The budget that appears poised for passage through the General Assembly and Governor Raimondo’s office fills me more with dread than hope. In recent years, state budgets have moved us incrementally in a worse direction. The combined effort of Raimondo and House Speaker Nicholas Mattiello seems almost like a reordering of things in the favor of special interests, with substantial risks for the future, like a wrecking ball held high somewhere in the dark.
Consider the programs that directly offload risk from private development companies and create union jobs. A sample from Patrick Anderson’s Providence Journal article:
The other large tax break Raimondo proposes is a “tax-increment financing” program that would allow new state tax revenue created by big development projects to be funneled back into paying for the project or infrastructure surrounding the project.
Most commonly attached to local property taxes, a state TIF could involve a range of state revenue, including income tax, sales tax and hotel tax. For example, a developer proposing a neuroscience building that includes a hotel and shops could pay off a bond using a portion of the new state taxes it generates.
What a contorted concept. When does a developer get his or her hands on tax revenue to pay off his or her own debt? Never. These would be non-voter-authorized bonds taken out with future tax revenue as security. Whether tax revenue actually goes up or not, the money must be paid.
Maybe most frustrating, though, is that the call of the obvious is finally starting to permeate the discussion, but our supposedly fiscally responsible leaders are refusing to hear it. Here’s a line about the Superman Building’s limbo:
… if demand for downtown Providence real estate were stronger and companies were clamoring for Financial District offices, someone, if not the current owner, would come to the rescue.
And here’s a word from an economist:
“Providence seems to have a surplus of empty buildings already, so providing incentives for more is not going to make this better,” said Brown University economics professor Matthew Turner. “If they are vacant because it takes hundreds of thousands of dollars in legal fees and two years at City Council to get approved, then the government should be simplifying the permitting process. If the answer is that no one wants to occupy them, you will end up with more empty buildings.”
The fatal problem that appears destined to destroy Rhode Island and undermine the United States is that simply making things better and easier for everybody does not create enough opportunity for political favors and self-dealing.