City/Town Government RSS feed for this section
justin-katz-avatar-smiling

The Dead End of Rhode Island’s Government Plantation Model

The entitlement mentality in this state will be palpable as the federal government rolls back the Obama Administration’s give-aways. Lynn Arditi writes about the potential cost to Rhode Island if it refuses to change its Medicaid program to reflect federal spending under the Republican health care plan:

Predicting how much it might cost the state to cover the roughly 70,000 adults in the Medicaid expansion population under the Republican plan is especially difficult, health experts say, because people move on and off the rolls. If, for example, the job market weakened and people who had left the Medicaid rolls return, the lower federal cost-sharing rate means they’d be much more expensive to re-enroll.

“While certainly we’d support the state continuing to fund the Medicaid expansion population,” [Linda] Katz [of the Economic Progress Institute (no relation)] said, “the reality is … it would be very difficult to replace with state dollars the federal dollars and keep people insured.”

Rhode Island never should have signed on to the Medicaid expansion if this was possible, and the likes of the RI Center for Freedom & Prosperity were ignored when we warned that it was most definitely possible.  What everybody can see clearly now is that insiders and bureaucrats padded their budgets at great cost and risk to others.

And it’s not just Medicaid.  Dan McGowan reports from Providence for WPRI:

President Donald Trump’s proposal to eliminate the $3-billion Community Development Block Grant (CDBG) program would be a “devastating” blow to Rhode Island’s capital city, Mayor Jorge Elorza said Friday.

Trump’s proposed budget would do away with the 42-year-old CDBG program, which provides local governments across the country with funding for community centers, housing programs and neighborhood improvements.

None of these programs should ever be built into state government budgets or the local economy.  They should be treated as gravy on a healthy, independent economy.  Instead, we’ve allowed our elected officials to suffocate real industry and substitute a government plantation model premised on being able to bill the federal government and local taxpayers for government services for others.

Eventually, when you turn toward an obvious dead end, you reach it.

justin-katz-avatar-smiling

Don’t Let Them Treat Pensions Like a Force of Nature

Ted Nesi captured a broader point with this item from his weekend Nesi’s Notes column:

[Pawtucket Mayor Don Grebien] pushed back at House GOP Leader Patricia Morgan’s argument that cities and towns should have to find savings to cover part of the $220 million tab to eliminate the tax. “That’s old-school thinking, that we haven’t done a lot of those things,” Grebien argued. His office points out that 94% of the growth in Pawtucket’s city-side budget over the last decade, about $12.4 million total, has gone to cover retiree benefits – leaving just $825,000 more to spend on everything else.

One must chuckle at a politician trying to act as if the state and municipalities have done all of the possible belt tightening and looking for more is “old-school thinking.”  Anybody who falls for that line deserves to continue to have his or her bank account raided by the looters.

But the bigger notion worth highlighting is that retiree benefits are some sort of natural occurrence that ought to be excluded from our conversations about budgets.  Robert Walsh, of the National Education Association of Rhode Island, attempted something similar during his appearance on Rhode Island Public Radio’s Political Roundtable Q&A when he tried to make it seem as if Rhode Island spends a great deal less on education than Massachusetts because of the different ways pensions are funded in the two states.

This is an old non-truth that I exposed in 2015, but my point here isn’t that Walsh’s statement was wrong (and he probably knows it).  Rather the point is that pensions are a part of our government spending — demanded by unions and supplied by politicians.

Of course, insiders want to act like all of their spending habits are off the table, but we should rebuff them when they try.  If you want more spending change your pension benefits.  The way actuaries figure out what governments owe means that lowering the promises being made now affect the funding required now.  We still won’t be able to afford it in the long term, but at least other priorities would have some space for now.

justin-katz-avatar-smiling

Local Taxes Set Us Back to the Future

I heard somebody say, recently that Tiverton is trying to run its town on a 1988 budget, so naturally I figured I’d take a look at the numbers:

It would be more true to say that in 2016 we paid 2044 taxes, because that’s when the average inflation rate of the last three decades would have brought the 1990 levy up to $37.8 million.  If remembering 1988 makes you feel old, how young does imagining 2044 make you feel? …

One detail makes the chart much more shocking: We’re being asked to pay our 2044-level taxes with 1990 income, or pretty close.  From 1990 to 2015, median household income in Tiverton increased about 2.8% per year, versus about 2.4% annual inflation, even factoring in population growth.  If Tiverton households’ income had grown as much as their town taxes, the median would have gone from $36,170 in 1990 to $124,295 in 2015.  The actual number was $71,901.

My general sense, statewide, is that Tiverton’s taxes are on the extreme end, but that most cities and towns have had a similar story, with taxes increasing well beyond inflation while income just barely kept pace with the cost of living.

justin-katz-avatar-smiling

Don’t Want “Devastating” Cuts? Don’t Rely on Federal Government.

It seems that the special interests who rely on federal money for their income in Rhode Island (in and out of state and local government) have been working to keep stories like this in the news every week:

Potential cuts to the National Oceanic and Atmospheric Administration put forward by the Trump administration could have devastating effects in Rhode Island.

The Coastal Resources Management Council, the state agency that oversees development along the state’s 400 miles of coastline, would lose nearly 60 percent of its funding.

This is the problem with the government plantation/company state model.  When you’ve built your economy around the government’s ability to make other people pay for services that the government insists on providing, local taxpayers will move away and people in other states may decide to cut funding.  It’s a risky dead end of an economic development approach.

Our goal as a state (similar to our goal in our cities and towns) should be to react to news of changes at the federal level by expressing relief that we don’t rely on the federal government for much of anything.  That would be a state of both freedom and stability.

justin-katz-avatar-smiling

Overcoming Confusion About Government and Unions

Crossing over the state line, I came across a curious essay by often-acerbic Fall River Herald columnist Marc Munroe Dion.  To some extent, I’m sure, his iconoclasm is just keeping him from fitting into standard political categories, but I can’t help but think that he’s a little confused.

Dion complains about the growing disparity between the plush deals of government workers and the hardships of those paying the bill.  He even asks a question that’s been on my conservative, small-government mind lately when he ends his column, “When can we call this looting?” But Dion also insists:

It isn’t so much that city employees are getting too much, as it is that the rest of us are getting too little.

I don’t want to see police officers NOT have a union. I want to see YOU have a union, too.

I want the average working person to have health care and a pension. I want you to retire at 55. It’s too late for me. I’m 59, and still showing up every day.

A city can’t prosper if the financial gap between citizens and city employees keeps widening.

You’ve got government employees’ continuing to get privileged status — such as retiring at age 55 — and Dion recognizes it isn’t affordable and that the cost is creating a dead end for economic advancement.  So, to whom, I wonder, does he think private-sector unions would be able to pass a similar bill?  The mystical, mythical Rich?  To the extent that they exist as an identifiable class in a city’s economy, they’ll just move their operations elsewhere or close up shop and go to work for somebody else.

The bottom line is that unions function for government employees because government can force people to pay.  The private businesses with which private-sector unions must work can’t do that.

The only solution is to back government up so it’s affordable and not obtrusive with regulations in order to give the private sector as long as it needs to find a local angle.  The ensuing growth will increase the leverage of private-sector workers and the margin for public-sector workers, too.

justin-katz-avatar-smiling

One Side Wants Both Public and Private Schools; the Other Wants a Monopoly

Denisha Merriweather has a powerful school choice story, as told by Alexandra DeSantis on National Review Online.  And it has made an advocate of her:

In her view, education policy ought to be a bipartisan issue, and she thinks the strength of the school-choice movement lies in its inclusive mindset. “I do feel like the public-school advocates or the teachers’ unions always want an ‘us or them’ mentality. In their minds, you can’t have both,” she explains.

“And we on the school-choice side are not saying that at all. We’re saying, ‘Let’s all be productive, and let’s all serve our children.’ That’s one thing that really sets us apart from those who are pushing for the public-school system,” Denisha continues. “Why can’t we have more choices, and all the choices? [The unions] can’t understand that we do want to keep the public schools. We just want all of these other choices, too.”

In some respects, she’s incorrect about that.  The unions, and the rest of the education establishment, have a different vision of what government schools should be — namely, the monopolistic control of all education, with only the exceptions that the very wealthy can carve out with their own money.  That’s what “both” means to them.

Where poor performance and high cost become so outrageous that a somnolent public begins to wake up to the problem, the establishment will concede very limited reforms, perhaps to the degree of setting up a private school system within government itself (that is, charter schools).  To rephrase Merriweather, it’s not that the establishment doesn’t believe that we can have both a public school sector and a healthy private school sector;  it’s that the establishment doesn’t want both to exist.

justin-katz-avatar-smiling

Psst… Lack of Mandate Is Not Lack of Choice

The Trump administration’s change of course on the issue of transgender bathrooms (and similar facilities) — sending the question back to state governments — was excellent for illustrating the narrative-driven bias in the news.  The best expression that I’ve seen came from the Newport Daily News, which ran a front-page headline last Thursday proclaiming that “Transgender students lose bathroom choice.”

The McClatchy news service article beneath the headline, however, immediately tells a different story:

The Trump administration Wednesday told public school districts across the nation that they no longer have to allow transgender students to use the bathroom that matches their gender identity.

In the progressive lexicon, when the federal government doesn’t force a position that progressives support, it is automatically forcing the opposite position.  In the terms of the headline, transgender students didn’t lose anything by this decision; rather, states gained a choice.

And what happened?  At least in Rhode Island (which should be the central concern of the Newport Daily News), Education Commissioner Ken Wagner immediately issued a statement to say:

The rescinding of this federal guidance does not change our policy – there is no room for discrimination in our schools, and we will continue to protect all students, including transgender and gender nonconforming students, from any type of bias.

Of course, what he says isn’t exactly true.  Students who aren’t comfortable sharing bathrooms with those of a different sex are “all students,” but the system is explicitly biased against accommodating them.  If they should be so bold as to express their discomfort, the state government suggests, “administrators and counseling staff” should get involved to change their beliefs.

Be that as it may, the fact remains that the state of Rhode Island is perfectly able to continue setting its policy, and several school districts have made a point of proclaiming their agreement.

For some, though, that’s never sufficient.  They are incensed by the notion that people hundreds or thousands of miles away might be able to agree among themselves to disagree with the progressives of Rhode Island.  Our freedom is only ever to agree with the Left.

justin-katz-avatar-smiling

Decisions in Federal Cooperation and the Direction of Profit

Something occurred to me while reading about the City of Providence’s refusal to go along with the federal government’s decision to increase the extent to which it enforces immigration laws:

Commissioner Pare said Providence won’t join a program that trains local cops to work as immigration officers. …

“Local law enforcement should not be immigration officers nor an arm of ICE,” Pare told Eyewitness News. “We will not be involved in the investigation or enforcement of immigration laws. This requires comprehensive immigration reform and should not be the responsibility of local law enforcement.”

Fair enough, but would the city participate in, say, an entrapment scheme involving the federal government and other agencies to net tens of millions of dollars in corporate money outside of their regular budgets?  Or is the government profit in illegal immigration all in allowing it to go on?

justin-katz-avatar-smiling

Keeping Up with the Pros in the Bureaucracy

The odds are pretty obvious and challenging, if you think about it:  Government at all levels employs millions of people; many of them have access to information the public does not; many of them make decisions that affect their own compensation and that of their peers; and (at least for now) their continued wealth and opportunity depends on getting people to allow government to take their money away.

Since the years of Obama stimulus spending — let’s say Rhode Island’s fiscal years 2009 through 2011 — I’ve been convinced that the administration’s goal was to ensure that government agencies were insulated from the recession.  (Another goal was to launder money to left-wing activists, but that’s not my subject with this post.)  As time moves along and data becomes more available, it’ll just take some work to trace the dollars.

But it is a lot of work.  The general public, occupied during working hours in their own private-sector occupations, can’t hope to keep up.  This fund blends into that fund from the other source through technical accounting categories, with repositories here and there that must remain shielded from public view for privacy or other reasons.  The opportunity to mislead is structural.

In a small way, though, I think I’ve got a handle on how the Tiverton School Department transformed temporary stimulus money into a permanent increase in local funding and have written about it on Tiverton Fact Check:

In summary, when the state money shifted from regular aid to “restricted,” the school department built the excess into its budget.  But when the funds shifted back, the increase was buried in this “restatement,” so local taxpayers would remain forever responsible for the supposedly temporary increase.  As a matter of fact, the “restricted” aid didn’t actually decrease much; the accounts just changed.

Thus, the Tiverton schools maintained healthy budget growth even as the Great Recession wore on and housing values plummeted.

I’d be surprised if something similar wasn’t accomplished by school districts throughout Rhode Island and across the United States.  Actual stimulus would have been a government reduction in taxes, but that wasn’t Obama’s goal.

justin-katz-avatar-smiling

Educational Efficiency Requires Lower Spending

Here’s an interesting study.  It’s from GEMS Educational Solutions, and I found it via a positive mention in a Guardian article, so we’re probably not talking a right-wing group, here.

The study compares certain educational statistics across countries, and one of its principles is that “inefficiency can be a result of either underpaying or overpaying teachers.”  By that measure, the United States would become more efficient (better managing results versus tax rates) by lowering salaries by five percent and increasing class sizes by 10%.

Rhode Island’s teacher salaries are top 10 for the country, so 5% would be too low for our state.  Also, the 15.3 student:teacher ratio listed on GEMS’s application compares with a Rhode Island average of 8.

To be clear, these are back-of-the-envelope comparisons.  A more-thorough review might require adjustments of the numbers (different years, different teacher roles included in the student ratios, etc.).  I come across people, though, especially locally, who find inconceivable the idea that less spending on anything government does might be bad.

justin-katz-avatar-smiling

The Rigged System of Unions and Town Government

The cliché about the news media is that readers will always find reports in their own areas of expertise erroneous, and something similar applies to news reports from one’s own town:  What’s happening locally seems to prove the point of the whole broad world.

Even adjusting for that tendency, though, I have to say that Tiverton controversies are starting to feel as if we’ve come just an inch away from making it legal for town employees to walk into our homes and take our money. As I write on Tiverton Fact Check:

Such proclamations become more difficult to believe each time it appears that town employees are learning the lesson from former colleagues’ reaping the rewards of (alleged) bad behavior. We had Town Foreman Bob Martin and his pal, former Town Administrator Jim Goncalo. Last year, it was an entire shift of police officers led by overtime king Lieutenant Timothy Panell. And now it’s the fire department’s turn, with firefighter Patrick White:

The case of a firefighter who was terminated in early 2015 for allegedly abusing sick leave has been settled, with the town agreeing to pay $175,000.

That’s right. We paid him (and his union lawyer, naturally). The “neutral” arbitrator in the complaint sided with the union member.

One of the problems with settling is that neither side can claim vindication.  The institutional bias toward that sort of ambiguity, like union contracts and arbitration practices, is part of the problem.  Rhode Island has created a fundamentally dishonest system of government.

justin-katz-avatar-smiling

When School Budgets Become Sky’s the Limit

I’ve got a post on Tiverton Fact Check pointing out the oddly divergent trends of school enrollment and budgets:

Think of it this way:  When the PTOs send out notices that the Budget Committee will be considering the school budget, parents and teachers fill the town hall.  How many of them show up at School Committee meetings when important curricular questions are on the table?  How many parents step forward during contract-negotiations to express concern that large increases for employees could eat up funds for innovative technology or even for fixing roofs and HVAC systems?

The taxpayers of Tiverton should absolutely provide the resources necessary to ensure our children and our neighbors’ children have every opportunity to succeed.  But acknowledging that principle still leaves us having to answer an important question:  How much is really necessary?

The following chart shows the trends in student enrollment in Tiverton public schools and the school department’s budget since the 2001-2002 school year.

justin-katz-avatar-smiling

Ah, the General Assembly’s Legislative Grant Program

Here’s a telling little tidbit that slipped through the strainer of Tiverton politics, from a not-online Newport Daily News article by Marcia Pobzeznik on January 30.

Town Council Member John Edwards the Fifth (son of Democrat State Representative John Edwards the Fourth) appears quietly to have planned a beach bonfire for Christmas trees, which left his fellow council members feeling like “the Town Council was the last to know,” per councilor Denise DeMedeiros.  They finally found out when they were called to a special meeting to decide whether to cancel the event because of gusty winds.

Here’s the telling part that makes the anecdote of statewide interest:

Firefighters and a fire engine would have been required at the beach, deMedeiros said, along with a police detail for crowd control.  She asked Edwards if he had considered the costs.

A legislative grant would take care of the costs of the firefighters and the police detail, said Edwards, son of Rep. John “Jay” Edwards, D-Tiverton.

There is no such grant on the House’s list, although it’s dated only through October 1.  The Senate’s list is more up to date and has some grants for Tiverton, but whether or not they’re associated isn’t possible to tell.

Think of the process, here, especially involving the son of the legislator who successfully pushed legislation to make it more difficult for individuals to participate in local politics, creating hurdles for them to jump in the name of “transparency.”  A Town Council member almost pulled off a public event involving town property and the use of town employees without the knowledge of at least some of his fellow councilors, and the whole thing was supposedly going to be funded through a General Assembly handout that, likewise, nobody else had any idea about.

Obviously, given the lack of transparency, there’s no way to know whether this is relevant, but as I’ve written before, the state Ethics Commission would find no problem with a member of the General Assembly pushing to use state taxpayer money to fund a politically helpful event secretly orchestrated by his son because everybody involved is acting in official government capacity.

justin-katz-avatar-smiling

Political Omissions in Worcester Story

For some reason the Providence Journal ran a minor story on a Worcester, Massachusetts, political incident.  In doing so, however, the paper spotlights a curious… let’s say… tic of the mainstream media:

Mayor Joseph M. Petty is now apologizing for remarks he made that, unbeknownst to him, were picked up by an open microphone at the beginning of Tuesday night’s City Council meeting.

The remarks were unflattering observations about some of protesters attending the meeting. Earlier, there was a rally at City Hall attended by people unhappy with President Donald J. Trump’s immigration policy.

Funny — Don’t you think? — that the article doesn’t mention that Petty is a Democrat and the main voice speaking out against him, Michael T. Gaffney, although in a non-partisan seat, has been backed by Republicans.  Why do you suppose that is?  How do you suppose the reporting might have been different if it were a Republican mayor badmouthing a Tea Party group?

justin-katz-avatar-smiling

School Choice Makes Families Consumers, Not Commodities

A great short report for which I’ve done some research, but which I never manage to get to, would look at the effects of Vermont’s legacy school choice program.  Given the long-rural history of the state, some districts offer students actual school choice, including to private schools, and a key finding that Rhode Island homeowners should find interesting is that property values go up significantly in areas with choice.  Geoffrey Norman doesn’t offer more than a nod to that dynamic in a recent article in The Weekly Standard, but he does use the current debate in Vermont to make a key, fundamental point (emphasis added):

So, school choice is not—and could never be—supported by the education bureaucracy. It threatens not just their convictions but their livelihoods. Where parents can take their kids and the public money that is being spent on them out of one school and move them, and it, to another—well, this threatens the entire system.

Why it might even, in the dark vision of one of the prominent Vermont opponents of school choice, “turn children into commodities.”

Which of course stands the whole thing on its head. Commodities don’t make choices. They are manipulated, packaged, and bundled. As are students in the grip of the industrial-education complex.

What Norman is touching on, here, is the government plantation.  Attracting people to an area who are likely to need government assistance, binding them to their region with government dependency, and locking their children in government schools creates a captive audience with little power to affect the services their receiving.  Again, “commodities don’t make choices,” but when human beings are “manipulated, packaged, and bundled,” they lose the authority to do anything but sit on the shelf until they’re of use to some powerful consumer.

justin-katz-avatar-smiling

Discount Rate Assumptions and the Certainty of Tax Increases

After years attempting to interpret public documents related to pension funds to understand the method of deciding what a reasonable investment return assumption would be, I finally have it straight from a municipal investment advisor. As I’ve posted on Tiverton Fact Check:

Me: So if a town comes to you and says, “We want to hit this number,” you say, “Well, what’s your risk?,” and that’ll play into seven-and-a-half percent.  The fact that the town can then in 20, 30 years increase taxes to make up for the loss, then you have a little higher tolerance for risk, so you can go up to 7.5%, which you may never hit, but in the end of 20, 30 years, you’ve got other assets — taxpayers — you can take money from.  Is that part of the conversation?

Gene McCabe, Director of Investments for Washington Trust:It is.

In the not-too-distant future, I suspect it’ll become unreasonably expensive for us municipal assets.  Elected officials and government employees should start pondering what will happen when assumptions about how much money can be confiscated from Rhode Islanders prove as fanciful as assumptions about high returns at the stock market roulette wheel.

justin-katz-avatar-smiling

When the Tolerant People Go to the City Council to Silence Those with Whom They Disagree

Writing in the Newport Daily News, reporter Colin Howarth slips in a helpful reminder — as we watch the Left attempt to make American life a non-stop political rally — of Lefitsts’ understanding of the role of government (emphasis added):

Locals have used social media to voice their concerns about DePetro’s rhetoric in the past, citing what they perceive as misogynistic and hateful remarks. A day after the announcement, a Facebook group was created titled “Get John DePetro off WADK.” Two local residents used the citizen’s forum at Wednesday’s City Council meeting to express their concerns about DePetro.

That’s right.  Progressives in Newport are going to the government in an attempt to silence somebody with whom they disagree.  As Mayor Harry Winthrop says, when others criticize him for welcoming a new talk-show-host to the market, “It’s unfortunate people don’t understand the role of mayor.”

WADK President and Owner Bonnie Gomes notes that, if boycotts threaten anybody, they threaten the 15 employees of the station.

For a long time, in our country, those of a progressive persuasion have been sold on the idea that opposing views are illegitimate.  It’s OK to silence conservatives while proclaiming dedication to free speech.  It’s OK to lock those who hold traditional religious views out of self-governance (by ruling their worldview unconstitutional) while pretending to be an advocate for religious freedom.

It’s time to insist on bringing real tolerance into American society, not just the phony one-sided version that progressives like to put on bumper stickers.

justin-katz-avatar-smiling

When the “Home-School Community” Is Separate from “the Community”

In Tiverton, the School Committee sees public education as promoting government-branded schools, not ensuring educational services that suit the needs of all of our children, as I’ve written on Tiverton Fact Check:

This distinction became clear at the January 24 meeting of the Tiverton School Committee, which introduced a new policy explicitly denying home-schooled students the opportunity to take classes — particularly technical and vocational classes — outside of the district through arrangements that Tiverton has made. Students enrolled in Tiverton schools can take such classes, even attending alternative schools full time at no cost to their families. …

The education officials in Tiverton have already decided that it is the responsibility of taxpayers to cover the tuition of students who want courses of education that they can’t get within the district. They are just applying that policy in a discriminatory way. No matter how much you may pay in taxes or contribute to the town in some other way, unless you put your children under their complete control, you are part of “the home-school community,” which is apparently separate from simply “the community.”

justin-katz-avatar-smiling

Another Government-Wall-Street Scheme; Of Course, RI Is In

The Wall Street Journal’s Kirsten Grind raises a red flag over another mortgage-related investment scheme:

About $3.4 billion has been lent so far for residential projects, and industry executives predict the total will double within the next year. That would likely rank PACE loans as the fastest-growing type of financing in the U.S.

As the loans spread, so do problems that echo the subprime mortgage crisis. Plumbers and repairmen essentially function as loan brokers but have scant training and oversight. They often pitch PACE loans to help land contracting jobs and earn referral fees from lenders, according to loan documents and more than two dozen borrowers, industry executives and employees.

The referring contractor gets a cut.  The municipality gets a cut.  And taxpayers will wind up on the hook if things go wrong.

In case you’re wondering, yes, Rhode Island has this.  Democrat Governor Lincoln Chafee signed the legislation into law in 2013, after Democrat Art Handy (Cranston) passed H6019 and a gang of Democrat state senators led by William Conley (East Providence, Pawtucket) passed S0900.  The RI Center for Freedom & Prosperity did include this legislation in the 2013 iteration of the Freedom Index.

Quantcast