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Chafee runs in R.I. as budget hawk

Providence - Former Republican Sen. Lincoln Chafee embraces the image of a bean counter as he runs as an independent candidate for Rhode Island governor. To solve chronic state budget deficits, his first campaign proposal is imposing a tax on groceries, medicine and other items - a move that might not be popular in a state with 12.9 percent unemployment.

"We've got to make the columns match," Chafee said in an interview with The Associated Press. "And I'm not a smoke-and-mirrors guy."

Chafee left the Republican Party in 2007 after losing his Senate seat to Democrat Sheldon Whitehouse, but he had for years clashed with most of his GOP colleagues over issues, including his support of abortion rights and opposition to the Iraq war. The other declared candidates are Attorney General Patrick Lynch, a Democrat, and little-known Republican John Robitaille, a staffer for Gov. Don Carcieri. General Treasurer Frank Caprio, a Democrat, also is raising money for a run.

Still, Chafee, 56, calls himself a fiscal conservative and continually cites his financial experience while running for governor in a state where unemployment hit 10 percent a year ago and hasn't dropped back to the single digits since.

Asked how to create jobs in a state with soaring unemployment, Chafee said he would start by balancing the budget.

He defends his proposal to impose a 1 percent sales tax on groceries, drugs and other items exempt from the state's 7 percent sales tax as a way of closing big state budget deficits. Democrats and Republicans have criticized the proposal, saying it will hurt struggling families and shows Chafee is a millionaire indifferent to working families.

Chafee, who comes from one of Rhode Island's founding families, and whose father was a governor and senator, denies he's out-of-touch. The Brown University graduate points out that he once made a living as a blacksmith shoeing horses and working at an Electric Boat plant at Quonset Point in North Kingstown.

Chafee also served as mayor of Warwick before being appointed in 1999 to fill his father's seat when he died in office.

He draws on that experience frequently when discussing what's wrong with the state budget, saying the state is shoving too many of its money problems onto local governments that are likely to raise property taxes when they are suddenly faced with big cuts in state aid.

"This is a real problem," Chafee said. "And the only proposal right now is slash the state aid. And that's not to me a legitimate filling of the deficit. It's dishonest."

He said Gov. Don Carcieri, a conservative Republican, has been too focused on social issues, such as his opposition to gay rights legislation and going after illegal immigrants, and not focused enough on jobs and the economy.

"He made the mistakes of getting diverted onto the social issues while the Rhode Island economy was coming off the tracks," Chafee said.

Chafee said he's also open to consolidating local government to save money, although he warns that won't be near enough to fix the state's budget problems.

Once the economy improves, Chafee said he would support eliminating the 1 percent sales tax and lowering taxes on personal income and corporate profits. He said he also would consider repealing a flat tax for top earners.

His proposals for creating jobs are less concrete, and borrow heavily from plans already under way.

For example, he hopes to turn Quonset Point into a manufacturing hub for green energy companies. Carcieri's administration already has selected Deepwater Wind LLC to build a massive wind farm miles off the coast. As part of the deal, Deepwater Wind agreed to create a regional headquarters and manufacturing facility at the port.

Chafee thinks companies can be recruited to Rhode Island by advertising a new rail connection at T.F. Green Airport in Warwick. Like other leaders, he thinks relocating Interstate 195 in Providence could open up new land to attract biotechnology firms in a corridor between Brown University's medical school and the city's hospitals.

Chafee said he finds it "hard to believe" that Rhode Island lacks a highly skilled talent pool for its defense and emerging biotechnology sectors, as some business leaders have complained, because of institutions such as Brown University, the University of Rhode Island, and others. He said he would not make cuts to the state's three public institutions of higher education, which have seen their state funding drop from $182 million to $147 million over four years. But he said he couldn't put more money in to the schools until the overall state budget is balanced.

Like much of his platform, Chafee's position on casino gambling is driven by the budget. He calls gambling an addictive behavior but would back turning slot parlors in Lincoln and Newport into full-fledged casinos if Massachusetts opens casinos that draw business from Rhode Island.

"Just have to be practical and pragmatic," he said.

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