We moved to the Edgewood section of Cranston almost 12 years ago, before our son was born. My husband is from New York, and I am from Toronto, but we chose to live in Rhode Island because we love it here. Our home, our friends, and our memories are all intricately linked with this quirky little state.
Despite these facts, for the past few months we have been thinking about leaving and moving across the border to Massachusetts. We are not making the decision lightly. When we bought our house, we planned to live out the rest of our lives here. But there comes a point when you have to ask yourself, Can we really afford to stay?
The economic climate in Rhode Island — and specifically Cranston — is why we are considering leaving. It’s not that we are necessarily against higher taxes; we are against higher taxes when we receive so little in the way of services. Even more important to us than our current situation is the outlook for the future. Unfunded pension commitments and budget deficits are burying Cranston, and my family only sees the situation getting worse.
Here are our facts: My husband is an ER physician, and I am a financial planner. Last year, our property taxes were $7,836 for a four-bedroom house on just under 6,000 square feet of property, less than 0.14 acres. The bill represented an increase of $711 over the previous year.
According to the Tax Foundation, the median real estate tax for Rhode Island is $3,618, meaning we pay more than twice the median level. We also pay an additional $452 in car taxes for two Subarus, one 11 years old and the other seven, and another $384 in sewer taxes. Our state income tax was $10,584 in 2010, but Rhode Island’s allowance of itemized deductions, specifically on expenses over 7.5% of adjusted gross income, lowered it to $8,178. This year, however, Rhode Island has discontinued itemized deductions, and our state income tax will jump to over $13,000, representing an increase of at least $4,822 over last year.
Our biggest expense by far is our son’s education. In grade one he was diagnosed with dyslexia and other language-based learning differences. After many months of trying to contact the special education department in the Cranston school system, we gave up and had our son tested both independently and by the City of Providence school system. Both evaluations diagnosed him with dyslexia, and had he stayed in the public school system, he would have had an individual education plan (IEP).
Dyslexics are generally very intelligent; their brains simply process information differently. Early intervention utilizing a small group of students in a concentrated program given by qualified teachers is extremely important to their development and success rate. Many famous visionaries, entrepreneurs, and artists were and are dyslexics: Charles Schwab, Jay Leno, Thomas Edison, Ansel Adams, Andy Warhol, George Patton, Nolan Ryan, John Lennon, Richard Branson, and Ted Turner, just to name a few.
When we looked into how well students with IEPs faired in our public school system five years ago, we were shocked to discover that students with IEPs as a group did not make it above the 30th percentile in reading, writing, or math on the New England Common Assessment Program (NECAP) test. Students with IEPs are not only dyslexics, of course, representing a range of students who require additional help for myriad reasons. But ask yourself: Would it be OK with you if your child were put into a group that does not rise above that line? Would that be acceptable to you, for your child? I can’t imagine any parent aspiring to those numbers.
Worse still, the performance of students with IEPs is not improving, and the gap between IEP students and their peers is increasing at an alarming rate. In 2011, only 28% of students with IEPs were proficient in reading in elementary school, 30% in middle school, and 38% in high school. In 2005, the reading gap between students with IEPs and students without was 40.7%; by 2011, it had increased to 49.3%. The gap in middle school jumped from 44.5% to 51.8%.
Test results in mathematics faired no better. The latest level of proficiency for those with IEPs in mathematics was 24% in elementary school, 18% in middle school, and an anemic 4% in high school, meaning that 96% of students with IEPs are not proficient.
With these results in mind, we turned to the Hamilton School at Wheeler, an incredible place that specializes in teaching students with language-based learning differences. This coming year, the tuition will be $40,355 — almost 30% of our federal taxable income —We do not take any financial aid from the school. Despite the large tuition expense, the money is extremely well spent. The education our son has received at Hamilton has made a world of difference to his learning capabilities and his self-esteem.
In contrast, we feel the money we pay in taxes to the City of Cranston and Rhode Island is not well spent. This year we will pay over $20,000 in income and property taxes for a school system that we cannot use, a crumbling infrastructure, and streets that can take days to plow after a snow storm. Where is our money going? Are our taxes benefitting the community as a whole, or only a lucky few? Are the funds being put to good use?
Last year, I watched General Treasurer Gina Raimondo take on Rhode Island’s pension crisis with great pride and a sense of hope for our future. People seemed to finally understand that we are on an unsustainable path. The state took action despite the usual finger pointing, because it doesn’t really matter how we got here. Unfortunately, Cranston has not made any substantial changes to address our municipal deficit, and we have one of the most underfunded pension systems in the state; at over $245 million, it’s equal to the entire annual budget for 2012. The tax rate per $1,000 of assessed value in Cranston is $20.26; compare this to Attleboro at $12.88, Foxboro at $13.73, or Westport at $7.05, and Massachusetts looks very attractive.
Let me be clear, we don’t expect taxpayers to foot the bill for our son to attend a private school, but we do expect to get some services in return for the $20,000 we will put into this state.
According to George Nee, the president of the Rhode Island AFL-CIO, the solution to our budget crisis is to tax “the rich” — i.e., those making more than $250,000. State representative Maria E. Cimini (D, Providence) has proposed a bill that would add another 4% to state income taxes for those earning over $250,000, bringing the top tax rate back up to 9.99% and returning us to the distinction of having the highest income tax rate in all of New England. Compare that figure with the 5.3% income tax in Massachusetts, and one has to ask why anyone with the ability to move would stay here.
I can understand why one might think that those who make over $250,000 are “rich.” We have worked very hard and are grateful for what we have, but the math is undeniable. Spend 30% of taxable income on private education because of local schools’ inadequacy, pay another 10-15% in state property and income taxes, put another 15% away for a retirement that is slipping away, and being “rich” means driving an 11-year-old car and postponing badly needed household repairs.
Rhode Island legislators are ignoring the fact that this is a tiny state. One does not have to live here to work here, and yet they are proposing higher taxes on those most capable of leaving. More importantly, the new tax will be a deterrent to younger families thinking of moving to New England or staying in Rhode Island after attending one of our great universities.
The state’s focus on developing a knowledge-based economy has the potential to increase the prosperity of all of its people, but high-income families will not choose to live here when Massachusetts, which has a better school system and lower taxes, is just a stone’s throw away. Cimini’s proposal would tie tax relief for such families to decreases in Rhode Island’s unemployment rate, but who is going to create these jobs when all of the entrepreneurs, professionals, and small business owners flee? When the only ones left are civil servants and those who can’t afford to leave, how will you balance the budget then?