the nation that didn’t increase higher education funding from year to year.”

“No amount of smooth talking makes those things go away.”

Carcieri countered that he would stack up Rhode Island against any other state in terms of capital investment in the university system. “I take your point,” the governor said. The state has put more money on the capital side, but not in the operating budget. “The reality is, we’ve got to get this budget under control.”

“I’m not blaming anybody,” Carothers said.

Paul Choquette Jr., chairman and chief executive officer of Gilbane Inc., said the state’s huge budget deficit is a big issue, especially because it gives the perception that Rhode Island is in poor financial shape, making people question whether or not they want to invest here.

“I think it’s a big downer for a lot of people,” he said. “The head-shaking that I experience day in and day out … are we ever going to climb out of this hole?”

The deficit, agreed Rep. Gordon Fox, House Majority Leader, “really does create a damper on things.” He said that there has to be a belief, a “confidence level” that something in state government is working by giving them tangible results.

“There are a lot of great things going on in the state, but people have to believe that you’re moving forward,” Fox said. “That’s our challenge.”

The governor said that once a consensus is reached on what the state’s economic development priorities will be, the next challenge will be figuring out how to pay for these investments.

His staff is now working on an analysis to determine how much money the state might be able to borrow through bonds to pay for these initiatives.

tbarmann@projo.com