Gov. Donald Carcieri said Jan. 26 he would use his final year in office to revive Rhode Island's economy through tax credits instead of tax increases and by continuing to cut government spending.
The Republican, who is limited by law to two terms, reached back into Rhode Island's history to emphasize a theme of economic revival. Noting that the state had the nation's highest per capita wealth over a century ago, Carcieri pledged that Rhode Island's economy "once again will rise on the tide of an entrepreneurial revolution."
"It's obvious tonight, the two immediate challenges we face in our state are financial and economic," he told members of the Legislature, which is controlled by Democrats who have a veto-proof majority. "First, how do we produce a balanced budget with less revenue and second, how do we put more people to work as soon as possible? Both are enormous challenges."
Unemployment is nearly 13 percent in Rhode Island; only Michigan and Nevada are higher. The high jobless rate has contributed to a $400 million budget shortfall in the coming fiscal year that starts July 1.
Carcieri recommended cutting $125 million in state aid to cities and towns, which local officials say would lead to higher property taxes. "Make no mistake about it. We are going to have to find more structural ways to reduce spending at the municipal level. We cannot sustain the present level of spending; we simply do not have the revenues," the governor said. He later added: "This legislature has the ability to prevent property tax increases by enacting sweeping authorizations that will allow our local leaders to reduce spending."
Though the details of the tax credit plan will be included as part of the governor's budget proposal in February, Carcieri said the credit would be targeted at companies that hire workers during a recession. He also said he would recommend programs for improving access to capital.
The governor listed several of his accomplishments: increasing the number of charter schools, downsizing the state workforce, taking steps to build a wind farm near the coast and relocating a major interstate highway, I-195, in the Providence area.
One of Carcieri's best quotes in his final state of the state address turned out to be a fake. He attributed a line to President Abraham Lincoln that said in part: "You cannot bring about prosperity by discouraging thrift. You cannot strengthen the weak by weakening the strong. You cannot help the wage earner by pulling down the wage payer. You cannot further the brotherhood of man by encouraging class hatred."
Ronald Reagan made the same mistake at the 1992 Republican National Convention after which historians reiterated Lincoln never said those words. A spokeswoman for the governor said the staff was aware of the controversy over the quote but included it anyway because it expressed the right tone.