For my weekly call-in on John DePetro’s WNRI 1380 AM/95.1 FM show, this week, about the start of truck tolls, the prospects of a ballpark deal, and the state of play in the governor’s race.
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:
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.
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.
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.
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.
As public opinion rejects one attempt to back a new baseball stadium after another, insiders are becoming more creative (and dangerous) in their tricks to hide the risk and the subsidy.
Rhode Island should pause and think about what it really means to give the state government bureaucracy a mandate to analyze the pay differences of every employer within our borders.
It’s difficult not to feel as if you’re missing something while reading Greater Providence Chamber of Commerce President Laurie White’s recent op-ed in the Providence Journal. On the one hand, she insists that “[e]nsuring pay equity is crucial for organizations to function successfully” and offers some suggestions for legislation currently working through the General Assembly. On the other hand, she lists ways companies can achieve “pay equity” without “government overreach.”
The impression, overall, is that White is signaling that some tweaks to the legislation could be enough for her organization to sign on as supporters, but that she has to take a tone of opposition for the benefit of her members.
The whole debate, however, has this feel of missing something, at least in Rhode Island. For starters, the wage gap is a myth. It isn’t real. Remove from the equation factors that should legitimately affect pay (like career choice, hours worked, and so on) and it evaporates. White’s op-ed doesn’t go there, but she does proclaim that “pay equity” is critical for businesses to function. If that’s the case, then why would they discriminate?
Another consideration that conveniently gets left out of this discussion is that Rhode Island already has laws against sex-based discrimination. Without actual evidence of a systemic effort to skirt those laws, making them more stringent is a reckless imposition.
Of course, reckless imposition appears to be the real objective, inasmuch as the most significant action of the legislation on the table is to expand existing sex-based-discrimination law to cover just about every identity group. Why is nobody acknowledging that reality?
Out of homage to political correctness, nobody seems to want to address the lies at the center of this debate. Consequently, they’re conducting this surreal discussion as if debating how best to patch a roof that isn’t leaking. Meanwhile, the foundation of our society is eroding and Rhode Island’s economic walls are crumbling — notwithstanding the governor’s frantic efforts to board them up with corrupt hand-outs.
Well might the Providence Chamber’s members be concerned about this issue, not the least because their spokeswoman is inevitably setting them up by failing to insisting that the state government legislate from within reality.
Don’t miss my essay on so-called “equal pay” legislation in the Providence Journal this week:
The corruption is twofold. First, many political leaders understand the danger to business, yet they may advance the legislation anyway — fearful of being tagged as “anti-woman” from petulant progressives. Worse, to remain in the good graces of the political elite, many prominent insider business groups, who pretend they represent the overall business community, are providing cover for lawmakers, making believe that their negotiated watered-down version is somehow acceptable to other employers across the state. It is not. This is exactly what happened last year with the free-paid-time-off legislation. And this repeated corruption is exactly why Rhode Island suffers one of the worst business climates in the country.
We are also fed the bogus argument that other states have passed similar laws, so Rhode Island must follow suit to remain competitive. False. To gain a competitive advantage, Rhode Island employers should have more freedom than their counterparts to hire workers on mutually agreeable terms, rather than have their hands tied with more government-imposed red-tape.
The Rhode Island Department of Health proposal could expand a child immunization database into a universal health tracking tool.
Legislation ostensibly to ensure “equal pay” between men and women is actually an ideological power grab that changes the nature of government and puts every RI business at risk.
Upon the entry of Connecticut into the National Popular Vote Interstate Compact, Michael Walsh emphasizes the practical motivation and effect:
“Work-around”? Nullification is more like it. But this is typical of the fascist Left, offering a “solution” to a non-existent problem in order to improve their chances at permanent political domination. It frustrates them to no end that having conquered California, New York, and Illinois in order to bank 104 electoral votes before a presidential campaign has even begun (270 are needed to win), they discovered that transforming those states into Democrat ghettos meant that every popular-vote margin over 1 is wasted, since the overall national popular vote doesn’t matter.
As I argued when Rhode Island took this leap, it makes no sense for small states. Rhode Island and Connecticut have more leverage under the electoral college than under a popular vote regime. But the powers who be in these states trust that their political party will continue to dominate other, bigger states, so they’re willing to sell out their own voters in order to take leverage away from other small states that either aren’t as partisan or are partisan in the other direction.
Walsh has it correct when he writes:
… the idea of independent and, dare I say “diverse,” states is repugnant to totalitarians. As they go about rewriting the history of the United States, one of the things they’re trying to expunge is the idea that thirteen separate colonies came together in order to form a more perfect union. The nation they envision — and which they’re on their way to realizing — is one ruled from Washington, with the states acting as administrative satrapies.
We can project farther into the future, too. We’ve already had plenty of indication that, once Washington, D.C., is reliably fixed in the hands of an executive to their liking (one who will use the power of government to hurt their enemies and skirt the Constitutional order to subvert that troublesome legislature), they’ll turn to shifting power to a global elite. Their goal is a planet that has no place to go where you can live as if their philosophy might be wrong.
With his criticism of Democrat Governor Gina Raimondo for appointing Democrat Senate President Dominick Ruggerio’s son, Charles, to the Narragansett Bay Commission, Republican Mayor of Cranston Allan Fung has drawn attention back to the City of Providence’s perennial effort to turn its big water asset into a one-time payment, largely to infuse the city’s pension system with cash.
The immediate controversy is that Ruggerio, the younger, works in multiple roles as a lawyer for the city, but his appointment is most significant as a flash point to illustrate how government works, in Rhode Island. The city has been after this for years. In 2013, it took the form of an objectionable regional water authority. Now, the strategy is to bring in the quasi-public Narragansett Bay Commission.
In every case, the goal appears to have been to come up with some excuse to saddle taxpayers and/or ratepayers with the additional burden of that one-time payment to the city.
Making matters worse is the general evidence that thinking about pension funds in this way is a mistake. Just after the turn of the century, for example, the City of Woonsocket took on debt with the calculation that its investment returns would exceed the interest, and it could get its pension system on track. That didn’t work out so well.
The Providence deal is different, of course, and would require a more thorough review prior to decisive pronouncements, but the impression one gets is that the primary difference is that the Woonsocket deal saddled the same people who owed the pension debt with the bond debt, while Providence is looking for somebody else to take on the new debt. Of course, Providence will also have offloaded an asset as a one-time part of the deal.
California may be pushing the envelope in the establishment of religion, but Rhode Islanders should understand that their state government has banned “conversion.”
Reporting about the budget’s change in payments to hospitals for uncompensated care raises more questions than it answers, pointing to the complexity of government spending and the vulnerability of taxpayers.
I’ve also got an op-ed in today’s Newport Daily News:
So here is what the Trump administration is suggesting: Employees who work for particular restaurants will be able to negotiate a tipping system that works for them. If a state finds that the balance of power favors one side or the other in those negotiations, it can regulate the matter at the state level. The only difference is that distant politicians in Washington, D.C., won’t be telling the whole country what to do.
If you find that “kind of disgusting,” I can only ask: Why do you feel so threatened by others’ freedom? Nothing in the rule change would require any change to the way restaurants handle tips. As the article illustrates with quotes from restaurant managers who support servers’ keeping their tips, the status quo – which was the status quo even before Obama’s power grab – would remain in place. Regulations could be imposed at the state level, if that’s what Rhode Island wants, and individual businesses could figure out what works for them.
I’m not sure why Patrick Anderson weaves together the hoopla about Sinclair Broadcasting’s recent promotional script with the idea of banning non-compete agreements in journalists’ contracts. That he strives to do so gives the impression of an ulterior motive to construct a narrative, as does the monolithic presentation of non-competes:
Used in a number of industries, non-compete clauses prevent employees from taking a job with a competing company for a set period of time, often one year, after they end their employment, even if it was the station that decided to part ways. …
Former WJAR investigative reporter Jim Taricani called non-competes unfair in written testimony supporting the bill.
“Prohibiting an employee from finding work to support themselves and their families is an outrageous condition of employment,” Taricani wrote. “Unlike non-compete clauses used for employees who work for companies where they may have knowledge of company ‘secrets’ or ‘confidential product research,’ ‘on-air’ talent in broadcasting have no such knowledge of any confidential information.”
The reasons for non-competes vary from industry to industry. In some cases, knowledge of sensitive information is the thing being protected. When I worked for a carpentry temp agency, non-competes were a way of preventing contractors from using the company as a trial service. In the case of journalism, building up contacts and expertise is a critical part of the job, and people who appear on camera are intrinsically part of a station’s brand.
I’m not, therefore, endorsing non-competes, but these aren’t crazy points to make. WPRI and WJAR have invested in Tim White and Parker Gavigan, respectively, to develop contacts and credibility for investigative reports; if WJAR were to hire White away, WPRI would lose one of its key faces and would have to scramble to rebuild its brand on a very important line of products.
Of course, that should encourage the company to make sure that its star employees are happy, but that balance should be subject to negotiation. For newcomers, a non-compete agreement could be something of a box, but further along in a career, an employee may offer a non-compete as a way to get more money out of the employer. If new employees don’t like the box, they don’t have to take the job.
The speed with which people turn to government to enforce whatever they think is in their best interest at any given time is disturbing to behold.
Isn’t it strange that there should even have to reforms like this?
Wisconsin Gov. Scott Walker, a Republican, signed into law a forfeiture reform bill last week that will require law enforcement officials to obtain a criminal conviction before permanently taking a person’s cash or property, making Wisconsin the 15th state to do so.
The law is intended to address the controversial practice of civil asset forfeiture, a common legal maneuver that allows police to seize and keep cash, real estate and other property from people suspected of criminal activity, regardless of whether those people are convicted. …
Nationwide, forfeiture actions amount to a huge transfer of property and wealth from private people to government agencies. At the federal level alone, asset seizures topped $5 billion in 2014, greater than the amount of property lost to burglary. The inspector general of the Justice Department last year found that since 2007, the Drug Enforcement Administration alone took more than $3 billion in cash from people who were never charged.
The article, from the Washington Post, goes on to suggest that even this sort of reform is not enough, given the loopholes. For instance, the requirement for those whose property has been taken to file a complaint and go to court creates a large disincentive in cost and convenience. A person who had his or her money confiscated while passing through a distant state might not find it worthwhile to pursue the matter.
Still, some reform is better than none, in this case. Ideally, legislation would require the confiscating agency to pro-actively return the property, and that shouldn’t be a difficult addition unless, of course, the practice is more a money maker than a law enforcement tool.
A couple of weeks ago, I expressed support for the notion of employees’ becoming owners of their workplaces, suggesting that the best way forward was to remove government barriers to their doing so. As WPRI’s Ted Nesi notes on Twitter, progressive Democrat Representative Aaron Regunberg of Providence has a hearing today on his legislation to, as Nesi puts it with reference to Benny’s, give employees “the right to buy the retailer and turn it into a worker-owned co-op, rather than let it shut down.”
Reading the bill, however, I can’t see that it really does much of anything. When employers are about to take an action that requires them to notify the federal government about a substantial layoff, the state Department of Labor and Training (DLT) would remind the employees that buying their workplace is an option.
The employees would then take a vote on whether to buy the company. If the vote succeeds, then any employees who are interested would form an entity in order to buy it. If the vote fails… well… I guess any employees who are interested in buying the company would do exactly the same thing. In either case, the employer can decline to sell. In other words, the bill does nothing but give a politician another talking point about supporting “working Rhode Islanders.”
Of course, because it is so ineffectual, one suspects that this legislation would be the foundation for an incremental change that activists think wouldn’t have chance if pushed into law all at once. In a few years, progressives might argue that too many owners are unwilling to sell for the price that employees are able to pay and remove their ability to say “no thanks.” Or maybe a state bank would come along, and these sorts of buy-outs would explicitly be given preferential treatment for loans.
Considering the origin of the bill, the safest bet for Rhode Island would be for the General Assembly simply to let it fade away. In the meantime, we should reinforce a simple truth that progressives seem to want people to forget: We already have inalienable rights that come from a higher place than the State House, and we don’t need government to step in and claim to be creating them for us, as if from nothing.
After all, if government can grant a group the right to buy a company, it can remove another group’s right to do the same.
Progressives in Rhode Island, with potential gubernatorial candidate Matt Brown the latest among them, have been floating the idea of a state-run bank for a few years. Cato Institute Fellow Walter Olson expressed some thoughts on the question in a recent Wall Street Journal op-ed.
The concerns are manifold. For one thing, government-run banks “succeed, if they do, because of unfair advantages.” (And if they fail, look for them to receive more advantages at others’ expense.) Because they’re fundamentally political in nature, they also tend to allocate their resources with less concern for sound investments than private banks must.
Referring specifically to his state of concern, Olson writes:
A State Bank of New Jersey would be unlikely to content itself with the predictable and repetitive lending that goes on in an agriculture-and-extraction economy like North Dakota’s. It would inevitably turn into a Favor Bank for politicos hoping to lure subsidized jobs from the more vibrant cities of New York and Philadelphia. Once the initial buzz of idealism passed, it would become a tempting honey pot for the corrupt politicians for which New Jersey is famous.
Rhode Island has a similar fame, along with a newly minted reputation for institutional incompetence — along with a not-so-newly-minted history involving organized crime and a banking crisis. Frankly, Rhode Islanders should find it unsettling that anybody of influence could look at the socio-political landscape of the Ocean State — with Crimetown, 38 Studios, the UHIP debacle, Deepwater Wind, unfunded pensions, one-party rule, regular investigative reports showing public-sector malfeasance, and all the rest — and conclude that what we really need is another way to shuffle money around.
With the prospect of a state-run savings and loan operation, one suspects insiders are waiting in the wings to do business at the Ocean State Shavings and Cronies, but if the rest of us fall for it, the smart investment would be in local U-Haul operations.
The RI Center for Freedom & Prosperity has found its Bad Bill of the Week in Pawtucket Democrat Representative Carlos Tobon’s legislation proposing to pay wealthy people $10,000 each to move to Rhode Island:
“If we have to pay families, students, and businesses to move to or remain in Rhode Island, to survive our state’s oppressive tax and regulatory climate, then something is very wrong,” said Mike Stenhouse, the Center’s CEO. “Worse than the obvious face-value inanity of the bill, the ignorant belief of how an economy and family dynamics actually work is what is most troubling. The legislation openly acknowledges the negative economy in our state, yet, as with other progressive policies, it tries to band-aid the symptom rather than cure the core illness. ”
The bill is so incandescently wrong-headed that it’s difficult to know where to begin criticizing it, but among the more objectionable aspects of Tobon’s proposal is the explicit concern of losing a seat in the House of Representatives in Washington, D.C. That is what motivates politician’s to take action. Decades of watching productive Rhode Islanders flow elsewhere for opportunity weren’t enough. Political clout is the real concern.
As of the July Census projections of states’ populations, Rhode Island was just 157 people away from losing one of its congressmen. That’s a 0.015% decrease in population, and we lose out. The next state in line is New York, which is currently on track to lose a congressional seat. But if the Empire State manages to add 0.015% to its population, then it will keep what it has at Rhode Island’s expense.
Numbers aside, suffice it to say that a state that has to bribe people in order to maintain its level of congressional representation — through either government welfare programs or direct hand-outs — is a state that has proven that it doesn’t deserve much clout in determining the course of the nation.
Rhode Islanders must get our own House in order. If we could just put into office people who don’t prioritize central planning and insider control, we could make our state a place that people aren’t as quick to leave and to which they want to move.
Senate progressives’ resolution condemning white nationalists seems uncomfortably like shouting at their reflection in a mirror.
Regular readers know I put a lot of emphasis on incentives as a way to understand events and a key consideration when crafting policies. The $250 million school bond proposed for the November ballot is a good example.
On the front end, the incentive is very strong for school districts and municipalities to let facilities deteriorate. First, the law is structured to give advantages to labor unions organized at the state and even federal level, creating incentive for them to manipulate the political structure. Then, elected officials have incentive to tilt budgets toward organized labor, drawing money to compensation. Next, having learned from that experience over time, taxpayers have incentive to squeeze money out of budgets so that even higher taxes aren’t paying again for things like maintenance that they thought were already included and that might be diverted again if available.
On top of it all, the near certitude of passing bonds for dire repairs creates disincentive for regular maintenance from the start. This mechanism creates incentives for financial interests and investors, and the bias toward big projects brings in the incentive that got me thinking of these things. As Dan McGowan reports for WPRI:
Fix Our Schools R.I., a 501(c)4 nonprofit formed last week, will spend the coming months “educating communities across the state about what this plan is and how it would affect them,” Haslehurst told Eyewitness News. …
The organization lists its address as 410 South Main St., the same building as the Laborer’s International Union of North America. Haslehurst said it will share space with the Occupational and Environmental Health Center of Rhode Island, a nonprofit that has an office inside the building.
A quick look at the health center’s IRS filing shows that it’s a labor union organization, with AFL-CIO poobah George Nee as the treasurer.
‘Round and ’round the incentives go, to the point that running things efficiently — in the way people run their households, planning ahead and all that — seems almost to be an impossible task. Be skeptical of anybody who tells you that this is a “once in a generation” investment that fixes a problem. After all, when the debt payments subside, the incentive will be to find more projects in need of debt or to build the payment amount into regular budgets.
Oppressive Regulations Harm Low Income Families. Hair braiding is a generational and practical African-style art-form for Jocelyn DoCouto and her family, which hail from Senegal and Cape Verde. Yet, unable to afford the burdensome levels of fees and training required to receive permission from the government to legally work in a field that presents no safety risks, Jocelyn, as well as other would-be entrepreneurs, are not able to operate a business that would provide them hope to achieve financial independence.
Rhode Islanders should give some thought to what legislators are assuming about government and about us before letting them push the rosy-sounding “equal pay” agenda on us.
I’ve been slow to share it, here, but the recent Providence Journal editorial on the return of perpetual-contract legislation to the General Assembly is important to read and take to heart:
Like a painful rash that keeps returning, the idea of “evergreen contracts” is back before the Rhode Island General Assembly. Year after year, union leaders who want even more taxpayer money revive this campaign.
Under this special-interest measure, police, fire and teacher contracts would remain in effect indefinitely after they have expired. The idea is to weaken the bargaining position of local cities and towns and pry more money out of the taxpayers, already burdened with some of America’s most crushing property taxes.
A fair accounting of this policy suggests that Rhode Island’s insiders understand that they’re really just managing the decline of the state. Theoretically, perpetual contracts could benefit either side, given the circumstances. We all understand that when the economic pressure would be on lower compensation for unionized employees, they’ll just sit on their contracts until things improve. When the economic pressure goes the other way, promoting higher pay, local governments could be the ones to sit on the contracts.
However, everybody from the unions to municipal and school district leaders to the Providence Journal understands two things:
- Economic flourishing isn’t in Rhode Island’s future unless the state can break insiders’ strangle hold on the state, and that doesn’t look likely, absent a terrible crash.
- Interacting with that point, the deals that unionized government employees get in Rhode Island are so generous that it’s even less plausible to imagine circumstances in which Rhode Island’s economic growth would be so strong that the government would struggle to find people willing to work for that amount of remuneration.
Add in the fact that union employees can disrupt government services much more readily than government agencies and school districts can get out from under their unions, and it’s clear why this is such a one-sided issue. At least the insecurity of a lapsing contract instills some discomfort among Rhode Island’s privileged class, which gives elected representatives a little leverage. Whether or not they take advantage of that leverage — which hinges, in large part, on whether they were elected with the unions’ help — is another question.
Newport restaurant employees’ outrage at a Trump initiative to end Obama’s power-grab nationalizing tip policy show a strange aversion to letting other people do things differently.