Ward 7 Councilman Stephen McAllister visited the Warwick Rotary Club during their weekly meeting Thursday, but not primarily as a representative of the City Council. Instead, McAllister provided an insider’s perspective on commerce issues at the national level, as he is an Eastern regional representative for the U.S. Chamber of Commerce.
McAllister has recently took trips to the Chamber’s D.C. headquarters to partake in discussions about commerce issues that affect Rhode Island, and presented an overview of five key areas to the Rotary – tax reform; immigration; trade; energy; and infrastructure.
“There is a lot going on in Washington even though there is not a lot going on in Washington,” McAllister joked.
Starting with tax reform, McAllister said that the overhaul of tax policy, which was signed into law by President Donald Trump in January, has created a windfall of opportunities from a business perspective; specifically due to the lowering of the corporate tax rate to 21 percent, which he said will continue to provide cost savings opportunities for small businesses to expand.
“I think we’re going to see a lot more where, two or three years down the line, these companies have been getting these breaks and all of the sudden they can reinvest,” he said. “Maybe now they can put an addition on and hire two new people full time because of the tax breaks. Little things like that we really think is going to bubble up and see that over the years.”
McAllister said that some Rhode Island companies have already begun sharing their savings through employee bonuses, listing Citizens Bank, CVS, National Grid and Washington Trust as examples.
“We’re hoping to see more of that as time goes on,” he said.
At the same time, McAllister admitted the reforms are still in their “infancy,” and that people should be collaborating with CPAs and tax professionals often throughout the coming years.
“They still have to make these rules,” he said. “It’s going to take a while for everything to go through, so you want to be vigilant and proactive moving forward.”
The next issue was immigration, where McAllister said that fixing the Deferred Action for Childhood Arrivals (DACA) situation, in which children of illegal immigrants are currently subject to an uncertain future regarding their legal status as Americans, was essential.
“There are over 700,000 of these people categorized in the Dreamers Act that are in the workforce today,” McAllister said. “We think taking them out would be disastrous for the economy, so we need to come up with a plan that keeps them there so that they can feel settled and takes care of that.”
McAllister also said the Chamber is in favor of filing more work visas for both high-skill and low-skill jobs, which is in contrast to Trump’s proposed action to cap work visas at an even lower amount than they are currently capped. He said that certain industries important to New England states, like tourism and hospitality, are having trouble finding people in the American workforce to fill necessary positions, and so they should be enabled to look for legal immigrant workers to fill those vacancies.
McAllister also said the Chamber was in support of increasing protection along the Mexican border, but that the Chamber did not necessarily support a border wall. He said that while more protection and vigilance about who is coming over the border was essential, performing actions like Trump did in January where he froze travel from several (mostly Islamic) countries was harmful for businesses.
“We had people that worked for these companies and may have been overseas visiting their friends and families and all of the sudden they can’t get back into the country,” he said. “We need a plan so that we know, moving forward there will be consistency. You need consistency.”
McAllister promoted the importance of supporting healthy trade with foreign countries, as he reported that there are 1,800 Rhode Island companies (1,600 of which are described as small or mid-sized businesses) that export goods outside the border, primarily to Canada and Mexico. He said that trade supports a total of 136,000 jobs in the state.
As such, McAllister said the U.S. Chamber is a staunch supporter of NAFTA, The North American Free Trade Agreement, which Trump has threatened to withdraw from if unspecified provisions of his administration are not taken into consideration.
“We understand it needs to be upgraded, we understand it needs to be modernized. When they drafted it, there was no internet, so that shows how long it has been,” McAllister said. “But we are not for ending it at all.”
McAllister said that Rhode Island suffers from an “energy crisis,” as the state ranks at or near the bottom in several categories, according to a new study released from the Chamber. These include being dead last in total energy production, second to last in renewable energy production and having the fourth-highest retail costs for electricity in the country.
For perspective, McAllister reported how the average price for energy (in cents per kilowatt hour) nationally is 10.54, but in Rhode Island it costs 16.44 – only Connecticut, Hawaii and Alaska are higher.
One of the reasons for the high costs is because Rhode Island relies on 98 percent of its energy coming from natural gas, of which can only be accessed through shipments from Connecticut. There is no direct pipeline to Rhode Island for natural gas. McAllister said that the Chamber supports a blend of all types of energy to help reduce these costly burdens.
“We want all energy,” he said. “We want all clean energy. We’re not looking for winners and losers. It has to be part natural gas, it has to be part wind, it has to be part solar. Let’s bring it all together.”
Last but certainly not least, McAllister said that the Chamber was most concerned about the state of infrastructure in the country.
“I don’t have to tell you that our roads and bridges need it desperately,” he said.
McAllister said that, despite infrastructure projects being among the most popular and unanimously supported projects in a historically divided D.C., the current administration has done little besides present a vague “trillion-dollar plan” to address the nation’s dilapidating infrastructure. Taking the lead, he said, is the Chamber, who are proposing a more comprehensive plan to address not just roads and bridges, but ports, airports, sewers, rails and other utilities as well.
They even have a plan to pay for it – however unpopular it might be – by increasing the gas tax five cents over five years, for a total of a 25-cent raise. McAllister said the Chamber’s research indicated this would raise $394 billion towards funding infrastructure projects nationwide.
“No one wants to increase a tax, but the money needs to come from somewhere,” he said. “We’re not married to five cents or 25 cents, it could be a combination of that; whatever it takes to get something done. But the time is now – we need infrastructure.”
The final piece of the infrastructure puzzle goes back to immigration, as McAllister said the Chamber has concluded that there simply is not the workforce in the United States to supply the true needs of infrastructure repair. Legal immigrants should be sought to perform some of this work, he said.
“The U.S. Chamber headquarters is right across the street from the White House,” he said. “We have two big banners that say ‘America was built by dreamers.’ So, that shows how important this is that we need the workers here. We do not have the workforce here at this time so we need to look outside the United States.”