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Overtime Rules and Progressives’ Vision of a Fallow Field of Money

Here’s a reminder, from the site Uprise RI, that progressives really do think this way.  The topic is the federal rule that allows companies not to pay overtime rates to managers who make over a certain limit.  The Obama Administration wanted to increase the limit from $23,660 to $47,476 annually, but the courts put a hold on the move, so the Department of Labor is spending some time doing research and listening to advocates.  This is from Steve Ahlquist’s coverage of the Rhode Island leg of the tour:

Each month, since the abandonment of the Obama-era threshold, Rhode Islanders have lost about $400,000 in wages, estimated the Center for American Progress and the Economic Policy Institute.

“This is money that could be helping those families,” said [Economic Progress Institute economic and fiscal policy director Douglas] Hall. “They would spend that money locally in our economy, helping the Rhode Island economy to thrive and helping global businesses to prosper.”

Progressives really do imagine that businesses have some field of uncultivated money laying fallow in the economy from which they can pluck more pay.  To the contrary, if this threshold is increased, businesses will have to reduce either productivity or investment.  Fewer new hires will happen and the demands on workers will increase, losing them benefits and flexibility.

Just let the market be.  The government shouldn’t be an uber labor union imposing blanket rules on our economy.  Money always has to come from somewhere, and as a general proposition, the burden will fall most firmly on those who have the least leverage.

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The Most Critical Consideration for an Inspector General

This came up in my discussion last week with John DePetro (for which I have no audio), but the point is significant enough to merit a quick post.  As most people who follow Rhode Island politics, Republican candidate for governor, Patricia Morgan, earned some attention for making the notion of an inspector general part of the campaign and naming her first choice:

At her Warwick campaign headquarters, Morgan, the House minority leader, announced that if elected governor, she would create an office of the inspector general, and she named Arlene Violet, a former state attorney general, as her first choice to run that office.

An inspector general would root out waste, fraud and corruption and make the government more accountable to the taxpayers of Rhode Island — goals that reflect Morgan’s vision of government.

Having helped to craft legislation to create an inspector general a few years ago, I find this approach worrying.  State government already has multiple offices for people auditing and reviewing government’s activities.  The whole reason to create a new office of the inspector general is his or her independence.  The most important components of any plan for such an office, therefore, are the way in which he or she acquires the position, who can take that position away, and how it is funded.

One could reasonably argue that such a job ought to be defined in the state’s constitution, but at least creating the job through the General Laws would impose political pressures on the legislature and the executive not to be seen meddling too much.  The notion that a governor could come in, create the office, and then appoint a person of his or her choosing is contrary to the fundamental spirit of the policy.

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Whom the Wavemakers Wash Out with the Tide

How typical of the Rhode Island Way is Democrat Governor Gina Raimondo’s Wavemaker program?

A total of 240 college graduates working in science, technology, engineering, math and design occupations have been awarded Wavemaker Fellowships to help pay their student loans, the R.I. Commerce Corporation announced Thursday.

The average award in this, the third year of the program, is about $3,600. The tax credits are intended to keep recent college graduates working in Rhode Island, rather than become part of a “brain drain” to other states.

Put aside chuckles at the notion that keeping 240 Rhode Islanders each year does much to help the brain drain problem and the question of whether that $3,600 is actually persuading most of them to stay here despite options elsewhere.  Who pays for this program?

The answer is that we all do.  The money is skimmed from all of the various taxes and fees that we all pay, and as small as the $864,000 price tag may be, it ultimately becomes concentrated on the most active participants in the state’s economy, who must find ways to pass the burden on.  One can’t trace such things, dollar for dollar, but it’s a relatively safe bet that the burden ultimately comes to rest on those with the least economic leverage.

Of course, we know it’s not only $864,000 per year.  For the Wavemaker program to seem so ordinary, there must be many other programs that follow a similar philosophy.  For such a seemingly inconsequential program to be proposed, enacted, and implemented, it must accord with Rhode Island’s political and economic strategy, which we can summarize as getting somebody else to pay for politically convenient favors… preferably somebody whose face we will never have to see.

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Government Involvement in the Internet Isn’t About Freedom

Here’s something I don’t get:  Not that long ago the word went out that retracting net neutrality rules would end the open Internet as we know it, bringing it all the way back to the distant, dark days of January 2015.  So one would expect new proposals reportedly leaked from Senate Democrats to rev up the outrage machine again.  The plan is extremely broad, but a major plank is requirements for verification of users’ identities (at least for non-hackers), as well as…

Other proposals include more disclosure requirements for online political speech, more spending to counter supposed cybersecurity threats, more funding for the Federal Trade Commission, a requirement that companies’ algorithms can be audited by the feds (and this data shared with universities and others), and a requirement of “interoperability between dominant platforms.”

The paper also suggests making it a rule that tech platforms above a certain size must turn over internal data and processes to “independent public interest researchers” so they can identify potential “public health/addiction effects, anticompetitive behavior, radicalization,” scams, “user propagated misinformation,” and harassment—data that could be used to “inform actions by regulators or Congress.”

Of course, this proposal and net neutrality are only at odds if the people pushing either attempt to use the rhetoric of freedom.  If the goal is government control of the Internet, then they’re both perfectly in line, in which case net neutrality supporters were either deceived or have an unjustifiable faith that government overlords will always favor the content they desire.

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Next/Last Round of Toll Gantries: Raimondo Administration Solicits Public Comment on an UNFINISHED Environmental Assessment

A couple of weeks ago, Governor Gina Raimondo’s Department of Transportation announced the locations of the balance of ten toll gantries and released an Environmental Assessment [PDF] of them. They also announced that hearings to take questions and comments on the E.A. would occur in three locations on July 27 – tonight, as a matter of fact.

Yes, that’s right, RIDOT is holding public hearings on a very significant project on a summer Friday evening. Quite similar in spirit, as a matter of fact, to the scheduling and location of the hearing for the first Environmental Assessment – in that case, two days before Thanksgiving hard by a cow pasture in South County so remote, the cows themselves need GPS to get there.

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Home Care: When Everybody Works for the Government and Government Works for the Unions

The RI Center for Freedom & Prosperity is warning that the Rhode Island government’s dogged push to unionize home care workers despite recent Supreme Court precedent in the opposite direction could very well make the state a target for lawsuits:

The Rhode Island Center for Freedom & Prosperity warns SEIU and the state government that it could face legal peril if they do not fully comply with the new federal restrictions expected to be in place this fall, as it pertains to the attempted unionization of the home care industry.

“The landmark Janus decision by the US Supreme Court, combined with the expected implementation of the Medicaid Provider Reassignment Regulation Proposed Rule by the federal government, means public employees can no longer be forced to support the political agenda of their designated union. It also means the government can no longer aid unions in their attempt to skim dues from precious Medicaid dollars, intended for the care of our loved ones.” explained Mike Stenhouse, CEO for the Center.

Voters can tell whose side their elected officials are on by how they respond to these changes in federal labor law.

There isn’t really any question, in Rhode Island.  The governing Democrats believe that unions represent a critical partner in their control of the electorate.  Taxpayer dollars flow to the unions and then to the politicians (through jobs, donations, “independent” campaigns, and other routes), and unions organize employees into a voting block for the high-tax, big-government policies that the state’s dominant party is selling.

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Amplifying Incumbent Protection Program of Campaign Finance

Maybe it’s a trap that has just organically formed due to human nature or maybe it’s a deliberate scheme, but ever-increasing campaign finance regulations are effectively an incumbent protection program.  Consider the next notch on the ratchet, as proposed by state representative Deborah Ruggiero and state senator Louis DiPalma:

The state’s campaign finance laws need to be tightened so officeholders and candidates cannot repeatedly amend their finance reports that list all expenses and contributions in a given period, according to Rep. Deborah Ruggiero, D-Jamestown. …

“Mandating submission of a paper bank statement is a good first step, it allows the Board of Elections to easily identify discrepancies, but we should go further and require banks to send electronic statements directly to the [Board of Elections], as is done in Massachusetts,” Ruggiero said in the statement. “Most-needed though are stiffer penalties for repeated amendments to campaign finance reports and not filing on time.”

Having spent many hours working with the Board of Elections Campaign Finance Unit, I can report that situations easily arise that aren’t absolutely clear in the law and can lead to very time-consuming revisions of reports going back months simply to adjust for a $1 discrepancy.  And having worked with local candidates for office, I can also report that even just the prospect of having to fill out these forms is a significant disincentive to run.  If the rules are made even more strict more people will simply decide that it isn’t worth the effort or risk.

The question that arises is whether it’s more important for our democracy to be able to trace every penny that is donated or spent by state and local campaigns or to avoid having more than one-third of incumbents in the General Assembly winning their campaigns simply by getting their names on the ballot, because they have no opposition.  From my point of view, that isn’t even a close competition.

We’re not going to end corruption by catching it in nickel-and-dime inspection of small-time politicians’ campaign accounts.  We need to ensure that all politicians are under constant threat of losing their seats.  The bigger-time the corruption, the more likely the politician will be to hire people to avoid accounting errors, even as the people who would like to challenge him or her out of a sense of public service are tripped up and fined for minor errors and lapses.

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Assumptions in the Elimination of Parental Rights

An advocacy-as-news article from Megan Mitchell, a reporter/anchor for WLWT in Ohio, inadvertently brings into stark relief a flawed assumption and deadly blind spot in the promotion of transgenderism among children.  Teresa Schrader supports the decision of her daughter, Riggins, to present as a boy:

“I know my transition was easier because of my family and friends, but I also know that other kids like me don’t have it as easy because they don’t have the support,” said Riggins.

The new bill, proposed by Ohio Rep. Thomas Brinkman (R), from Mt. Lookout, would require school and hospital staff to inform a parent if a child indicates they aren’t sure about their gender.

Transgender advocates say the bill can create an unsafe environment for transgender children who aren’t supported by their family.

“The suicide rate for transgender kids is around 40%. So who wants their kid to possibly commit suicide because they’re not feeling comfortable with who they are or their not feeling supported?” said Schrader.

In an argument over legislation that would require teachers and therapists to inform parents of their children’s gender dysphoria, the party asking what parent wants his or her child to commit suicide should be the one insisting that parents have a right to know what’s going on with their children.  Schrader is assuming not only that satisfying the transgender impulse can be the right answer, but that it should be assumed always to be the right answer if the child with the dysphoria thinks it is, and that some parents might actually be willing to risk his or her suicide to disagree.

The more dreadful point, though, is the one less remarked upon.  The implicit argument is that schools and therapists should help to push children — children in a group that is more prone to suicide — into a situation in which they’re deceiving their parents about something supposedly central to their identities, possibly changing their own biology behind their parents’ backs.

A reasonable argument might exist that the legislation should be amended to account for those extreme and rare circumstances in which a parent can be excluded from the notice, but even getting that far is apparently beyond consideration.  Parents are villains until proven woke.

Rhode Islanders should pay attention, because policies being promulgated at the state and local levels infringe on parents’ rights in exactly the way Representative Brinkman is striving to remedy in Ohio.

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In Rhode Island, Everything’s in a Name

The Rhode Island House Republicans’ Twitter account tweeted out a bit of deep insight from Mike O’Reilly of the Federal Communications Commission on C-SPAN:

“I was dealing with Rhode Island. They decided they were not going correct it, withstanding all the promises early in the year. They rename the program for the following year, thinking it’s going to fix the problem.” FCC Commissioner @mikeofcc

He’s talking about the 911 fee that the state government has come under scrutiny for misappropriating, but this is common in Rhode Island.  After 38 Studios, the General Assembly changed the name of the Economic Development Corporation (EDC) to the Commerce Corporation and, voila, all is right with Rhode Island policy.  In the season of education reform, Rhode Island shifted some names and org charts of state-level education boards around and all of a sudden children began a new educational voyage… I guess.

Once again the reminder:  Elected officials will keep doing this stuff until it stops working for them.

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Law Will Cure Lack of Paid Time Off by Undermining Businesses That Have Difficulty

Paul Edward Parker’s Providence Journal article profiling businesses that are and aren’t concerned or confused about Rhode Island’s recently passed law to force employers to provide paid time off for employees implies the reason the legislation was a product of hubris:

“I can’t even imagine how that would work out, being a seasonal business,” Bitto said in a telephone interview last week. At Evelyn’s, the season runs from mid-April to Oct. 1. …

With the Evelyn’s season running about 170 days, any employees who work the whole season will be able to use their accrued sick time during the last two or three weeks of their employment. …

“Honestly, I have no focus on it at all,” she said. “I’m just busy running the business, worrying about my freezer breaking down.”

Meanwhile:

Dan Dwight, president and chief executive of the Pawtucket-based Cooley Group, which makes fabric and polymer roof membranes, isn’t sweating the new law. His company, which has about 130 employees in Rhode Island, already provides paid sick days.

For the most part, employers who can offer this benefit already do, and those that don’t have a good reason and (given market pressures) have probably accounted for the omission somewhere else in their compensation packages or business practices.  That could mean higher pay, to attract employees willing to forgo paid time off, or a work environment that is attractive for some intangible reason or hiring people who might not otherwise be able to find work (like young adults looking for seasonal jobs).

Forcing this regulation on every business reduces employees’ negotiation leverage, makes it more difficult for new businesses to get going and to expand, and gives some businesses an advantage over others simply because of their size or because the nature of their work better lends itself to this particular benefit. In the long run, the result won’t be that every Rhode Island employee has paid time off so much as that those whose potential employers who can’t offer it simply won’t exist.

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Wasted Opportunity – 2019 Budget Graded “D-” by the Center

When will Rhode Island’s political leaders remember of the real needs of families? Despite a large and unexpected revenue windfall and clear policy lesson, resulting from the recent federal tax and regulatory cuts, Rhode Island’s General Assembly has wasted an opportunity for reform and, instead, are seeking to maintain the status quo in the FY2019 Budget.

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Equal Pay Is Dead, Long Live Equal Pay

The news is everywhere in Rhode Island media that the Rhode Island Senate will not consider the House version of the “equal pay” legislation:

The day began with a pronouncement by the Senate that the “pay equity” bill — which tied the House in knots before a 64-to-9 vote of approval the previous night — was dead on arrival in the Senate, which had passed a much further-reaching bill earlier in the year.

“The Senate prioritized pay equity this session,″ said Senate spokesman Greg Pare. “On April 10, national ‘Equal Pay Day,’ the Senate passed strong legislation to address wage gaps in the workplace. The legislation the House passed last night does not reflect the Senate’s commitment to ensuring equal pay for comparable work and meaningful change for women’s economic security.

“The Senate will not be considering the House bill.”

So, even though the two versions of the bill have substantial overlap, if one chamber doesn’t pass the other chamber’s version, that’s that.  A cynic (which can, with only mild cynicism, be defined as “somebody who has observed the Rhode Island General Assembly for a while”) might wonder how choreographed this performance was.

Prioritizing the issue was an early and somewhat surprising point of emphasis for Senate President Dominick Ruggerio.  This outcome gives him progressive cover, while giving House Speaker Nicholas Mattiello pro-business creds for his first election after nearly being unseated by a conservative challenger, all in the muddy mix of a legislative process that makes it difficult to blame anybody in particular.

Rhode Islanders should welcome the results, though.  The Senate legislation was a radical nightmare that was arguably only in part about reducing a wage gap between men and women, and the notion that discrimination is creating an unfair differential in pay is a myth.  In other words, forcing its mandates on the economy would create a regulatory environment that would be unfair to businesses and to employees whose work would be devalued in order to adjust pay rates that are not based on discrimination as it is.

The inability of the General Assembly’s two chambers to come up with common legislation will now move the issue past the November election, which may very well take some of the hot air out of the narrative’s sails, one way or another.

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The Conditions Under Which Progressives Will Lease Us to Businesses

One last minute bill in the Rhode Island General Assembly, H8324, may or may not be going anywhere, but it’s worth a look as an educational exercise.

Very simply, it would require any “hosting platform” (e.g., AirBnB) that allows people to “offer any property for tourist or transient use” to be responsible for making sure that the rentals are in compliance with state and local laws and regulations.  It would also require the platform operators to take a more active role in the collection and transfer of all relevant taxes.

This little change in law, affecting a narrow portion of a single industry in the state, carries some important questions of the sort that we don’t consider thoroughly enough.  What is the nature of commerce?  Who works for whom?  Who has responsibility for whom?

From a free-market perspective that starts with the individual as the origin of all economic activity, the property owners are responsible for the product that they are offering, and the hosting platforms work for them.  Because they are the constituents of state and local government, they have a say in that government and can arguably be said to have consented to granting it some authority to regulate their activities.

The progressive perspective that has long been insinuating itself into Rhode Island government and encroaching on Rhode Islanders’ rights is very different.  That view doesn’t begin with individuals as autonomous sources of responsibility and power.  The Rhode Islanders seeking to rent their property don’t truly have ownership of themselves.  Rather state and local government has claims on their activities, and the hosting platforms own their rental businesses.  It is therefore reasonable for the government to require platforms to make sure that their workers comply with its requirements.

From a free-market perspective, a government that imposes requirements on people might create incentive for them to hire a contractor to do tasks for them — for AirBnB to provide inspections for regulatory compliance, for example, with an extra fee.  But from a progressive perspective, the government has a right to tell companies that intend to draw profits from its people what conditions they must impose, or else they cannot do business here.

In other words, progressives implicitly believe that the government is renting us out to the companies.

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We’ll Get Internet Sales Taxes; Will We Get Our Rate Reduction?

With its more-conservative members taking the lead, the Supreme Court today opened the way for states to begin imposing their sales taxes on Internet commerce, even for sellers that don’t have a presence in their states, through South Dakota v. Wayfair.  The judges’ reasoning was that previous Supreme Courts had incorrectly applied the Commerce Clause of the United States Constitution on this topic.

From an originalist point of view, then, the states have always had the authority to collect sales taxes, but as various technologies have eased the ability to conduct commerce across state lines, Supreme Court decisions have incorrectly restrained that authority.  This point is especially relevant in Rhode Island, because our state law (RIGL 44-18-15.2) instructs the executive branch to begin collecting sales taxes from online retailers “upon passage of any federal law authorizing states to require remote sellers to collect and remit sales and use taxes.”

State law also (RIGL 44-18-18) requires the executive branch to lower the rate for all sales taxes from 7% to 6.5% “upon passage of any federal law that authorizes states to require remote sellers to collect and remit sales and use taxes.”  So, “on the date that the state requires remote sellers to collect and remit sale and use taxes,” every retailer in the Ocean State (and those outside of Rhode Island, like Amazon, that already collect our sales tax) should begin to collect 50-cents less for every $100 of a sale.

Here’s the possible catch:  Does a Supreme Court ruling count as “passage of any federal law”?  Rhode Islanders should watch closely for signs of the following possibilities:

  • The executive branch asserts that it is already authorized to collect the online sales tax based on 44-18-15.2, in which case taxpayers would have a very strong claim that it must also collect tax at the 6.5% rate.
  • The General Assembly rushes to change state law in a way that allows the collection of Internet sales taxes without dropping the rate.
  • The General Assembly attempts to sneak in the same result in some way, perhaps by inserting a phrase like “or upon a Supreme Court ruling to the same effect” into 44-18-15.2 but not into 44-18-18.

Frankly, it’s disappointing that no state-level politicians (particularly legislative leaders) have yet proclaimed their happiness that the state can now lower its sales tax rate.  Presumably the scheming remains offline for now.

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“Equal Pay”: From the Radical to the Uselessly Disruptive

Fortuitously, the Providence Journal ran an op-ed by me explaining how insanely radical proposed equal pay legislation actually is:

This legislation must, therefore, be about something other than simple fairness in the workplace. Sure enough, the biggest piece making this legislation so radical is its broad scope — going well beyond the battle of the sexes. Indeed, the “equal pay” umbrella extends to the categories of “race or color, religion, sex, sexual orientation, gender identity or expression, disability, age, or country of ancestral origin,” covering all “comparable work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.”

Plainly put, this gives the government power to investigate just about any business and dictate changes to its pay policies, because the only pay differences that wouldn’t have legal risks would be those between people of the same race, religion, sex, orientation, gender identity, disability, age, and nationality. For any two employees who aren’t more or less demographically identical, the lower-paid one could initiate a complaint with the state with the same weight as complaints that the employer withheld pay. The law explicitly puts the burden on the employer to explain it and to prove that no other business practice could erase the difference, even if it’s innocent.

Today, the Rhode Island House will consider an amended version of the bill that gives reason to think that some legislators are not quite as crazy as the original bill would require them to be.  House 7427A limits the scope of the bill to race and gender, exempts companies under 18 employees, and reduces employers’ liability in a variety of ways.

The question now is why the legislature is passing anything at all.  Existing law already covers such things, so all this bill will do is create some new regulatory burdens with unproven legal language that may have unintended consequences.

The only explanation is political: that politicians want to be able to say they did something, even if they did nothing good in practical reality.  This gives momentum to the people who are manipulating the cultural narrative while tangling up Rhode Islanders who are doing their best just to support their families and move our society forward.

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A Big Lesson from a (Relatively) Small Tax Increase

I’ve got an op-ed in the Valley Breeze today taking the opportunity of a new sales tax on software as a service products to illustrate the harmful thinking of our legislators:

In short, the state government is going to tax an innovation that empowers productive, motivated Rhode Island families who are making the most of technology that levels the economic playing field. Even if it’s “only” $4.8 million, why would the state government do that? …

So, when Speaker of the House Nicholas Mattiello, a Democrat from Cranston, tells reporters that “to not expect (the budget) to rise every year is not realistic,” he’s really saying it is unrealistic to expect state government only to grow at the same speed or more slowly than the household budgets of Rhode Island families. If that’s the expectation, then the governor and the General Assembly must find new ways to take more money from Rhode Islanders.

After all, the politicians have to find some way to pay for election-year raises for unionized state employees. If they’re going to increase the tax credits for producers who film movies here, they’re going to have to start taxing your Netflix account. If they’re going to promise a big chunk of the state’s income, sales, and corporate taxes to the PawSox for a new stadium, they’re going to have to increase those taxes even more to break even.

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Legislators Get That Old Elementary School Thrill Over Motion Picture Filming

I still remember the excitement around the elementary school when a house in the neighborhood was used to film some part of a movie or TV show.  (Obviously, my memory isn’t that clear, although I don’t know whether any of us ever actually knew what it was that was being filmed.)  It’s almost like finding a door to another dimension when a place in this world is used in the creation of some fictional world on the screen.

As with everything else, however, the excitement sours when politics enter the mix:

A major TV show is expected to start filming in Rhode Island soon and may have helped persuade lawmakers to sweeten the state’s motion picture incentive program. …

We aren’t allowed to know what the show is or who is in it before our elected representatives commit to giving it more money — much less whether it is the kind of content we would want to subsidize — but:

… they say it is big, with $34 million in estimated production costs, which would make it the most expensive Rhode Island motion picture since the $41.5-million canine superhero flick “Underdog” in 2006.

… those credits could swell to $10.2 million thanks to an amendment inserted into the state budget passed by the House on Friday night, which would allow productions to get 30 percent of their costs back instead of 25 percent.

So why are we doing this?  As Patrick Anderson reports in his Providence Journal article, the state’s own office of Revenue Analysis finds that these tax credits don’t come anywhere close to returning their investment for the State of Rhode Island (by which I understand the report to mean the state government).

Perhaps that old elementary school excitement about local movie making doesn’t ever sour for those who get to spend other people’s money to make it happen.

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Unionizing Home Care Workers

Reading the section in this week’s Providence Journal “Political Scene,” one can’t help but think that our legislators are either not thinking things through or have ulterior motives:

Sponsored by Majority Whip Maryellen Goodwin in the Senate, and Rep. Christopher Blazejewski in the House, the legislation envisions a new class of worker — the “independent″ home care worker — going into the homes of the elderly and the disabled to help them with basic daily activities such as eating, bathing, dressing and getting to and from the toilet. The legislation would allow these independent contractors to choose a “representative″ to negotiate with the state over their rates, benefits “and other economic matters.”

Granted, the consequences of this bill would be much less than they would have been a few years ago, before the Supreme Court ruled that Illinois couldn’t force this class of worker to join a union.  Before that ruling, parents who were simply seeking financial assistance to care for their disabled children were being billed for union dues.  Even so, allowing unions into the equation will raise concerns about whether care providers are being fully informed about their rights and the pluses and minuses of joining the union as well as provisions that the unions might negotiate to be written into laws affecting even non-union workers.

More directly, though, this legislation would be another issue raising the question of who is actually advocating on behalf of taxpayers.  As the Providence Journal points out, “since then-Gov. Lincoln Chafee signed the child-care unionization bill, the state subsidized cost of child care has increased by 54 percent.”  Is Rhode Island’s budget not growing fast enough?

The article also raises the question of why this is needed.  The legislation already calls for 10–20% raises for home care workers and implements annual inflation adjustments.  Moreover, the column closes with Speaker of the House Nicholas Mattiello arguing on behalf of making pay for the workers more-competitive.

Two possibilities emerge:  Either unionization is absolutely unnecessary and is simply a way to siphon off home care dollars to the unions and then back into politicians coffers, or it will drive up costs beyond what even sympathetic legislators think is reasonable.

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Summing Up the Budget (And RI’s Problem) in One Sentence

The Providence Journal article on the Rhode Island House’s budget vote last night captures in one quotation the problem our state is struggling to overcome:

“I expect the budget to rise every year,” said House Speaker Nicholas Mattiello after the final vote, a few minutes before 10 p.m., in response to Republican complaints about overspending. “To not expect it to rise every year is not realistic.”

First, let’s go along with the premise that the state budget should rise every year.  Does it have to go up 3.9% every year, regardless of the health of the economy or changes in taxpayers’ ability to pay?  That’s the important next question.  From Mattiello’s explanation, it doesn’t seem that there is any limiting principle.  From his comments to WPRI’s Ted Nesi:

“I always look at the specifics,” he said. “The level of spending in this case was appropriate to the needs of our society.” He noted that the cost of social services continues to rise faster than other areas.

But there is no reason a budget this big has to climb every year.  If it’s possible that annual growth of 3.9% is too much, then it’s possible for it to be too high, right now.  Sadly, state leaders exhibit is no underlying philosophy.  There is only a balance of various interest groups’ power.  Raises for state employees.  Increases in welfare-related spending.  More crony deals (as foreshadowed by the increased generosity of tax credits for movie productions).

Taxpayers will only become a consideration when they do one of two things:

  1. Change their voting habits in a way that threatens entrenched politicians.
  2. Leave the state in sufficient numbers that the politicians have no choice but to reduce spending or squeeze those who remain painfully enough that they notice (and resort to #1).
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Another State Edging Toward Licensing Reform (Including for Hair Braiders)

Occupational reform catches on in Pennsylvania:

Being a barber, an auctioneer, or even a “campground membership salesperson” in Pennsylvania requires a state-issued license.

That should change, says Gov. Tom Wolf.

Wolf, a Democrat, called Thursday for the state legislature to abolish 13 occupational and professional licenses, following the completion of a year-long review of Pennsylvania’s licensing laws. In place of some of those licenses, the Wolf administration says workers could be required to register with state boards. For others, such as hair-braiders, the administration has recommended eliminating the state’s role entirely.

Is Rhode Island going to take the lead on economic freedom for its residents or be among the last states holding on to insider deals?  Sadly, that isn’t difficult to predict… unless voters start surprising us.

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FY19 Budget: When Government Outgrows the Governed

With the House budget released, the RI Center for Freedom & Prosperity has updated its annual chart showing how the state’s spending has actually grown during this century versus inflation and population.  As you can see, it isn’t a pretty picture:

RI-expendituresallfunds-2001-2019

 

For some perspective, the state budget has grown at a compound annual rate of 3.9% per year.  Inflation’s growth rate, by comparison, has been 2.0%, and the population’s has been 0.0%

Granted, for the ease of the comparison (and making it easy to repeat), we’ve just used the national inflation rate, here, and people periodically argue that some other metric would be preferable.  Well, using data from the Bureau of Economic Analysis, personal income in Rhode Island has grown at a rate of 3.0% per year, and the state’s gross domestic product (GDP) has grown at 3.1% per year.  (Both of those are current, unadjusted dollars.)

That means year after year, the state government eats up more and more of the Rhode Island economy and takes more of Rhode Islanders’ real income.  Over the period shown in the chart, the state government has grown to the point that it’s taking another two percentage points of income and GDP out of the economy each year.

Even worse:  This isn’t just a loss to the people right now.  It actually affects broader economic growth, and likely plays a significant role in Rhode Island’s economic growth rate coming in below the national GDP rate of 3.8% over these two decades.

This is why Rhode Islanders often feel like they are serving the government, not the other way around.  Few people would complain about the growth of government if the people of the state were becoming relatively wealthier, but that it’s the other way around.

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When Blackouts Come, Will We Remember to Blame the Right People?

Valley Breeze publisher Tom Ward has an important warning related to the latest government-backed wind project in Rhode Island:

I’m OK with wind turbines miles offshore. But when the May 31 Journal story ran out of political high-fives and got to the end, it came to our daily reality. Wrote Alex Kuffner, “The price of power from the Revolution project is still uncertain.” Its cousin, the Block Island Wind Farm, “will ultimately cost ratepayers (that’s us!) hundreds of millions of dollars in above-market costs.”

One day later, an opinion column also appeared in the Journal, by Meredith Angwin, of Vermont, a physical chemistry researcher and pro-nuclear power advocate. The headline: “We’ll lose power in the winters ahead.” In it, she detailed the now well-known facts surrounding the coming closing of many of New England’s traditional electric plants. …

What I know with 100 percent certainly is this: If in eight years rolling blackouts come to New England during the winter, families who live here will have been put in danger by radical environmentalism and the politicians who practice that religion. Short-sighted decisions from a decade earlier will come home to roost as energy costs explode, children shiver, schools close, and businesses grind to a halt. Those who caused the problem will be long gone. Reasoned people need to demand predictable power today.

In too many areas, across too many levels of government, we’re simply failing to take the future into account.  The incentives of big government all but ensure that this will be so.  Our government is very skeptical about the goodness of people and our ability to guide our own lives, but it ought to be skeptical of its own ability to micromanage the universe.

Look to any socialist country to see what happens when the predictable consequences of big-government policies come to pass:  They scapegoat the people who are trying to keep things going, nonetheless, particularly those in industry, perpetuating a cycle.  We can already see the beginnings of this process with all of the ideological legislation that treats business owners as if they are morally suspicious characters.

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A Relatively Small Sports Gambling Payoff for Host Communities

As I highlighted on Tiverton Fact Check, the budget proposal from the Rhode Island House would change the legislation initiating sports gambling at the two Twin River establishments: 

Now another chunk of cash looks likely. When we mentioned that a Supreme Court ruling had put sports gambling on the table for Twin River, supporters of Budget #1 took to social media to say it was misleading even to hint that the town might receive revenue from this new source. Well, with the introduction of the Rhode Island House’s version of the budget, Friday, a number has been put on that windfall:

The state shall pay the Town of Lincoln an annual flat fee of one hundred thousand dollars ($100,000) and the Town of Tiverton an annual flat fee of one hundred thousand dollars ($100,000) in compensation for serving as the host communities for sports wagering.

Of course, while that’s something, it doesn’t seem like much in comparison with the $23 million the state’s expecting for itself.  Why the state wouldn’t simply define sports gambling as either a table game or a video slot for the purposes of calculating host community shares (which would be 1% or 1.45% of revenue, respectively), is not clear.  Local residents of Tiverton and Lincoln should hope their representatives and senators are still pushing for more.

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Some Numbers on Asset Forfeiture

The Stephen Hopkins Center for Civil Rights this week released analysis (PDF) of the state’s narcotics-related civil asset forfeitures, wherein police agencies take money and property from people who have not been — and may not be — charged with a crime, under suspicion that the money or property is connected with the illegal drug trade:

Joee Lindbeck, lobbyist for Rhode Island Attorney General Peter Kilmartin, testified at both the House and Senate Judiciary committee hearings in opposition to legislation which would require a criminal conviction before seized assets may be forfeited. Ms. Lindbeck asserted in both hearings that the proposed reforms would serve only to protect drug cartels and drug kingpins.

The Hopkins Center reviewed data collected by the Rhode Island General Treasurer on forfeiture cases in in 2015 and 2016, which was provided to us and requested under the Rhode Island Access to Public Records Act. The Center then aggregated and analyzed that data in order to assess the realities of how the law is currently being used. The results are clear – the majority of forfeitures were for small dollar amounts, not the type of cash or property “wealthy drug lords” have on hand.

As the brief explains, out of the $970,524 seized, 28.34% was given back as not legitimately confiscated.  A closer review of the numbers shows instances in which law enforcement ultimately returned most of the money or property, but kept some of it.

Rhode Islanders can disagree about whether the ability to take citizens’ property without prosecution is a legitimate use of government power even when those citizens are big time drug dealers.  We will probably mostly agree, however, that the limits should be strict and the guaranteed due process rights very strong on behalf of those whose property is taken, which is what the legislation mentioned in the brief would do.

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