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The Budget: RI Government Seeks To Grow Itself, Not the Economy

Should the hopes, dreams, and aspirations of Rhode Island families be limited by an arbitrary, politically-driven budget number at the bottom of a spreadsheet? Unfortunately, our state is now suffering the consequences of such an approach, fueled by the progressive-left’s big-spending agenda.

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Vistaprint Deal a Great Example of Government Economic Meddling

The GoLocalProv Business Team has a great catch related to the deal that Democrat Governor Gina Raimondo’s Commerce Corp. just made to bribe online printing company Vistaprint to open facilities in the state:

The Raimondo Administration on Wednesday announced that Vistaprint and the potential of 125 new jobs are coming to Rhode Island over the next three years. But, RI Commerce admitted in a phone interview that they were unaware that one of Vistaprint’s competitor Moo.com is already located in Lincoln, Rhode Island. Moo.com is a design driven competitor who has been building its business in RI since 2009.

This discovery gets to the heart of the problem when government decides to be a player in the business world.  An investor picks a company and has no ethical quandary with his or her preferring that company over others.  A representative government respectful of individual rights and the free market isn’t supposed to do that.

State Commerce Secretary Stefan Prior tells GoLocal that Moo.com is free to apply for incentives, too, but what if there’s another Rhode Island company competing in this space?  Or, to take the next, easy step, what about other companies that aren’t in that particular type of business?  Ultimately, they’re all competing for the same dollars, employees, and so on, and taxpayers can’t subsidize every business.

This entire approach to economic development is presumptuous and a shortsighted reach for the headlines.  In the GoLocal article, Raimondo points directly to the problem when she says:

Governor Gina Raimondo said about the announcement of Vistaprint “The economy is growing, and today’s announcement means more good-paying jobs for Rhode Islanders. I’m thrilled that Vistaprint Corporate has chosen Rhode Island for its national sales office. Rhode Island provides exactly what Vistaprint Corporate was looking for-access to talent, a high quality of life, fiscally responsible incentives to make our state competitive during its search and long-term potential for growth.” (Emphasis added.)

That can’t be true.  If it were, the state wouldn’t have to bribe the company.  A better economic development plan would be to make it true by lowering taxes and regulations.

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The Corporate Welfare Strategy Has Failed

The massive budget shortfall is proof that the state government’s corporate welfare strategy has failed. Rhode Island’s current corporate tax-credit economic development strategy is highly inefficient as it creates relatively few jobs at an extremely high cost per job to taxpayers. This targeted ‘advanced industry’ approach does little if anything to improve the overall business climate, which is necessary if organic entrepreneurial growth is to occur on its own. A 3.0% sales tax would disproportionately help low-income families.

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Not Stating the Obvious on RI Economic News

I noted a couple of days ago URI economic professor Len Lardaro’s witticism at Democrat Governor Gina Raimondo’s suggestion that the state government’s revenue shortfall is a consequence of the Donald Trump presidency.  Lardaro also appears as a stronger-than-others voice of sanity in Patrick Anderson’s Providence Journal article on the same subject:

Leonard Lardaro, economics professor at the University of Rhode Island, said overall revenues falling short by 1.6 percent is “not a crisis,” but may be a sign that the recovery, tepid as it was, may be giving way to a stall in growth.

“The second half of last year was not a terribly favorable one for Rhode Island,” Lardaro said. “The biggest problem is our labor force has been declining since the last recession peak. Rhode Island for a decade should be in crisis mode.”

If anything, Lardaro understates things.  As I’ve written before, employment (Rhode Islanders working) has essentially flatlined since the start of Governor Raimondo’s first full fiscal year in office, and job growth (jobs in the state) has slowed down.  New York Times proclamations notwithstanding, there is no “momentum” in the Rhode Island economy.  And there’s no surprise that revenue growth isn’t materializing.

Why is everybody so hesitant about stating the obvious:  that Governor Raimondo is just making things up?  Is it partly because of glowing political profiles across the nation are a signal to local journalists and commentators about how they should be presenting our governor?  I rather think that pressure should go in the other direction, with the national press looking locally to make sure that they’re not falling for some spin about one of our own politicians.

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Suicide Demands More than Generic “More Services” Answers

I suppose Rhode Island Education Commissioner Ken Wagner deserves credit for mentioning non-government organizations when answering a question about young-adult suicide, but his “solemn” answer still elides something important:

A student from Barrington High School said suicide is the third-leading cause of death among young people ages 10-24 in Rhode Island. What can the schools do to help students with mental illness?

Wagner grew solemn. He said he had lost a close friend to suicide when he was young. That was one of the reasons he became a school psychologist. The schools have to invest in mental-health services, he said. But they also have to partner with mental-health organizations, with churches and temples, to get the word out, to publicize the warning signs.

Let’s start by acknowledging that the numbers are, thankfully, relatively small.  According to the WISQARS database of the Centers for Disease Control (CDC), the number of suicides among Rhode Islanders 19 and younger was 26.  That’s 26 horrible tragedies, but in light of the fact that there are more than 140,000 students enrolled in Rhode Island public schools, it’s a very small percentage, which suggests that the answer is more cultural than representative of a systemic problem that government services can solve.

The disappointing omission in Wagner’s generic, albeit heartfelt, answer is that this isn’t a demographically even group.  In the age group that the Barrington student mentioned (10-24), 80% of suicides are boys and young men.  If we look only at boys, defined as teens and pre-teens, the percentage is 73%.  That goes up to 77% if we just look at 2014 and 2015, meaning that the gender disparity is getting worse.

If teenage suicide is a problem in Rhode Island, it’s overwhelmingly a problem among boys.  Yet, Wagner’s boss, Democrat Governor Gina Raimondo, hosts an annual “Governor for a Day” writing contest that is only open to girls.

If we look only at Rhode Islanders aged 20-24, 88% of the 32 suicides over five years were young men.  These guys don’t need government services.  They need opportunity and a strong, healthy culture that encourages marriage and families.  In short, they need everything that the progressive agenda discourages.

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Booze Confirms: Sales Tax Sauce for Art Is Sauce for Everything Else

In case you (especially my fellow tea-totallers) hadn’t heard: in 2013, RI removed the sales tax on wine and spirits.

Coincidentally, that was also the year, at the urging of then-Senate President Teresa Paiva-Weed, the state removed the sales tax on art; more specifically, “original and limited edition works of art sold in the State of Rhode Island” were made exempt from state sales tax.

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Disconnect Between Health Care Rhetoric and Reality

So it seems that Rhode Island and national Democrats have decided that the outrage machine must remain dialed up to 11.  Rhode Island Congressman David Cicilline has proclaimed that Congress would kill “tens of thousands of Americans” if it passed the Republican health care bill.  (Put aside evidence that ObamaCare’s already tallying the deaths.)  Democrat governor of Rhode Island Gina (everybody calls me “gov”) Raimondo insists that the bill would strip families of health care coverage.

Meanwhile, as WPRI’s Ted Nesi reports, Care New England hospitals are losing money and struggling under ObamaCare:

The $26-million operating loss for the winter quarter, Beardsworth said, “further tells the story we have been very candid about – decreases in patient volume, a worsening payer mix, changing health care needs of the population, and extremely restrictive reimbursement caps in place through the state health insurance commissioner’s office.”

The payer mix refers to what share of hospital bills are paid for by different commercial and government insurers. In Care New England’s case, more of its revenue is coming from Medicaid, the state-federal insurance program for low-income people, and Neighborhood Health Plan; it says both pay less than Blue Cross & Blue Shield. The hospital group’s management attribute the shift to the Obama health law, which President Trump is now seeking to overhaul.

And not to be outdone, insurers around the country are beginning to be more vehement in warning that ObamaCare may have entered the much-warned-about “death spiral.”

Of course, many have suspected that a death spiral leading to full government control of health care was the underlying plan of ObamaCare all along.  So those now squawking are trying to score political points (and out-of-state donations, no doubt) while preventing Republicans from doing just e-pitiful-nough to keep American health care from fainting fully into the arms of the government vampire.

In a state with no political pull within the national Republican Party (i.e., the party in power), it seems politicians’ time would be better spent trying to figure out how to handle any changes that come along than jumping on this week’s excuse for stoking a “resistance.”

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What Are Raimondo Campaign Donors Buying from Out of State?

Shortly after adding the certification of school bus drivers to my running list of tasks at which Rhode Island government is failing, my morning reading brought to my attention multiple articles about Democrat Governor Gina Raimondo’s big fundraising take in the first quarter of this calendar year.  Here’s WPRI’s Ted Nesi:

Raimondo continues to demonstrate a fundraising prowess rarely seen in Rhode Island politics, having raised nearly $3 million since becoming governor and millions more before that when she was general treasurer. The state’s last two-term governor, Republican Don Carcieri, had about $275,000 on hand at the same point during his third year in office.

Want a fun fact?  According to the helpful spreadsheets that one can download from the state’s campaign finance search tool, so far in 2017, only 31% of the $570,110 the governor has raised came from people with addresses within Rhode Island.  That does represent a little bit of a change.  Going back to 2009 (the earliest available for her) brings Raimondo’s in-state percentage up to 51%.  Over those seven-plus years, by the way, the governor of Rhode Island has averaged a $541 donation from people out of state, but only $406 from donors in the state.

For comparison’s sake, Cranston’s Republican Mayor Allan Fung, presumed to be Raimondo’s most likely GOP challenger in 2018, has collected 99% of his $30,109 campaign donations so far in 2017 from people with in-state addresses.  If it seems unfair to compare a governor with a mayor, turn to the fundraising record of former Republican Governor Donald Carcieri.  He raised 89% of all of his campaign money from people in Rhode Island, and Rhode Island donors gave him an average $427 donation, versus $397 from each out-of-state-donor.

So what are Raimondo’s out-of-state donors buying with their money?  I’m sure their motivations are manifold, but I can’t help but notice that Wexford Science & Technology is back in the news, having received approval for $13.5 million in taxpayer incentives to do business in RI.  As I highlighted back in December, the interactions of Wexford, the Brookings Institution, and other private organizations are certainly, let’s say, interesting, as is the overlap with Raimondo’s donor base.

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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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Well, RI Does Love Passing Laws for Emotional and Political Reasons

In a Wall Street Journal op-ed with the get-right-to-the-point title, “Tuition-Free College Is Nothing More Than a Political Ploy,” Allysia Finley suggests real motivation is Democrat Governor Andrew Cuomo’s presidential aspirations.  She also suggests another topic that merits some careful research before Rhode Island jumps on the bandwagon:

Promising free tuition could steer more students to public schools from private ones. The Commission on Independent Colleges and Universities in New York estimates Gov. Cuomo’s plan would boost enrollment at public colleges by 116,000 while reducing the head count at nonprofit schools by 11%. The declines would be particularly acute at small, less selective colleges. For-profit schools would be pinched, too.

According to the commission’s analysis, the plan would shift $1.4 billion away from nonprofit colleges, resulting in 45,000 job losses. Compensating jobs would be created at public schools, but dislocations would invariably occur. “Once this is out there and implemented, possibly some of the more precarious institutions will go under,” Gary Olson, president of Daemen College, told Inside Higher Ed. “And what that will do is cause millions of dollars of lost economic impact on the local community where the college is located.”

Yes, the Commission on Independent Colleges and Universities sounds like an interested party, but our society is supposed to work by pitting such interests against each other for the public’s edification.  Perhaps one of Rhode Island’s problems is that it isn’t big enough for collective voices to emerge, even as politicians have enough power to make individual institutions wary of crossing them.

In that, Rhode Island an excellent case study in the danger of big government.  When your economy depends on the ability to procure special deals from the government, the incentive is to not advocate for your interests publicly, which leaves the public uninformed for votes.

Anyway, if Rhode Island’s non-government institutions of higher learning are too besotted or timid to argue their own interests, mark this down as another reason the General Assembly should pass the “free tuition” idea along for a study commission that might draw some real evidence out of the still waters of public discourse.

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You Can Save Rhode Island From Progressive ANTI-JOBS Agenda!

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? Not only does cutting the sales tax to 3.0% make sense for improving our state’s troubled economy, it is also the cure to the dangerous progressive agenda.

The four major PROGRESSIVE legislative initiatives that Rhode Island families and business owners should be worried about are:

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Higher Education Funding for Unaccountable Administrators

The American Interest points to an investigation of California’s state higher education system:

In other words, administrators have been hiring more administrators for make-work positions and giving each other raises without sufficient accountability in a self-perpetuating cycle of bureaucratic decay that is sadly endemic to academia at large.

These findings should give pause to those who think that larger and larger state subsidies are the answer to higher education’s woes. Much of the public money spent on “free college” schemes championed by left-wing populists would end up being pocketed by the ever-expanding bureaucratic class of student services directors, Title IX coordinators, and HR managers, raising costs while steadily diluting quality.

Before Rhode Island embarks on this “free tuition” idea — Curious, isn’t it, how this out-of-nowhere scheme by the governor is being pushed through without any real time to think? — maybe the state should conduct a study of the administrative weight of the organizations under the state’s system.  It’d be difficult to out-do California, but Rhode Islanders have a right to know how much they’re wasting on unaccountable educational bureaucracy.

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Marijuana and the Inevitable Pin-Hole Burns

The headline for this post derives from the Pink Floyd song, “Nobody Home,” from the concept album turned movie, The Wall.  As our rock star protagonist slips into loneliness and insanity, he’s looking around his hotel room and at himself, and he sees “the inevitable pinhole burns all down the front of my favorite satin shirt.”  The holes are from the embers of his cigarettes, which presumably he’s chain smoking.

Of course, neither smoking nor the indolent burning of holes in your shirt are inevitable.

Anyway, the lyric came to mind when I read the reaction of RI’s leading lobbyist for the legalization of marijuana upon hearing that Democrat Governor Gina Raimondo backs a study commission for the related bill, not the actual policy:

… legalization advocates say the commission would only delay the inevitable.

“The public is behind it. Massachusetts is moving forward. We don’t think a study commission is necessary because we already have the data,” Jared Moffat, of Regulate RI, said. …

Massachusetts retail shops will begin selling marijuana in July 2018. Moffat said delaying legalization in the Ocean State will result in sending jobs and revenue to the Bay State.

So speaks the pusher:  “Hey kid, your friends are all doing it.  You’re going to buy some eventually.  You might as well buy it from me, now.  Why be the last?”

Pink Floyd rhymes “inevitable pin-hole burns” with “the obligatory Hendrix perm.”  Hendrix’s death from a drug overdose wasn’t inevitable.  As a carpenter, I worked on a few projects with a painter who railed against anti-drug laws on the grounds that Hendrix died because his girlfriend was afraid to call for help out of fear of being busted for possession.  The first day I worked with that painter, by the way, he mentioned that he wasn’t quite himself because his friend had just died.  Another overdose.

Legalization is not inevitable.  If states that have made the leap find, for example, an explosion of hard-drug use (which is still in the cards), opinions will change quickly.  Haste is the imperative of those who fear a gamble will go sour.

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State House Report with John DePetro, No. 5: Branding Raimondo & Free Tuition

For my weekly call-in on John DePetro’s WADK 1540 AM show, the topics were my column on the “free tuition” plan, Raimondo’s free branding help from the Providence Journal, and more on the PawSox scheme.
Click full post link for audio.

I’ll be on again Tuesday, April 18, at 2:00 p.m.

(Note: Graphic parody of the Providence Journal‘s free promotional work for Governor Raimondo.)

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Leader Patricia Morgan Files Bill to Repeal (Clearly Unnecessary) Tolls

On behalf of all Rhode Islanders, thanks to Minority Leader Patricia Morgan for filing a bill to repeal RhodeWorks’ truck (wink) tolls. (See her statement after the jump.)

Governor Gina Raimondo asserted the need for tolls as a financial necessity to repair state bridges which were/are some of the worst in the country but, by golly, we just don’t have the will to find the money in the state budget (even though it’s a MAJOR public safety issue, danger, danger, Will Robinson).

However, the governor has decisively rebutted her own assertions about the fiscal necessity of tolls, as StopTollsRI.com (disclosure: I act as their spokesperson) pointed out in a letter to the Providence Journal on Sunday, by proposing a brand new, $30M/year spending program.

“Free” college tuition is at best nice to have (and it certainly would not solve the state’s employee skills gap, as the governor claims). If there is money in the budget for an expensive nice-to-have item, then it is clear that there is money for a less expensive vital service such as bridge repairs.

Legislators can now vote to repeal tolls, secure in the knowledge that public safety did not necessitate the passage of this highly destructive new revenue stream and confident that the money can be found in the budget to repair the state’s unsafe bridges. The governor has helpfully done this hard work for them.

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“Save RI”: The Antidote To The Progressive Agenda

Rhode Island families understand that our quality of life can only be improved if more and better businesses create more and better jobs! Yet, the progressive-left has a very different vision. They are openly promoting job-killing, anti-business, and anti-family policies. Their so-called “fair shot agenda” would transform our Ocean State into a liberal utopia … where businesses face even higher legal and financial risks, and where worker safety, absenteeism, and workplace productivity are compromised.

The Ocean State faces a stark choice.

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State House Report with John DePetro, No. 4: Flanders in the Outside Lane, Ruggerio on the Inside

For my weekly call-in on John DePetro’s WADK 1540 AM show, the topics were Robert Flanders’s play for the U.S. Senate, Raimondo’s tuition talking point, and Dominick Ruggerio’s insider senate presidency.
Click full post for audio.

I’ll be on again Tuesday, April 11, at 2:00 p.m.

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“Free Tuition” Makes Suckers of Us All

I’ve got the “con” side of a Providence Journal commentary-page presentation of Democrat Governor Gina Raimondo’s college tuition proposal, today:

The typical transition of students to adulthood goes something like this: Children begin attending public school in kindergarten (or earlier) and graduate with diplomas at the end of the 12th grade. Depending on their interests, aptitude and resources, they will either begin working, pursue vocational training or enter college. These decisions are all highly personal and represent only the beginning of a long life in the productive labor force.

In general, where is Rhode Island going wrong for its young folks in this story?

Hint: It isn’t the lack of opportunities for insiders to buy votes or take more money from taxpayers.

On the “pro” side is Deval Patrick who (as one might expect of a politician) tries to take credit for his state’s long slog toward health, proclaiming that “in many ways, from the perspective of a shifting economy, Rhode Island today looks like Massachusetts did 10 years ago.”  Umm.  Massachusetts’s Prop 2 1/2 tax reform went into effect in the early ’80s.  The Bay State’s education reforms were implemented in the early ’90s.  On that count, as I’ve written before, Patrick’s capitulation to the teachers’ unions placed a political ceiling on Massachusetts’s progress, and its standardized scores haven’t improved.

Raimondo’s got the front-page plastered with her face under the headline, “The Raimondo Brand: Nation’s top Democrats tout R.I. governor as icon of party’s ideals.”  If that’s true, the national party is gambling a great deal on the governor’s phony self promotion.  I end my op-ed quoting from Crimetown and suggesting that “free tuition” both compromises its beneficiaries morally and makes us all suckers.  One suspects a national audience won’t be as inclined to ignore the utter failures of Rhode Island government, nor be impressed with the numbers games of its “reforms,” nor desire to emulate the policies of a governor under whom employment growth has almost entirely stopped.

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Innovation Chief Takes Innovative Step of a Private-Sector Job

After a year or so of lucrative somehow-related-to-government work in Rhode Island, the state’s “chief innovation officer” Richard Culatta is venturing out into the (probably even more lucrative) Washington, D.C., non-profit sector:

Richard Culatta, Rhode Island’s chief innovation officer announced to NBC 10 Tuesday night that he is leaving for a new job at an educational non-profit in Washington DC.

Despite telling NBC 10’s Bill Rappleye that the move was “in the works for weeks,” Culatta gave no indication that he would be moving on during an appearance under a week ago with WPRO’s Tara Granahan.

The CEO for the RI Center for Freedom & Prosperity (a not-nearly-as-lucrative Rhode Island non-profit), Mike Stenhouse, is cited in the article for his doubts about the funding structure of the innovation office.  Readers may recall that The Current led the way last January in pointing out how Democrat Governor Gina Raimondo had a tendency of placing key people a few steps removed from accountability, in this case through a Constitutional loophole.

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PawSox and the Way Rhode Island Doesn’t Work

Reading up on the matter of the Pawtucket Red Sox and their search for a better stadium, as well as on the new Rhode Island Senate President Dominick Ruggerio (D, North Providence), something jumped out at me.  Here’s Ethan Shorey reporting on Ruggerio’s elevation to president in The Valley Breeze:

Given the fact that Providence and North Providence have two of the highest car tax rates in the state, Ruggerio said one of his top priorities is reducing or eliminating the state’s car tax.

As we all know, the person who made elimination of the car tax a major issue this year was Speaker of the House Nicholas Mattiello (D, Cranston), who — it needn’t be said — has a lot of influence over whether Ruggerio is able to move his own priorities.

Now here’s Patrick Anderson reporting in the Providence Journal on Ruggerio’s support for public funding of some sort of major project benefiting the PawSox:

Ruggerio said [Pawtucket Red Sox Chairman Larry] Lucchino did not present him with a specific request for state funds or identify a stadium site. He said those specifics are being negotiated with representatives of Gov. Gina Raimondo’s administration.

Doesn’t it seem like these multi-million-dollar matters are ultimately decided by a handful of politicians, each of whom has a self-interested agenda….

  • Mattiello to make his House seat more secure
  • Raimondo to pave the way for reelection and moving up in national politics
  • Ruggerio for some other reason, perhaps benefiting the labor union for which he works

… and basically negotiating for those reasons how they should distribute other people’s money?

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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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