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Business Burden Reductions Are Good, but Increased Risk Taints

Let’s acknowledge that Ted Nesi is reporting positive news, here:

Rhode Island has long had some of the highest unemployment taxes in the United States. Last year, however, state lawmakers approved a proposal by Gov. Gina Raimondo to change the formula and reduce the levy. DLT said the new policy saved employers an estimated $30 million this year, meaning the two-year reduction will total $40 million in 2018. …

Separately, DLT said the Temporary Disability Insurance (TDI) tax rate paid by workers will dip in 2018 for the first time in six years, from 1.2% to 1.1%, which the department said is the lowest rate since 1996. TDI taxes fund both that program and the fairly new Temporary Caregiver Insurance (TCI) program often used by new parents.

We should keep in mind, however, that this is a small piece of the cornucopia of big-government policies that suppress Rhode Island’s economy.  Moreover, this particular tax relief doesn’t come with any adjustment of government priorities.

Basically, these two changes are like the state’s too-high assumption about its pension returns.  The savings come from increased tolerance for risk, not from any actual change in policy.  In these two cases, the tolerance for risk may very well have been too low, but throwing businesses a bone by gambling isn’t an approach on which further reforms can build.

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Money-Grabbing State Officials Seek To Tax Everything That Moves

Yet again, Rhode Island has been saddled with a bottom-10 ranking: This time for its heavy-handed occupational licensing regulatory regime, which effectively denies many people the right to earn a living. In Washington, the Trump administration is returning to a “light-touch” regulatory strategy, a strategy that our state would be wise to follow.

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An Attitude That Needs Reinforcement

Maybe it’s just that I live in Rhode Island, but I don’t hear the opinion that Sarah Hoyt expresses here nearly often enough:

… “if you never balance your checkbook, you never have to admit to debt.”  But what I really like is [Democrats’] idea that they’re entitled to all of our money and that somehow not taking as much money from us as they are now means they’re “adding to the debt.”  No, what is adding to the debt is unconscionable spending.  Stop acting like drunken sailors on shore leave.  And stop putting your hand in my pocket, too.

One comes across the Big Government attitude in ways subtle and overt, but careful listening reveals the underlying belief to be that all money ultimately belongs to government.  Politicians just let us keep some of it.

We’re well past time for taxpayers to insist that enough is enough.  Our bloated, corrupt, incompetent government has no right to take our money and tell us what to do to the extent that it does, and ought to be returned to the status of working for us, rather than the other way around.

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Contrasting Benny’s with State Bennies

While sympathetic to the plight of Benny’s employees whose jobs are disappearing out from under them, I can’t help but wonder how many people actually enter retail expecting benefits like severance pay.  Kim Kalunian and Ted Nesi’s WPRI article on the impending closure of all Benny’s stores makes it seem as that must be a thing, but even with a good bit of retail experience, I’ve never heard of it.

Presumably, workers were satisfied with the terms of their employment while it was ongoing.  It would be generous of the company’s owners to offer employees who happen to be working for the stores now that they’re closing an additional, unexpected bonus, but it would be above and beyond what tends to happen in the private sector.

Now contrast that situation with Kathy Gregg’s Providence Journal follow-up article on Democrat Governor Gina Raimondo’s incentive offer to near-retirees on the state’s payroll:

The retirement plan hinges on the one-time payment of an amount twice the “longevity” bonus that each worker, already eligible for retirement, is receiving. Until this bonus-pay program was frozen in 2011, the state automatically gave state workers 5-percent, 10-percent, 15-percent, 17.5-percent and 20-percent pay increases at milestones in their career, such as the 5-year, 10-year or 20-year mark. The cap on Raimondo’s offer: $40,000. …

More assumptions: the departing workers would leave with $8.94 million in retirement-incentive payments and $4.57 million in “severance payments” for all of the unused vacation days and sick time they were allowed to bank over the course of their careers. Assuming the administration replaced 252 of these workers by the end of this budget year — at substantially lower salaries — the Budget Office projected $2,608,406 in state-dollar savings this year.

We really do have two classes in Rhode Island, whose lived experiences and expectations about the world are entirely separate, and politicians (rather than workers’ talents) are the ultimate gatekeepers to the more-desirable one.  In one class, we work by mutual agreement, and all parties are tasked with assessing their own financial needs and adjusting accordingly, seeking the best deals we can as we go.  The other class collects what it needs from taxpayers and makes decisions based on the political clout of special interests (notably labor unions) before considering financial viability.

As Kalunian and Nesi report, the financial reality of defined-benefit retirement plans forced an end to the benefit at Benny’s in 2007.  The state’s, on the other hand, still stands available as another bucket of money and liability into and out of which officials can slop cash so as to create the appearance of fiscal viability in any given year.

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PawSox: Suddenly a Legislative Hot Potato?

Kathy Gregg is reporting in today’s Providence Journal that

[Senate President Dominick] Ruggerio said the Senate Finance Committee will unveil a revised version of the PawSox financing bill next week, and then vote to “hold it for further study,” so the public can see it, discuss it and debate it before the General Assembly convenes for its 2018 session on Jan. 2.

Yesterday on the WPRO airwaves, Dan Yorke, an open supporter of the state’s financial participation in a new stadium for the PawSox, noted that he had been aware since last week that this would happen. More interestingly, he reported that members of the House have been urging their colleagues in the Senate “do not send us this bill”.

Interesting. Are some in the House seeing the folly, financial or political or both, of the state getting involved in a sport when far more important matters have been budgetarily neglected or outright cut? For example – and feel free to add to this list of unwise legislative priorities – of course, excessively generous state pensions had to be cut, though bringing the fund from 49% funded to only 56% funded was in no way worthy of the fawning national media coverage showered on the governor for this “feat”. But bigger picture, should public pensions take a secondary position to a very seasonal “economic development” (please, no snickers) sports project?

And as was demonstrated by both the Rhode Island Center for Freedom and Prosperity and the Republican Policy Group, headed by Minority Leader Patricia Morgan, the money to repair Rhode Island’s as roads and bridges could easily have been found in the budget. But Governor Raimondo pretended otherwise and the legislature unwisely followed her lead in passing a highly destructive and inefficient toll plan (the implementation of which is not going swimmingly). Really? Our roads and bridges are less important than the state participating in the frivolity of a sport?

What does it say about Rhode Island’s priorities if the state participates in the PawSox stadium? That needs to be the point that House members and leaders mull over as they consider the PawSox request and the Senate’s bill. Possibly, it is the basis of the quiet push-back, referenced by Yorke, that the Senate is getting from the House and that has hopefully turned the PawSox stadium into a political hot potato.

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Nursing Education Center and Rhode-Island-Style Innovation

Take a moment to consider the import of this paragraph, from Ted Nesi’s report of the opening of a new combination URI/RIC nursing center and Brown University administrative center in Providence:

“This was a power plant across the street from the vibrant Jewelry District,” [Democrat Governor Gina Raimondo] said. “The economy is changing, and we’re not standing still. We’re changing with it. The New York Times just called this area, quote, ‘a busy hive of invention and collaboration.’ And so we’re changing the narrative of our whole state.”

In the past… the private market made Rhode Island a hub for a particular industry.  Now… the government collects $85 million from productive areas of the state’s economy to renovate a building vacated as the economic tide went out from the Ocean State and use it for bells and whistles at government-run universities and a wealthy tax-exempt non-profit.

Honestly, I don’t want to sound that cynical, but come on.  Now throw this into the mix:

The developer of South Street Landing was CV Properties LLC, a Boston-based firm led by Dick Galvin. Earlier this year, real-estate company Ventas Inc. paid nearly $130 million to buy the facility and a new 750-space parking garage being constructed next door from Blackstone Group LP. Ventas is the parent company of Wexford Science + Technology LLC, the developer building a high-profile innovation campus on the vacant 195 land in the same part of the city.

As I mentioned when I detailed the suspicious interconnections of the bigger Wexford deal, Ventas CEO Debra Cafaro and her husband are substantial Raimondo donors, located in the governor’s notable fundraising hot spot of Chicago.

Yeah, for the general public, renovated buildings make for nicer scenery than abandoned ones, but that doesn’t mean we should accept the surface story every time politicians proclaim the advance of public-sector-focused crony deals.  Somebody’s got to lose out, and we can be reasonably certain that it’s us.

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Rhode Island 49th On The Jobs & Opportunity Index

Rhode Islanders want to prosper in an economic climate that rewards hard work, encourages small-business growth, creates quality jobs, and can lead to a better life for their families. In this regard, the traditionally cited monthly unemployment rate is often used by state lawmakers as a benchmark to evaluate the effectiveness of state economic policy initiatives. However, this rate represents a very narrow glimpse of the employment health of a state and can often paint an incomplete, or even inaccurate, snapshot of the broader economic picture.

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Chris Maxwell: RIDOT’s Inadequate Environmental Assessment Intended to Accelerate Toll Bait Lawsuit

[Below are the prepared comments of Chris Maxwell, President of the Rhode Island Trucking Association, for the RIDOT toll gantry workshop Tuesday evening. The video of Chris’ actual comments, abbreviated due to time constraints, can be viewed here. For the sake of the news outlet that erroneously reported that public comment Tuesday night was mostly a re-hash of old objections and omitted all on-topic comments from their story, Ocean State Current has bolded all of Chris’ comments that pertain to the Environmental Assessment that was the subject of Tuesday’s workshop.]

Good evening. My name is Chris Maxwell and I represent the Rhode Island Trucking Association and all local trucking companies adversely affected by truck-only tolls.

Our opposition to this plan from its introduction in the spring of 2015 is well-documented. And despite the justified rancour that still exists, our industry’s willingness to contribute to infrastructure improvement remains steadfast – even beyond our existing contributions which are considerable.

In 2016, the trucking industry in Rhode Island paid roughly $70 million in federal and state roadway taxes.

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Wheee! Warwick Fire Chief Puts Taxpayers On Hook for Cool $2.8 Million Fine

From the front page of yesterday’s Warwick Beacon.

[Taxpayer activist Rob] Cote claims that in the past four years the fire department has averaged about 1,400 shift changes a year, totaling about 5,600 Form 109s that are supposedly missing or have been purposefully disposed of. This could incur a maximum fine of $2.8 million, which the city would be on the hook for, according to Cote.

Cote filed an Access to Public Records Act request (APRA) in May and December of 2016 to get any documents pertaining to changes of shift within the Warwick Fire Department.

Fourteen hundred shift changes per year times four years requires 5,600 forms, each of which must be signed by four people in authority. What happened to those 5,600 forms? Where they destroyed? That is what Warwick Fire Chief James McLaughlin claims. Or did they never exist? If the latter, those 5,600 shift changes were never authorized and, therefore … what? The firefighters must pay back that money? (Asking honestly. Legal-types are encouraged to chime in on this point.)

Terrific work by Rob Cote, who worked for over a year rounding up all of this information and (lack of) documents to expose what is a scam, one way or the other — and could well turn out to be a costly one to taxpayers.

One other item from the article. This is called foreshadowing. (Emphasis added).

In response to allegations from Cote that fire department personnel had used the change of shift system to subvert using vacation or sick time in order to go work other jobs or even attend a softball tournament in Maine, McLaughlin said that he had seen no evidence of such activity, and if anybody has proof of such accusations to please bring it forward.

As they teach first year law students, never ask a question you don’t know the answer to … and government officials should never ask for proof of shenanigans unless they are 100% certain it does not exist.

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The Calciphylaxis of Union Contracts

Tim White provides the numbers for the long-term leave benefit that allows state employees to change jobs with a right to return to the jobs they left:

More than 1,600 positions in state government are effectively on hold, with employees having the right to return to them and potentially bump the worker who holds the job now, according to data reviewed by the Target 12 Investigators.

For the record, 1,600 jobs is about 11% of all authorized full time jobs in the state budget.  More telling, though, is this:

“The Leave to Protect rule was developed really in large part as a management tool to encourage employees to accept promotions, take a chance on a new opportunity and later if they did not pass the exam for that opportunity they would still have the ability to go back to their former position,” [Deputy Director of the Department of Administration Mark Dingley] said.

Merit exams are no longer common with promotions in state government, Dingley said. Yet the Leave to Protect policy has expanded to cover more employees as another job protection prized by organized labor.

Merit exams go away; this aristocratic benefit just keeps on going.  Just so, the benefits and stability that used to be the public sector’s compensation for its lower pay remain in effect though government work has become increasingly lucrative.

These provisions are like calcification in the blood stream, sticking to the walls and forcing us to work harder to push the blood through.  Once again, it appears that they don’t work for us; we work for them.

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Why Not the AttSox?

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… By the Way, RIDOT’s New Tolling Study Has Major Problems, Too

At about the same time they issued a not-ready-for-primetime Environmental Assessment of the first two proposed toll gantry locations in southern Rhode Island, the Rhode Island Department of Transportation (RIDOT) also issued an “investment grade tolling study” of the entire RhodeWorks toll plan – a study, we should note, which cost the taxpayers of Rhode Island a cool million dollars.

During their show, “Changing Gears”, yesterday on WPRO, Mike Collins and Chris Maxwell broadly hinted at major problems with this tolling study. Maxwell remarked that the state “would have been wise to put it through the shredder because it is very favorable” to the truckers’ anti-toll position.

Stay tuned on this – or drop by RIDOT’s hearing on Tuesday to hear about it first hand. That’s when the Rhode Island Trucking Association (represented by Maxwell) and the American Trucking Association (represented by Collins) will point out chapter and verse how RIDOT’s own toll study apparently torpedoes Governor Raimondo’s highly destructive, wasteful and unnecessary RhodeWorks toll plan.

Remember, Governor Raimondo and the General Assembly are only going to toll trucks! *snort*

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Hearing Tuesday on First Toll Gantries With Acute Case of UHIP-itis

RIDOT has identified the locations of the first two proposed toll gantry locations in southern Rhode Island. This Tuesday, they will be holding a workshop and taking public comment on their newly-released (not to say rushed out the door) Environmental Assessment of the locations. The problem is that the assessment suffers from exactly the same serious flaw as the ill-fated UHIP system: it was released before it was ready. “Continue Reading” to learn why – and for deets about attending the hearing.

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The Unadulterated Projection of Relative Decline for Rhode Island

The word “mixed” in the headline for a Ted Nesi report on WPRI.com seems misplaced.  Michael Lynch’s report for the state government, by way of consultant IHS Markit, seems pretty negative to me:

Through 2022, Lynch predicts Rhode Island payrolls will grow by just 0.4% a year on average, a rate that would rank near the bottom among the 50 states, at 48th. …

Overall, IHS expects Rhode Island’s population and labor force to grow about 0.1% a year on average of the next 10 years. “This will rank among the lowest in the country,” Lynch noted, and is “reflected in our forecasts for lackluster employment growth.” …

“This would provide a useful crop of young and well-educated workers ready to enter the labor force and fill vacancies left behind by the aforementioned retirees,” he wrote. “Our forecasts indicate that the state will fail in this area – its 20- to 29-year-old cohort will contract over the next decade.”

Nesi touts a “silver lining” in the “booming” housing market, but in context, that’s a negative.  Regulations and taxes are keeping the housing inventory in Rhode Island from growing (which means construction jobs are restrained, too).  In context, the more-accurate characterization would be that, however pitiful Rhode Island’s economy may be, the government is keeping our housing market even more suppressed.

This isn’t a mixed picture.  It’s an unadulterated portrait of how an overbearing government can drag down a state.

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Tax Foundation on What Senate Tax Reform Would Mean to RI

The Tax Foundation, specifically Nicole Kaeding and Morgan Scarboro, has estimated the effects of the U.S. Senate’s version of tax reform:

The TAG model estimates that the plan would result in the creation of roughly 925,000 new full-time equivalent (FTE) jobs, while increasing the after-tax incomes by 4.4 percent in the long run, meaning families would see an after-tax income boost of 4.4 percent by the end of the decade. The increase in family incomes is due in part from individual income tax reductions and the broader rise in productivity and wages due to economic growth.  These estimates take into account all aspects of the Senate version of the Tax Cuts and Jobs Act, including changes to the individual and corporate tax codes.

The results are provided by state, and Rhode Island stands to gain 3,135 jobs, with the typical middle-income family seeing another $2,707 in income.

Keep in mind that this is the outcome of improving the tax climate nationally.  Imagine what would be possible if the State of Rhode Island were sufficiently forward thinking to improve its own tax and regulatory climate relative to other states.

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The Danger to the Status Quo of Thwarting Democracy

I have no doubt this dynamic plays itself out across Rhode Island, but as another instance, it seems the Tiverton Town Council thinks democracy is mostly legitimate to the extent that it empowers them to make decisions for everybody else, with minimal accountability:

Beware this trio’s “looking.” Take away the political spin, and the objection of [Town Council Member John Edwards, the Fifith,] and his posse is clearly to limit the ability of voters to have control over town government more often than every two years at a heated election with state and national races on the ballot. Because their political friends have an advantage during regular November elections, that’s when they want the key decisions made.

Every budget for the past six years of the [financial town referendum] has received a majority vote, and usually, it isn’t even close. Members of the Budget Committee who put forward last year’s low, 0.5%-increase budget were all elected. Members of the Charter Review Commission were also all elected. Edwards just doesn’t like that his friends didn’t win.

The responsibility for the rest of us is to make sure that the insiders learn one lesson good and hard:  At some point, we’re going to stop dabbling around the edges and take over the governing bodies, and when we do so, we’re going to change a whole lot more than the year-to-year tax increases.

Grover Norquist put his finger on something true when he said, at the RI Center for Freedom & Prosperity’s banquette on Friday, that progressives are motivated by the possibility of taking things from other people and making them do things, while conservatives are motivated by the desire to be left alone.

Too often, being left alone includes being able to avoid getting involved in the day to day operation of government, but there’s bound to be a breaking point.  People will put up with quite a bit of abuse if it means they get to keep their Monday nights more or less to themselves, but if the abuse becomes too substantial, they’ll give up those Monday nights to meetings… and then work to reduce the amount of time they have to spend telling other people what to do.

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