Raimondo On Unclaimed Properties, Sales Taxes & Payday Loans

Rhode Island Treasurer Gina Raimondo addressed a joint lunch meeting of the East Greenwich and North Kingstown Rotary clubs last week, specifically to talk about the Crime Victims Compensation Program, since October is Domestic Violence Awareness Month. But Rotary members were more interested in hearing Raimondo's opinions on everything from eliminating the sales tax to state pensioners leaving Rhode Island to the black hole that is payday lending in the state.

Raimondo, a Democrat, is expected to run for governor in 2014. She said after she spoke Wednesday that she'd make an announcement about that "by the end of the year."

She has been both lauded and vilified for the state employee pension reform she got passed in 2011. 

More recently, she's been touring the state on what she calls her "Smart Money" tour, urging residents to check to see if they have any money in the state's Unclaimed Properties fund and to make them aware of the crime victim fund. 

"We have over $200 million in unclaimed property," she told the Rotarians. "That is $200 million that belongs in the pockets of Rhode Islanders, not in the Rhode Island State Treasury."

Rather than publish a list people with unclaimed properties a couple times a year, the state now is trying to raise awareness about the list on a regular basis.

"It used to be that once or twice a year they put a big list in the Providence Journal so once or twice a year we'd have this huge spike in claims. So naturally it would take us forever to work through that huge stack of claims. So we said, 'Hey, how about we smooth it out by constantly publicizing this?' It will get more people to know about it and we won't have any backlog."

During the question-and-answer period, an audience member asked about payday lending, something Raimondo and others tried to get the General Assembly to regulate last year. 

"There's no place for it in Rhode Island, a state that is struggling and a state that's trying to grow," Raimondo said. "They present it as a harmless thing. It's not harmless. They give you a loan for a few hundred dollars. You must repay it within 10 days to two weeks. If you can't repay it, they give you another loan to payback the first loan.

The interest rate they are allowed to charge is about a 260 percent annual interest rate. The average person who has one payday loan has six of them. It's designed – it can just suck people into a debt spiral."

Rhode Island is the only state in New England where payday lending is not regulated, she said, noting she would be pushing for regulations again in the coming legislative session.

Another Rotary member asked what Raimondo thought about getting rid of the sales tax as a way to boost the Rhode Island economy.

"We need to ask ourselves, what's it going to take for Rhode Island to be competitive and so we can have opportunity. That does cost money – to have public schools that are well funded and roads that are funded and job creating that works, you've got to invest," she said. "The state depends on the sales tax. I think to say, 'Eliminate the sales tax,' is fiscally irresponsible because we need that money to invest in education, job creating and infrastructure so we can have a viable future."

The questioner responded, "So you don't buy that the gain you get from additional sales would offset …"

Raimondo replied, "It would be wonderful if it was true. But I don't think there are any easy fixes right now. I think Rhode Island's in a really tough spot…. I think we're in a tough spot, because we have no growth."