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Irrational Avoidance of Actual School Choice

In a not-online Newport Daily News article from April 18, Derek Gomes reports on new programs allowing students from other towns to attend Portsmouth High School:

The move comes on the heels of the state Department of Education designating the high school as a regional program provider for the career and technical pathways of child development and television production.

While the school has offered courses in each subject for years, it had to tailor curricula and have state education officials observe the classes before the state education department approved Portsmouth’s application last month.

“These tuition-based programs will welcome students statewide to participate and earn industry-based credentials and job experiences in these areas,” according to a letter the School Department posted on its Web site.  “Students from other districts may apply for enrollment … and be considered for admission on a competitive basis.”

Details from the district’s Web page don’t make it immediately clear whether students attend the district full time or, as with vocational classes at Rogers High School in Newport, just attend for the few relevant classes.  The Portsmouth tuition of $15,830 could certainly be full time, but the economics of these programs are crazy, with students’ home districts paying the same tuition for a couple of courses as they would for a full course load.

What strikes me at the moment, though, is how narrow and convoluted this all is.  There’s a reason Little Compton sends its high school students all the way through Tiverton to attend Portsmouth High School.  People actually move to Portsmouth for the same reason, and some private school parents in the area simply treat Portsmouth as another private school and pay the tuition.  Why should the district have to offer specialized programs in order for the Department of Education to incorporate the choice into the system?

As I’ve written before, taxpayers should see themselves as funding the education of children in our community, not the maintenance of a government-branded school system.  If that were the attitude, then we’d direct our resources where they will be used to greatest effect.

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The Measure of Debt in Rhode Island

The debt study put out today by the state treasurer’s office merits a more detailed look than I’ve been able to do today.  For the quick summary, see Ted Nesi’s article on WPRI:

The $10.5 billion in total public debt – excluding pensions – breaks down as $1.9 billion for Rhode Island state government, $6.6 billion for quasi-public state agencies such as Rhode Island Housing and Commerce RI, and nearly $2.05 billion for municipalities and local special districts. With pensions, the combined total rises to $17 billion, Magaziner’s office said. …

… The study suggests a community’s debt and pension liabilities should be less than 6.3% of its total assessed property value; in Providence that ratio is 17.8%, and in Woonsocket it’s 20.3%. Central Falls, Pawtucket, Johnston, West Warwick and Cranston are also above the target.

One question Rhode Islanders should consider is whether assessed property value really ought to be the measure.  Assets are certainly important to the question of debt, but mainly from the perspective of the lender, not the borrower.  For your mortgage, banks want to know your property value and other assets because they’re looking at the likelihood that you’ll be able to liquidate and pay them back if things go wrong.  That’s not really possible for a state (even “a state for sale,” as Rhode Island has been called).

From the perspective of the borrower, income is more important, because it relates to the ability to pay off the loan.  In that regard, we can look at the matter in two ways.  Rhode Islanders’ personal income (including investments) is about $44.5 billion, which means that even using the treasurer’s unrealistically sunny estimate of pension debt, government debt is about 40% the size of our income.  And of course, personal debt would come into play when thinking about personal income.

The second way to look at the public debt would be public revenue, and Rhode Island’s state and local tax revenue totals around $6 billion.  So our government owes about three years’ worth of revenue.

Each man woman and child in the state owes $17,000, around $68,000 for a family of four.  Whatever arbitrary benchmarks politicians may pick, that’s too high.

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The Cheese Sandwich Lesson for Socialism in Schools

It’s difficult to believe that Bob Plain isn’t trying his hand at parody with an interesting article on RI Future today about “lunch shaming”:

It’s known as lunch shaming. Students are subjected to special, sometimes embarrassing, treatment because their parents didn’t pay the school lunch bill. “Some provide kids an alternative lunch, like a cold cheese sandwich,” according to a recent NPR story. “Other schools sometimes will provide hot lunch, but require students do chores, have their hand stamped or wear a wristband showing they’re behind in payment. And, some schools will deny students lunch all together.”

The so-called cheese sandwich policy seems popular in suburban Rhode Island: Bristol/Warren, South Kingstown, and East Greenwich all use it.

From Bob’s article it appears that we’re talking debts in the amounts of $5 or $10, which seems like a paltry amount that districts could find some way to accommodate.  I’m trying to imagine a working-to-middle-class private school taking such steps.  In a transaction in which one side actually has the option to leave, other approaches have to be considered, whether a mandatory up-front fee, a deposit of some kind, a credit card on file, mandatory use of a payment processor that handles the collection, or a slight increase to all lunches in order to generate a reserve fund that provides a buffer for this sort of “debt.”

Putting aside the “what would the private sector do” comparison, though, think of what this little story says about the relationship of government to the people.  Adults in position of authority over school districts with budgets in the tens or even hundreds of millions of dollars are agonizing over ways to embarrass children so as to extract a few owed dollars from their parents.  That doesn’t indicate a mindset of provider-client or public-servant–beneficiary.  Rather, it indicates the dynamic of ruler-subject similar to a Dickensian orphanage.

Suffice to say it takes a series of monumentally bad social and public policy decisions to get us to the point at which the proverbial lunch lady is scornfully handing a child some bread and cheese over $5 owed.  We should start unraveling those decisions.

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Live by Cronyism, Die by Cronyism

GoLocal is reporting that Blue Cross Blue Shield of Rhode Island plans to move a good chunk of its Providence workforce to East Providence:

Despite making promises to the City of Providence in 2007 to centralize its work force in its gleaming $125 million tower, Blue Cross Blue Shield of RI confirmed late Tuesday that it will be moving more than 125 jobs out of Providence to East Providence.

The Blue Cross Tower is assessed at $46 million, but only pays a portion of its tax obligation because of a generous twenty-year tax stabilization.

Average residents tend to get caught up in rhetoric and lose sight of basic realities like incentives.  Although individual workers and executives do take morality and personal fulfillment into consideration, private businesses ultimately exist to make money (whether for profit or non-profit).  If they don’t do that, they don’t get to do what it is they do.  Likewise, politicians’ have to gather votes and political support, otherwise they lose both their livelihoods and ability to accomplish what they want.

So, when a particular arrangement is no longer optimal for a business, given other opportunities, it will walk away from deals.  And when a politician comes into office who didn’t make a particular deal and is building a different base of support, the dynamic changes from that direction.

Public policy should therefore build beneficial incentives and then let people work out their deals in a free market.  From cutting deals for office buildings to reshaping an entire population for the benefit of a sugar-daddy industries (through, for example, “free tuition”), it is utter folly to accept central planners’ promises that the people can make out in the long run.

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Building in a Structural Surplus

Over in Tiverton, the school department is considering campaigning for an alternate budget that would add to its structural surplus.  I look at the history over on Tiverton Fact Check:

The prospect of that campaign reminds me of spring 2015.  That year, a budget petition that I put forward reduced the school’s increase by about $126,000.  (The school budget still went up more than that, but not with local taxes.)  The school committee voted to cancel plans for all-day kindergarten.

Ultimately, they reversed that decision after weeks of advocacy on my part and that of affected parents.  How much would you guess their budget came up short at the end of the year?  It didn’t.  In fact, the school department had $1,130,867 left over, a surplus, bringing its reserves to $3,454,163.  If my budget petition had lost (or if all-day kindergarten had actually been cancelled), the surplus would have been around $1,257,208 for a total of about $3,580,504.

The most important phrase in Rhode Island public school budgeting is “maintenance of effort.”

Continue reading on Tiverton Fact Check.

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A 3.0% Sales Tax Is A Question of Fairness

As taxpayers continue to be asked to fund generous corporate subsidy programs, lawmakers are now dueling over two new spending ideas, reimbursing localities to phase-out the car tax and public funding for free college tuition, each of which would likely further raise taxes and fees on Rhode Islanders. But would these programs make Rhode Island a better state? Or would the more innovative and bold policy concept of cutting the state sales tax help families become more self-sufficient?

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Consolidating the Pension Problem for Whose Benefit?

Not that long ago, I might have been supportive of Rhode Island General Treasurer Seth Magaziner’s initiative to move the remaining municipal pensions into a group under state control.  Among the positives would be getting them all together so that Rhode Island could make a decision about how to resolve the problems once and for all and move forward.

I’ve shed a bit of naiveté since then, and information like this, from Ted Nesi’s WPRI article has disconcerting undertones:

Magaziner emphasized that the proposal does not involve putting state money into the local pension plans, and said allowing them into MERS would not impact the funding of plans that are already in the state-run system. He also suggested joining MERS could force communities to be more responsible about making their annual required pension contributions.

“There are some pretty strong sticks to get communities to be responsible” in MERS, he said, such as withholding state aid or taking legal action if they fail to make their contributions.

This means the state will pressure municipalities to raise taxes as pensions prove to be unfundable through reasonable payments plus investment returns, which is almost certainly going to happen.  The bill will go up, and local governments will turn to voters and say, “We have no choice.  The state is making us pay more toward pensions.”  This will defuse some of the local push back, both on pension payments and the deals being offered to active employees.

Meanwhile, the looming catastrophe at the state level will be that much more threatening, and compromises on the employees/pensioners’ side will come later (meaning the promises will be bigger).  In short, my thinking is increasingly that, as with most budget items, the more local the decisions and the pain can be, the better.  The people paying the bill have a more-fair hand locally (if only slightly), and if one municipality slips into the abyss, the others may have time to work out their problems based on that lesson.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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?

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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.

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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.

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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.

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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.

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