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Rhode Island's Governor Isn't a Conventional Democrat. Will That Help or Hurt Her in November?

Gina Raimondo, a former venture capitalist with blue-collar ties who has made job creation her No. 1 priority, could face a tough reelection.
by | July 2018

Gina Raimondo should be in an ideal spot for reelection right now. The Rhode Island governor is a Democrat and a woman in a year when Democrats and women candidates are expected to do well. She faces a fractured field of opponents, none of whom has won a statewide contest in more than a decade. And Raimondo can credibly claim that, for the first time in a long time, Rhode Island’s economy is improving. It is competing for jobs against other states and winning a fair number of them, including some against its neighbor and chief rival, Massachusetts. The unemployment rate has dropped considerably under Raimondo’s watch, and is now hovering just above 4 percent. “Rhode Island is stronger than we’ve been in decades,” Raimondo told lawmakers earlier this year. “Four years ago, our unemployment rate was the highest in America. Today, it’s in line with the national average. The number of people who filed for unemployment insurance last year is the lowest it’s been in 50 years. Our economy has more jobs than at nearly any other time in our state’s history.”

Not bad for someone who made job creation her overriding priority four years ago and hasn’t stopped talking about it since. But even the governor knows Rhode Islanders aren’t sold on the improvements she has been touting. They may know that construction cranes are towering over Providence, Johnston and Kingston. They may notice work crews repairing long-neglected roads. They may even know that their hated car tax is finally going away. Yet they’re still skeptical. “We’re making real progress,” Raimondo acknowledges. “But our work is far from done.”

 


Raimondo made job creation her top priority four years ago. Her successes have created a building boom of sorts, with construction projects underway across the state. (Shutterstock)

 

Polls early this year showed Raimondo in a statistical dead heat with her likely Republican challenger, a danger signal for any incumbent, especially one who assumed office with just 41 percent of the vote in her first general election. But it’s not too much of a stretch to say that, while the governor’s poor poll numbers reflect doubts about her job performance and concerns about her close ties to corporate interests, they also say something about the spirit of the electorate. These are tempestuous times in the tiny teacup of Rhode Island politics, with Democrats struggling to find unity, Republicans hoping to gain relevance and independents relishing the idea of upsetting the whole darn system. “There’s a deep resentment in the state and a lot of anti-establishment feeling” because Rhode Island’s economic woes lasted for so long, says Maureen Moakley, a political science professor at the University of Rhode Island. “The context isn’t favorable for anybody. It’s also a reflection of the fact that it’s a small state, and people are very feisty. People want to stick it to the establishment. They’re blowing off steam.” 

So, while this year’s governor’s race should be Raimondo’s to lose, the situation is volatile enough that she can’t take a second term for granted.

 

For as long as anyone alive can remember, Rhode Islanders have wanted their politicians to fix the state’s economy. 

Rhode Island was an economic powerhouse for most of the past two centuries, after Samuel Slater built the country’s first textile mill in Pawtucket in 1790, and, in the process, brought the Industrial Revolution to America. But the state’s manufacturing engine, which drew Italian and Irish immigrants to its towns and cities, began to sputter by the 1970s, and blue-collar jobs started leeching away. In the 1990s, the Providence area lost more jobs to Chinese competition than almost any place in the United States. The state’s famed jewelry industry dwindled. Defense industry spending for ship construction declined as the Cold War ended. 

And that was before the Great Recession.

Rhode Island was one of the worst-hit states in the country during the 2007-2009 downturn, and it certainly fared worse than its New England neighbors. More manufacturing jobs disappeared. Housing prices collapsed. Governments laid off workers. Central Falls, a small city near Providence, filed for bankruptcy in 2011. And because Rhode Island’s economy sank further than those of other states, it also took longer to recover. By 2013, nearly 181,000 of Rhode Island’s roughly 1 million residents were receiving food stamps. Between 2014 and 2015, Rhode Island went nine months with the highest unemployment rate in the country. 

Meanwhile, a widely touted effort to give the tech industry a foothold in the state went sour, too. In 2010, Don Carcieri, Rhode Island’s Republican governor at the time, signed onto a deal to loan $75 million in public funds to a video game company founded by former Red Sox pitcher Curt Schilling, persuading the company to move from Massachusetts to Rhode Island. But instead of igniting a tech sector boom, the company went bankrupt. Its failure led to years of lawsuits, as Rhode Island tried to recover its losses. More important, it fueled the public’s antipathy toward government, especially any government initiative that reeked of a corporate giveaway.

It was in the midst of all that economic distress and political distrust that Raimondo introduced herself to Rhode Island voters. Her first step was to run for state treasurer, which fit her background as a venture capitalist. As a Rhodes scholar with an economics degree from Harvard and a law degree from Yale, she had impeccable credentials. But she also had authentic connections to blue-collar Rhode Island. Raimondo often relayed the story of her father being laid off from his job in Providence when the Bulova watch factory closed. She says she jumped into politics because libraries around the state were shutting down, a point that hit home for her because her grandfather learned English at his local public library.

Raimondo moves comfortably in these two worlds. But, inevitably, these worlds collide.

They certainly did after the Central Falls bankruptcy, in which Wall Street investors remained unscathed but retired city workers faced steep benefit cuts. “It broke my heart to see 75-year-old firefighters saying, ‘I can’t buy food. I can’t buy my medicine. I can’t stay in my house,’” Raimondo said in an interview with the podcast Freakonomics earlier this year. She worried the same thing would happen to teachers and other workers in the state pension funds, which were also dangerously underfunded. “I decided, I’m not going to do that. It’s not about my politics, it’s about shoring up the system. … There are a lot of people in this system who need their pension to be there in 30 years, and it wasn’t going to be. My tagline at the time was, ‘This is math, not politics.’” 

She insisted that existing benefits had to be reduced, and said that if lawmakers didn’t act, the system would be broke in 25 years. She proposed eliminating cost-of-living increases and moving recipients into a system that more resembled the riskier 401(k) plans used in the private sector. After Raimondo made her case around the state, lawmakers in 2011 passed her proposal by wide margins. Unions fought the deal unsuccessfully. They eventually reached a settlement with the state several years later, but resentment over the issue, particularly among teachers unions, has never really died away.

Raimondo’s pension victory boosted her profile, setting up her campaign for governor in 2014. She narrowly won a three-way primary against two labor-friendly Democrats, then won the governorship in November in another three-way race. Raimondo didn’t dwell on the pension fight during her campaign, although it galvanized support for her opponents. Instead, her message in that race was all about job creation. It still is.

During Raimondo’s term as governor, she has appeared countless times touting one commitment or another by companies to bring or add jobs to Rhode Island. She joined the head of General Dynamics Electric Boat in May to tout the creation of 1,300 jobs. Electric Boat is expanding to build parts for a new class of nuclear submarines for the U.S. Navy. Raimondo has announced 500 new jobs from Infosys, an Indian tech company; 75 jobs at a tech center for Johnson & Johnson; 50 new positions for GE Digital; 300 additional jobs for Virgin Pulse, a health software company; and 700 jobs for Infinity Meat Solutions to package and process meat. And the list goes on.

But Raimondo has backed more controversial projects as well. She appeared with the CEO of Deepwater Wind in 2016, when the company started building the first offshore wind farm in the United States. Residents of nearby Block Island tried to fight the new development because it obstructed their view of the ocean, but the governor forged ahead anyway. This spring, she signed off on a deal to let the company construct a wind farm that would produce 13 times as much energy as its first project. Meanwhile, Raimondo backed an effort to build a $1 billion natural gas-fueled power plant in the northern part of the state, despite fierce objections from environmentalists and local residents. 

Laurie White, the president of the Greater Providence Chamber of Commerce, credits Raimondo for rebuilding the state’s economic development agency, which had languished under previous governors. “There were zero tools in the toolbox,” she says. “The state didn’t even have marketing materials. This governor understands what a contemporary economic development agency must do today to be in the game in order to win.”

The company officials who appear with Raimondo to announce new jobs often tout the tax incentive packages that the state has offered to lure them there. Most of those incentives were created under the Raimondo administration. “Massachusetts and nearly every other state in the Northeast still uses incentives. And they’ve been doing it for years,” Raimondo explained in her State of the State address this year. “Until recently, though, our leaders didn’t have a strategy and, because of that, Rhode Islanders got left behind. And the few times our past leaders did take action, they put all their eggs in one basket or chased special deals. Any way you slice it, Rhode Islanders got hurt.”

The governor’s supporters note that some of the biggest state tax credits companies can qualify for require them to actually create jobs before they get the tax subsidy. In the end, they argue, the jobs will bring in more than enough money to pay for the breaks that drew them to Rhode Island. But to the governor’s opponents, especially the ones lining up to run against her this year, the tax breaks smack of “corporate welfare,” gifts to out-of-state companies that won’t change the fundamentals of a broken Rhode Island economy. 

 


A poll early this year showed Raimondo leading her likely Republican opponent, Cranston Mayor Allan Fung, by just 2 percentage points -- a statistical dead heat. (AP)

 

In Rhode Island, independent voters outnumber registered Democrats, but both far outweigh the number of Republicans. As a practical matter, Rhode Islanders have selected Democrats for the vast majority of state and federal offices for the past generation. That’s good news for Raimondo. So is her huge lead in fundraising. She had $4.3 million in her campaign account at the end of March, compared with $316,000 for her next-closest rival, Republican Allan Fung, the Cranston mayor whom Raimondo defeated in the general election four years ago.

But public polls continue to suggest she is vulnerable. A late February survey showed Raimondo leading Fung by 2 percentage points, within the poll’s margin of error. Perhaps as troubling for her, only 39 percent of respondents said the state was headed in the right direction, compared to 45 percent who said it was going in the wrong direction. So it’s no wonder that other gubernatorial candidates have been unsparing, not just in their criticisms of Raimondo, but of Rhode Island’s political establishment as a whole. 

Fung released a plan he said would “bulldoze Smith Hill,” where the state Capitol sits, at least metaphorically. The mayor’s plan calls for 10-year legislative term limits, creation of an inspector general’s office and work requirements for welfare benefits. More generally, Fung wants to focus on making life easier for small businesses and lowering tax rates to spur more economic growth. Fung says “shoveling millions of dollars” to out-of-state companies to lure jobs is not a sustainable way to get that done. “We are a high-tax state,” Fung insists, “whether it’s property taxes or whether it’s the state income tax. We’re taxing things other states don’t.”

Fung has a credible primary opponent in Patricia Morgan, the Republican leader in the Rhode Island House of Representatives. She says the state’s high car insurance rates, health insurance costs and high energy prices don’t get enough attention in the capitol. She also says Fung is out of touch, just like the governor. “I am absolutely the opposition party,” she says. “The mayor is part of the problem.” 

But perhaps Raimondo’s most outspoken conservative critic isn’t even running as a Republican. Joe Trillo, a former state representative who was an honorary state co-chair of Donald Trump’s presidential campaign, is campaigning for governor as an independent, likely setting up another three-way race in November. “The Republican Party doesn’t bring much to the table,” he says. “Party politics in Rhode Island is dead. The General Assembly is 90 percent Democratic. If you’re a Republican governor, they lock you in a box, lock the door and maybe feed you every once in a while.”

 


Former Rep. Joe Trillo is running for governor as an independent. “Party politics in Rhode Island,” he says, “is dead.” (AP)

 

Trillo’s platform includes building trade schools, lowering taxes, imposing harsher penalties for animal abuse and reducing regulations on businesses. Not surprisingly, as a follower of Trump, he is also pushing to crack down on illegal immigration. He wants to end “sanctuary” policies by requiring state and local law enforcement to cooperate with federal immigration agents. That is a contentious issue in a state where 14 percent of the residents are Hispanic, many of them recent immigrants, with a sizable presence of Dominicans, Guatemalans and Colombians.  “A lot of what we are doing is inviting low-income, illegal immigrants [by offering] free day care, free health care and free subsidized housing,” Trillo says, noting that Rhode Island’s overall population decreased in the 2010 Census. “We’re importing poverty and exporting wealth.”

The discontent in Rhode Island isn’t just limited to conservatives. There’s turmoil in the Democratic ranks, too. Part of the reason is a growing progressive movement in what has traditionally been a relatively conservative blue-collar Democratic Party. Bernie Sanders, for example, won Rhode Island’s presidential primary in 2016. And on the same night that Hillary Clinton carried the state in the general election, Rhode Island’s House speaker barely held on to his seat in the chamber with an 85-vote win over his Republican opponent. That’s created a dynamic where the progressives feel emboldened to push for more liberal policies, even as Speaker Nicholas Mattiello has hewed to a more conservative approach of lowering taxes and reining in spending. The liberal wing and the traditional wing have clashed recently on gun control measures, abortion rights and the minimum wage. 

Stepping into that conflict is Matt Brown, a former Rhode Island secretary of state who left politics after an ill-fated U.S. Senate race in 2006 and has scarcely been heard from since. Brown toyed with the idea of running as an independent in this year’s governor’s race but settled on challenging Raimondo as a Democrat in the September primary.

"It will be uphill climbing for the Republicans. Rhode Island is a state that is strongly opposed to Trump, and is very Democratic-leaning," says Jared Leopold, a spokesman for the Democratic Governors Association."

Brown calls Raimondo’s policies “corporate socialism.” “Her overall agenda,” he says, “is to give taxpayers’ money in corporate giveaways to companies that decide to locate and open offices in the state. It’s not real economic development if most taxpayers who are struggling to make ends meet have to pay for jobs. That’s a subsidized economy. It’s not a self-sustaining economy.”

Instead, Brown argues, the state needs to invest in industries likely to grow in the future, such as renewable energy and health care. Brown criticizes Raimondo for supporting the construction of the new natural gas plant in Burrillville, saying it would commit Rhode Island to fossil fuels for decades when the rest of the economy is likely to shift to greener energy sources. Brown also takes issue with Raimondo’s cuts to the state Medicaid program, which, he says, not only hurt patients but may harm the state’s hospitals and other health-care facilities. 

Raimondo replies that her opponents are largely bringing up issues she is already working on. She points out that she has cut regulations on small businesses, cleared the way for the elimination of the car tax, signed off on renewable energy and called for rehabilitating dilapidated school buildings -- all proposals pushed by some or all of her challengers. 

It’s a safe bet that Raimondo’s critics will bring up several programs that have not worked out so well. The biggest is an overhaul of the state computer systems for processing applications to public assistance programs such as food stamps and Medicaid. The overhaul delayed payments to recipients for months at a time, and the price tag for the project -- which still has not been completed -- has grown to nearly $500 million. Less serious, but still an embarrassment, was a botched rebranding campaign for the state’s promotional efforts. Residents almost immediately panned the new “Cooler and Warmer” motto and criticized a video that showed a building in Iceland instead of Rhode Island. “With her approval rating continuing to plummet as her administration struggles with transparency issues, lackluster economic growth and scandals involving state social services, Gina Raimondo remains one of the most vulnerable incumbent Democratic governors seeking reelection this year,” says John Burke of the Republican Governors Association. “Rhode Islanders are clearly ready for a change.”

But Jared Leopold, a spokesman for the Democratic Governors Association, says Raimondo will have an easier time attracting support from undecided residents than a Republican candidate will, especially if Trillo siphons off conservative voters in the general election. “It will be uphill climbing for the Republicans. Rhode Island is a state that is strongly opposed to Trump, and is very Democratic-leaning,” he says. Leopold notes that Morgan, the House minority leader, recently visited the White House to meet with the Republican president, and Fung went to Trump’s inauguration. The mayor even posted a photo of himself wearing a Trump-themed hat at the event. “Come November,” Leopold says, “it’s going to be hard for them to pull the lever for someone who wears a Donald Trump hat.”

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