The Incentive to Rend Communities

The financial town meetings (FTMs) that Tiverton used to have in order to approve the town government’s annual budget made a huge impression on me.  I’d even say the experience was formative, coming as it did at a time when I was just beginning to become knowledgeable about and involved in local government.

One moment in particular remains vividly in my memory.

The supporters of another big tax increase had been talking about how little it would take out of a typical family’s budget.  Just a few hundred dollars, they said.  Less than a dollar a day.  I pointed out that many families in town, like mine, didn’t have that money lying around.  For me, that was a year’s worth of contact lenses to wear on the construction site, or an annual donation to charity, or Christmas presents for my children.

That’s when the big-budget crowd began to jeer.  A group including a significant number of people who teach children for a living jeered at Christmas presents for the children who live in my house.  Here’s video of that moment:

At one point during that round at the microphone, I remember looking up into the bleachers in the gymnasium and seeing the high school principal, whom I recognized from regular attendance at school committee meetings.  His face was a picture of hatred.

The main lesson of that look was the imbalance in motivation that our unionized government workforce creates.  A few hundred dollars less in the household budgets of each family in Tiverton is thousands of dollars more in the household budgets of people who work for the town.  It’s that simple.  More than half of the school budget goes to payroll, and many other costs are fixed.  It’s long since been absorbed into the unionized culture of government school employment that the town will never give raises unless they’re fought for.

As I noted in a Tips & Tutorials post on Tiverton Fact Check, the payroll application shows that Principal Steven Fezette was the third-highest-paid town employee, earning $104,437 during fiscal year 2014.  That was up from $100,474 the year before.

It’s also interesting to note that Mr. Fezette’s wife, Susan, is a teacher in the Tiverton school district.  She earned $76,297 in FY14, up from $61,097 the year before.  That’s a combined household take from the Tiverton budget of $180,734, up from $161,571, or a 12% increase.  A few percentage points of that may have to do with the timing of pay periods, which don’t overlap perfectly with the fiscal year, but still, it’s quite a bit of motivation to find ways to pass larger town budgets.

The tax rate went up 38 cents per thousand for fiscal year 2014.  The typical family had to find something around another $100 in its budget for property taxes.  The school department got over $800,000 more to spend.  And the Fezette household claimed a little under $20,000 of that.

It is understandable (even if it is unreasonable) for the people who end up getting the money to feel as if taxpayers would be greedy to deprive the school department and the Fezettes of so much based on such a little cost to them.  The problem is that the increases in taxes are year after year after year, and according to the U.S. Census, the median household in Tiverton earns $68,706 (as compared with the median teacher, who made $70,861 all on her own, according to the Fact Check data).

This is the source of the division that can rend communities.  It doesn’t take much discomfort to get voters feeling like a few hundred more dollars out of their budgets each year isn’t worth being treated like outcasts in their own community.  When some crazy activist does decide to make a stand, the employees have a great deal of incentive to turn up the heat — just for that person, and just until he does the math and asks himself what he’s really saving for his trouble.

If Rhode Island’s representative democracy were functioning, then the little bit of incentive that each household has to save its few hundred dollars would add up to a majority of votes, giving elected officials incentive to negotiate strongly to keep costs down.  But local elected offices hardly pay anything and come with few rewards.  So with elections, too, the unionized labor force, partisan Democrats, and wealthy people for whom each year’s increase is, indeed, a skim from their surpluses have stronger incentive to run and hold office.

With elections, too, the big-budget special interests demonize any candidates who might try to bring some balance to local government and make them feel unwanted among their neighbors.  That’s mostly an illusion, but again, they’ve got incentive (and resources) to make it a convincing one.

Only… there’s something clearly not right with a system in which a town employee’s household makes two-and-a-half times the median income of the households paying the bills and that employee feels such entitlement that he’ll join his coworkers in jeering at a resident who admits that he’s struggling to put presents under the Christmas tree.

When something is so clearly wrong, it has to be fixed.

Disclaimer: The views and opinions expressed in The Ocean State Current, including text, graphics, images, and information are solely those of the authors. They do not purport to reflect the views and opinions of The Current, the RI Center for Freedom & Prosperity, or its members or staff. The Current cannot be held responsible for information posted or provided by third-party sources. Readers are encouraged to fact check any information on this web site with other sources.

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