John Kostrzewa
John Kostrzewa: Four questions about the economy
03:53 PM EST on Wednesday, November 18, 2009
As Rhode Island’s economy deteriorates, people are asking questions about jobs, development and the state’s future. Here are some answers to four of them.
When will a full-scale casino open?
Governor Carcieri and House Speaker William Murphy have said they are not opposed to a ballot referendum in 2010 to allow a casino, possibly at Twin River. That opens the door to another statewide vote next November.
Remember, voters by a wide margin defeated a 2006 drive by Harrah’s Entertainment and the Narragansett Indian tribe to build a casino in West Warwick.
But politics and the economy have changed in the last few years, making casinos more palatable this time around.
Look at Ohio.
Four times over two decades, voters there turned down proposals to permit casinos.
But on Nov. 3, voters approved a proposed constitutional amendment to allow casinos in four cities: Columbus, Cleveland, Cincinnati and Toledo.
Ohioans were won over by promises that casinos would create 40,000 jobs, distribute a casino tax to counties, cities and school districts, and pay $300 million in licensing fees to the state. Ohio’s 10-percent jobless rate and widening city and state budget deficits helped put the issue over the top.
Rhode Island’s recession is worse than Ohio’s. There’s a 13-percent jobless rate here, with 74,000 people out of work, creating huge deficits in state and city budgets. Economists forecast it will get worse before it gets better.
Carcieri was a leading casino opponent in 2006 but after he said he wouldn’t stand in the way of a ballot issue next year, others will line up with the proponents.
By the way, Twin River — the Lincoln slots parlor trying to work its way out of bankruptcy — will begin operating 24 hours a day, 7 days a week on Thursday.
But it’s not considered a full-scale casino because it doesn’t offer table games, such as poker, blackjack and craps. Full-scale casinos are built as destination resorts with hotels and entertainment venues to keep gamblers there for several days. Think Foxwoods and Mohegan Sun.
Where’s Jet Blue?
Business leaders in Rhode Island launched a campaign earlier this year to coax discount carrier Jet Blue to use T.F. Green Airport after Southwest Airlines, the biggest carrier at Green with 54 percent of all passengers, said it would start flying from Logan International in Boston.
The thinking was that if Southwest’s arrival at Logan set off a fare war with Jet Blue and other discount carriers, and Southwest picked off passengers, Jet Blue would try to fight back by challenging Southwest at Green.
That could drive down fares at the Rhode Island airport and increase passenger traffic, according to a theory advanced by Kevin Dillon, president and chief executive officer of the Rhode Island Airport Corporation.
Since then, the Greater Providence Chamber of Commerce led a letter-writing campaign by business leaders to get Jet Blue to Green. Laurie White, Chamber president, said Jet Blue has talked with Dillon about preferred routes.
But so far, no dice.
“I feel pretty optimistic that at some juncture, hopefully in the near-term, that Jet Blue will look closely at Green,” she said.
Since Southwest began flying from Logan in August, the nation’s biggest low-cost carrier has expanded service three times there with more flights to new destinations.
And Jet Blue, which already flies to 32 destinations from Logan, said recently it will increase its flights at Logan by 30 percent, and add several new cities, including Chicago, Baltimore and San Francisco.
T.F. Green got a bump this week when U.S. Airways said it would increase its daily departures to LaGuardia Airport in New York from 4 to 6 per day and that Southwest will add to its seasonal service to Florida.
Still, passenger traffic at Green through the first nine months of the year was 3.3 million, down 9 percent from last year.
Who’s the geek’s candidate for governor?
It’s going to take vision and leadership of the state’s top executives to transform Rhode Island’s old-economy base of small machine shops, manufacturing and heavy industries to new-economy, knowledge-based work. The life sciences, technology, health care and alternate energy all show promise.
And there is a community starting to form, mostly in Providence, of entrepreneurs, small business owners and researchers on which a new economy can be built. So, which of the politicians who want to succeed Carcieri will reach out to the geeks and win their support? Which politician will try to connect his ideas for building jobs in a new economy with what the entrepreneurs need to set up companies and prosper?
No one’s stepped up yet.
Rhode Islanders should demand an answer from the politicians before they step into the voting booth next November.
What’s the national media saying about Rhode Island?
The New York Times reported on the economic opportunity being created in the Jewelry District in Providence by the relocation of Route 195. The story compared the opening up of the waterfront land under the old Route 195, which will be torn down, with the uncovering of the Woonasquatucket and Moshassuck Rivers 20 years ago, which set the stage for Providence’s renaissance.
The Wall Street Journal wrote about the Pew Center for the States report on 10 states in fiscal peril. Rhode Island was the only state in New England on the short list. The report said, in part, “The country’s smallest state has big problems … State government has a poor record of managing its finances and its economic recovery is hampered by high tax rates, persistent state budget deficits and a lack of high-tech jobs.”
John Kostrzewa is assistant managing editor/commerce & consumer issues. Reach him at 277-7330 or at jkostrze@projo.com
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