Rhode Island's Woes

I'm applying for an internship this summer in RI's state government. I'm hoping to get placed with the legislature and work on policy development. I'm sure that one of the biggest things that they'll be working on is the state of Rhode Island's economy.

Governor Carcieri gave a speech last night on a new budget designed to avoid a $357.4-million current year budget deficit. The plan is basically designed to cut spending, not raise revenue (apart from a hike in cigarette taxes). Short term, the plan will probably make sure the state stays afloat, but many communities will have to cut back on everything from garbage collection to schools.

But what about the long term? Rhode Island had one of the highest unemployment rates in the country (second behind Michigan) in November. The Corporation for Enterprise Development released a report for 2007 that gave Rhode Island Cs in the categories of economic performance, business vitality and development capacity. Anyone who has driven in RI will agree with the report's findings that the state has the worst bridges in the country. Will the governor's budget help alleviate these long term issues?

The answer is unclear. It may be that if the state can weather the current storm, its economy will get back on track. CFED also rated Rhode Island in the top 20 most diverse state economies in 2006. It may also be that it will face an exodus of residents as they leave to find jobs in Massachusetts or Connecticut.

The CFED report is available here, but be warned, as it opens an Excel file.