Rhode Island's ambitious 'greenhouse' plan cultivates a hotbed of controversy
Providence, R.I. — The way David Sweet recalls the incident, talent scouts from a major New England supermarket chain came to Rhode Island College last year to interview graduating seniors. Of the 10 students they talked with, two were offered good jobs with the chain in neighboring Massachusetts.
College officials were delighted; it isn't always easy to lure recruiters from such a prestigious company onto the campus of a lesser-known school.
But both students turned down the offers in order to stay in Rhode Island, even if that meant taking less-promising jobs at lower pay. The recruiters went home unhappy and, Dr. Sweet laments, they won't be back.
This experience helps explain why Sweet, president of Rhode Island College here in Providence, was quick to jump aboard the bandwagon for an ambitious plan to pump new vigor into the state's economy.
''My sense is that it represents a bold and exciting idea for this state,'' Sweet says. ''A major characteristic of the younger people of Rhode Island is that they do not want to leave. . . . That is actually a problem in that they will make poor economic decisions in order to stay here. There has not been the kind of economic development that would provide them with upwardly mobile opportunities.''
Since its unveiling in mid-October, the development plan has become the hottest issue in Rhode Island. And by most accounts, the heat is just beginning to build. Only about half the people in the state apparently know much about the plan so far. By the time it goes before the voters next year there's no telling how many people will have fanned the flames.
For reasons that will become clear in a moment, the plan is known as the Greenhouse Compact. It was put together by a proverbial blue-ribbon panel of 19 Rhode Islanders representing business, finance, labor, public service, education , science, and one internationally known consultant. Serving at the behest of Gov. J. Joseph Garrhy (D), these people - all of whom volunteered their time - worked for 13 months to produce a 1,000-page document containing more than 70 recommendations.
If the plan works by the 1990 target date, the panel says Rhode Island will have:
* Become the envy of other states because of its bold leadership in economic development.
* Reversed the outflow of industries and jobs to other states and foreign countries. The two largest industries here, jewelry and textiles, are especially vulnerable to low-wage competition from elsewhere.
* Developed four nonprofit research ''greenhouses'' to spawn and nurture new industries. These greenhouses would come in areas to be designated by the panel but would draw on technological strengths that the state already has, such as the robotics program at the University of Rhode Island and the photovoltaic studies program at Brown University.
In fact, a drawing of a greenhouse with a huge tree growing through a jagged hole in the roof seems to have become the unofficial symbol of the plan.
Panel members are now in the process of filling some 1,000 speaking engagements around the state over the next four months to promote it.
In fact, David Barricelli, business agent for the International Union of Bricklayers and Allied Craftsmen in Providence and a member of the panel, says he would happily go out speaking every night if that would help the plan to pass. He has had opportunities to leave Rhode Island for promising jobs elsewhere but is happy he stayed. Now he watches as his high-school-age son considers his own future.
''Hopefully, my son, when he gets out of college, would be able to get a job in Rhode Island,'' Mr. Barricelli says.
But on the other side of the ledger, says the panel in its report, per-capita income in Rhode Island last year was $10,723 - some $384 lower than the national average and $1,193 lower than the New England average. The hourly wage average in manufacturing ranked 47th in the country. Industries that are rated likely to grow here make up only 19 percent of ''traded'' employment - i.e., producing goods or services to be sold outside the state.
''At one point, better than 50 percent of our jobs were in textiles,'' says Governor Garrahy in boosting the plan. ''So we were hurt especially hard during the textile decline in the Northeast. And then we ended up so that our largest employer was the United States Navy. And then in 1973-74 they closed down the Quonset Point base and took the fleet out of Newport. So we suffered another crushing blow.
''I think most people would say that Rhode Island has a good quality of life. But what we want are quality jobs, and I hope that the people in this state are going to support this.''
The goal of the Greenhouse Compact is to increase the number of higher-paying jobs in Rhode Island by 60,000 over the next seven years. That would, it is estimated, keep the unemployment rate here at about 7 percent and make Rhode Island competitive again with its immediate neighbors, Massachusetts and Connecticut.
Nearly everybody here likes the sound of that. The compact already has received the endorsements of the influential Providence Journal, the state AFL-CIO, various chambers of commerce, 11 of the state's college presidents, and the 7,000-member Rhode Island chapter of the National Education Association.
But that's just about where the agreement ends.
Critics fault the plan for nearly everything: its price tag ($248.5 million in public funds); the method by which big chunks of that money would be raised ( via a new payroll tax); the potential for it to become just another vehicle for political patronage; the haste with which its backers want it voted on (Feb. 21 ); the take-it-or-leave-it attitude with which the panel submitted its proposals; even the economic data and reasoning that the panel used.
''I share some sense that, tactically, the take-it-or-leave-it approach is less desirable,'' Sweet says. ''But it is attention-getting.''
''I don't think there's any way anybody will be able to tell in seven years whether this has worked or not,'' argues Brown University economist George Borts. ''In the meantime, a lot of sugar will have been spread around. You know the expression, 'doing well by appearing to do good?' Well, I think that's what's happening here.''
In an eagerly awaited event, Dr. Borts is scheduled to debate one of the two driving forces behind the plan, globe-trotting development consultant Ira Magazinercq, at Rhode Island College Dec. 13. Borts says the report ''is not a professional document.'' And he disputes that the Rhode Island economy is as poorly off as the panel claims in its report. Rather, he says, the current state of the economy is a factor of the prolonged national recession - out of which the United States is still emerging.
''If you really want to attract business, you've got to cut taxes that are levied on business,'' Borts says.
He also denies that his arguments are sour grapes because no economists from the prestigious Ivy League school were on the Greenhouse panel. ''I'm acting as a spokesman for the taxpayer,'' he says. ''Brown will benefit quite substantially from this. But if people wanted to help Brown there's a much easier way to do it: just give the money directly.''
One of those most opposed to the income-tax surcharge and most worried about the political patronage potential of the compact is state Senate minority leader Lila Sapinsley (R) of Providence.
''The premise was that the people ought to feel good'' about supporting the plan through the one-time tax surcharge, Senator Sapinsley says. ''My view is that people never feel good about paying taxes.''
She says she thinks the $15 million that is being asked of the taxpayers could, in large part, be obtained instead by taking the state budgetary surplus at the end of the current fiscal year. The GOP has demonstrated that millions of dollars of state money could be saved by eliminating patronage positions and the fees paid to consultants, she says.
Mrs. Sapinsley says she objects ''to being manipulated and rushed'' by those who want to push the plan through as fast as possible. It will require passage of 50 pieces of legislation before the plan can be implemented, a process that could take until next spring. Meanwhile, February weather here is uncertain, and the state already has a presidential primary scheduled for March that will compete for the voters' attention.
''But in fairness,'' she adds, ''I find more of a willingness to discuss it now. The bottom line is that I support much of what is in the compact, and I hope it will be approved by the state. I just want it examined closely first.''
Governor Garrahy says he is not wedded to the tax surcharge. Indeed, there are indications that it is hanging by an increasingly slender thread.
''Let me say to you that I'm a realist,'' he says. ''Ninety-nine percent of the report is outstanding, and I don't want to jeopardize the 99 percent (for the remaining 1 percent that is controversial).''
Those who favor using a state budget surplus for the compact instead of the tax surcharge, Garrahy says, ''are not being realistic. . . . There will be no extra surpluses in this fiscal year . . . and the financial picture for next year is not clear to us yet.''
And he strives to lay the patronage question to rest.
''Yes, I can,'' he answers when asked if he can say unequivocally that the compact will not become a patronage vehicle. ''There's too much at stake here.''