Russell Moore: Death by 1000 Cuts—RI Style
Monday, March 03, 2014
The state had a higher unemployment rate in December than previously reported—coming in at a whopping 9.3 percent—two-tenths of a percentage point higher than expected. We were already had the distinction of being the highest unemployment state in the nation before the negative revisions took place.
To make matter worse, Cox Communications, one of the state’s largest private sector employers, announced plans to lay off more than 234 people. The company decided to consolidate by closing their smaller call centers and relying more on their larger ones. According to their spokesperson, it was not part of a cost cutting effort (say, what?).
Bad to worse
That means, we’ll soon be adding another 234 people to the ranks of those who desperately need work, but thanks to our miserable economic climate—will have trouble finding it.
National Grid then announced later in the week that the company was seeking a natural gas rate hike that would cost consumers an average of 16 percent. It’s not just Rhode Island’s ridiculous tax and regulatory climate and high health insurance costs—it’s also the high energy costs that inhibit our economic growth as much as anything else. Last week brought us just one more instance of our troubles increasing—not going the other way.
But wait! There’s more. We learned that Plainridge race course, located a measly 12 miles (a short distance even by RI standards given how the track is right off of 495) away from Twin River Casino (it will always be Lincoln Greyhound Park to my mind). This is a bigger slot threat than Wes Welker.
It was amusing to watch the local network television stations tried to play down the significance of Twin River taking on world class competition literally just up the road. I suspect this had something to do with the fact that they’re not looking to irritate one of their larger advertisers.
Twin River reportedly is only expecting a 10 percent drop in revenues. That’s a borderline laughable prediction unless they’re changing their business model and marketing campaign to something other than “so close”.
Once you get past the folks who prefer to whistle past the graveyard, it’s hard to underestimate what type of a blow represents to not only Twin River, but the state of Rhode Island as a whole. Rhode Island relies heavily on gaming. It’s our third largest source of instate revenue. The latest available data, which dates back to June 30 2012, shows that the state raked in $321 million from slot machines alone—the preponderance of that revenue from Twin River casino.
Nothing to see here
In other words, when your state is addicted to gaming revenue, the last thing you want to see is the fixes get cut back. Just ask Nevada, our biggest competitor in the highest unemployment race what its like to see a drop in gaming revenue.
Golocal reported that the addition of slots to Plainridge could mean a loss of $422 million. For the math disinclined, that makes the 38 studios fiasco seem like a drop in the cup of coffee milk.
Surveys and studies have shown that approximately 51-percent of the vehicles parked at Twin River have Massachusetts license plates. Granted, some of the patrons will show loyalty to Twin River, but on the other hand there will be plenty of folks from Rhode Island who will check out the new competition. So those numbers stand to reason.
Make no mistake about it: the new slot operators at Plainridge are world class casino management. They currently operate 23 gaming facilities in 18 different states. That means they know what they’re doing, and they’ll be doing their best to take business away from Twin River. (The silver lining in all of this is that the gaming experience will be better for the customer as Twin River will be forced to treat its customers better to retain their business.)
Beaches, Del’s, Coffee milk
It’s always interesting to hear the folks who say Rhode Island is suffering because we’re just not thinking positively enough. These pollyannas types who claim the realists are just too negative. Governor Chafee and former Governor Lincoln Almond are among the people who point fingers at folks living in a reality based world and say that we’re just a bunch of Negative Nancy’s. The rest are usually other connected people who have benefitted quite nicely from the state and local governments here in Rhode Island at the expense of the rest of us.
But when we have the highest unemployment, high energy costs, and are about to see a huge drop in our third largest source of revenue—in other words when the situation is dire—it’s irresponsible to make like an ostrich and pretend everything will be fine. (Yes, I know we have coffee milk, beaches, hot wieners, and Del’s lemonade.)
And oh, did I forge to mention that Providence doesn’t have any salt for today’s storm?
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