The latest example of Rhode Island legislators’ not understanding the problems of the state comes via Senator Ryan Pearson (D, Cumberland, Lincoln) and his legislation to allocate a percentage point of the sales tax to school construction:

“No state has figured out how to do this,” Pearson said, referring to the financing of school construction. The Rhode Island plan is similar to one developed by Massachusetts, which dedicates 1 percent of the state’s sales tax to help pay for school facility improvements.   In fiscal 2016, this proposal would generate $81.4 million, according to Pearson. The annual increases would add an additional $5.7 million.

Another variable that Pearson doesn’t take into account, which I’ve noted recently, is enrollment.  By the Dept. of Education’s own report, Rhode Island schools already have 19% too much space, with projections for a continuing drop in enrollment.  How many millions of dollars are we going to spend maintaining schools that face inevitable consolidation?  How many more millions of dollars in economic activity are we going to forego in order to keep our sales tax rate so high?

If our state legislators really want to help cities, towns, and school districts, they should do two things.  The first is to start easing the burden that they place on the people of Rhode Island in taxes and regulations and let the economy grow, improving local tax revenue.  For example, Pearson’s plan would add $81.4 million at first, increasing to somewhere around $143 million over a decade, but the RI Center for Freedom & Prosperity’s dynamic projections for eliminating the sales tax showed around a $149 million increase in local tax revenue with an elimination of the sales tax ($109 million if it were reduced to 3%).

The second is to alleviate the burdens that state law places on schools and on the municipalities that house them.  A huge majority of local budgets goes to labor costs that are exacerbated by laws designed to push everything in the favor of the unions.  A more fair regime of labor laws would allow cities, towns, and school districts flexibility to finance infrastructure.

Anybody who pays attention knows the score, here.  Elected officials (often elected with union support) set up regular budget processes as a battle between labor and taxpayer, with the labor side parading children and the elderly as the victims of fiscal restraint, and let capital needs fester until they reach a point of such expense that there’s no choice but to borrow the money, which simply notches the labor-taxpayer battle up to a higher and higher level of expense, each year.  That can’t go on, no matter how many gimmicks elected officials pass into law.