Economists, business owners and academics congregated Tuesday to discuss Rhode Island's severe fiscal woes in an economic forum hosted by the state's House of Representatives.
The focus of the event was on galvanizing the "knowledge" economy and "green" economy in the state, which face a large budget deficit and an unemployment rate that reached 12.9 percent in October.
Participants — who ranged from an official of the U.S. Treasury Department to owners of local businesses — also examined measures taken on a national level and by other states in the hopes of reviving Rhode Island, which has been hit hard by the recession.
"The members (of the House) wanted to have a brainstorming session" before the General Assembly convenes in January for the 2010 session, said Larry Berman, director of House communications.
"You're not going to turn around a state's economy in a one day session," he added, but the discussion will help form a "plan of action" for the following year.
There were few specifics decided Tuesday, which was a day for "listening and learning," Berman said.
While the national economy appears to be gradually improving, benefits will take longer to trickle down to the state level, Berman added.
"Despite the improvements, challenges and risk remain," Aaron Klein, deputy assistant for economic policy at the treasury department, told lawmakers assembled at the State House. The state budget deficit has ballooned to over $200 million and unemployment has not subsided.
In addition, a key culprit of the recession — the bursting of the housing market bubble — continues to harm the state, said Robert Tannenwald, vice president of the Federal Reserve Bank of Boston and director of the New England Public Policy Center.
To counter the effects of the bust, "we need more aggressive intervention on the household level," Tannenwald said.
Assembling a variety of experts for a forum can be beneficial during a crisis, as novel solutions can emerge, Professor of Economics Peter Howitt wrote in an e-mail to The Herald. Howitt also spoke at the forum.
"I was impressed by the seriousness with which the legislators were trying to come to grips with their problems and their openness to new ideas," he added.
But the major problem remains — the state is facing "shortfall of revenues at a time when rising unemployment and a wave of foreclosures are creating big demands on the state's fiscal resources," Howitt wrote.
The General Assembly will address the state's lingering economic struggles when it convenes Jan. 5 to launch its 2010 session.