Raimondo Administration Offers Buy-Outs to Close $25M Budget Hole
Saturday, October 07, 2017
GoLocalProv News Team
|Governor Gina Raimondo|
The plan includes $15.1 million in personal savings, $5 million in general government efficiencies and $4.9 million in contracts and grants.
About $6.5 million of the personal savings will be derived from a one-time retirement buy-outs to state employees who are already eligible to retire.
The payment will equal twice the value of an employee’s annual longevity bonus, with a total cap of $40,000. About 940 Executive Branch employees are estimated to be eligible for retirement by the end of this year.
Other savings include the elimination of state-only funded services that do not have federal Centers for Medicare & Medicaid Services (CMS) approval or federal match dollars, FTE reductions, and several streamlining initiatives.
The budget as approved by the legislature included a $25 million budget hole that the Raimondo administration needs to close during the course of the year. Now, the Raimondo administration is facing a $237 million revenue shortfall. And state officials got bad news in the Lottery Commission's audit which saw revenues decreasing.
GREAT: Snow removal
In Raimondo’s first winter in office, Rhode Island was rocked by snow — a plethora of 10-inch storms and about 100 inches of total snowfall.
While snow removal in Providence was a disaster, Raimondo’s team looked like war-torn veterans in cleaning up the snow on state roads.
UGLY: Ethics Violation for Lally
The Raimondo administration tapped State Representative Don Lally for a slot at the Department of Business Regulations — before he had been out of office for one year.
The Ethics Commission found that the appointment violated the Rhode Island ethics laws.
BAD: Appointment of McDonald
The appointment of the former aide to former Governors Don Carcieri and Lincoln Chafee, Jamie McDonald, to head DCYF when she did not have the minimum qualifications turned out to be a BAD decision that led to UGLY outcomes.
BAD: Out-of-State Staffers
It was supposed to be a strategy of bringing new ideas and new people into to elevate Rhode Island, but it turned out to be a collection of unemployed staffers from the Governor’s office in Maryland (back when Hillary was the Presidential front-runner...and national ties oh-so-appealing).
They were ineffective and dismissive of Rhode Islanders. A number of them are gone, but Rhode Island Commerce is still littered with them.
UGLY: Raimondo’s Initial Toll Plan
The initial toll plan proposed by the Raimondo administration was government funding as its worse.
The architect of Raimondo’s truck toll infrastructure plan is the same firm that the State of Rhode Island is presently in litigation against, for its role in the state’s loss of over $100 million in the 38 Studios collapse.
First Southwest is a key defendant in the state of Rhode Island's effort to recover the millions in loss loan funds and damages. Ultimately, the firm settled - and paid $16 million.
GOOD: Final Toll Plan
Rhode Island has the 47th ranked roads and bridges and the final truck toll plan minimized the influence and costs of the program. The House trimmed back Raimondo’s initial plan and shifted the structure of financing minimizing the Wall Street boondoggle.
Now, roads are getting fixed.
UGLY: Blocking Release of 38 Studios Documents
In October of 2016, GoLocal filed suit asking the court to force Raimondo to require her administration to release the State Police 38 Studios interview notes. Raimondo repeatedly claimed that they could not be released because they were tied to the Grand Jury.
That simply was not true and a few months later many of those documents were released, but not all.
GoLocal continues to press for all of the State Police records.
UGLY: Fate of Children at DCYF
As GoLocal reported in April, "In Rhode Island, ten babies all under 18-months old, have died in the past 26 months, and at a recent State House hearing, it was disclosed by the state’s Child Advocate that two new 'near deaths' are now under investigation."
The disclosure was made during a House Finance sub-committee meeting in which most of the subcommittee's members were missing for the majority of the meeting.
BAD: McDonald Goes to Work at Deloitte
The revolving door from government, to private consultants that have contracts with governmen,t always raises questions, but in this case it is simply inappropriate for Jamia McDonald, who was neither qualified nor competent at running DCYF to go to work for UHIP contractor Deloitte (who has not demonstrated many competencies).
Raimondo should have told Deloitte not to do it.
GREAT: Jobs Numbers
In July, Rhode Island hit a record number of Rhode Islanders working — just under 500,000. The long recovery from the Great Recession is over.
GREAT: Girls and Coding
Raimondo has pounded a constant beat to encourage girls and young women to focus on education and careers in technology.
Raimondo has supported the group Girls Who Code, which states: Women represent one of the single largest untapped sources of talent in the technology field and according to new research, only 24% of technology jobs are held by women today. Solving this challenge demands a tailored and sequenced series of actions starting in junior high school that is sustained throughout high school and college.
BAD: Deloitte Sponsorship
Just days after blasting UHIP consultant Deloitte, Rhode Island Governor Gina Raimondo spoke at a conference in California -- sponsored by Deloitte.
"We paid them a lot of money, we didn’t get what we paid for," Raimondo said at the time of Deloitte's involvement in the UHIP debacle. "And they represented to us that it was in much better shape than in fact it was: defective functionality, incomplete interfaces, engines that still aren’t working."
Days later, Raimondo was en route to headline the Deloitte-sanctioned event.
"Deloitte is not paying for any of the travel," said Raimondo spokesperson David Ortiz. "She had already committed to be at the event, and was able to have a private conversation with the CEO of Deloitte Consulting, who committed to being in regular communication with the Governor."
GOOD: Cost of College Funding
Raimondo deserves credit for bringing attention to the issue of the high cost of college education. Ultimately, her proposal got severely trimmed back and she insisted on a number of provisions which undermine the program — no means test, no requirement for grads to work in Rhode Island and minimum GPA at a measly 2.5.
But, give credit where credit is due.
UGLY: Perception of Staff Self-Dealing - Smiley Inc.
While working for Governor Raimondo, Chief-of Staff Brett Smiley owns a political consulting business that represents clients including Providence Mayor Jorge Elorza, and he has hired his consulting firm’s former staffers to work in the Governor’s office. Smiley earns more than $170,000 per year in his role for Raimondo.
This summer, Providence City records show that he and his husband Jim DeRentis sold their house to Brown University for $1.1 million — 30% more than the assessed value of the house at $843,600.
UGLY: Perception of Staff Self-Dealing - Neuman and DraftKings
Governor Gina Raimondo’s first Chief of Staff Steven Neuman was negotiating legislation that impacted one of the most controversial companies in America -- just three weeks before his wife started her job for the very company as Vice President, GoLocal has learned.
Boston-based DraftKings is a “fantasy sports” startup company that is now valued in excess of $1 billion, and is under fire in many states for being an unregulated gambling venture.
After Neuman’s wife was hired, only then did he seek an advisory opinion from the Rhode Island Ethics Commission on how to handle a potential conflict moving forward, but the letter seeking the advisory opinion did not speak to Neuman’s involvement in legislation during his wife’s hiring process.
GREAT: DMV Reboot
Rhode Island DMV has been the “House of Pain” for years and faced with a major upgrade to the software, the Raimondo administration (maybe for the first time) under promised and over delivered.
The process was not perfect, but it was without a major tech failure and the outcome is an improved customer experience.
GOOD: Raimondo Releasing Tax Returns
One of the areas of demonstrating transparency — Raimondo and her husband deserve credit for demonstrating transparency to their personal wealth.
BAD: Raimondo’s Invenergy Position
It is hard to know exactly what Gina Raimondo’s position is on the proposed and controversial gas powered power plant proposed for Burrillville. When the plant was proposed, she strongly endorsed the project.
Then, Raimondo said she would leave it to the State's Siting Council to determine the project's fate. Then, she took campaign donations from top officials with the company and their agents. Then she said she regretted "putting her thumb on the scale" of the the process.
Which one is it?
Now, she faces an opponent whose primary political focus has been fighting Invenergy.
UGLY: Raimondo Gives $3.6 M to Los Angeles “Slum Lord”
Governor Gina Raimondo and the Board of the Rhode Island Commerce Corporation voted in September of 2016 to provide Urban Smart Growth — which is run by controversial developer Lance Robbins — up to a maximum of $3,569,657 in Rebuild Rhode Island Tax Credits.
However, one of the top advocacy lawyers in the country, Lauren Saunders, told GoLocalProv.com following the announcement that “Robbins was one of the most dishonest and unscrupulous people I have come across in my career working for vulnerable tenants and consumers. I cannot imagine entrusting any (public) money to him.”
Despite Rhode Island leaders questioning the decision, the Raimondo administration pushed forward.
GREAT: Combating Opioid
Governor Gina Raimondo signed several pieces of legislation strengthening Rhode Island’s response to the opioid crisis in August.
"This epidemic is our single greatest public health crisis, and the legislation I signed today will help our state fight back and save lives. I hear stories from families hurt by overdose everywhere I go. Fentanyl-related overdose deaths in Rhode Island have spiked in the past year, and I commend the General Assembly for passing legislation that specifically targets this problem. By ensuring that patients are aware of the risks of opioid addiction and increasing the penalties for trafficking fentanyl, we are steps closer to winning this fight,” said Raimondo.
Raimondo has overseen the greatest financial failure, staffing failure, and human failure for Rhode Islanders -- ever.
Rhode Island Auditor General Dennis Hoyle said that the state had "unrealistic expectations" regarding the rollout of UHIP - and that project costs to develop the integrated eligibility system known as UHIP/RIBridges and HealthSource RI totaled $407.3 million at April 30, 2017.
The auditor’s report includes observations -- including that there was "a near-term over-emphasis of purported savings" - and that the state "did not have an established and staffed project management function in place to support and facilitate the state’s oversight of this large and very complex technology initiative."
UGLY: Budget Management
Raimondo was supposed to enter office as an experienced budget manager — both from her experience as a venture capitalist and as Rhode Island’s General Treasurer.
But today, the budget shortfall (as of September 2017) is more than $230 million and there is confusion as to how she will cut $25 million in this year’s budget.
Between federal and state investments in moving I-195, roughly a billion dollars has been spent over nearly 20 years. Raimondo deserves credit for breaking the logjam.
"For too long, the I-195 land was nothing but dirt," Raimondo said at the Wexford groundbreaking. "Today marks the start of something transformational, not just for this land, but for our state and its economy. This complex will become the epicenter of Rhode Island's resurgence, creating jobs at every rung of the ladder, from janitors to Ph.D. computer scientists. We've worked hard for this, and we are finally seeing the results of our efforts. Wexford, Cambridge Innovation Center, Johnson & Johnson, Brown University and others are making an investment in Rhode Island because we are making crucial, forward-thinking investments in our people and in our economy. This is just the beginning."
UGLY: Wexford's False Claims, Lack of Transparency, and Mismanagement
In an interview with GoLocal last week, Raimondo continued to refuse to answer questions about the leases between Wexford and Brown University, Cambridge Innovation Center, and Johnson & Johnson, citing that they are private -- and unconcerned as to whether Rhode Islanders should know where their $40 million is going to.
In January, a GoLocal investigation found that the permanent job claims for the Wexford project by the Raimondo administration were inflated.
Raimondo had repeatedly claimed that project will create 1,000 new permanent jobs in Rhode Island. After weeks of requesting information about tenants, rents, and job creation, GoLocal was finally able to secure actual job numbers for the project and then fact check those claims.
In fact, actual jobs created will be closer to 80 to 90.
$1 Million Wasted
A GoLocal investigation uncovered that the Raimondo administration will waste $1 million for incentives building out space for Johnson & Johnson.
The monies go to the private developer Wexford and in two years, Johnson & Johnson will leave to move into another Wexford space — which is receiving $40 million in incentives.
UGLY: Lack of Support to Rhode Island Companies
Under Governor Gina Raimondo, the agency in charge of building Rhode Island’s economy has spent 65 percent of its contract dollars with out-of-state companies in the last two years.
Nearly $8 million of taxpayer dollars went to consultants as far away as New York, Toronto, London, and Frankfurt under the Rhode Island Commerce Corporation. Even the money spent on porta-johns contracted for Volvo races went to out-of-state interests by an overwhelming margin.
Havas Got as Much as All of Rhode Island
No companies scored more consulting dollars than consulting businesses located in New York. Havas, the public relations firm that oversaw the development of the tourism campaign that included the now infamous promotion video for Rhode Island that included footage from Iceland, received payment in the past two years more than $4 million — $4,114,025.78 according to data provided to GoLocal from Commerce.
Havas has been paid nearly as much as all Rhode Island contracts combined during the past two years.
It was a state, national, and global embarrassment.
Gina Raimondo, accustomed to getting glowing national press, was suddenly not just in the Rhode Island media glare, but under national scrutiny for the botched rollout of the state's new tourism campaign.
“The campaign’s rocky start marks a public setback for Governor Gina Raimondo, a Democrat and former venture capitalist who has basked in waves of positive press since taking office in early 2015,” wrote Jon Chesto for The Boston Globe.
“A world-renowned designer was hired. Market research was conducted. A $5 million marketing campaign was set. What could go wrong?” quipped Katharine Seeyle for The New York Times in the post-mortem a week late. “Everything, it turns out.”
“The anatomy of a disastrous state branding campaign,” wrote Aarian Marshall for City Lab for The Atlantic Cities. “After Rhode Island’s epic screw-up, a five-step guide to doing better.”