HEADLINES

Press Conference & Request By Concerned Citizen, Bill Murphy, to Testify about Unfairness of Pension Settlement

[The following was received via e-mail this afternoon.]

Concerned Citizen Seeks to Testify about Unfairness of Pension Settlement to Taxpayers at Court Hearing Tuesday, Schedules Press Conference to Explain Request to the Public

Concerned citizen Dr. William J. Murphy will hold a press conference in front of the Frank Licht Judicial Complex at 250 Benefit Street in Providence at 4:30 PM on Tuesday, May 26, 2015 to explain to the public the reasons for his request to testify about the unfairness of the pension settlement to taxpayers at the ongoing fairness hearings in Superior Court. Dr. Murphy will deliver a statement emphasizing that the terms of the settlement itself as well as the impropriety of the court-supervised secret negotiation process that produced it have significantly harmed the financial welfare of taxpayers, violated the political rights of citizens, and severely damaged the public interest.

(EAST PROVIDENCE, RI – May 25, 2015) – Dr. William J. Murphy, a concerned resident of East Providence, has petitioned the Rhode Island Superior Court to testify at the ongoing pension settlement fairness hearing Tuesday. He held a press conference at Superior Court in Providence on Tuesday to issue a statement explaining the reasons for his request.

Dr. Murphy opened his remarks by saying that, “The pension settlement is grossly unfair to good citizens of Rhode Island because it adds over $290 million to the unfunded pension debt that the state’s already overburdened taxpayers cannot afford. Even more troubling, the terms of the settlement itself as well as everything about the nature of the process itself fail to demonstrate appropriate sensitivity to the economic hardships this increased tax burden would impose on elderly citizens living on fixed incomes as well as low-income younger taxpayers and their families who remain deprived of adequate economic opportunities in part because of the unaffordable state pension system, the high rates of taxation imposed to feed it, and the resulting negative consequences for the Ocean State’s economic competitiveness.

More Losses for Taxpayers, Student Loan Edition

As college graduates move on to wherever they’re going, it’s worth remembering this finding from February:

In obscure data tables buried deep in its 2016 budget proposal, the Obama administration revealed this week that its student loan program had a $21.8 billion shortfall last year, apparently the largest ever recorded for any government credit program. …

The 40 million Americans with student loans are now saddled with more than $1.2 trillion in outstanding debt. And with higher education costs rising much faster than inflation, the already massive program has been growing at a spectacular clip; direct government loans alone increased 44 percent over the last two years despite an aura of austerity in Washington. The Obama administration has tried to ease the burden for some borrowers by reducing their payments to 10 percent of their income and forgiving their loans after 20 years; this year, the Education Department plans to make all borrowers eligible for that “pay-as-you-earn” relief.

Even better, thanks to what the writer, Michael Grunwald, calls “a quirk in the budget process for credit programs,” that money just goes straight to national debt, without Congressional input.

Sadly, as all of these new sticks fall on taxpayers’ backs, few Americans — including or maybe especially the better educated among them — will understand where the massive burden came from.

The GM Bailout and the Pawsox

The other day, somebody speaking favorably of moving the PawSox to Providence with a taxpayer “investment” cited the bailout of GM as an example of how taxpayers can actually get their money back from such activities.  As it happens, I was just clearing out some old bookmarks and came across this, from Conn Carroll on Townhall:

In his 2014 end of the year press conference, President Obama claimed that, “effectively today, our rescue of the auto industry is officially over. We’ve now repaid taxpayers every dime and more of what my administration committed.” (emphasis added)

And it is true: if you look at only the new money the Obama administration spent bailing out General Motors, Chrysler, and Ally Financial, taxpayers did get back “every dime” of that cash.

But that completely ignores the $17.4 billion President Bush promised General Motors and Chrysler in December 2008.

If you take the entire Troubled Asset Relief Program bailout into account, taxpayers spent a total of $79.7 billion on the auto bailout, received only $63.1 billion back, for a total loss of $16.6 billion.

It’d be nice if we all could start learning our lessons on this stuff.

Credit for Healthcare Initiatives

When you read the following, from today’s Providence Journal, who do you think ought to get credit for the innovation?

So with Governor Raimondo pushing her cost-cutting Reinventing Medicaid initiative, Neighborhood Health Plan of Rhode Island is eagerly touting what it says is the early success of a program begun just five months ago to address Medicaid subscribers with frequent and hefty medical bills.

Astute readers might pick up on the fact that the program began five months ago, which would mean the governor would have been implausibly dynamic to get it rolling, if it was possible at all.  Still, you should be forgiven if you finished the paragraph with the impression that Reinventing Medicaid is to credit.  How about this one?

Most states have not [advanced data and analytics to target high-cost insurance members], because of the intense partisanship over “Obamacare” and in some cases because of technical problems.

Instead, they rely on the federal HealthCare.gov website. Rhode Island, however, has its own health-care exchange, HealthSource RI.

So, maybe it’s HealthSource to credit, then.  But wait a moment:

The program has been in development for two years and is similar to other projects under way in the state, Trilla said. Given Reinventing Medicaid’s goals of targeting so-called “high utilizers,” he said that Health@Home has “ended up dovetailing nicely” with the governor’s efforts.

Two years ago would be May 2013, at which point HealthSource was still in development (based on wildly inflated projections).  That suggests this innovation was not driven by Governor Raimondo, and it was not driven by ObamaCare or HealthSource RI.  Rather, one can infer that it was driven by a private organization’s assessment of how it might better use its resources.

Maybe we can find our way to giving government some credit if Neighborhood’s innovation was inspired by the much-maligned Global Waiver program (to which Raimondo’s Reinventing Medicaid initiative bears some striking resemblance), but then the credit would have to go to Republican President Bush and Republican Governor Carcieri.  ObamaCare and Democrats actually hindered savings from that effort.

Coming up in Committee: Twenty-One Sets of Bills Being Heard by the RI General Assembly, Today, May 26


1. H6174 “The division of motor vehicles is authorized to issue driving privilege licenses and driving privilege permits to any applicant who meets the licensure requirements of this chapter but is unable to establish legal presence in the United States”. The bill then lists an extensive set of documents, two of which must be provided to establish eligibility for a “driving privilege license”. (H Judiciary; Tue, May 26)  Issue 1: If “undocumented immigrants” are expected to have documents before they get their driving privilege license, then add said license as an additional document to the documents they already have, does it seem honest at any time to refer to a status of “undocumented”?  Issue 2: The archaic, one-off legal concept that being able to drive is a privilege and not a right — indeed, that there is any broad class of human activities that fall into a category of government-granted “privileges” — should be should be resisted and ultimately rejected whenever it appears.

2. H5387: Government takeover of healthcare, creating a state-run insurance plan, and prohibiting providers who accept the state insurance from billing “any patient for any covered benefit” while also subjecting the providers to comprehensive price controls. (H Finance; Tue, May 26)

3A. H5104: Requires that a photo ID be presented when a person between the ages of 18 and 60 who is not blind, disabled or a victim of domestic violence uses an EBT card. (H Finance; Tue, May 26)

3B. H5347: Requires school-aged children of families receiving welfare benefits through the Rhode Island Works program to have an 80% attendance rate at school. (H Finance; Tue, May 26)

4. S0610: Allows a municipal economic development zone (where qualifying businesses are “exempt from the requirement to charge and collect fifty percent (50%) of the current sales and use tax…for a period of ten years”) to be established “in a municipally designated and state-approved ‘growth center’ in accordance with the Land-Use 2025 element of the state guide plan”. (S Finance; Tue, May 26)

5. S0348: Prohibits condominium associations from making up rules that “shall prohibit any reasonable accommodation for religious practices, including the attachment of religiously mandated objects to the front door of a condominium unit”. (S Judiciary; Tue, May 26) Recent events in Cranston, where the school committee took it upon itself to decree that people aren’t required to go to church during school hours on Good Friday, raise a question about this bill: Is the reference to “religiously mandated objects” something narrower than “religious objects”, i.e. does this bill put condominium associations in the position of being able to decide that yes that’s a religious object on your door, but you still have to take it down because we don’t think your religion requires you to put it there.

Rhode Islanders Killed Serving in Afghanistan and Iraq


The Silver Lining on Rhode Island’s Foam

I have to break into my Friday evening pre-reveling (“reveling” being something I’ve recently discovered to be illegal in Tiverton, if it disturbs somebody else) to note that this is one list on which I’m happy to find Rhode Island in the bottom 10 of states:

Tax treatment of beer varies widely across the U.S., ranging from a low of $0.02 per gallon in Wyoming to a high of $1.29 per gallon in Tennessee. Check out today’s map below to see where your state lies on the beer tax spectrum.

Although, the half-drunk libertarian in me (whom I’ve suspected to be half drunk even when I’m completely sober) can’t help but bristle at this:

The Beer Institute points out that “taxes are the single most expensive ingredient in beer, costing more than labor and raw materials combined.” They cite an economic analysis that found “if all the taxes levied on the production, distribution, and retailing of beer are added up, they amount to more than 40% of the retail price.”

I’ll put that on my list of injustices to battle, but noting that the list is long, so anybody inclined to rush forward is encouraged to do so.

Property Tax Reform Lessons from Small Town Rhode Island

At a public hearing to discuss the two budget options that would be on the ballot for local voters in the smallish town of Tiverton, Rhode Island, the town administrator shook his fist at me.  “Every single account you cut needs to have the money in it,” hesaid.

I’d submitted an “elector petition” budget for the town government that would hold the total tax levy at a 0.9 percent increase, versus the 2.9 percent increase proposed by the government.  The 0.9 percent budget, which voters ultimately chose with a 60:40 margin, meant a drop of the highest tax rate in the area, across two states, and savings for property owners of $39 per $100,000 of value on their home (about $100 on average).  The previous year, my proposed 0.0 percent budget had won a smaller amount of savings.

In recent years, Tiverton has led the two nearest Rhode Island counties in foreclosures.  The town’s total tax burden had doubled in about a decade.  In that context, what struck me about administrator Matthew Wojcik’s speech — apart from the Republican’s Obamaesque threat to “get in [my] face”–was the insistence that local government could not possibly make cuts, paired with the assumption that residents of the town always can.

Property taxes are a problem in Rhode Island.  According to the Competitiveness Report Card put out by the RI Center for Freedom & Prosperity, based on data from the Tax Foundation, Rhode Island has the seventh-worst property tax burden in the country.  In 2006, the state’s General Assembly passed a law phasing down a cap on each city and town’s property tax revenue increase, to 4 percent by 2013.

Continue to read on WatchDog.org.

Political Outrage Rather than Community Interaction

Long-time readers may recall the time a local political activist managed to stoke up a phony scandal over some tweets of mine, when I was running for school committee in Tiverton.  Well, the same group has struck again.

A supporter of my petitioner’s budget, who is also a town council member, set up a display outside the town’s polls at the high school, Saturday morning, consisting of a replica military motorcycle with various accessories.  Leaning against it was a drill-dummy rifle with a helmet over its pretend muzzle.  Most people passing paid no attention to the display, and those who did were admiring.

Late in the day, somebody called the police, and at their request, the owner put the fake gun away.  Now the same group of political activists who went after me have cranked up the outrage machine with the help of the local news media.

I go into detail on Tiverton Fact Check, noting that similar outrage could be ginned up about the town council president smoking while campaigning for the other side.  Neither is an outrage, and neither should be leveraged to create scandal that does nothing to resolve the town’s challenges, but does much to make people feel that civic participation is not part of full involvement in the community, but rather that it’s a risky and dangerous (yet dull) duty best left to others.

Children as Political Hostages in an Empty Room in Cumberland

Marcia Green’s Valley Breeze article on the Cumberland School Department’s threatened cuts if its budget isn’t increased by more than the mayor has proposed caught my attention when Monique tweeted it thus: “Cumberland School Committee issues list of (budget) hostages; threatens to start shooting.”

This sort of thing takes place all over the state — probably the country — and it’s a good example of why it’s dangerous to attempt to do things through government.  Everything’s a battle.

For contrast, try to imagine a similar situation for a private school.  It’s actually not that difficult, with so many smaller schools that serve working-class populations closing.  They don’t berate the parents with threatened cuts.  Instead, they very often try to increase programming, asking faculty and staff to pitch in to move a plan forward, and then asking parents to volunteer in order to minimize tuition increases and ensure the best educational experience for the students.

If faculty, staff, and parents don’t step up, it’s on them.  Note this, for example, from Green’s article:

Monday’s subcommittee meeting drew a half-dozen parents, including Laura Sheehan and Linda Haviland, who were not only speaking against the proposed cuts, but beginning to prepare for Town Council hearings.

Cumberland has nearly 5,000 students, and about six parents showed up at a meeting discussing supposedly dire cuts in programming.

Perhaps one of those parents should research the budget of Cumberland’s schools.  As it happens, I’ve been doing just that, looking into comments made by Sen. Ryan Pearson (D, Cumberland, Lincoln) about the cost of charter schools during the hearing the other day on the Bright Today legislation.

In the five years ending with the current one, Cumberland Schools’ revenue and expenditure increases have averaged a little more than 4%.  Meanwhile, its October enrollment has dropped an average of 2% per year over those five years.  That has led to average per-student expenditure growth of 6.21% — or 5.34% if we take out the tuition paid to charter schools.  Inflation, by contrast, has averaged around 1.7% per year.

Discussions about schools should be sensitive.  Maybe one of the reasons parents and other members of the community are checking out is that they aren’t being offered decisions; they’re being whipped into inexplicable frenzy.  The first approach is empowering; the second is enervating.

The tone should not be “give us more money or else.”  It should be, “here’s where we are, here’s why these are the best steps to take, and here’s what we can do to live within the means that the people paying the bills are willing to provide.”

Of course, a calm recitation of reasonable options might lead people to choose them.  Where would that leave the folks with very healthy salaries and unparalleled benefits working for the system?

Excitement for the Wrong Direction for I-195 Land?

Rhode Island’s informderati is all atwitter (pun intended) with the news of a “life-sciences complex” proposed for the land formerly occupied by I-195:

A real-estate investment and development company that partners with universities and hospitals across the country to build research parks has submitted a joint proposal to build a multimillion-dollar facility on 5 acres of former highway land in Providence — drawing praise from Governor Raimondo, House Speaker Nicholas Mattiello, Senate President M. Teresa Paiva Weed, Providence Mayor Jorge O. Elorza and others. 

Wexford Science & Technology of Baltimore, a subsidiary of BioMed Realty Trust Inc. in San Diego, and CV Properties LLC, the Boston firm leading development of South Street Landing on Eddy Street in Providence, hope to build a life-sciences complex with lab space, academic research space, a hotel, and retail and residential space. Richard Galvin, founder of CV Properties, said it’s too early to pin down exact costs, but “it will be several hundred million dollars” to build.

The details are sparse, so far, and one question that will need to be made explicit is whether “partnership” with a bunch of non-profit organizations means tax exemption for the development once it’s done.  One can imagine a bunch of tax deals to get the thing built and then payments in lieu of taxes (PILOTs) once it’s operational.

Off the top of my head, the scorecard for that supposedly game-changing property is:

  • Student housing
  • A minor-league baseball stadium
  • A facility with no prospective clients, thus far, other than non-profit universities

These strike me as things that a state should seek when its people are thriving, not when they’re tapped out for taxes and leaving the state in despair.  But whaddayagonnado, I guess.

So far, developers that have submitted proposals are seeking tax-stabilization agreements with the city because Providence’s commercial property taxes are far higher than in other communities. Yet the city has not granted any such tax treaties yet.

It all comes back to an institutional mandate to maintain the power of government insiders.  Unless that changes, Rhode Island’s done.

James Cournoyer: Please Allow Municipalities to Have the Flexibility of a Three Platoon Firefighting System

[James Cournoyer sent the following e-mail to members of the General Assembly. It is published here with permission. Additional background on this subject is available here.]

Dear members of the General Assembly,

Please reject House Bill H-5473 and Senate Bill S-0533, which seeks to make fire-fighter Platoon Structures / Shift Schedules subject to Collective Bargaining, and therefore potentially subject to the decisions of unelected and unaccountable arbitrators.

These bills serve only to further erode essential Management Rights and the ability of municipalities to exercise home rule.

Employees are already afforded an abundance of work-place and employment protections via the myriad of state and federal labor laws and regulations that currently exist.

RhodeMap and the Sustainable Elimination of Freedom

With the House Finance Committee scheduled to hold a hearing on several bills related to state planning and RhodeMap RI, this afternoon at the rise of the House, this article with similar themes in the Midwest caught my eye:

Here in the Twin Cities, a handful of unelected bureaucrats are gearing up to impose their vision of the ideal society on the nearly three million residents of the Minneapolis-St. Paul metro region. According to the urban planners on the city’s Metropolitan Council, far too many people live in single family homes, have neighbors with similar incomes and skin color, and contribute to climate change by driving to work. They intend to change all that with a 30-year master plan called “Thrive MSP 2040.” . . .

Thrive MSP 2040 is part of a nationwide movement called “regionalism.” Regional planning of infrastructure is important, of course. But regionalism, as an ideology, is about shifting power away from local elected officials and re-engineering society on behalf of “equity” and “sustainability.” According to regionalist guru David Rusk, author of the book “Cities Without Suburbs,” federal programs that promote regionalism should strive to produce “racially and economically integrated and environmentally sustainable regions.”

This is a well-planned assault on American freedoms concocted by a global elite and in the ivory towers of the U.S. that has been facilitated and substantially funded — in planning and implementation — with taxpayer dollars by the Obama Administration.  Of all the damaging initiatives that have been undertaken in the process of “fundamentally transforming” the United States of America, as Obama pledged to do, this one may be a sleeper that creeps up on Americans, but it may also be the one that locks the chains around our ankles.

Why Not Set the People Free?

J.D. Tuccille highlights some murmurs in Europe that remind one of the Rhode Island attitude:

The shadow economy—off-the-books business and labor that would be perfectly legal if people felt like subjecting themselves to taxes and regulations—ebbs and flows with the years. Right now, it’s down a bit in many countries from the days of the recession, but shadow economic activity is still huge. Across the European Union, it’s estimated to amount to 18.4 percent of GDP. Why people work off the books is no secret—high taxes and burdensome regulations are constantly cited by economists as primary drivers for people to hide what they’re doing. So, current policies are like kryptonite to people who want to keep the fruits of their labor. Got it. The obvious solution then is to…harangue and coerce people back into the official economy?

Even though regulations are pushing people out of the taxed-and-regulated economy, leaving them with effectively no taxes or regulations, government officials aren’t simply going to reevaluate their approach.  In their view, it isn’t government’s job to accommodate the people.  The diktat has been issued, and the people must be made to comply.

Even if it means banning cash so every transaction can be traced.

At least in Rhode Island, government officials make periodic noises about easing regulations.  Still, the plan appears to be to try every power-centralizing solution they can imagine for a hundred years before simply doing the obvious and leaving people alone.

(Via Instapundit.)

Late Additions to the Week’s General Assembly Committee Calendars


A number of major bills in the policy areas of education, state “planning”, and illegal immigration were added to this week’s General Assembly committee calendars at the start of the week…

S0607: From the official description: “This act would provide parents of K-12 students in Rhode Island with an opportunity to enroll their child in an educational program of their choosing, either via open enrollment in a traditional public school in their own district or any other public school district, or by receiving a scholarship, with designated public monies to follow the student to a participating private school or private curriculum program selected by the parent”. Scholarships can be up to $6000 and are income adjusted. (S Education; Wed, May 20)

H5644/H6041/H6042: Allows cities and towns to decline to “comply with any provision” related to local planning laws or with “the state guide plan relating to affordable housing programs” by filing a notice with the chief state planner. (H Finance; Thu, May 21)

Other bills on state “planning” below the fold

S0391: “The division of motor vehicles is authorized to issue driving privilege licenses and driving privilege permits to any applicant who meets the licensure requirements of this chapter but is unable to establish legal presence in the United States”. The bill then lists an extensive set of documents, two of which must be provided to establish eligibility for a “driving privilege license”. (S Judiciary; Thu, May 21)

Other bills on illegal immigration below the fold

The IRS, Media, Democrat Nexus

Eliana Johnson phrases her recent National Review Online article as if it nudges the controversy over the IRS’s Tea Party targeting in another direction, but I think it fills out the picture in exactly the way that most Tea Party types would expect.  Consider:

The targeting of tea-party groups traces back to February of 2010 when a low-level employee in the IRS’s Cincinnati office flagged a single file for his superior. In an e-mail written on February 25, 2010, Jack Koester, a revenue agent, told his boss, John Shafer, that “recent media attention” made the application at hand a “high-profile” case. In doing so, he was following the Internal Revenue Manual’s directive to agency personnel to elevate to senior managers cases that fall into several categories, including those “that are newsworthy, or that have the potential to become newsworthy.”

In a comprehensive analysis, Step #1 wasn’t the low-level employee’s flagging of the application.  Rather, it was the news media’s handling the Tea Party movement as a suspicious, controversial development.

Next, the flagged file worked its way up the ladder until it got to the political operatives at the top of the IRS.  In D.C., the issue took another step:

Once in Washington, the applications landed with a group of attorneys known in the IRS as tax-law specialists. The Internal Revenue Manual directs tax-law specialists to create what is known as a “sensitive-case report” if, among other possible criteria, the application “is likely to attract media or Congressional attention.”

Such judgement is subjective, of course, but one suspects that any individual Tea Party group’s application would have fallen well short of national media or Congressional attention.  Attention to a movement is quite different than, say, attention that might be paid to a specific charity created by a political family that has the potential to be used for laundering political donations.

That’s when the politics came into it:

Disgraced IRS official Lois Lerner didn’t become involved with the tea-party cases until May 13, 2010, when she received the sensitive-case report created by tax-law specialists in Washington. Then, in early 2011, Lerner ordered that the cases go through a “multi-tiered review” process, called the tea-party cases “very dangerous,” and reiterated, “Cincy should probably NOT have these cases.”

It may not be the case that the Obama Administration had the idea, one day, to disrupt the development of the Tea Party movement with the IRS.  But when a biased news media had made backlash against President Obama’s policies a matter of national controversy, and when a Democrat-heavy bureaucracy had interpreted some individual manifestations of that backlash as “sensitive cases,” the idea arrived on the administration’s doorstep with ribbons and bows.

The partisan Democrats at the top of the chain (perhaps including the President) could have declined the opportunity in the name of freedom and the rule of law, but they didn’t.

When the Students’ and the Teachers’ Interests Differ

This paragraph out of a 2010 Julia Steiny column has come to mind periodically ever since, but I somehow never got around to posting about it.  It makes an important point that is too easily forgotten as the state argues over standardized testing, teacher evaluations, charter schools, school choice, and even property taxes:

When Marcia [Reback, President of the RI Federation of Teachers] had had enough, she outted the elephant in the room. The interests of the teachers and kids are not the same, but were sometimes in direct conflict with one another. And when their interests diverge, she said, “I represent the teachers.” And shrugged. Who could argue with that?

Think about that.  Here we have a wealthy and powerful union organization, funded with money forcibly taken from taxpayers and frequently used to help elect politicians and modify laws in order to tilt negotiations and the entire educational landscape in its favor, whose mission is, at least in part, to advocate in opposition to the needs of school children.

Reback’s statement has come to mind for two reasons, this week.  The first is that the school choice legislation on which I’ve been working is being heard by the RI Senate Education Committee, today.  The second is that the 0.9% budget that I put in for Tiverton won, and the local school department has been threatening not to go forward with all-day kindergarten in the upcoming school year if it didn’t get its full budget request (even though doing so is a no-brainer).

In both cases, we’ll get some indication whose interests elected officials put first.

That’s a critical question at the local level.  Sure, most cities and towns probably have it written down, somewhere, that school committees are supposed to put the children first, but the incentives undermine that mandate.  Many school committees are stacked with teachers, whether retired or active in other communities, and many others were elected with the help of teachers unions and their activist allies.  Even if they weren’t, the nature of their position creates incentive to balance the demands of the teachers with the needs of the students and their families, not to advocate for the latter.

It’s an imbalanced system that can’t do otherwise than harm children.

 

First Hearing for Bright Today, Tomorrow

The legislation on which the RI Center for Freedom & Prosperity has been working that would implement the education savings account (ESA) variety of school choice in Rhode Island is scheduled for a hearing tomorrow.  It’s the second bill on the agenda of the Senate Education Committee, scheduled for room 313 at the rise of the chamber — somewhere around 4:30 p.m., give or take.

The bill in question is S0607.  Here is information about the idea.  And here is the membership list for the committee.

Legislation to grant freedom from government monopolies on this scale are a challenge in Rhode Island under any circumstances, but the public is going to have to show growing interest in the possibility for it to have any chance.