The Rhode Island Public Expenditure Council, a business-backed nonprofit group, and NEEP forecast sizeable budget deficits for the next few years, putting additional stress on state legislators to raise taxes when one-time fixes run out.
Business climate / taxes
Rhode Island has one of the highest personal income, corporate income and sales tax rates in the country. The tax burden has damaged the business climate and the ability of the state to attract new employers and local companies to expand.
Governor Carcieri's proposal to eliminate the corporate income tax in phases and shrink the personal income tax brackets was not approved during the recent General Assembly session, now in recess.
The legislators did raise the state's $675,000 estate-tax exemption to $850,000, effective Jan. 1, 2010, and index it to rise with inflation each year thereafter. The lawmakers also eliminated favorable treatment of profits from the sale of stock, mutual funds or other such assets. Capital gains would be treated as ordinary income. Carcieri approved the budget on Tuesday.
Rhode Island's approach to economic development has for years been "fragmented, disjointed and without focus," according to a report by a panel appointed by Carcieri and led by Al Verrecchia, chairman of Hasbro. The committee said a development strategy lacks leadership from the executive and development branches, and recommended a new board of directors and national search for a new director of the state Economic Development Corporation.
Development
Several major condominium developments in downtown Providence are moving toward completion. Because of the depressed housing market, some of the condos have been converted to apartment rentals. A $35-million condo and apartment complex called Capitol Cove has been leased as a dormitory to house 300 students from Johnson & Wales University.
Some condo and hotel projects, such as One Ten Westminster, have been delayed.
Other high-profile projects, such as renovations of an old power plant in the waterfront district and a factory complex in Olneyville, both being developed by Struever Bros. Eccles & Rouse, have been marred by cash-flow problems.
Colleges / universities
In January, the University of Rhode Island completed a $59-million biotechnology center in South Kingstown. URI also has been expanding its biotechnology research and teaching infrastructure in downtown Providence.
Brown University plans to spend $45 million renovating a building in the Jewelry District in Providence that will serve as the headquarters of its medical school. The university is also seeking tens of millions of dollars in federal stimulus funds to expand its medical education and research facilities in Providence.
Brown and Lifespan are interested in acquiring some of the 19 acres being freed up in downtown Providence by the relocation of Route 195.
Hospitals
The state's two largest hospital networks, Lifespan and Care New England, have proposed a merger, now under review by regulators.
After state government, Lifespan is the second-largest employer in Rhode Island (11,772 jobs), according to a 2008 report by the state Economic Development Corporation. The other major hospital system, Care New England, employs 6,193.
Transportation
The state Department of Transportation has completed several stages in a $610-million project to relocate Route 195 and open up a huge section of Providence to development.
The DOT expects to move up the start date for about 50 road, highway and bridge projects when more federal stimulus funds are allocated.
Federal stimulus
About $154 million of federal stimulus funds was spent by state agencies through June 5. About $124 million, or 80 percent, has gone to Medicaid recipients. The breakdown of the other major categories is: state fiscal stability, $19.2 million; unemployment insurance, $10.3 million; highway infrastructure, $1 million.
Population
The state's population (1.05 million in 2008) has decreased every year since 2005.
However, the population is expected to be stable in 2009 and grow slightly in 2010, in part because low real estate values have made it difficult for homeowners to sell their property, according to economists.
Most of the state's population is concentrated in Providence County, which had 626,150 residents in 2008, according to the Census.
While the population in Providence County has slipped each year since 2006, Washington County's population rose 1.8 percent to 126,264 in 2008.
The U.S. Census reports Rhode Island and Massachusetts are two of the most densely populated states in the country.
The median age in Rhode Island is 38.6 years old (2008), up from 36.8 years old in 2000.
