My testimony at the RI Senate Committee hearing on whether or not the state should subsidize the Paw Sox stadium. (well not exactly, I never say it quite like it is written)
Testimony Greg Gerritt September 14 2017
Members of the committee
I am opposed to the State of RI spending taxpayer dollars to build a baseball stadium for the Pawtucket Red Sox for a number of reasons, some of which others will speak of today. My task is to point out things I do not think other speakers will focus on.
One consideration is the recent news that RI has a large and growing budget deficit. How do you spend the taxpayer’s money on baseball with a deficit that threatens people’s health and well being? But what I want you to focus on is why is there such a large and growing deficit. One of the reasons is that RI budget estimates always include an economic growth factor that is systematically too large. RI continually takes actions that are intended to spur economic growth, and yet year in and year out RI’s growth rate is 60 to 80% of the national rate. But the rising growth rate is baked into your calculations, meaning that you will regularly expect more revenue than is generated. I have asked a variety of people associated with the state about this and no one has been able to tell me the assumed growth rate. If you are privy to such information, it should be public knowledge as it is a critical policy issue for RI. This is something to ponder for the stadium as we have been told that so much business will happen around the stadium that it will cost us nothing.
It is not just RI, the growth rate is trending down globally, and more and more it is obvious that only a few places have the particular characteristics that allow them to have a few more years of rapid growth, but the characteristics of RI, specifically our limited natural resource base (so no oil or mining boom) our reduced influx of first time urban dwellers coming from the countryside, and a relatively small population, combined with our industrial history, tell us we will never see rapid growth.
Besides relying on policy proclamations from the Koch Brothers to determine RI economic development policy, policies that every serious study has shown do not increase growth rates, and quite often are correlated with economic slowdowns, RI economic development focuses on two things, real estate development and the medical industrial complex. At the best of times the real estate industry fosters a greater inequality in our communities and often creates the displacement of large numbers of lower income people, often people of color, but when things go bad it can crash the economy. Both the World Bank and the International Monetary Fund point out that subsidizing the rich, especially for real estate investments, is among the least useful things you can do for an economy. Maybe we should pay attention.
New research out of Harvard confirms what I have been saying ever since The Miriam Hospital tried to run over my neighborhood a decade ago, the more you use the medical industrial complex to grow the economy, the more healthcare becomes unaffordable, and the more it squeezes the life out of every other segment of the economy. No time today to finish this thought, but here is a link https://prosperityforri.com/comments-on-the-september-2014-ri-economic-development-draft-plan/ that covers several of the topics in this commentary.
Final point, when the legislature of RI ponders what to do on this, one thing to factor into your equation is your rather undistinguished record on large projects. Others will speak of 38 Studios, but the more relevant one is the idea of building a large container port at Quonset. The legislature as a body was all on board, the Governor was on board, the RI Economic Development Corporation was on board. The people were not on board and in the process demonstrated that the entire leadership of RI had been lead around by the nose by con men. But just ponder how much money the taxpayers of RI would have been on the hook for when the new port facilities were ready to go right as the Great Recession started. We took a bath on 38 Studios. If you had your way that would have seemed like a picnic.
If you really believe that Bread and Circus is so critical, then you are saying the empire is collapsing and we need this to prevent the poor from rioting, you have my sympathies. But if you are doing this for any other reason, it would be a mistake.