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Rhode Island Lags in Food Stamp Reductions

Neil Shah reports, in the Wall Street Journal, that food stamp usage (Supplemental Nutrition Assistance Program [SNAP]) is down in the United States.  Although “food-stamp use remains high, historically speaking”:

There were 46.2 million Americans on food stamps in May, the latest data available, down 1.6 million from a record 47.8 million in December 2012. Some 14.8% of the U.S. population is on the Supplemental Nutrition Assistance Program, or SNAP, down from 15.3% last August, U.S. Department of Agriculture data show.

According to the data, there were 3.0% fewer SNAP participants in May 2014 than in May 2013.  In Rhode Island, the reduction over that same period was 1.3%.

In Rhode Island in May, 178,110 people were participants in the SNAP program.  That’s 16.9% of the population, according to the latest estimate of the U.S. Census, That’s 2.1 percentage points higher than the number for the United States as a whole.  Rhode Island has the 14th highest SNAP usage in the country.  Only Maine is higher, in New England.  (New Hampshire’s at 8.4%, while Connecticut and Massachusetts are both between 12% and 13%.)

It’s interesting, though, that Rhode Island’s reduction of SNAP participants has been so much slower than the national average, given the employment boom shown in Bureau of Labor Statistics (BLS) data.  I’ve asked the U.S. Department of Agriculture if it provides previous monthly estimates of SNAP participation.  It’d be interesting to see how that’s changed month to month.

RI’s Bad Decisions and Burning Money Instead of Tobacco

My op-ed in today’s Providence Journal places the match of Rhode Island’s experience of the tobacco settlement money (a one-time-fix turned bad debt) on the pile of bad decisions that the state government has made in the past decade or so:

According to a review by ProPublica, Rhode Island has just refinanced some of the resulting debt, with the expectation that “the deal would shave $700 million off a $2.8 billion tab due on the bonds in 2052.” In that regard, it’s a bit like the state’s pension reform, which was marketed as salvation but merely shaved about $3 billion from $9 billion of unfunded liability.

The people who operate Rhode Island’s government are racking up quite a list of these liabilities.

RI’s Bad Decisions and Burning Money Instead of Tobacco

My op-ed in today’s Providence Journal places the match of Rhode Island’s experience of the tobacco settlement money (a one-time-fix turned bad debt) on the pile of bad decisions that the state government has made in the past decade or so:

According to a review by ProPublica, Rhode Island has just refinanced some of the resulting debt, with the expectation that “the deal would shave $700 million off a $2.8 billion tab due on the bonds in 2052.” In that regard, it’s a bit like the state’s pension reform, which was marketed as salvation but merely shaved about $3 billion from $9 billion of unfunded liability.

The people who operate Rhode Island’s government are racking up quite a list of these liabilities.

Becoming the Medicaid State

Yesterday, I noted that enrollment in health insurance plans through the state-government-operated HealthSource RI had dipped by August 2.  In contrast, Medicaid enrollments have continued to grow, by an average of 3,430 per month, or a five percent growth of the total Medicaid rolls from the end of March to the end of August, now up to 257,884.  That’s now more than one-quarter of the entire state population.

If we assume that all new Medicaid enrollments were through the exchange, it’s an increase of 21% since March.

 

Here’s a not-so-fun fact:  The number of new Medicaid enrollments in Rhode Island from March to August was more than five times greater than the number of seasonally adjusted new jobs based in Rhode Island.  If you want a barometer of the direction in which the state is headed, that’s a pretty good one.

When the Future Can Pay for Your Business Model

The federal government’s deus ex machina act with HealthSource RI is as good an example as any of how government shouldn’t (but inevitably will) behave.  There was a little bit less than the preferred 100% certainty that the state would allocate money for its experiment in health broker entreneurialism during the last session of the state General Assembly, and the administration of big brother Obama swooped in with the cash to keep the Web site going for another year.

It wasn’t supposed to do so, under the written word of the Affordable Care Act (ObamaCare), and the state wasn’t supposed to accept it, under the written word of Governor Lincoln Chafee’s executive order creating the health benefits exchange.  But what’s the rule of law and twenty-something million dollars compared with giving government agents the opportunity to experiment with a new business model?

If the U.S. Congress and the governor have to say one thing in order to get their big-government policies implemented and then ignore the specifics when they become inconvenient, and if more imaginary money has to be pushed to the resulting agencies, that’s just the price of trying to solve all of our problems via the political system.

The combined activities of Americas local, state, and federal governments now cost more per American household than the median American household brings home in income.  The federal debt is now higher than the national GDP.  In Rhode Island, the state government is suffering the consequences of its need to fill budget gap with one-time fixes and a ratcheting squeeze on residents, who are choosing to leave.

Last week, I checked in with HealthSource RI.  After the open enrollment period ended in March, the agency had 27,961 enrolled individuals, with 21,097 having paid.  By the end of April, 25,767 had paid.  As of August 2, HealthSource counted 26,686 enrollees and 25,892 people paid up.

The federal government, in other words, gave nearly $1,000 per enrollee just for the exchange’s operating costs.  That doesn’t include the subsidies that 85-90% of the enrollees are receiving.

It takes a little bit of education and imagination to see the consequences of this behavior.  All that money comes from somewhere, and by the looks of the recent trends, it isn’t the much-vilified One Percent.  Not being able to trust that the deal that politicians make actually means what they say it means when they first say it has consequences, too.

It may be the perfect crime, though.  As the machine works its destruction, those whom it kills and those from whom it steals can’t easily see who’s to blame.

July 2014 Employment: The Dream Is Over

Rhode Island’s statistical employment surge came to a screeching halt in July, but not before putting the Ocean State in company with the Deep South. (Of course, the numbers still look likely to be revised downward dramatically in January.)

Illegal Alien Juveniles: And Rhode Island’s Total Rises to 148

Breitbart’s Tony Lee has obtained updated numbers from the United States’ Office of Refugee Resettlement as to the number of illegal alien juveniles released by the federal government for the period of July 7 to July 31 – July 7 being the last date for which we had those figures. The state by state breakdown indicates that Rhode Island’s total has risen from 129 to 148.

Our elected officials – those who support illegal immigration – have been acting as though this has been a completely unforeseen, one time wave of children, such as might be due to an earthquake, flood or other natural disaster.

Nothing could be further from the truth.

These children are being drawn here – are being sent here, more accurately – by the willful actions and inaction of our national leaders: 1.) more generally, the United States has substantially reduced its enforcement of the immigration laws currently on the books and 2.) more specifically, the action of the President of the United States, who has effectively turned on a beacon by making it clear that his administration is extremely reluctant to deport any illegal children who come here. (You don’t suppose word will get out about the data that backs this up, do you? Naw!)

It probably doesn’t hurt that the federal government has rolled out the red carpet for at least some of the illegal alien juveniles.

Accordingly, as things stand, there is no reason for this stream of illegal arrivals, nor the strain on public budgets nor the erosion of our sovereignty, to end.

The question now, closer to home, is, what is Governor Chafee doing to stem the tide of illegal aliens into Rhode Island and the corresponding stream of money out of state and local tax coffers? Has he offered objection to the federal government to the arrival in Rhode Island of these and any additional illegal alien juveniles, an action that would also help to address the larger problem by discouraging illegal immigration? If not, has Governor Chafee identified what he would like to see cut from budgets, both local and state, none of which have much leeway in the expenditure column, to pay for the expenses – minimally, education and Medicaid – associated with these arrivals?

The People Are Leaving. Be Angry.

News that productive people seeking to build a life are leaving Rhode Island is not new, but Rhode Islanders have to start being angry about it.

About That Part-Time Job Theory

Whatever is generating the strange statistics in the labor market, a shift toward part-time work doesn’t appear to provide a satisfactory explanation.

Progressive Policies Hurt Working People

Kevin Williamson is on a roll, lately:

Progressives argue that we need deeper government involvement in the economy in order to assuage the ill effects of economic inequality. But, as Joel Kotkin points out, inequality is the most pronounced in places where progressives dominate: New York City, San Francisco, Los Angeles, Chicago. The more egalitarian cities are embedded in considerably more conservative metropolitan areas in conservative states. “Part of the difference,” Mr. Kotkin writes, “is the strong growth of higher-paid, blue-collar jobs in places like Houston, Oklahoma City, Salt Lake, and Dallas compared to rapidly de-industrializing locales such as New York, San Francisco, Chicago, and Los Angeles. Even Richard Florida, the guru of the ‘creative class,’ has admitted that the strongest growth in mid-income jobs has been concentrated in red-state metros such as Salt Lake City, Houston, Dallas, Austin, and Nashville. Some of this reflects a history of later industrialization but other policies — often mandated by the state — encourage mid-income growth, for example, by not imposing high energy prices with subsidies for renewables, or restricting housing growth in the periphery. Cities like Houston may seem blue in many ways but follow local policies largely indistinguishable from mainstream Republicans elsewhere.” In Detroit, Chicago, and Philadelphia, African Americans earn barely half of what whites earn —  and in San Francisco, African Americans earn less than half of what whites earn. Hispanics in Boston earn 50 percent of what whites make; but it is 84 percent in Riverside County, Calif., a traditional Republican stronghold (it holds the distinction of being one of only two West Coast counties to have gone for Hoover over FDR and is Duncan Hunter’s turf), and the figures are comparable in places such as Phoenix and Miami.

As in many other recent political arguments, Rhode Island offers an excellent test case.  As I’ve long been pointing out, the group that is struggling and leaving Rhode Island is the “productive class,” those people who are striving to transform their labor into money and comfort.  The rich are insulated and the disadvantaged are well served, relative to other places.  Meanwhile, the insider culture (which includes government unions) creates a path to the middle and upper-middle classes for people willing to play along, but at the expense of the working and lower-middle classes.

Profit as Theft from the Collective

Disdain for “for profit” companies is an indication that progressives believe all property actually belongs to the government, and taking extra is a type of theft.

June 2014 Employment: And the Happy Face Keeps Smiling

Based on the numbers, Rhode Island’s employment woes appear to be coming to an end. The numbers feel wrong, though, and some experts’ explanation doesn’t seem to fit.

During Hard Times, Crack Down on Workers?

Here’s a pretty good example of how Rhode Island politicians and the special interests who govern them look at their neighbors’ plight.  The legislation is Senate bill 2410, sponsored by Hanna Gallo (D, Cranston, West Warwick), Erin Lynch (D, Cranston, Warwick), and Dominick Ruggerio (D, North Providence, Providence), and House bill 7391, sponsored by John Edwards (D, Portsmouth, Tiverton), Donald Lally (D, Narragansett, South Kingstown), Christopher Blazejewski (D, Providence), and Katherine Kazarian (D, East Providence).

Basically, the legislation — which Governor Chafee signed into law (naturally) — triples the fine for a first offense violating the chapter of Rhode Island law dealing with the licensing of plumbers, from a painful $500 to a potentially devastating $1,500.  Second and subsequent offenses more than doubled, from $950 to $2,000.  There may be a variety of violations that could spark the fines, but mainly, they have to do with performing unlicensed plumbing or disregarding plumbing regulations.

That’s right: After years of Rhode Island’s being thousands shy of its peak employment, after months of its having the worst unemployment rate in the country, during an era of low or non-existent economic growth and taxpayer flight, the Rhode Island General Assembly finds it important to tighten the screws on one of the better-paying blue-collar occupations.

In the upcoming election, voters should consider that the only legislators who don’t think a time of economic agony is ripe for cracking down on people trying to make ends meet were Rep. Michael Chippendale (R, Coventry, Foster, Glocester), Rep. Doreen Costa (R, Exeter, North Kingstown), Rep. Karen MacBeth (D, Cumberland), Rep. Michael Marcello (D, Cranston, Scituate), Rep. Patricia Morgan (R, Coventry, Warwick, West Warwick), and Joseph Trill (R, Warwick).  Not a single senator voted against the bill.

Here are the “yea” votes in the Senate:

YEAS- 33: The Honorable President Paiva Weed and Senators Algiere, Archambault, Bates, Conley, Cool Rumsey, Cote, Crowley, Doyle, Felag, Gallo, Goldin, Goodwin, Hodgson, Jabour, Kettle, Lombardi, Lynch, McCaffrey, Metts, Miller, Nesselbush, O’Neill, Ottiano, Pearson, Picard, Pichardo, Raptakis, Ruggerio, Satchell, Sheehan, Sosnowski, Walaska.

And in the House:

YEAS – 66: The Honorable Speaker Mattiello and Representatives Abney, Ackerman, Ajello, Almeida, Amore, Azzinaro, Bennett, Blazejewski, Canario, Carnevale, Casey, Cimini, Coderre, Corvese, Costantino, Craven, DeSimone, Diaz, Dickinson, Edwards, Fellela, Ferri, Finn, Gallison, Giarrusso, Guthrie, Handy, Hearn, Hull, Johnston, Kazarian, Keable, Kennedy, Lally, Lima, Lombardi, Malik, Marshall, Martin, McLaughlin, McNamara, Melo, Messier, Morin, Newberry, Nunes, O’Brien, O’Grady, O’Neill, Palangio, Palumbo, Phillips, Ruggiero, San Bento, Serpa, Shekarchi, Silva, Slater, Tanzi, Tomasso, Ucci, Valencia, Walsh, Williams, Winfield.

Continuing Incredulity on RI Employment Reports

Preliminary employment numbers for June produce the following chart.  I’ll have the final chart and all its companions tomorrow.  One thing’s clear, though: The employment numbers are still impossible to believe and likely to be revised dramatically after the election.

State Taxes and Economic Health

The effect of taxes on a state’s economic health is one of those repeated questions that is never resolved.  The obvious reason (I’d propose) is that it’s one of those areas that depends hugely on specific circumstances, but the ideological intentions of those having the discussion tend to promote specific findings as broad conclusions.

The last sentence of the most recent academic contribution to the debate, by Pavel Yakovlev of the Mercatus Center, probably captures about the broadest statement that can be made:

… not all tax variables exhibit a significant correlation with the selected measures of economic activity, but when they do, the relationship is usually negative.

Yakovlev concludes his summary in a way that’s probably more comprehensible to the average person:

Not all types of tax increases can be expected to significantly harm economic outcomes, but higher taxes are generally correlated with lower standards of living.

In the phrasing of a popular meme: I don’t always affect the economy when I increase taxes, but when I do, it usually hurts.

Another important variable that Yakovlev mentions in the course of presenting his findings is the quality of public services provided.  It is assumed that in some circumstances (or at least to some people) the trade-off of higher taxes for quality government services favors the latter.  Presumably, it is less common for people to want to have high taxes in order to finance poor government services.

Throughout the study, Yakovlev looks at two competing ways of calculating the correlation of variables that can sometimes serve to support different ideological preferences.  On the government-spending side of the ledger, the results find a positive correlation between taxpayer migration and education spending, but negative correlation of migration with infrastructure spending, public health spending, and public welfare spending.

Especially on the infrastructure count, that finding might be counter-intuitive, because we tend to think of better roads and bridges as a contributor to economic health.  One plausible explanation for the results is that the amount of spending on infrastructure doesn’t translate well into results.  In other words, over a basic minimum of spending on roads and bridges, additional dollars are wasted.

Of course, an objective viewer of Rhode Island would have to conclude that this level of discussion is mostly moot in the Ocean State, as the latest competitiveness report card from the RI Center for Freedom & Prosperity illustrates.

All of our taxes are high.  Most of our services are poor.  People are generally leaving; opportunity remains difficult to find.  And the hope of substantive change is limited.

The Missing Question on Transportation Funding

Channel 10 has a report up on the sorry state of Rhode Island’s roads and bridges and the absence of funds to address the problem.  Here’s the missing question that really needs to start being asked:  Where is all the money going?

From 2003 to 2013, Rhode Island’s budget increased from $5.4 billion to $7.7 billion.  That’s a 42% increase, or 3.56% per year compounding.  Over that same period, the gross state product (GSP) went up 32% (2.79% compounded per year), and inflation was 27% (2.39% per year).  (From 2005 to projected 2015, by the way, the state budget increase is 46%, or 3.88% compounded annually.)

With the government’s budget growing so much more quickly than either the state’s economy or inflation, where is all the money going?

According to WJAR’s Susie Steimie:

President Barack Obama is pushing Congress to put $300 billion toward road repairs.  The president warns if we don’t put money toward infrastructure repairs the economy will suffer.

We must stop letting politicians off so easily.  $300 billion doesn’t materialize out of nowhere.  From where does Obama plan to take that money, and why won’t that hurt the economy?

Unless we move past the superficial analysis of noting problems and insisting that the solution is money, we’re like children being governed by the Coachman on Pleasure Island.

Rhode Island Fix a Philosophical Shift; Contra Renn, Part 6 of 6

Ultimately (part 6 of 6) Aaron Renn has to explain why a small group of decision makers have a better chance of success than Rhode Islanders acting on their own initiative.

Rhode Island Fix a Philosophical Shift; Contra Renn, Part 5 of 6

Part 5 of a response to Aaron Renn: What kills the entrepreneurial spirit in Rhode Island?

Rhode Island Fix a Philosophical Shift; Contra Renn, Part 4 of 6

Aaron Renn’s prescriptions for RI. Part 4: Who is the “you” who puts us to use?

Rhode Island Fix a Philosophical Shift; Contra Renn, Part 3 of 6

Countering Aaron Renn’s central planning in Rhode Island. Part 3: What’s unemployment insurance have to do with the price of gasoline in Seekonk?