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Center Blasts Newest Truck Toll Tyranny; RIDOT’s Laughable Denial

It has come to light that, on August 11, RIDOT *corrected* requested a hearing, scheduled for today, to issue commercial truck route restrictions within the state. The Rhode Island Center for Freedom and Prosperity (for whom I am Communications Manager) has just issued a statement strongly condemning this. It says, in part,

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The Complexities of Tax Policy

I’ve always been skeptical when wonky types on my side of the ideological aisle start proclaiming one tax or another to be universally better than others.  Typically, among conservatives, that becomes a preference for consumption taxes, like the value-added tax (VAT).  What appeals to them (and me, honestly) about such a tax is that it applies taxes to consumption, meaning everybody who consumes something has to factor the value of government into the equation.

What may appeal to big-money donors is that it pushes the tax burden down the economic ladder.  Joseph Sternberg points that out in the context of Europe and, specifically, Germany:

Indirect taxes, such as the value-added tax on consumption and social-security taxes (disguised as “contributions”), are a different matter. The VAT disproportionately affects lower earners, who spend a higher proportion of their incomes. And social taxes tend to kick in at lower income levels than income taxes, and extract a higher and more uniform proportion of income.

A chart at the link shows that Germany’s tax burden, as a percentage of income, falls pretty evenly across the socio-economic landscape.  Take social security out, and essentially, the country has a VAT for lower-income households and an income tax for higher-income taxes.

I’m not sure that spreading the tax burden on paper ought to be the goal, though.  The cost of government is spread out in one way or another, even if we don’t capture the effect of, say, lower wages and lost jobs because wealthy job creators pass on the cost of government to their employees.

The really lost component is the effect that particular taxes have upon the economy, and that will depend greatly on the specific conditions of the local area… its culture, its industry mix, is geography, and so on.  Rhode Island, for example, could boost its economy with a low sales tax because none of the state is far from the reach of out-of-state consumers.

These questions get impossibly complex, though, and the best approach is probably to tax based on the legitimate claims of government, meaning a philosophical rationale for each tax, not an economic one. That way, the cost of government will be most accurately priced into the economy.

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Cranston’s Disability Pension Funny Factory

This is hilarious… but unfortunately not so hilarious that Rhode Islanders won’t accept it or step up their laughter into a demand for change.  In Cranston, 69% of retired firefighters and 77% of retired police officers in the state municipal pension system have disability pensions, which are meant to provide the additional benefit of a two-thirds-of-salary, tax-free pension in compensation for some disabling injury on the job.

Of course, when the large majority of your employees receive enhanced benefits, they’re no longer “enhanced.”  They’re just the norm.

The funny part comes with Cranston union boss Paul Valletta’s explanation:

What could explain the difference [from other municipalities’ disability percentages]? There are no easy answers, although Cranston fire union chief Paul Valletta suggests that “bad luck” plays a role.

Valetta, readers might recall, was a visible presence in the successful push this legislative session to add “illness,” not just “injury,” to the language allowing a disability pension.  Everybody from the union activists to the Democrat Governor Gina Raimondo, when she courageously let the expansion become law without her signature, has insisted this is a mere correction to an oversight in the law.

That’s laughable.  To see why, consider that the law includes mental incapacity, as well as physical.  Allowing disability pensions for mental illness is clearly something broader than for mental injury.

The task of successful comedy writers — think Seinfeld — is to put characters in zany circumstances that seem like they really could happen.  It isn’t funny if it isn’t at least reasonably plausible with just a mild quirk of the character to make the difference.

The task of successful negotiation con artists is to make their special deals seem plausibly reasonable, with just the minor supernatural intervention of “bad luck” to explain what would otherwise be outrageous.  Bad luck, indeed… for Rhode Islanders.

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Chilling: H5069, Single Payer Healthcare (And the Inconsistencies It Poses)

In the course of reviewing certain bills filed during this year’s General Assembly session, I clicked on H5069 — and stared in growing horror at all of the red-lining (i.e., everything to be struck from current law). I turned to the succinct description of this bill written by Justin Katz, Research Director for the RI Center for Freedom & Prosperity, for the Center’s Freedom Index and the horror did not abate:

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Taxing the Rich Across the Country

Reading an Oklahoma editorial that cites public policy in Maine while I sit here in Rhode Island can’t help but make me wonder how it is we fail to learn with the entire nation — the entire world — as a real-time generator of examples and case studies:

Last year, voters in Maine approved a ballot measure that increased by 3 percentage points the income tax rate for those earning more than $200,000. This set Maine’s top income tax rate at 10.15 percent, second-highest in the country.

The tax increase, promoted by teachers unions, was a classic “soak the rich” proposal. The 41 percent rate increase was expected to impact only around 7,000 filers in Maine, and was expected to generate $157 million per year, which would be earmarked for schools.

Pause and think about a pair of aspects, here.  First, you’ve got the teachers unions using government literally to confiscate money from a targeted group of people and give it to themselves.  (The one step of separation that sends the money to the school districts makes no difference.)  To progressives, that’s called “representative democracy.”  If one side can manipulate political processes, their “representatives” will give it things taken from another side.

Second, following on that idea of taking from others, do a little quick math.  Taking $157 million from 7,000 people means taking $22,429 from each.  How is that not plain plunder?  Sure, maybe wealthy people can afford that hit, but robbing from rich people is still theft.  And what would make people think families wouldn’t seek some way to adjust their finances in order to prevent the taking of so much money?

It isn’t at all surprising that the Maine Revenue Services office reported no evidence of increased revenue a month ago.

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What It Means to Be 45th

In all the years I’ve been following Rhode Island’s standing on various national rankings, about the only substantive comeback from the forces of the status quo has been that we do okay when it comes to “quality of life.”  As I’ve pointed out, “quality of life” is only much use to those who can afford to enjoy it, and Rhode Island fails by that standard.  Great restaurants may impress an organization ranking states, but they’re utterly irrelevant to the family that can barely put food on the table.

So, now the buzz is that Rhode Island finally moved from dead last on CNBC’s “Top States for Business” ranking.  Here’s Ted Nesi on WPRI:

“Just one year ago the Ocean State finished dead last,” Cohn wrote. “The improvement is no accident. Every time we rank Rhode Island at or near the bottom, state officials take it to heart.”

The CNBC list and its methodology have plenty of critics, particularly on the left. But Rhode Island’s elected leaders have made clear over the years that they care a great deal about the state’s perennially poor showings on this list and other national business-climate rankings.

Exactly.  It’s been clear for years that state officials in Rhode Island are very concerned about the ranking, but not so much about what the ranking is actually telling us.  Consequently, they’ve sought policies to game the methodology, not to address the underlying problems — policies such as income and corporate income tax “reforms” that lowered rates on paper but wound up increasing the amount of tax collected.  Folks, you’re missing the point.

This is how Rhode Island produces an unemployment rate drop, but only because it’s driving people out of the labor force.

It’s also how we get a change that nobody’s talking about.  Our “quality of life,” according to CNBC, fell from 24th best in the country to 31st.  And observe that our state experienced this drop despite the fact that it includes such measures as health insurance coverage, at which we supposedly excel.

Our politicians may be improving our statistics, but they’re making our lives worse.

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Penn Station and the CCRI Observatory: Where the Money Goes

Boy, taxes and the cost of government must have really fallen for this to be the case:

Penn Station is just one symptom of a larger illness. With an aging subway system subject to a recent state-of-emergency order by Cuomo, and a 67-year-old bus terminal called “appalling” and “functionally obsolete” by officials of the agency that runs it, the New York area’s transportation systems embody America’s inability, or unwillingness, to address its aging infrastructure.

Of course, far from shrinking, the cost of government has exploded over the lives of Penn Station and the bus station, so where is the money going?  In brief, our tax dollars are being redirected to pet projects, progressive redistribution, and (I would say) special deals that amount to outright theft.  A core tenet of blue-state spending is that the people will always accept more debt and higher costs if the last things they get to pay for are the things they find most critical.

We don’t have to go to the Big Apple or major infrastructure for the lesson.  Take a look at this somewhat-cryptic Providence Journal article by Alex Kuffner:

The Community College of Rhode Island organized an open house on Saturday at its Margaret M. Jacoby Observatory to celebrate the completion of a $45,000 renovation that included a new control desk, new seating and repairs to the roof-opening mechanism. …

But the event was clouded by a demonstration outside the observatory’s doors by faculty members and students who protested what they allege is mistreatment of the astronomy professor who has overseen operation of the observatory for the past decade. …

Britton was hired in 2007 to teach astronomy to students and to operate the observatory for his classes and on nights when it’s open to the public. Last month, when the administration changed the way he would be compensated for the public nights, resulting in less pay, he balked.

Kuffner never details the change, but the context suggests that the college may now be paying only a non-faculty rate for the public night.  That is, a special deal has gone away.

One needn’t look far at all to find other examples.

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Local Taxes, All About Perspective

On Tiverton Fact Check, I’ve taken a look at comparative taxes across the state.  Because the local Tiverton Taxpayers Association has been successfully controlling tax increases for the past four years by informing people about our regionally high tax rate, proponents of higher taxes have taken to insisting that we really don’t pay that much.  Why, our tax rate is in the middle of the Rhode Island pack, they say.

That may be true, but it has no context.  This chart shows every Rhode Island municipality’s tax levy per capita, and as you can see, Tiverton is 12th highest.

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Above Tiverton, for the most part, are notably wealthy towns and those that are relatively sparse in population.  This is the chart that Tiverton should be in the middle of, and it would require a relatively low tax rate.

Even this, though, concedes too much.  The main difference in perspective is that the taxpayer group takes the point of view of the family and how much it has to pay for an asset.  Progressives and other high-tax constituencies take the approach of asking how much government can get away with taking from those families.  In that regard, all of Rhode Island is way too high.

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Budgeting Woes in the Northeast

A State House News Service story by Katie Lannan appearing in The Herald News of Fall River answers a question that I’d been wondering:

After Maine and New Jersey reached deals to end their government shutdowns, just six states remain in budgetary limbo: Massachusetts, Oregon, Wisconsin, Illinois, Rhode Island and Connecticut, according to the National Conference of State Legislatures.

Interesting, isn’t it, that half of the states are from New England — specifically Southern New England.  Five of the laggard eight are Northeastern states.

Looking at the list, one’s tempted to muse about general similarities of the policies that these states have pursued over the past half-century.  Maybe the can has met the end of the road.

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Going from Crime to Illness Means Big Growth for the Government Plantation

Marc Munroe Dion picks up on what I’ve been calling “the government plantation” in his latest “Livin’ and Dion” column about the budget consequence of recasting drug use from a crime to an illness.  Noting that a person who comes across a homeless beggar could feed him or her with a $10 sandwich, but:

If you ran a non-profit agency, you’d need an outreach worker to find the homeless guy, an intake worker to make sure the homeless guy was really hungry, a case manager to find out what kind of sandwich he likes, a nutritional expert to make to make sure he got a healthy sandwich, a coordinator to introduce the outreach worker to the case manager, a facilitator to go into the store and buy the sandwich, and a five-member board of directors to approve the $10 sandwich, which would be referred to in all documents as a “nutritional expenditure for indigent substance abuse-affected client.”

At all times, the homeless guy eating the sandwich would be referred to as a “client.” Total cost of the sandwich? $65,000, not including benefits, and pensions.

Rhode Island’s state government is deliberately working to transform our economy into one built on this very model.  Declare some benefit to be a right, find a way to collect money from the rest of the economy and other states (via the federal government), and fill out a massive bureaucracy with government-satellite non-profit agencies with plenty of well-paying jobs whose holders will tend to support the system politically and to fund the necessary political action through their labor union dues.

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Sales Tax and Another Threatened Lawsuit Against Money-Grabbing Government

Is it me or are the policies the Rhode Island General Assembly is implementing sparking more lawsuits, lately, indicating a desperation to find new ways to squeeze money out of a strangling economy? Here’s the latest:

The new rules order online retailers with no physical presence in the state to collect the state’s 7-percent sales tax on purchases by Rhode Island buyers or mail those buyers a letter notifying them that they owe the equivalent use tax on the items. Buyers already owe use tax on purchases made from out-of-state sellers, including websites, but very few actually pay it at the end of the year.

NetChoice, an e-commerce trade group that’s challenged online sales tax policies in states across the country — including a current lawsuit against Massachusetts — is urging senators to reject the sales tax provisions in the Rhode Island budget, which they call “privacy invading,” costly and unfair.

“Don’t pass this law,” said Carl Szabo, senior policy counsel at Washington, D.C.-based NetChoice. “It is hard to understand what the purpose of it is except for the perception that the Internet is hurting Main Street. Now Amazon, Walmart and most of the top 20 online retailers collect and remit sales tax for Rhode Island.”

NetChoice is coming off a victory on Wednesday when Massachusetts Gov. Charlie Baker, responding to the lawsuit, abruptly canceled plans to begin collecting sales tax on Internet purchases from out-of-state retailers.

The next question is who is going to sue over the fact that Rhode Island will effectively be double-taxing the thousands and thousands of Rhode Islanders who pay the minimum use tax on their income tax returns even though they’ve already paid sales tax on all of their online purchases?

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Huge Generator: RIDOT Recommended The Engineering Firm That Missed Five Bridges

You may have seen the huge, yellow tarp-covered generator that has been parked on the side of Route 95 north just past Route 4. It’s been the cause of lots of rubber-necking. Then came the news a couple of days ago that it had been pulled over by RIDOT while traveling and ordered not to advance because it is very heavy – 560,000 pounds.

John Tassoni, speaking for the company that is moving the generator, was on the WPRO Morning News with Gene Valicenti this morning. And he shared some eye-opening information about how the generator came to be side-lined.

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Budget Season: Opportunity for Articulating a Vision for Rhode Island

Every year, this time of year, the budget for the State of Rhode Island comes out and, accompanied with surrounding legislation (much of it premised, one can infer, on quid pro quo for budget votes) shows the vision of the insiders who run our state.  Every year, life in Rhode Island becomes more restrictive, business becomes harder, government budgets go up.

Earlier in this legislative season, the RI Center for Freedom & Prosperity put out a pair of “Hey, Dude!” radio ads illustrating the point from the perspective of somebody who wants more freebies and somebody who sees the opportunities inherent in a society out from under government’s thumb.

For a little fun, here’s a pair that I’ve put together.

Open post for audio.

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Legislation Holds Mobility Over the Heads of the Poor for Municipal Bucks

I’ve been very critical of Mike Araujo and his rhetoric on this site, but he is absolutely correct to object to this bill:

Tuesday night, the House Finance Committee passed a bill (H-6213A) that seeks to expand the denial of vehicle registration to individuals who may have outstanding unpaid interest or penalties on fines owed to a city or town, rather than only revoking it for the amount of the fines themselves owed to the municipality.

Legislation like this, making it easier for people to lose their licenses or registration based on financial debts, has been criticized all over the country for its problematic and counterproductive effects on poor Americans. Driving without a registered vehicle leads to substantial penalties or even a revoked license, which simply worsens the person’s financial issues and hardships. This in itself is challenging since the restrictions would deny the person the ability to drive to work, school, or any other related activity making them less able to meet their monetary obligations.

As an indication of how thoroughly aggressive the legislation is, even in the small details, consider this:  Right now, the legislation requires the city or town to pay the DMV $5 in order to request a registration denial, and that fee “may” be added to the total due from the driver.  This bill waives the up-front payment and says that the $5 “shall” be added to the total.

Where is the public interest in all of this, beyond wanting more money for profligate government?  People need to be mobile to have a shot in the modern world and making it more difficult for them to get right with the regulations for mobility undeniably makes it more likely that they will continue struggling and probably remain dependent on government.

The legislation’s primary sponsor is progressive Democrat Christopher Blazejewski of Providence, who apparently submitted it at the request of the city, but who, in doing so, proved that government always comes first for people in government.  Keeping others dependent on government isn’t exactly contrary to that goal.

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Not Just Spending, but That Upon Which It Is Spent

Reading about Illinois’s budget problems a little earlier today, an association nagged at the corner of my mind, and I remembered something from Table 5 of the National Association of State Budget Officers (NASBO) report comparing the states.  Specifically, in fiscal year 2015, Illinois was near the top of the list when it came to the percentage of its budget spent on “other” expenditures — that is, things other than elementary & secondary education, higher education, public assistance, Medicaid, corrections, and transportation.

The states higher than Illinois seem generally to have unique circumstances (Wyoming, Oregon, Alaska, and Hawaii), and with 43.7% of the budget going to “other” expenditures, Illinois is way up there.  What’s apt to catch a Rhode Islander’s attention is that our state is only two ranks behind Illinois (after Nevada), with 42.1%.

That, if you’re wondering, is the highest in New England.  The percentages across New England are interesting, particularly in the degree to which they scuttle some clichés.

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Two conspicuous myth busters are Massachusetts’s relatively low spending on education and Rhode Island’s relatively high spending on higher education.  Also conspicuous is Rhode Island’s low spending on transportation.

Overall, though, notice that, with the exception of higher education, Rhode Island is typically in the bottom tier for all categories, to the benefit of “other.”

What is this “other”?  And why do we need so much of it?

Of course, we need to keep in mind that these percentages might be a little misleading, inasmuch as the amount of total spending will make a big difference.  Nonetheless, the results are interesting.

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The Bubble Begets Tone-Deafness on Eternal Contracts

So, the teachers unions’ annual attempt to give themselves even more leverage in negotiations by making their contracts eternal is back in the mix.  The lobbying by union employees and donations to politicians are ultimately taxpayer funded, so this bill probably won’t go away until it passes someday.

What’s notable, this time around, is that the bill accompanies a labor dispute in Warwick, leading to this telling point from Warwick Teachers Union President Darlene Netcoh:

Netcoh said the bill “levels the playing field between employers and employees.”

Referring to [Warwick Schools Supt. Philip] Thornton, she added: “Would he go to work every day if he didn’t have a contract? I don’t think so.”

One wonders how it could have escaped Netcoh’s attention that plenty of Rhode Islanders go to work every day without contracts.  See, it’s called “a mutually beneficial transaction.”  The employer has work that has to be done, and the employee has a need to earn income.  If a contract makes sense in a particular circumstance, then the parties draw one up and abide by it; otherwise, the contract is essentially a casual, even verbal, agreement to do work and to pay for work that’s done.

In government, though, it’s not about that mutually beneficial transaction, in part because nobody’s spending their own money.  Contracts for government employees are fundamentally agreements about how much one party will take from taxpayers and transfer to the other party, and so they’ve become a mechanism for labor unions to get politicians to lock taxpayers into expenses.

This eternal contract legislation is about ensuring that taxpayers are locked in to the promises of elected officials (often elected with the help of the employees) to an even greater degree.

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