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Support for Families More Effective than Government Co-parenting

Grover Whitehurst of Brookings has made an attempt to compare research findings concerning the effects of different programs on the test scores of young students, and the findings conflict with the progressive preference for increasingly moving responsibility away from people and toward government:

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Whitehurst suggests:

The results illustrated in the graph suggest that family support in the form of putting more money in the pockets of low-income parents produces substantially larger gains in children’s school achievement per dollar of expenditure than a year of preschool, participation in Head Start, or class size reduction in the early grades. The finding that family financial support enhances academic achievement in the form of test scores is consistent with other research on the impact of the EITC showing impacts on later outcomes such as college enrollment.

The most important takeaway from this is that it reinforces conservatives’ contention that government should not seek to displace parents, relieving them of responsibility for raising their children.  Government policy should seek to strengthen families.

Of course, the fact that this would tend to reduce the influence of government and (therefore) progressives leads me to expect Whitehurst’s research not to have a significant effect on progressive policies.  Indeed, in his subsequent discussion, Whitehurst endeavors to speculate that imposing restrictions on families’ use of the funding would be even more effective than simply improving their financial standing. However, if giving parents money is so much more effective than public funding of pre-school programs, one might question Whitehurst’s belief that letting the public funding stop in the parents’ accounts for a moment would be better than both approaches.

Note, too, the limits of Whitehurst’s consideration.  The first and irreducible assumption is that government must do something to bring about specific social outcomes.  If supporting families through broad welfare that is largely free of strings is so much more effective than building government programs, one might expect even greater rewards from getting government out of the way of families.  Let people act in the economy without the weight of high taxes and oppressive regulations; allow communities and states to determine their own economic and social policies; allow the society, broadly, to follow cultural traditions that have proven, over time, to be the healthiest for human society (such as the traditional institution of marriage).

Unfortunately, it’s much more difficult to test for and make charts of the effects of progressive redistribution on the whole society.  Researchers can’t know (to simplify) that taking EITC money out of the economy wound up hurting other families, resulting in worse test scores.  Still, taking in all of the evidence, the weight of it suggests that leaving people free is not only the most moral approach, respecting civil rights, but is also likely to prove to be the most effective system by any standard apart from the wealth and power of government.

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Katz’s Kitchen Sink: But Bountiful Parody Song

As the fiscal year comes to a close for the State of Rhode Island and most municipalities in June, it’s ever more clear that civic life in Rhode Island revolves around government budgets.  For insiders, town, city, and state budgets represent their hopes and dreams — often their livelihoods.  For everybody else, though, they can be a time of dread, as the impossibility of real change is affirmed, cherished programs are threatened (if you’re on that side of the ledger), or more money is confiscated from your bank account (if you’re on the other side of the ledger).

Herewith, a parody song to the tune of “But Beautiful,” inaugurating a somewhat regular new video series, “Katz’s Kitchen Sink,” which will feature whatever sort of content I think might be useful to throw at the problems of the Ocean State — songs, short skits, commentary, or whatever.

Download an mp3 file of this song.

But Bountiful

A budget’s taxes, or it’s pay
Handouts are credits or giveaways
We’re investing, or we save
But bountiful

Bountiful, our industry’s bureaucracies we run
It’s a budget you have no choice but to fund

A budget appropriates, or it steals
Votes are traded in backroom deals
Nobody’s sure just what’s real
But bountiful

And I’m thinking if I had chips, I’d cash them in for gold
And take them to a more bountiful abode

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Taking the “Predatory” Out of Lending

Although I can’t find the offending essay, just now, some years back, I upset some people by suggesting that the attack on payday loans was taking the wrong direction by using government to shut the practice down.  As I’ve also noted, such approaches tend to address what activists see as a problem without addressing (or even seeking) the underlying incentives.  As a result they can make things worse by, for example, denying opportunity to somebody whose specific interests might actually be served by a short-term loan at very high interest.

I noticed, in particular, that while all of the activists were sure that the terms of such loans were unfair, none of them appeared interested in providing high-risk, short-term loans at better rates, whether as a better business model or by writing off any losses as charity.  If the argument is that lenders are abusing people and charging them unfair rates, given the risk, then it ought to be easy for more moral people to make a healthy profit at the same occupation; otherwise, we can’t really say that the lenders are being abusive.

I was intrigued to see, therefore, a Los Angeles Times article reprinted in the Providence Journal, this weekend, about employers setting up such programs as a benefit:

[Doug] Farry isn’t trying to shame employers into boosting wages. He’s trying to persuade them to sign up with his company, Employee Loan Solutions, a San Diego startup that works with a Minnesota bank to offer short-term loans. They carry a relatively high interest rate but are still cheaper than typical payday loans. …

That there are multiple firms in the market illustrates the size of the opportunity and the dire financial straits many workers experience. An estimated 12 million Americans use payday loans, borrowing tens of billions of dollars annually.

Even with this approach, activists are worried that the loans don’t come with enough investigation about borrowers’ ability to pay, to which the entrepreneurs point out that they’re serving customers’ needs for high-risk loans made on short notice at the lowest possible cost.  Paying for reviews of their credit will either take longer than they have to wait or cost more than they can afford to pay.

Whether any of these products is the ideal solution, I don’t know.  But in a recurring theme, of late, solutions have to begin by acknowledging that everybody involved in a transaction is a human being in unique circumstances that can’t be addressed well when activists use government to make judgments for people whom they don’t know.

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Government Runs the Economy in Reverse

Sometimes policies become commonplace to the point that we no longer question their purpose or wisdom until legislators build them up so high as to expose their underlying problems.  Targeted development funds from the state government may have hit that point with S2042, which passed the Rhode Island Senate but died in the House this session.

The legislation would have allowed cities and towns to set up “micro zones,” requiring them to give property tax exemptions or at least stabilization agreements, that would open up access for developers and businesses to exemption from a wide array of state taxes, such as sales tax, income tax, and interest taxes, as well as discounted and expedited fees related to development, all under the famously watchful eye of the Commerce Corp.

Apart from the details, though, two passages catch my eye.  This one’s from from the “legislative findings” section:

That the numerous programs undertaken by the federal government and the state during the past two (2) decades to stop the deterioration and stimulate economic activity in these 14 distressed areas have, in large part, failed…

Even acknowledging that they’ve failed — that their approach simply doesn’t work — legislators think the solution must be to double-down and ramp up the special treatment, which relates to this section:

To the maximum extent possible, the directors of the departments of administration, business regulation, labor and training, environmental management, human services, transportation, and the Rhode Island housing and mortgage finance corporation shall provide special assistance to the zones. This shall include, but not be limited to:

  1. Expedited processing;
  2. Priority funding;
  3. Program set asides; and
  4. Provision of technical assistance in furtherance of the public policy enunciated in 34 §42-64.32-2.

Even in milder forms, it’s objectionable that the state government would distort market signals by subsidizing development in certain areas, but this legislation truly brings into relief the degree to which the prioritization comes at the expense of others, who have to get in line behind the super-favored developers.  Of particular note is that the state government is making the healthy parts of the state’s economy wait behind parts that have failed… and without any assurance (or even hope) that the underlying factors that have made those parts failures have been fixed.

It’s not as if Rhode Island, overall, is going so gangbusters that its economy is throwing off wealth for the state government to apply in this way, and if it were, the state probably wouldn’t have to do anything to make it happen.  The market would take care of it.

This proposed program is all too emblematic of Rhode Island’s approach.  A corrupt government would be reinforcing an admittedly failed strategy to invest the state’s limited resources in the areas of least opportunity.  How could that scheme possibly work?

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Government Contracts to Infringe on Rights

Here’s an interesting bill — H7736 — on the Freedom Index (having passed both chambers) that raises some interesting political questions.  Basically, it forbids state and local government agencies from contracting with any company that is engaged in a boycott, unless the contract is very small or the company is much cheaper than competing bids.

Inasmuch as boycotting is more a thing for progressives than conservatives, particularly corporate boycotting, my gut reaction isn’t entirely negative.  I mean, boycotting Israel or North Carolina for political reasons doesn’t tend to endear a company to me and, in fact, tends to encourage me to direct my business elsewhere.

Even if every corporate boycott were a creature of the Left, though, such legislation gets dangerously close to using government’s economic clout to infringe on the speech and association rights of the individuals who band together for corporate purposes.  As government expands into more and more activities, increasing its role in our society, it approaches the point at which being blocked from government contracts would be a killer in more and more industries.

According to the Family Prosperity Index, using a metric that the RI Center for Freedom & Prosperity also uses for its competitiveness report card, Rhode Island ranks near the back of the pack when it comes to the private sector’s portion of the economy.  That means companies can be locked out of a disproportionately large part of our local economy if they don’t wrap themselves in these sorts of strings, just like the federal government’s increasing role in funding the states has given it power in direct contravention of our Constitution.

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Raimondo Vetoes Reasonable Compromise with Wartime Rationale

Early on in this session, asked for an opinion on a bill that would allow the Dept. of Motor Vehicles (i.e., the executive branch, i.e., the governor) to enter reciprocity agreements with other countries with respect to driver’s licenses, I suggested that it contained a loophole for executive granting of licenses to illegal immigrants so big that a truck could drive through it, with room for a toll gantry.  The final version of the legislation, which passed the General Assembly, answered that concern to a high degree.

Well, surprise, surprise, Democrat Governor Gina Raimondo vetoed it, with a strange rationale:

In a veto letter signed late Wednesday night, Raimondo said she supports the reciprocity aspects of the bill that would have potentially allowed someone with a foreign driver’s license and an active visa or green card to get a Rhode Island license without taking a test. But she took issue with a section that would have narrowed existing standards — requiring those drivers to submit additional documents before their foreign licenses could be recognized in Rhode Island. …

“The additional application and certification requirements of this bill are at odds with the [Geneva Convention’s] purpose of simplifying and unifying driving regulations on an international level. As such, these restrictions limit rights granted by the Convention and thereby violate the Supremacy Clause of the United States Constitution,” Raimondo wrote.

I’m no expert on the Geneva Conventions, and the governor’s veto message doesn’t appear to be online, so I don’t know if she provided some additional legal explanation.  However, the Geneva Conventions are mainly addressed to war-time matters.  A 2009 booklet for the American Association of Motor Vehicle Administrators gives the impression that what’s really at issue is a United Nations Convention on Road Traffic, to which the United States agreed in Geneva in 1949.  There, one finds the “establishing uniform rules” language, but also that the convention doesn’t have any mandates for foreigners in a country for more than a year, and it also refers to international driver permits (IDPs), which could easily be interpreted to be the foreign nation’s way of validating the person’s driver’s license as required in the bill.

Who would have thought that this issue would be so complicated, both politically and legally?  If the legislation comes up again next year, it’ll be worth a deeper dive, but at the moment it seems to me that either the governor’s goal is to secure the loophole mentioned above or the legislation isn’t needed in the first place, because anybody with a license and an IDP can drive here for up to a year, anyway.

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The Speech About Which the Governor Cares

All things considered, I’d probably have to side with Democrat Governor Gina Raimondo in concluding that the “revenge porn” legislation that she just vetoed is too broad and ought to be much more explicit in protecting free speech.  That said, this line from her veto message contributes to my cynicism:

“The breadth and lack of clarity may have a chilling effect on free speech,” she wrote.

The reason I smirk at that is that other legislation that would most certainly have a chilling effect on free speech has passed both chambers of the General Assembly, and I suspect the governor won’t find it quite so objectionable.  Specifically, I’m referring to H7147, which would subject any individual, or any kind of organization at all, who spends more than $100 advocating on local ballot questions to campaign regulations, including reporting requirements.  (The legislation is championed by Tiverton Democrat John “Jay” Edwards and is obviously aimed at my friends in town.)

There’s no question but that adding such burdens to political activity has a “chilling effect,” and there’s no question that electoral speech ought to be the most sacrosanct when it comes to the law.  Yet, under the current progressive understanding of free speech, it seems publishing naked pictures of people without telling them is a more fundamental right than expressing opinions on local issues without telling your vicious rumor-mongering opposition who your friends are.

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A Recess from the Diktats

Sometimes we can discern important principles most easily in relatively inconsequential contexts.  Take, for example, Senate bill 2669, which the RI Center for Freedom & Prosperity did not consider substantial enough to include on its Freedom Index.

It mandates that “all children attending public schools… shall receive… at least twenty (20) consecutive minutes of supervised, safe, and unstructured free play recess each day.”  When Republican Senator John Pagliarini (Tiverton, Portsmouth, Bristol) initially stood up against the group-think and voted against it, Democrat Senate President Theresa Paiva Weed (Newport, Jamestown) chided him, saying “How can you vote against recess?”

Let’s be specific.  Voting against this bill wasn’t a vote “against recess”; it was a vote against the state government’s assuming that it is swooping in as the hero of recess to save the kids from horrid local committees and administrators bent on depriving children of unstructured play.

Just so, politicians in their vanity layer on mandates that make them feel good about themselves and give them something to brag about to voters with no strong base of information on which to make electoral decisions.  Rather than observing a problem (no recess) and investigating its causes for factors within the proper scope of their role (like eliminating other state mandates), the legislators go straight from intention (encourage recess) to command (thou must).

Sen. Pagliarini was correct in his first instinct.  His narrow-minded peers may fervently believe that children should have time to play in an unstructured way, but they can’t imagine that their neighbors can live without the detailed list of rules and requirements to which the legislature and bureaucracy add year after year after year.

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Ethics (Authority) Poised to Return to General Assembly

The Providence Journal reports on one of the few bright spots out of this General Assembly session: the passage of a resolution that would, as Common Cause Rhode Island phrased it in an e-mail last night with the subject line “Victory!”,

… put a question on the November ballot to allow you, the citizens of Rhode Island, to restore the full jurisdiction of the Ethics Commission over legislators.

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Accounting Issues Persist for John Hope … and, Far Worse, for Government

The impression about financial irregularities at the John Hope Settlement House has been that all of that took place years ago. Well, yes, it did. But now the problem seems to be that the organization cannot demonstrate to HUD’s satisfaction that it has taken sufficient corrective action to prevent a repeat.

[Providence Director of Community Development Brian] Hull said the Department of Community Development was troubled that audits of John Hope’s books showed shortcomings in 15 areas, such as monitoring payroll, tracking cash receipts and payables, loans to employees without a loan policy in place, late debt payments and a lack of documentation in numerous other areas. The city sought guidance from HUD’s New England area office and the agency, which finances the CDBG program, told the city not to give John Hope the grants “at this time.”

“We note that the entity responded to many of the auditor’s concerns but no evidence was provided to support whether the discussed corrective actions were verified or whether the corrective action taken resolved the deficiencies,” New England HUD Director Robert Shumeyko wrote.

In light of that, it was prudent for the city of Providence (at the recommendation of HUD) and the state to pull back on grants to the organization, though apparently the organization can re-apply if it can show it has come in compliance with HUD’s accounting requirements.

The bigger issue here is that, whether it is social programs or corporate welfare or community grants, government has an obligation to keep tabs on the tax dollars it hands out and make sure that they are not abused. (We are stipulating for a moment the worthiness of the expenditure. The John Hope Settlement House is, for example; corporate welfare is not.) While the Gallison scandal has compelled the state and the city of Providence to start checking into grants as with the John Hope Settlement House and others, little is done to prevent waste and abuse in other programs – the aforementioned social programs, for example – where far larger amounts go out the door. It’s simple. If our elected officials lack the resources or inclination to properly oversee the tax dollars they hand out, they need to stop doing so.

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Speaker & OHIC: Stopping Some of the State Taxpayer’s Bleeding

As with his pulling of Budget Article 18, another reason to praise Speaker Mattiello this week: he is not seeing why state taxpayers should be forced to step into the breach left by the drying up of federal funds.

The office responsible for protecting consumers from excessive health insurance rate increases stands to lose nearly its entire staff if the House on Wednesday approves a budget amendment passed by the House Finance Committee. The $1.03-million loss in funding for 9 of its 12 full-time staff would leave the Office of the Health Insurance Commissioner (OHIC) with only three employees …

Governor Raimondo’s budget included $1.03 million to replace federal grant funding for the nine staffers when the grant runs out on Sept. 30, but the House Finance Committee last week voted not to replace the funding. “When the money runs out the programs are off,” House Speaker Nicholas A. Mattiello said during a budget briefing last week. “Every time a federal grant expires everybody wants the funding to continue. You have a government that Rhode Island cannot afford.”

If I understand correctly (let me know if I’m wrong here), these FTE’s are in ADDITION TO the staffing of Rhode Island’s (completely useless) ObamaCare exchange, HealthSource RI. Staffing levels of this department have fluctuated somewhat but have generally suffered as the tide of federal ObamaCare funds has receded (as scheduled).

There needs to be some thought before state officials agree to implement a federal program with funds that sunset. State taxpayers simply don’t have the capacity to take on the funding of ever more, new programs.

And if the sitting Governor (in this case, Governor Raimondo) feels that the program should continue with state taxpayers picking up the tab from the lapsed federal funding, he or she should make cuts elsewhere in the budget to find that revenue, not simply heap another burden on state taxpayers.

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Matthew Henry Young: Proposed Budget Challenges Educational Choice, Families

The Rhode Island House Finance Committee’s proposed budget includes, among other things, a substantial cut to funding for Rhode Island’s 18 charter schools. Charter schools receive government funding, but are managed separately from the public school system, and are able to tailor their programs, hiring, and management to meet specific goals. The proposed budget would allow for municipalities to subtract certain costs from their funding for local charter schools—a move that could hamstring high-performing charter schools, and will reduce any edge that charter schools enjoy in providing a higher quality education.

Charter schools are an important part of providing educational choice and freedom to Rhode Island’s families—without the presence of charter schools, children from low-income families unable to afford private school tuition may be trapped in underperforming public schools.

Rhode Island can ill afford more setbacks to its educational system. While Rhode Island ranks 29th in the nation for educational attainment in the Family Prosperity Index, minority groups experience substantially different outcomes. According to data from the American Community Survey, African American and Hispanic youths in Rhode Island are 2 and 3 times less likely (respectively) to graduate from high school; a trend that is mimicked in college-graduation rates.

Many of Rhode Island’s most vulnerable communities are being poorly served by the public school system—the last thing we should be doing is limiting their choice of schools.

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Alarming – Budget Article 17 Could Set Up Stream of 38 Studios-Style Failures

Another problem article in the proposed House budget would, remarkably, put state taxpayers in positions of equity in certain, chosen companies. See the language below on page 9:

(b) Notwithstanding anything in this chapter to the contrary, the commerce corporation may make a loan or equity investment as an alternative incentive in lieu of the provision of tax credits so long as the applicant otherwise qualifies for tax credits under this chapter.

This is a bad idea and poses serious dangers to taxpayers if it passes, as Rep Patricia Morgan (R – Coventry, Warwick & West-Warwick) outlines in the following statement just issued.

Rep. Morgan Questions New Commerce Article Which Puts Taxpayers at Risk

STATE HOUSE — Representative Patricia Morgan (R-District 26 Coventry, Warwick, West Warwick) is calling attention to the new provisions in Article 17, which relate to commerce and economic development.

“The new language governing the Commerce Corporation’s program for economic development on the 195 land is troubling. The new law would fundamentally change the original intent of the program and lead the state into areas best left to financial experts. Financial money managers risk private money, the state risks taxpayer money,” stated Representative Morgan.

“Rhode Islanders have made it clear that they do not want tax dollars given to projects that should be left to the private marketplace. In the past, we have granted authority for the Commerce Corporation to issue tax credits which have the goal of growing tax revenue as the company thrives. However, the Commerce Corp. is now asking for the ability to make equity investments. This investment puts taxpayers in the position of being owners of the company.” explained Morgan.

“If the company thrives, the state not only receives the investment, but also a potential profit. However, if it fails, as in 38 Studios, state would lose the entirety of the taxpayer investment. Public money should never supplant private investment in the marketplace. It’s dangerous for taxpayers.”

Other provisions the Article17 also raise a red flag. “In existing statute the Commerce Corporation is authorized to give up to $15 million, capped at 30% of the total cost of the project, to a developer. The new Article allows a developer to split the project into two and accept $15 million for each portion for a total of $30 million. Additionally, the new language allows the Commerce secretary to waive the 30% cap once a year. That takes away taxpayer protections.”

“One major concern is a taxpayer funded subsidy for the Superman building project in Providence. In current law, economic development incentive programs for the 195 land reclamation project, include the Downtown Providence area with the Superman building. The budget article before the General Assembly increases the maximum aggregate tax credits for this program. The program has been increased to $150,000,000. With such a high program cap, the fear is that money will be diverted to fund redevelopment of the Superman building without taxpayer input.” explained Morgan.

“While these changes were presented to the Finance Committee, albeit well after midnight, they have not been thoroughly explained or vetted. The financial impact to Rhode Island must be thoroughly reviewed before any budgetary vote. I, as a House Representative, want to be fully confident this program will not lead taxpayers down another dead-end path of wasted taxpayer money.”

“Ultimately, our state’s leaders need to do more than find creative corporate subsidies. This welfare takes money away from hardworking Rhode Islanders and is funneled to companies of specific choosing. The State should not be in the venture capital business. Instead we need to do the hard work of reforming our economic climate; reducing property taxes, eliminating costly and non-value added regulations, changing a hostile legal system, restoring ethics, and reducing the cost of government instead of tacking on new taxes, fees and tolls each year.”

“Companies should come to Rhode Island because it’s a great place to grow, not because we pay them to come.”

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Article 18: Another Insider “Deepwater” Scam in the Making? (Corrected)

Despite disturbing new revelations and renewed public criticism about insider legislative grants, cronyism appears to be alive and well at the Rhode Island State House. And once again, Ocean State families and businesses would be asked to foot the bill.

In the budget that got voted out of the Finance Committee early Wednesday morning, alert observers spotted and brought to the attention of the RI Center for Freedom and Prosperity as well as the Ocean State Current on Friday an extensive revision to Article 18.

They are correct to loudly ring warning bells about it. If it stays in, state electric ratepayers are in for even higher electric rates than they currently pay.

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A Word of Caution When Reacting to Targeted Legislation

Here’s a hypothetical:  State legislators create an unaccountable bureaucratic board and, over time, invest it with power to make increasingly minute and economically significant decisions affecting private businesses.  After an extended and costly ordeal, one such business resolves to address an abuse that its leaders see as affecting not only its own bottom line, but the future of its entire industry.

Lobbyists and political donations are almost universally despised, but they are the the way the system works, and the business utilizes them.  Legislation it proposes to rein in the power of an insider-tied public utility and the unaccountable board make it nearly to the point of passage by being placed in the House’s revision of the budget.

How should free-market, small-government conservatives react to this sequence of events?  Apparently, if the business in question is a renewable energy company, it’s a story of cronyism on the part of the business.  I’d suggest that conservatives should temper the broad indictments of the system they’re making about the story of Wind Energy Development and House Finance’s Article 18.

Yes, there’s clearly an immediate benefit to Wind Energy if this article passes, but here’s the first provision of the relevant section of the budget article:

The electric distribution company may only charge an interconnecting renewable energy customer for any system modifications to its electric power system specifically necessary for and directly related to its interconnection. Any system modifications benefiting other customers shall be included in rates as determined by the public utilities commission.

I have to admit: that sounds reasonable to me.  Switch the details around a little.  Imagine a manufacturer wants to set up a new energy-intensive factory in the wilds of Southwestern Rhode Island, and the current practice of National Grid and the Public Utilities Commission (PUC) would be to force that company to pay 100% for upgrades to any part of the power grid that its increased usage might affect, even if a particular bit of the infrastructure were on track for a scheduled upgrade the following year, anyway.

Would we characterize it as cronyism if the company took its case to the General Assembly through the usual means, asking only to pay for modifications “specifically necessary for and directly related to” its business?

There is, of course, a bit of justice to the PUC’s ruling.  National Grid should be making upgrades anyway (with the urging of the PUC), perhaps with money that it currently funnels to insider green-energy deals.  That would create a healthier business and residential environment for all of us.  One could see the Wind Energy ruling as a sly way of redirecting some of that cronyism to the public good.

But let’s be careful about our generalized proclamations.  When a near-government entity like an electric company conspires with an unaccountable bureaucracy to tilt deals away from private companies, the recourse should be to the legislature.  Maybe we don’t like the players in a particular case, but we shouldn’t attack broad principles for a particular contingency.

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Toll Relief (Shhhh! It’s Not That!) for In-State Truckers Falls Way Short

It turns out that the General Assembly’s proposed 2017 budget will, after all, contain very partial relief from impending truck tolls in the form of lower registration fees for in-state trucks though, due to questions of constitutionality, the Speaker is asking that we not connect the two.

With the national trucking industry threatening to challenge the constitutionality of the truck tolls in court, after the first gantry goes up, House Speaker Nicholas Mattiello was insistent on Thursday that the registration-fee cuts in the newly unveiled budget bill have nothing to do with the tolls.

“I don’t want to connect the two,’’ House Speaker Nicholas Mattiello said Thursday.

Okayfine, they’re not connected. The reduction in registration fees for this NON-RELIEF from tolls will vary with truck size.

At the lowest end, the annual registration fee would drop from $106 to $78. For trucks weighing more than 74,000 lbs. — which are at the top end now — the fee would drop from $972 (plus $24 for every additional two pounds in weight) to $510. For even larger rigs, there would be a graduated fee schedule, topping off at $690 for tractor-trailer trucks weighing more than 104,000 pounds (plus $12 for every additional 2,000 lbs. of weight).

Soooo, on the upper end – $500-$600 savings per year? By the way, this means that some of the heaviest trucks which do the most damage (to use Governor Raimondo’s logic for implementing truck tolls) to our roads and bridges will be getting relief from tolls EVEN THOUGH THEY WILL NOT BE PAYING TOLLS.

Back to the matter at hand. Approximately $500-$600/year in registration savings for this NON-TOLL RELIEF. Now let’s look at the cost of tolls. At the $40 max per day, a truck driving around in Rhode Island, assuming he operates five days per week, fifty weeks a year:

5 days/week X $40/day = $200. $200 X 50 weeks/year = $10,000/year

Ten thousand dollars a year. Yeah. “Token” relief is actually an understatement, Christopher Maxwell, President of the Rhode Island Trucking Association:

“If they’re trying to help the truck industry, great,” Maxwell said. “But it’s a long way from undoing the damage the tolling would do. It looks to me more like a token gesture.”

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Latest (Bad) Rankings of RI: Will the Budget Turn Them Around?

The release of some new/updated rankings of Rhode Island are perfectly timed as we sit on budget watch.

Rhode Island currently has the eighth highest state & local tax burden as percentage of income.

And the Providence Business News points to a new study by WalletHub showing that Rhode Island has the eleventh worst economy in the United States.

These are the rankings that need to be turned around. The Governor’s proposed budget of a couple of months ago won’t get the job done. Will the General Assembly step up to the plate? Judging from alerts via Twitter about the just-announced availability window later today of the Speaker and the new Chairman of House Finance, we will know soon.

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Will Governor’s Toll Projections Fail as Badly as Her Admin’s Short-Term Rental Tax Projections?

Of course, Governor Raimondo’s new tax on vacation-home rentals needs to go. Rhode Island government doesn’t have a revenue problem, it has a spending problem.

The bigger take-away from this Providence Journal article is how far off base her administration’s projections have turned out.

So far, Rhode Island’s plan to collect an extra $7.1 million in annual revenue through new vacation-home rental taxes is falling short of expectations.

In the first eight months since collections began, from last July 1 to the end of February 2016, the state has received just $1,563,565 in new rental taxes, according to Neil Downing, chief revenue agent for the state’s Division of Taxation.

Even on the basis of another projection – $5.3 million – presumably revised to account for a shorter season last year, the $1,563,565 actually collected is far short. Meanwhile, the biggest effect of the introduction of a new (ineffective) tax/fee is to reinforce Rhode Island’s reputation as heartily anti-taxpayer and anti-business.

Is this a preview of how far off the projections by her administration about toll revenue are? If so, what happens then? We know the answer: “Sorry, our projections were off. We now need to toll all vehicles including cars.”

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Lawmakers Moving to Tighten Up Punishment Procedure of Toll Violators

Isn’t this charming.

A package of toll scofflaw bills sought by the Rhode Island Turnpike and Bridge Authority are moving slowing through the General Assembly and drawing questions about whether they might apply to the state’s planned truck toll network.

The bills, sponsored by Middletown Democrat Louis DiPalma in the Senate and Tiverton Democrat John Edwards in the House, would allow the Turnpike and Bridge Authority, through the Division of Motor Vehicles, to block toll violators from renewing their driver’s licenses or registrations.

Important to note that these toll scofflaw bills are sponsored by East Bay legislators – DiPalma and Edwards – who fought tolls on the Sakonnet River Bridge but voted in favor of statewide tolls. Tolls for thee but not for me appears to be their repugnant philosophy.

Now they are going a step further and spearheading the legislative effort to make it easier for the Rhode Island Turnpike and Bridge Authority to crack down on toll violators. At this point, the RITBA only administers tolls on the Newport Pell Bridge. But the RhodeWorks toll law enables them to administer statewide tolls if RIDOT wants it. Even if RIDOT goes with a private firm to administer tolls, it’s a snap that these tougher measures would quickly apply to statewide tolls – just as it’s a snap that litigation will morph tolls on trucks into tolls on all vehicles INCLUDING CARS.

We know how DiPalma and Edwards voted on Governor Raimondo’s highly destructive statewide toll plan. How did your legislator? Find out here for reps and here for senators, then please keep that in mind in November. Rhode Island DOES NOT need toll revenue to repair its bridges, only legislators who are willing to think for themselves and act in the best interest of all Rhode Islanders rather than blindly accept destructive marching orders from above.

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Whew, No Subsidies for Superman Building – At Least, This Year

WPRI’s Dan McGowan reports the good news (pointing out that the ProJo had announced it first).

The effort to secure millions of dollars in taxpayer-funded subsidies to revitalize Providence’s tallest building has again stalled at the Rhode Island State House.

This is a very good thing, as far as it goes. City and state taxpayers already pay too much in taxes, fees and cost-of-living without also being compelled to compensate property owners for the effects of both a real estate market that has not fully rebounded but especially for the state’s abysmal business climate that is keeping prospective tenants out of the state.

“As far as it goes”, however, because, like the Terminator, the owner of the Superman Building has promised, “I’ll be back” next year to once again try to tap into the taxpayer’s already seriously overextended wallet.

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Energy Surcharge and the Scam of Magic Government Economics

The green program that Patrick Anderson describes in a Providence Journal article today may be a near-perfect encapsulation of the scam that is progressive government, with its magical economic thinking (i.e., that everybody makes out when government controls money):

State lawmakers are debating a plan to help home heating oil and propane customers pay for energy efficiency improvements — such as new furnaces — with a surcharge on those fuels. …

The cost: a half-penny-per-gallon surcharge on oil or propane in the first two years of the program that would rise to 1 cent per gallon in the fourth year of the five-year plan. …

There are an estimated 186,400 properties heated with oil or propane in Rhode Island, 149,800 of them residential, Kearns said.

The program would be capped at $2 million per year, be overseen by a new advisory board and administered by a third-party consultant. Administrative costs would be capped at 10 percent.

For the low, low cost of a few bucks a year to 186,400 fuel users, some contractor can get $200,000 to manage the program.  Installers and manufacturers get to pocket the other $1.8 million, and a few hundred Rhode Islanders (heavily weighted toward insiders and others “in the know”) would get new furnaces (or something equivalent).  It all sounds great, doesn’t it?

Except… you’re still talking $2 million from people who won’t have it to spend on something else.  If a single household were able to invest its $4 per year at a 4% rate of return, the family would have another $224 after 30 years.  Now add that loss to every other similar scam that government runs at our expense.

On the other end of the deal, the consumer either gets a furnace or something else that he didn’t really need or simply unloads a cost he would have had to bear on to somebody else.  As for the installers and manufacturers, they absorb resources that would have gone to some other purpose, setting off a chain of cost shifting that drains resources from some innovation at the margins of what people would voluntarily finance.

When government takes money from people to give it to somebody else, the things that might otherwise have happened are impossible to see, so the deal looks like it’s all upside.  We can imagine that every family would have just wasted that $4 per year.  But giving a few self-interested bureaucrats authority over other people’s money is never the most efficient plan for the economy.

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Burrillville Power Plant: Torn Between Empowered Taxpayers & Much-Needed Energy

On the one hand, I support the gas-fired power plant that Invenergy is proposing to build in Burrillville, in large part, because the EPA has UNNECESSARILY shut down other large fossil fuel-powered energy generating plants, leaving New England with few reliable, reasonably priced fuel sources for making electricity.

On the other, even though it might mean that this gas-fired power plant does not get built, I like the bill that passed the House Committee on Environment and Natural Resources yesterday

The legislation, which passed through the House Committee on Environment and Natural Resources by an 11-2 vote, would require an approval by Burrillville voters for any type of tax agreement between the town and the developers of the power plant.

especially because it apparently restores some authority that the taxpayers of Burrillville used to have.

“I think that’s excellent,” said Jeremy Bailey, who opposes the [power plant] proposal. “Years ago, we used to have that right to vote on a potential tax agreement or tax treaty, however you want to refer to it. That right was stripped from us. We lost a little bit of that democracy that we once had, so this bill is gong to help restore that democracy to us.”

Interesting and compelling. In fact, serious consideration needs to be given to expanding this right to the state level, as it would be another way to clamp down on all of the corporate welfare that the Raimondo administration has been handing out via the Commerce Corporation, formerly the EDC, the agency that faciliated the 38 Studios debacle, in lieu of real economic development measures.

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The Illegal Activity That the Government Will Tolerate

It’s good news, of course, that the powers who be in Rhode Island have held off for at least another year before amplifying Rhode Island’s magnetism for illegal immigrants, but this sentence in a related Providence Journal article struck me:

“There are many undocumented Rhode Islanders who work and pay taxes, but don’t have the right to obtain a license, like they do in 12 other states (and Washington, D.C.),” Raimondo’s statement said. “The reality is that they are driving on the roads right now without a license, and that presents a public safety issue.”

I can’t help but see this statement from the governor in the context of all the legislation that I read, with proposals like license-plate scanners to catch anybody who dares to drive with lapsed insurance and, as I mentioned the other day, pervasive linkage of databases centered around personal prescriptions of Rhode Islanders and their personal connections, to track the distribution of certain drugs.

It’s one thing to acknowledge that some laws will be broken in our society, but why, do you suppose, the governor is so keen to accommodate just a certain group of law breakers?

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Legislature’s Budget Expected “As Soon As Possible”

The Democrats caucused on Wednesday. Stand by, everyone.

Asked the likely date for the unveiling of the legislators’ version of Democrat Raimondo’s proposed $ 8.9 billion tax-and-spending plan, Mattiello again told reporters: “As soon as possible.”

Interesting observation by Rep Marcello about an admittedly small but highly controversial item in the budget.

“The elephant in the room [was] the legislative grants,’’ said Rep. Michael Marcello, D-Scituate, of the budget earmarks that have mired the General Assembly in controversy again this year, especially the $70,875 grant that went to an education non-profit that employed Raymond Gallison, the House Finance Committee chairman who resigned mid-session amid a police investigation.

Shall we start a pool? What’s going to happen in the budget with community service and legislative grants? Is it too much to expect that they will all be cancelled, along with tolls, and the revenue directed to repair our unsafe bridges??? (Okay, that last item may border on delusional. But it would certainly be the right thing to do!)

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Serving One Another Through Innovation

There are bills being considered by the RI General Assembly, H8044 &S2864, which may kill the efficient transportation network services like Uber & lyft in the Ocean State.

In this video, I give commentary on testimony given by Rhode Islander to the RI State Senate on the role of Uber in his life. Nick Zammarelli, a blind Coventry school teacher, testified to RI State Senators: “As a totally blind school teacher, prior to Uber’s arrival in Rhode Island, I had to think about how got from point A to point B every single day. ”

Watch my commentary on the compelling testimony now. For my money, the most important part of the testimony had nothing to do with Uber, per se. It had everything to do with innovation and everything to do with the way in which Rhode Island government prevents us from finding the most effective ways to serve one another. Why do we tolerate elected officials to kill the innovation that will help the disadvantage among us?

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The Panopticon State Moving Forward with Prescriptions

For the 2013 Freedom Index, the RI Center for Freedom & Prosperity highlighted legislation that was ultimately signed into law “to create a state-controlled electronic prescription database storing all information related to electronically distributed medical prescriptions.”  We gave it a -2, and naturally the General Assembly passed it and Governor Lincoln Chafee signed it into law:

  • S0647, sponsored by Democrat Senator Donna Nesselbush (Pawtucket, North Providence)
  • H5756, sponsored by Democrat Representative Joseph McNamara (Warwick, Cranston)

Well, surprise, surprise, legislators are in the process of expanding the reach of this database in newly invasive and frightening ways, and naturally the Senate passed the legislation last night, with only Republican Elaine Morgan (Charlestown, Exeter, Hopkinton, Richmond, West Greenwich) voting “nay.”  This legislation will “empower the state Dept. of Health to combine its drug prescription database with any other source of data to analyze the behavior and personal connections of patients and pharmacists, under the pretense of finding abuse”:

  • S2946, sponsored by Democrat Louis DiPalma (Little Compton, Middletown, Newport, Tiverton)

Add this database to the information that will be produced by gantry-based tolling systems and license-plate readers looking for the uninsured, and then mix in the comprehensive data to be collected by the Unified Health Infrastructure Project (UHIP) and that which is already collected for taxation and other economic activity, and everybody in Rhode Island will have a frighteningly complete digital profile accessible to unaccountable bureaucrats, following the lead of a gang of elected officials best known for violating ethics rules and being investigated by the feds.

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Good Grief – No Grants or Any Other Tax Dollars Should Go to Lobbying

Good article in today’s Providence Journal by Patrick Anderson, headlined: “Do R.I. General Assembly grants funnel back into lobbying?”

The answer, in many cases, is “yes, they do”. And for those recipient organizations who use this defense of the dollars they receive from Smith Hill:

Many said they use only non-grant funds to lobby.

Bosh. If your organization does ANY lobbying, grant dollars free up other dollars in your budgets to be used to lobby.

Often, the goal of lobbying is for policies that are antithetical to the best interest of the taxpayer. Accordingly, it is grotesque that tax dollars, whether via grants or any other source, would go to an organization that lobbies any arm of the government of Rhode Island.