Why you should care
Because she’s trying to make the littlest treasure in the U.S. a better place to live.
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OZY first profiled Gina Raimondo on our very first day, when she was still state treasurer and hadn’t even announced her gubernatorial campaign. She did announce, won a three-way slog of a race with 40 percent of the vote and became Rhode Island’s first female governor on Jan. 6.
Since then, Gov. Raimondo had her first budget approved almost unanimously by the Rhode Island General Assembly this summer, and pushed for a state-sponsored college tuition plan. She’s also tried to create incentives for young Rhode Island natives to stay in the state they grew up in. (That’s a migration she is familiar with, having spent over a decade out of the state before returning to start the Rhode Island’s first private venture capital firm.) The biggest struggle so far? Adapting Rhode Island’s somewhat stodgy systems to data-based decision-making. Raimondo told OZY this week that she knows the state of 1 million has “a tall hill to climb, and together we’re going to climb it.” She added, “I don’t want Rhode Island to be like Blockbuster. Blockbuster didn’t change.”
America’s smallest state has long been known as one of its most corrupt. As the old joke goes, things got so bad in Rhode Island during the recession that the mob had to lay off two of its judges. Which is why when a Little Rhody politician says she has an idea for how to better manage the state’s money, the first question most locals ask is: “Will it be your cousin or your lover getting the cushy new post in the statehouse?”
Rhode Island had no choice but to enact reforms, but according to Raimondo, “The way we approached it was a choice.”
That’s just the way things get done in the Ocean State, or should we say used to get done before Gina Raimondo came on board as General Treasurer. The prodigal daughter, Rhode Island Rhodes scholar and Harvard College and Yale Law graduate is also a former venture capitalist and a mother of two. (Yeah, she leans in.)
Raimondo, 42, had never run for political office before seeking the state treasurer’s post in 2010. And her message for voters was even more off-putting than nepotism: Rhode Island is going broke, and reforming state pensions, she declared, is the only way to save it. For Raimondo, who like President Obama believes that a government that works can be a force for good, pension reform is simply “the right thing to do,” and once people realize that they are “all in it together,” then “the politics will work itself out.”
And sure enough the politics worked out for Raimondo. The Italian-American Democrat and Smithfield, R.I., native won by a landslide. Once in office, she continued to barnstorm the state to rally support for revamping Rhode Island’s pension system, which threatened to swallow 20 cents of every state dollar as a result of having more public-sector retirees than workers.
Rhode Island had no choice but to enact reforms, but according to Raimondo, “The way we approached it was a choice. We could have put a Band-Aid there … but instead we chose to step back and do it right … [and] find a lasting solution.”
Massive protests from unions and public-sector workers ensued. Yet Raimondo managed to persuade voters and ultimately the Democrat-controlled state legislature to enact a series of reforms: delaying retirement until 67, suspending cost-of-living increases and providing workers with 401(k)-esque retirement plan. Collectively this should save the state upwards of $3 billion.
Raimondo has also launched the state’s first investor relations portal to make the state’s bond funding and other financial information more transparent, as well as the Rhode Island Financial Coach Corps, a public-private partnership that matches volunteers with financial know-how with people who need help managing their finances.
For Raimondo, who focused on labor economics as an undergraduate and whose doctoral thesis at Oxford was on the determinants of single motherhood, it’s always been more about analysis and results than politics.
“Never underestimate the power of good analytical thinking and looking at the math,” she says. “So much of what I’ve done as treasurer has been cutting through the emotion … cutting through the game of politics to focus on the substance and to remember that at the end of public policy, and the end of politics, it’s all about helping somebody.”
Raimondo’s straight-shooting politics are receiving national attention as a model for Democrats.
But it’s Raimondo’s straight-shooting politics, not her math skills, that are receiving national attention as a model for Democrats grappling with unpopular entitlement reforms. Raimondo emerged from the pension battle with a whopping 58 percent approval rating— 36 points better than the rating of the state’s current governor, Lincoln Chafee. This has fueled speculation that she will run for governor in next year’s race — and potentially make the shortlist of Democratic vice presidential candidates in 2016. And with the Republican-turned-Independent-turned-Democrat-turned-unpopular Chafee recently declaring that he will not seek a second term, the stage has been set for what could be an epic primary showdown between Raimondo and Providence Mayor Angel Taveras.
Although she has yet to declare her candidacy, Raimondo claims that she is “looking hard at running for governor.” With Taveras likely to enjoy the support of the state’s public-sector unions, Raimondo would have her work cut out for her. But she has already amassed over $2 million in campaign funds (to Taveras’ $700,000), including out-of-state donors like Sheryl Sandberg, New England Patriots president Jonathan Kraft and Cory Booker, Newark’s mayor and her husband’s Yale Law roommate. Mayoral heavyweights Michael Bloomberg and Rahm Emanuel also have already thrown fundraisers on her behalf.
As Howard Wolfson, a senior counsel to Bloomberg and a top strategist for Hillary Clinton in 2008, explains, “Gina is one of the most impressive public officials in America today in the mayor’s opinion … he really thinks she’s a superstar.”
Many Rhode Island Democrats, though, do not share Mayor Bloomberg’s enthusiasm for Raimondo, a social liberal who supports gay marriage and immigration reform. Her critics cite a spate of Wall Street donors, including Texas hedge fund billionaire John Arnold. Some question the former fund manager’s stewardship of state monies altogether, angered that 20 percent of Rhode Island’s $7.7 billion pension portfolio now rests in high-risk “alternative investments” with steep management fees, like hedge funds.
But Raimondo is used to controversy. Making tough fiscal decisions is just part of her job.
Not only in the state house but at home too. “My kids have little bank accounts they put their tooth fairy money in,” she recently shared with Brand RI. “They say, ‘Let’s buy ice cream!’ and I tell them: ‘You can spend it now, or save it and have more to spend later.’”
Not something you typically hear from a politician — particularly in a state where leaders have so often opted for full-on sundaes. But Raimondo has put Rhode Island on a pretty serious diet that seems to be working. And while cynics insist that spoils and corruption will always play starring roles in the state’s political theater, the fact remains that its biggest show has never been directed by a woman.
At least not yet.
Nick Fouriezos contributed updated reporting.
To delve deeper …
- Rhode Island pensions are in the black but not out of the woods, at RI Public Radio.
- Gina Raimondo speaks about the importance of public services, at YouTube.