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Consequence for Employee Theft, Fraud, or Whatever: Cushy Retirement

I’d say this is outrageous, but it’s far too common and doesn’t seem to produce the appropriate outrage in the Ocean State.  Stephen Greenwell reports in the Newport Daily News:

A Tiverton police lieutenant accused of sleeping during overnight shifts will retire June 30, after the Tiverton Town Council voted 4-3 on Wednesday night to accept a plea agreement that was executed Thursday morning in District Court.

Timothy R. Panell, 47, of 50 Shannon Ave., Tiverton, had a not-guilty plea entered for one charge of obtaining money under false pretenses. The charge was filed, meaning it will be removed from court records in one year provided Panell faces no additional charges.

As part of a court-approved plea-bargaining agreement, 48 additional charges of obtaining money under false pretenses and nine counts of falsifying documents were dismissed.

Keep in mind, by the way, that it wasn’t just this officer.  He merely led his entire shift to have “quiet time.”  The others faced no publicly stated consequence.  Also keep in mind that for years, Panell was the second-highest-paid employee in town, after the school superintendent, largely because of huge amounts of overtime.

In little Tiverton alone, we’ve had multiple instances of similar stories throughout town government over a handful of years, and every time the Town Council takes one of these union-friendly pleas, one can only wonder how they don’t see the incentives they’re creating.  Theft, fraud… whatever.  If an employee gets caught taking advantage of the town and its taxpayers, the consequence is that he or she simply eases into retirement, with an agreement that nobody on the town side will say anything bad about them.

How could this do otherwise than make it more likely that employees will make bad decisions?

Voting for the plea were council members John Edwards the Fifth (son of Democrat Representative John Edwards the Fourth), Randy Lebeau, Christine Ryan, and council President Joan Chabot.

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Legislation Holds Mobility Over the Heads of the Poor for Municipal Bucks

I’ve been very critical of Mike Araujo and his rhetoric on this site, but he is absolutely correct to object to this bill:

Tuesday night, the House Finance Committee passed a bill (H-6213A) that seeks to expand the denial of vehicle registration to individuals who may have outstanding unpaid interest or penalties on fines owed to a city or town, rather than only revoking it for the amount of the fines themselves owed to the municipality.

Legislation like this, making it easier for people to lose their licenses or registration based on financial debts, has been criticized all over the country for its problematic and counterproductive effects on poor Americans. Driving without a registered vehicle leads to substantial penalties or even a revoked license, which simply worsens the person’s financial issues and hardships. This in itself is challenging since the restrictions would deny the person the ability to drive to work, school, or any other related activity making them less able to meet their monetary obligations.

As an indication of how thoroughly aggressive the legislation is, even in the small details, consider this:  Right now, the legislation requires the city or town to pay the DMV $5 in order to request a registration denial, and that fee “may” be added to the total due from the driver.  This bill waives the up-front payment and says that the $5 “shall” be added to the total.

Where is the public interest in all of this, beyond wanting more money for profligate government?  People need to be mobile to have a shot in the modern world and making it more difficult for them to get right with the regulations for mobility undeniably makes it more likely that they will continue struggling and probably remain dependent on government.

The legislation’s primary sponsor is progressive Democrat Christopher Blazejewski of Providence, who apparently submitted it at the request of the city, but who, in doing so, proved that government always comes first for people in government.  Keeping others dependent on government isn’t exactly contrary to that goal.

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The Bubble Begets Tone-Deafness on Eternal Contracts

So, the teachers unions’ annual attempt to give themselves even more leverage in negotiations by making their contracts eternal is back in the mix.  The lobbying by union employees and donations to politicians are ultimately taxpayer funded, so this bill probably won’t go away until it passes someday.

What’s notable, this time around, is that the bill accompanies a labor dispute in Warwick, leading to this telling point from Warwick Teachers Union President Darlene Netcoh:

Netcoh said the bill “levels the playing field between employers and employees.”

Referring to [Warwick Schools Supt. Philip] Thornton, she added: “Would he go to work every day if he didn’t have a contract? I don’t think so.”

One wonders how it could have escaped Netcoh’s attention that plenty of Rhode Islanders go to work every day without contracts.  See, it’s called “a mutually beneficial transaction.”  The employer has work that has to be done, and the employee has a need to earn income.  If a contract makes sense in a particular circumstance, then the parties draw one up and abide by it; otherwise, the contract is essentially a casual, even verbal, agreement to do work and to pay for work that’s done.

In government, though, it’s not about that mutually beneficial transaction, in part because nobody’s spending their own money.  Contracts for government employees are fundamentally agreements about how much one party will take from taxpayers and transfer to the other party, and so they’ve become a mechanism for labor unions to get politicians to lock taxpayers into expenses.

This eternal contract legislation is about ensuring that taxpayers are locked in to the promises of elected officials (often elected with the help of the employees) to an even greater degree.

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The Labor Union Takes Credit for High-Performing Schools

While we’re on the topic of public education, a different angle caught my attention in the ongoing matter of East Greenwich budgeting.  Readers may have heard something about the fiscal changes and personnel turnover under a largely Republican town council, actually reducing spending and holding the school side of the budget flat.

What jumped out at me as worthy of commentary (beyond “rah, rah, go Team Reform”) is this reaction from National Education Association of Rhode Island union poobah Bob Walsh:

“They level funded the schools, with Corrigan saying her firm would do administrative functions,” said Walsh. “The Chair stopped taking testimony and approved the budget — and now the school committee has to figure out how to implement some of the cuts. This is after it took us a year to get the contract.”

“I’m really surprised by the whole thing — our best performing communities are Barrington and East Greenwich,” said Walsh. “And East Greenwich has not been as generous in funding, whereas the Barrington parents usually step up.”

That’s a strange statement to make, considering that East Greenwich spends almost $1,000 more per student than Barrington.

More to the point, though, what is this “our best performing communities” stuff?  When it comes to arguments about higher per-student costs and lower performance in other cities or towns, the Bob Walshes will run to the microphone to argue that the biggest contributor to success is demographic, the teachers or districts, thus denying the link between spending and results.  They make the same argument with charter schools.

And yet, when one of those towns with supposedly high-performing demographics reins in its budget growth, suddenly the union organizers want us to believe they deserve the credit for results?

It has never made sense for one part of town government to have the authority to allow the teachers union to “get the contract” while only the other part of town government is authorized to raise the money to pay for it.  Maybe it’s time to start removing some of the layers that confuse the question of who can say “our communities.”

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Expanded Disability Pensions Will Be Boon for Investigative Journalists

The bright side, if the bills that Ted Nesi summarizes for WPRI were to pass into law, would be a boom in gotcha-journalism stories about questionable disability pensions:

The first bill, sponsored by Providence Rep. Joe Almeida, would allow an “injury or illness” sustained on duty – rather than just an “injury,” the current wording – to be cause for the granting of a tax-free accidental disability pension to a police officer or firefighter. It would also increase how long officers have to file a disability claim from 18 months after the incident to 36 months. …

The second bill, sponsored by North Kingstown Democrat Robert Craven, would mandate that any firefighter who suffers from hypertension, stroke or heart disease will be “presumed to have suffered an in-the-line-of-duty disability” and therefore be eligible for a disability pension, unless there was evidence of the condition in his or her entrance exam.

When first published, Nesi’s story noted that the bills had been posted for votes, implying passage, but after his story went live, they were removed:

“They were posted prematurely,” House spokesman Larry Berman said in an email. “Both bills were on a preliminary list for possible posting and then were posted in error. Those two bills are still being reviewed.”

Even if it ends there, this episode is a good reminder that special interests (ultimately funded with taxpayer dollars) are constantly working the system to expand benefits for government union members at the public expense.  They work to elect friendly officials to local office for generous contracts, and they work to elect friendly legislators to write generous benefits into the law.

Something dramatic and structural has to happen to change this, because our system has no countervailing forces short of bankruptcy that will withstand the year after year after year push.  The embarrassment of hidden camera stories about retirees abusing their benefits will only go so far in restraining ever-more-unsustainable benefits from being bestowed.

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A Lesson in the Limits of Employee Costs

Always on the lookout for the practical lessons of economics, I have to highlight an article by Marcia Pobzeznik from Friday’s Newport Daily News even though it’s not online.

The Tiverton Town Council is deciding what to do about trash pickup because the costs are rising, and there are two basic options:

  1. Continue with a system using workers to pick up the trash.
  2. Switch to an automated system that uses machines.

If I’m reading the article correctly, at first, option 2 will be more expensive because the town would buy every household the totes in which the machine requires garbage to be placed, but apart from that initial charge, the price is essentially the same.  The lure of the machines, though, is the expectation for the future of workers:

“I’d like to see us go automated,” said [Director of Public Works Bill] Anderson. That would happen in October if Waste Management wins the bid.

Companies are transitioning to automated pickup because of safety issues for workers and the high cost of Worker’s Compensation insurance, Anderson said.

Like many other rackets in Rhode Island, workers compensation is a private operation but is largely a creature of state law, which is heavily weighted to drive up costs.  On top of every other regulation that lawmakers have decided Rhode Islanders can’t live without, it makes employing people increasingly expensive, which in turn makes automation look increasingly attractive, even with an initial cost for the transition.

That puts people out of work, shifting leverage from all workers in the state to all employers, which suppresses salaries and benefits.  This change in the balance creates incentive for politicians to meddle, which produces new ways in which hiring people becomes more expensive.  And repeat.

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Micromanaging Ourselves to Death (Indictment Edition)

Can we please stop trying to use the law to ensure that every situation has the outcome that we want on the time frame that we’d prefer?  Some processes are best left out of the direct, immediate dictation of legislators trying to correct something that happened in the past.

This problem is all over the place, all the time, but it comes to mind today with this news out of Providence, reported by WPRI’s Dan McGowan:

If this policy were already in place, former Providence City Council President Luis Aponte would have been forced to resign his leadership position immediately following his May 10 indictment.

That’s the pitch from Councilman Sam Zurier, who’s put forward a proposal to amend the city’s code of ethics to require any councilor indicated on a felony “directly related to his or her employment’ to step down from leadership positions and subcommittees. It will get a public hearing Tuesday evening at 5:30 in City Hall.

Zurier’s motivation is that it took political pressure for Aponte to resign his presidency, and it wasn’t a sure thing that he would do so.  That should be how we want such issues to be resolved.

If the removal from leadership becomes an instant consequence of indictment, prosecutors would have huge power to bring about political outcomes.  Perhaps we trust the people who have such power right now, but the same could be said of city council leaders as a general proposition.

The system worked in this case.  People made a case (and a scene) for Aponte’s resignation, and he wasn’t able to mount an adequate defense of himself.  If the indictment were corrupt or superfluous, he would have been able to push back against it and hold on to his role.

There are reasons we consider folks innocent until proven guilty, and one of them is that we don’t want to empower those who can bring charges to produce binding consequences without due process of the law.  We forget that at our own peril.

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Little Compton Shows Education Evolution is Inevitable

Folks elsewhere in the state may not know that Little Compton sends its high school students all the way through Tiverton to Portsmouth High School.  Why?  Because it’s generally understood to outperform the high school that they bus right past.  Some Tiverton private school families move to Portsmouth when their children hit high school or pay the tuition.

Now, according to the Providence Journal’s Linda Borg, Little Compton is looking to market its K-8 school to area families as a school choice option in its own right:

… By pricing tuition at $6,000 — less than the typical parochial school — the district hopes to attract students from neighboring Portsmouth, Tiverton, Middletown and Westport, Mass. …

“If I’m sitting in Portsmouth or Tiverton, I’m going to say, ’I can get my kid into a class where the student-teacher ratio is 14 to 1, where the school has music, choir, band, athletics, where we go on field trips to New York and Washington, D.C.,” said Supt. Robert B. Powers.

With Rhode Island families generally on a decline, we may see more and more public school districts looking for similar opportunities.  As that happens, Little Compton’s approach may raise questions at the Dept. of Education.  Can the state allow particular schools the flexibility to price their tuition under the assumptions that it will have a cutoff before they have to start thinking about hiring new teachers and “have a conversation” if any higher-cost special needs students apply?

These questions will start becoming thorny pretty quickly.  What happens to Tiverton, for example, if Little Compton starts filling out its excess capacity with low-cost Tiverton students for K-8 and Portsmouth tries the same for high school?  For that matter, what happens to private schools as the government’s subsidized competition expands beyond just charter schools to include all public schools, too?

Little Compton’s proposal may be an early indication that change is coming to education whether established players like it or not.  Given the degree to which government already distorts the education market, edging into it on a case-by-case basis will prove extremely disruptive.  Better to implement a well-considered, all-encompassing school choice program.

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About the Other Stadium…

Tim White raises an important point that seems to have been avoiding discussion related to the PawSox deal:

If approved, there will be another cost associated with building a new stadium in downtown Pawtucket to host the PawSox: tearing down McCoy Stadium.

The city of Pawtucket owns the land that 75-year-old McCoy is on, and officials have indicated there are no plans to keep the ballpark if the PawSox leave, whether by moving across town to the proposed Apex site or out of state.

The options on table range from likely to certain to require more government money and debt.  Rebuilding the high school on the spot will mean a big bond and a state taxpayer fund match and still leave the city with a plot of land to repurpose or dispose of.  A private buyer would probably negotiate and receive subsidies for some part of the property redevelopment.  Or just leaving it alone will mean a tax-free chunk of land in the city.

Whatever the final ask for the new stadium is, don’t forget that the project isn’t done with taxpayers, yet.

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Talk Property Taxes in Real Terms

Here’s a worthwhile exercise.  Pick a house value — the median for your town, perhaps — and search your town’s tax rolls for every house of about that value.  Then go back a few years, find the same houses, and see how things have changed.

For Tiverton, I used $260,000, which is around the median for the town, with this result:

In 2009, which is the first year for which the town has tax rolls that are easy to search on the computer, those same households paid $4,231, and the average value of their homes was $294,843. In other words, each family is now paying $744 more in taxes, even though each house is worth about $35,000 less.

Of course, that doesn’t tell the whole story because for the past three years, voters have used the [financial town referendum] to keep their taxes from increasing more than 0.9%. From 2009 to 2013, before the first zero-point-something FTR, those 37 taxpayers lost 14% of the value of their homes, but their actual tax payments went up 16%. Does that seem fair? Would Mr. Edwards tell his neighbors, “Hey, don’t worry! We ‘only’ added $166 to your tax bill every single year, and you ‘only’ lost $11,563 of your house’s value each year”?

Those who run government, and those who profit from it, are focused on their expenditures and finding ways to get taxpayers to keep handing over more and more money for their use and personal gain.  Hey, $166 added per year is only $3 per week.  If everybody in town would just skip a couple of coffees every week, they can collectively hand over millions more of their dollars to the town government.

Of course, after a few years of that, the entire town has had to give up the pleasure of coffee altogether, but it’s for the greater good, right? And we can feel comfortable letting the people who benefit from the money decide what the greater good is, can’t we?

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What Are City Governments’ Real Priorities?

Ted Nesi reports (if I may paraphrase) that Rhode Island cities have been crawling over each other to slurp from the sluice some money from the Boston Federal Reserve:

Federal Reserve Bank of Boston President and CEO Eric Rosengren visited Rhode Island on Thursday to award $400,000 grants to three local cities through the bank’s Working Cities Challenge.

The program aims to promote collaboration between local leaders to address socioeconomic challenges. The three Rhode Island winners are Providence, Cranston and Newport. Eight other cities submitted applications but did not win grants, which are funded by public and private contributions, not the Fed. …

Appearing on this week’s Executive Suite, Rosengren said the four-year-old program grew out of research conducted by the Boston Fed that showed efforts to tackle cities’ challenges worked best when leaders from different groups worked together toward a common goal.

Readers may recall that the Boston Fed’s involvement with Lawrence, Massachusetts, under a project in the same program is what kicked off my thinking about the “company state” or “government plantation” model, whereby government services become an area’s core industry, with the revenue coming from other taxpayers or higher levels of government (such as state or federal taxpayers).

With these new grants, we should also put the matter in the context of political structures and incentives.  Here we have cities competing to charm “public and private” outside interests with their proposals.  That is, they’re competing to match the values of the Boston Fed and the people or groups funding the project.  Sure, these “community” projects have local advocates (most often ideological activists, special interests, and other insiders), but ultimately, these projects are things being done to local constituents, not for them.

It’s time we stop seeing money that our governments manage to collect from other sources as money that we’ve somehow received.  It isn’t.  That’s especially true when it’s used for projects that the government wouldn’t otherwise have bothered to do.  It’s money that goes to the sorts of people who know how to get government money and spent in order to shape our society in ways that other people want, not us.

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Government Connections as Their Own Qualification

Here’s a peculiar tidbit from the Newport Daily News (not online).  Tiverton is hiring a new town administrator, and one of the applicants has a name that might be familiar to others across the state:

[Democrat State Representative from Lincoln and Pawtucket Jeremiah] O’Grady, a former Town Council president in Lincoln, is the director of operations for asset management for ONE Neighborhood of Providence, managing a 330-unit residential portfolio, he said.

He does not have any experience as a town administrator and does not have any experience negotiating union contracts.

OK, then.  On the other hand, O’Grady has “studied” some “town documents, such as budgets and audit reports” and therefore feels “comfortable in the position,” according to reporter Marcia Pobzeznik.

As a general proposition, I’d never discourage people from putting themselves out there for jobs for which they might not be credentialed, but I have to scratch my head on this one, not only the application, but also the fact that the Personnel Board would forward it on to the Town Council as one of three finalists.

Incidentally, ONE Neighborhood Builders appears to be a successor or parent organization to the Olneyville Housing Corporation, which has received nearly $400,000 per year from the state government in the past two (and more than $100,000 in prior years) from multiple agencies.

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Jackson Caught Up in the Suck of Big Government

Reading Dan McGowan’s detailed background of Providence City Councilman Kevin Jackson’s travails, I couldn’t help but feel sorry for the guy:

On Tuesday Jackson could become the first councilperson in Providence history to be recalled from office. A group of his constituents in Ward 3 on the city’s East Side launched the campaign to remove him after he was arrested last May on charges that he embezzled from the youth sports organization he co-founded in 1978 and misused his political campaign account.

The guy’s been in city government for twenty-something years.  You can see how, over time, funds get mingled, and liberties get taken.  (I’d actually argue that the campaign finance rules ought to be eliminated, anyway.)

The moral, it seems to me, is the value of term limits.  Spending that long in a position that makes one feel righteous and powerful is corrupting.

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School Buses and Regulatory Truancy

Students in Tiverton and elsewhere are having difficulty getting to school on time and parents are being made late for work because of a bus driver shortage, as Marcia Pobzeznik reports in the Newport Daily News.  Here’s the bus company’s explanation:

The company has tried every way possible to attract potential drivers, [First Student Transportation General Manager Bill Roach] said. It has put up billboards at bus stops and advertised at movie theaters.

“We’ve gone to football games, local markets,” Roach said.

The efforts have succeeded in getting 56 candidates into the state’s 50-hour training program, he said. But it takes 20-30 days to get an appointment for a road test.

“It’s very discouraging. The road testing is the choke point,” Roach said.

There are just one full-time and two part-time road test agents for the entire state. They not only have to certify new drivers, but re-certify existing drivers, he said.

So, the state has set up an arduous regulatory regime for bus drivers.  That is, the state has artificially restricted the number of bus drivers by requiring candidates to be approved (and reapproved and reapproved) by the state.  And then the state doesn’t supply the road test agents (or some other system) to handle the demand for this mandatory service.

The state has to begin choosing its priorities, because from UHIP to the DMV to bus driver certification to infrastructure to everything, it isn’t accomplishing the basic tasks that it has set for itself.  Of course, there’s money for crony capitalist tax breaks, flashy videos promoting the governor, vote-buying schemes by legislators, and disproportionate pay and benefits for union employees.

Given the tax burden throughout the state, money cannot be the issue.  The issue is a government that claims for itself too much power and won’t use the bountiful resources it has to accomplish the tasks that it therefore must undertake.

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