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Public Policy Solutions To Restore Rhode Island’s Financial Security in COVID-19 Crisis

If we rely on American innovation in the private sector, our state can weather this horrible COVID-19 crisis! Our Center has ten proactive policy ideas that can help Ocean State businesses and families survive the crisis, while also paving the way to recovery. And, we need your help to tell lawmakers you want them to take action.

State lawmakers must find a way to get back in the saddle, demonstrate calm and deliberate leadership, and consider emergency legislation to help our citizens and businesses lead the way back. We’re recommending:

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Government-Distancing Can Help Keep Rhode Islanders Safe And At Work

We see the federal government considering bold ways to keep businesses running and money in people’s pockets. Here in Rhode Island, we’re calling on lawmakers to provide online sales tax relief to residents concerned about their physical and financial health.

Our state must do its part… The government-distancing we are recommending can help people remain at home and practice healthy social-distancing. Every sales tax dollar saved might be vitally important to families who are suffering a loss of income during these trying times.

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The 2020 Rhode Island General Assembly Bill Tracker – A Handy Way to Track the G.A.

Are state lawmakers helping to make Rhode Island a better or worse place to raise a family and build a career?

With Rhode Island already ranking a dismal 47th on the Jobs & Opportunity Index and with the worst business climate in America, the Center tracks critical pieces for legislation making their way through the Rhode Island General Assembly and what they will do to your freedom.

We evaluate bills in terms of their likely effect on the free market, the size and scope of government, the balance of residents’ interests against those of public employees and beneficiaries, and the constitutional structure of a divided government with limited power over the people whom it represents.

It is the core tenet of the Center that with greater freedom comes greater prosperity, or conversely, as is the case in the Ocean State, that a continued loss of freedom leads to the type of economic stagnation that Rhode Islanders have suffered from over the past decade.

We encourage you to follow along with us as we track the 2020 General Assembly session. Click on the link here to see our 2020 Bill Tracker.

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Christopher Maxwell: A Quick Cost Benefit Analysis for Tolls

The all-powerful director of the R.I. Department of Transportation, Peter Alviti, has invoked the authority granted to him by Gov. Gina Raimondo and General Assembly to double the toll rate at Oxford Street overpass. The increase is justified by a nebulous, internally-concocted cost-benefit formula.

I am reminded of the very telling testimony of one Mike Riley, my friend and the former head of the Connecticut Motor Truck Association, who joined us in opposition to RhodeWorks before the House Finance Committee back in 2015.

He stated: “Methinks your director protests too much. He wants way too much authority and you ought not give it to him. You ought to stop. You ought to think about this. Remember the highway intersection sign: Stop, look and listen.”

With the General Assembly’s self-proclaimed “firewall” against car tolls currently taking on water, the recently-announced move by RIDOT to “nationalize” the R.I. Turnpike and Bridge Authority, and this latest toll increase maneuver, I urge Rhode Islanders to “stop, look and listen.”

Methinks (MeKnows) you are next on the establishment’s “cost-benefit” menu. After all, the formula is very simple: your cost will always be to their benefit.

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Casimiro and Vella-Wilkinson on Pending Legislation

Guests: Julie Casimiro, State Representative, H-D 31, rep-Casimiro@rilegislature.gov
Camille Vella-Wilkinson, State Representative, H-D 21, rep-vella-wilkinson@rilegislature.gov
Host: Richard August
Topic: Vaping and other pending legislation
Host: Richard August Time: 60 minutes
Representatives Casimiro and Vella-Wilkinson discuss a broad range of pending legislation and other matters, which have their concern. Topics include vaping legislation; a veteran joint oversight committee; pharmacist having birth control prescription authority; reproductive health; firearm legislation; climate control; out of school time learning; early parole for young rehabilitated offenders; military sexual assault trauma; and more. Other matters include the need for a constitutional convention; line item veto; minimum wage; and candidate endorsements.

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The Independent Man Needs YOU: Consider This Call To Civic Action

Is it time for you to get involved… to save our state? If we are ever going to change the policies that are driving away families and crippling businesses, the sad truth, my friend, is that we are going to have to change the players.

Rhode Island’s political class is so beholden to so many special interest groups and agendas, that they are paralyzed when it comes to considering common-sense, pro-growth policy reforms.

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Promising the World to Sell the Policy

A couple things should be observed about the claims of RI Department of Environmental Management Deputy Director Terrence Gray on State of the State, recently.

Mr. Gray was on the show to talk about the Transportation & Climate Initiative (TCI).  That’s a proposed regional organization that our state government wants to permit to tax gasoline to create a slush fund for projects that can fit under the “green” umbrella.

The definition of the “tax” is the first observation that must be made.  At one point, Mr. Gray insists that TCI is not a new gas tax, but then he proceeds to describe the mechanism by which the tax is implemented.  It reminds me of an old Remi song about cap-and-trade schemes:

It sounds like cap and trade is a tax we pay then
No sir, cap and trade is just a regulation

See tax is when there’s money spent
this is just a fee to the government

With TCI, the new regional government artificially limits gasoline production and distribution, forcing companies to bid for “allowances.”  The profit from these bids goes to government.  It’s a tax.

Which brings us to the spending part of the equation.  The other important observation one can make from Mr. Gray’s commentary is that he tried to sell the new tax on a wide variety of great things that could be done with the money, when obviously, it can’t go to everything.  So, when convenient, he’ll talk about spending it on public transportation… or charging stations for private cars… or some sort of dividend or fund to offset the new costs for residents.  Until there’s a written plan, it’s possible to say that the money will do any number of wonderful things.

If we look to the spending of the similar Regional Greenhouse Gas Initiative (RGGI), which covers energy production with a regional cap-and-trade scheme, we can get some sense of what actually happens.  Maybe early on the money is used to offset something in the costs to average Rhode Islanders, but inevitably, the funds drift toward government, whether solar for municipalities, buses for RIPTA, or similar programs.

Those may or may not be worthwhile projects, but one suspects it would be a harder sell if it were made clear that TCI is, yes, just another tax to fund government activities, which ought to be funded already if they’re good ideas, given the amount we already pay for government.

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Chris Maxwell on the Truck Toll Shortfall

Guest: Chris Maxwell, RI Trucking Association, www.ritrucking.org
Host: Richard August Time: 30 minutes
In a recently completed study the state of RI learned that truck toll revenues have not yielded what had been expected or predicted by the RI Department of Transportation. This shortfall is consistent with what the local trucking industry has been predicting since the state announced its plans to toll trucks. The RI Trucking Association has filed a court case challenging the plan and more. Maxwell discusses various consequences of the tolling and the court case his Association has filed.

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Q & A On TCI, The Transportation & Climate Initiative

Q. What is TCI?

The Transportation & Climate Initiative (TCI) is a multi-state regional agreement designed to drive up the price of motor fuel (gasoline and on-road diesel). As a regressive tax, the TCI Gas Tax will disproportionately harm low-income families, especially those who live some distance from commercial centers or their workplace.

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Tolls: What Happened to Gina Raimondo’s Promise to Hold off on Gantries Until After Lawsuit?

As public attention understandably turns to legal developments in the toll case and the very visible construction of toll gantries around the state, it is important to note how the governor explicitly broke her word on the critical matter of when toll gantries would go up and highlight the heavy financial consequences to which she has needlessly exposed Rhode Island residents with this completely unprincipled volte-face.

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We’re Backing The TCI Gas Tax Proponents Into a Corner

It is not by accident that the proposed Transportation & Climate Initiative (TCI) is losing support among many of the states it has targeted… to the point where some proponents are considering a Plan-B.

Last week, I traveled to Boston to meet with other organizations from east coast states who oppose TCI, a regional compact targeting 12 states and Washington DC that seeks to impose a 5 to 17 cent per gallon tax on gasoline and diesel fuel, with the intent of forcing Rhode Island to drive less often and into more costly and less convenient electric vehicles and public transportation options.

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Political Monday with John DePetro: Budgets and Politics

My weekly call-in on John DePetro’s WNRI 1380 AM/95.1 FM show, for January 20, included talk about:

  • The governor’s budget (and popularity)
  • The speaker’s interest in the Convention Center
  • The women’s march
  • Big money state jobs, especially corrections

I’ll be on again Monday, January 27, at 12:00 p.m. on WNRI 1380 AM and I-95.1 FM.

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Rolling Effects of Housing Wealth Redistribution

As hints had suggested Rhode Islanders should expect, Democrat Governor Gina Raimondo’s proposed budget for fiscal year 2021 (beginning July 1, 2020) includes a new program with new dedicated funding to build affordable housing.  (Naturally, Democrat Senate President Dominick Ruggerio, of Providence and North Providence, a Laborers Union careerist, loves the idea.)

WPRI’s Eli Sherman summarizes the plan:

The budget, which will now be vetted by lawmakers during the coming months, suggests creating a two-tiered tax system that doubles the so-called “conveyance tax” to 0.92% on all property sales – both residential and commercial – totaling more than $500,000. The current rate — 0.46% — would apply to the first $500,000 of any transaction. …

State officials estimate the new tax would generate about $3.6 million in state revenue next fiscal year, and $8 million in each budget year afterward. The money would create a dedicated funding stream that would go into a restricted receipt fund at Rhode Island Housing, a quasi-public agency, and be controlled by the Housing Resources Commission.

This scheme brings to mind some analysis I did of tax rates in Tiverton back in 2018.  My conclusion was that the exorbitant tax rate was suppressing home values at the high end of the market.  At the same time, broader market forces were increasing house values at the low end.  Because the tax rate is uniform across the town, and because the tax rate is set in order to match the town’s budget (not the other way around), this had the effect of moving the tax burden toward the working class neighborhoods.  Their houses were worth more, while the expensive houses were worth less, so the taxes followed the value.

Of course, adding a couple thousand dollars at the point of sale will have much less effect than a tax rate that charges that amount every year, but the principle is the same.  Taxing high-end houses more will make them less valuable, shifting the real estate tax burden down the scale.

At the same time, the state projects that it will be building an additional 250 “affordable houses” every year.  Increasing supply at the low end of the market will tend to reduce prices there, too.  So, while the increased stock will expand the low-end’s share of total value, taxpayers’ bills will decrease with the value.  Whether this helps spread municipal tax bills to more homeowners will depend on whether the affordable houses are distributed evenly across the state.

This leaves the middle of the market, which will see upward pressure on its annual tax bill, while also being nudged toward the $500,000 line, where it will be more-expensive to sell.

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A State That Doesn’t Need to Raise Gas Taxes

With the advocates for the Transportation & Climate Initiative (TCI) now revving up for their cause, and with Democrat Governor Gina Raimondo remaining intrepid in her desire to push Rhode Islanders out of their cars for the good of the planet, Ocean Staters might wonder where we stand already on the gas tax.  Fortunately, the American Petroleum Institute has compiled information on all states’ gas taxes, and the Tax Foundation provides this useful map:

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Taking note that none of these numbers includes $18.40 added per gallon by the federal government, we can say that Rhode Island is most definitely not in need of new taxes on this basic fuel.  If the TCI tax were to be implemented at the 17-cent high that has been cited, the Ocean State would rocket to 4th highest.

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Political Monday with John DePetro: Doubting the People in Charge

My weekly call-in on John DePetro’s WNRI 1380 AM/95.1 FM show, for January 13, included talk about:

  • A union president accuses race heretics
  • OPEB swamping Providence and Warwick
  • Fear about “red flag” laws
  • The legislative session starts
  • RI losing claim to a Congressional seat,
  • The rolling fundraising party of the State House

Open post for full audio.

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The Political Class Plans To Harm Rhode Island In 2020

The more freedoms we have, the more prosperity we will enjoy. The constitutional government of our great nation was formed to preserve our freedoms. But in the Ocean State, we reduce freedoms … and we suffer the consequences.

As the 2020 General Assembly Session begins, and we are once again looking at even more of status quo (or worse) based on the policy agenda from the political class, when will Rhode Islanders say enough is enough?

Instead of focusing on the real issues harming the business climate of our state… the insiders are looking to restrict the rights of citizens by stopping the use of plastic straws and bags. Give me a break.

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The Hidden Message of the Music Box

Back before many people trusted the Internet as a medium through which to conduct consumer transactions — or even thought to use it for that purpose — I would periodically travel over the bridge from the University of Rhode Island to Newport to hit the Music Box, a record store on Thames Street.  When searching for recordings of the (sometimes relatively obscure) music I was studying for performance or theory, a trip of that distance was often unavoidable.

Now we’ve reached the point that almost any recording you might want to hear is available instantly on a portable device for a relatively inexpensive annual subscription.  It isn’t difficult to understand why the business model of stores like the Music Box has hollowed out.

As Scott Barrett reports, however, Rhode Island’s pitiless government didn’t make it any easier for the store — which just closed after extending its life by changing its product mix — to survive:

Jay added that operating a business in Rhode Island, and Newport specifically, is getting more and more difficult because of the mounting taxes.

Express, a clothing store located directly next to the Helly Hansen store, also had signs in the window Thursday announcing a going-out-of-business sale. An associate at Express told The Daily News the store will close at the end of the month. Across the street, a pair of stores — The Tourist Trap and Nautical & Nice — had signs on the door that read “Sorry, closed.”

Defenders of Rhode Island’s insider status quo sometimes assert things like, “Businesses don’t go under because the tax rate is a couple percentage points higher,” or, “People move south for the weather, not the tax savings.”  Such arguments, while they may be untrue because too simplistic, make valid points, but they miss the critical point.  Our government shouldn’t be laying sticks on the camel; it should be striving to accomplish what it needs to accomplish with the least amount of disruption possible.

Politicians are terrible at predicting and adequately considering the consequences of their policies.  Rhode Island officials frequently prove they can manage to provide targeted incentives so new businesses can overcome the artificial barriers, but they should be making business easier across the board so legacy businesses like the Music Box can better survive the changing landscape.

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Local Podcast Kicks Off Budget Season

For those in and out of Tiverton who have some interest in the politics and budget process of the town, the latest episode of the Tiverton on Track podcast of the Tiverton Taxpayers Association (TTA) covers that ground:

Track 1: The Gander Hires a Solicitor
Track 2: Passing the Joint… Meeting
Track 3: What’s the Plan?
Track 4: How the Budget Thing Works

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TCI Gas Tax Unnecessary; RI Already Won the War on Carbon

As you probably know, Governor Gina Raimondo is proposing that Rhode Island sign on to TCI (Transportation and Climate Initiative), a regional carbon cap-and-tax program on transportation that would involve, among other things, Rhode Islanders paying an additional tax on gas and diesel of seventeen – twenty four cents+ per gallon. A couple of Justin Katz’ excellent posts about TCI are here and here

Let’s discuss the stated purpose of TCI. According to the governor, it is to save the planet by getting Rhode Islanders to give up their cars. This is not an exaggeration; below is what the governor says about TCI in this December interview with WPRI’s Kim Kalunian (starting at minute 03:15).

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From Childish Negotiations to Demands

As we edge toward a new decade, something about the progressive RI Political Cooperative’s tax-the-rich plan is especially worrying:

They propose a state income tax hike for individuals making more than $467,700 a year. By their calculations, raising the top marginal tax rate from 5.99% to 10.99% on these top earners would “generate over $170 million″ in new revenue “to help meet Rhode Island’s critical needs in education, housing, health care, and clean energy.”

They also endorsed the $15-per-hour minimum wage proposed in recent years by left-leaning Democrats in the Rhode Island legislature and public employee unions. The proposal generated headlines and some support, but not enough to win General Assembly approval during the last session in the face of heated opposition from the state’s business lobby. A $15-an-hour wage equates to $31,200 a year.

Right away, progressive Democrat Governor Gina Raimondo balked at the idea of doubling the income tax rate to make the Ocean State a regional outlier again, which brings to mind my op-ed about how progressives who aren’t in direct control of government can just say anything to seem more pure, while those in office have responsibilities.

In this case, the progressives have to know that their policy has no chance, which makes the proposal a sort of childish, aspirational negotiating ploy — start high to increase leverage.  In public policy, however, that means we can never have an honest discussion about what’s realistic and what the trade-offs are.  The biggest trade-off is the principle of giving government the authority to decide how much money people should make.

This is well-trodden ground, however.  What feels new and worrying is that education (particularly higher education) has increasingly become about training activists, rather than breeding thinkers.  We might soon get to a place where a critical mass of our countrymen have forgotten not only about negotiation and rights, but also about reality.  At that point, it doesn’t matter what the effects might be of taking a big chunk of money from those with the higher income, while also forcing them to pay employees above market rate.  Even as the economy shrivels, no trade-offs will be acknowledged, because there will always be somebody to blame for inequity and government screws to tighten.

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Raimondo in Search of Yet Another New Thing to Tax

Here’s one of the more-worrying parts of Democrat Governor Gina Raimondo’s recent interview with the Providence Journal:

Raimondo said she is trying to come up with a permanent and steady revenue stream to address Rhode Island’s shortage of affordable housing and its homelessness problem.

“I don’t know where it will come from. I have a $200-million hole. But everyone who is an expert in this area tells me: If you are serious about housing, you need a steady funding stream …. So if we can find a way to do it, I’d like to do it.”

“I just have to find some money,” she said. “It could come from anywhere. It could come from an income tax. It could come from a sales tax. It could come from a fee.”

Put aside the laugh-line that experts in the field say the field needs its own dedicated money.  This sounds like the same rationale as the controversial truck tolls.  It is as if Governor Raimondo came into office knowing the state was already over taxed and so — being unwilling to reduce the overall burden of government — she decided early on that the only solution would be finding new ways to take people’s money away.

What this really reminds me of, however, is the “permanent and steady revenue stream” some in state government attempted to secure for the non-profit RI Coalition Against Domestic Violence.  For a few years, legislators tried to get that organization $300,000 through a new, $46 fee on marriage licenses.

Of course, that was terrible policy, but it was offensive, too.  We should want people to get married, so taxing the action is just dumb.  But then to implicitly link marriage with domestic violence?  Only progressives could see that as natural.  So, the state gave up and decided to fund this handout straight from the general fund.

What the governor tries to do in the upcoming legislative session will depend how much money her experts think they need.  A few years ago, I traced the connections between various housing-related organizations and special-interest groups, and they are extensive, with a lot of overlap.  If the money needed to make that network flush is high, look for some sort of new statewide building permit fee or added stamp taxes.  From experience, however, we should probably expect a more-limited tax on something the wealthy governor thinks she can vilify as a luxury.

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Raimondo Comes for Your Car

The Transportation & Climate Initiative (TCI) is scheduled to put out its initial memorandum of understanding (MOU) today, which the northeastern states will consider signing in order to impose a new gasoline tax on their residents.  It was therefore helpful of Democrat Governor Gina Raimondo to be so clear and direct about her intentions for Rhode Island, during a recent Providence Journal interview:

“Yeah, there is going to be some element of a fee on fuel. Now, how do you assess it? What do you assess it at? … What do you [do] with the proceeds? That still needs to be figured out,” she said about the plan, which is modeled on the Regional Greenhouse Gas Initiative program for the energy sector.

What’s her message to Rhode Island drivers about the costs of the program being passed on to drivers at the pump?

“It is a fact we have to get off of gas-guzzling cars for the existence of us,” she said. “If we don’t do it, we will all be in much bigger trouble because climate change is here and it is real and we need to meet the challenges.”

She doesn’t know how much the fee will be, how it will be collected, or even what it will be used for.  The whole point is to make gasoline more expensive so you have to give up your car.

She added, “By the way, there will be benefits to consumers. This money will result in more, better, faster electric trains, more electric forms of busing and public transit.”

Isn’t that wonderful?  You lose the ability to afford your car and the freedom that comes with it, and you’ll get public transit in exchange — along with a requirement to trust in and rely on a government that can’t seem to do anything right.

Wealthier people (like Gina Raimondo) will be able to buy electric cars (thus transferring their fossil fuel consumption from gasoline to energy production), which raises the question of whether this is a power grab or a condescending statement.  Is the governor pushing you into a lower class, or is she saying she doesn’t trust you to use freedom responsibly because you are already of lower class?

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Political Monday with John DePetro: Progressive Pressure

My weekly call-in on John DePetro’s WNRI 1380 AM/95.1 FM show, for December 16, included talk about:

  • The governor’s Projo interview
  • Where’s all the money go… in Providence and RI?
  • Progressives’ state-killing tax proposal
  • Women’s caucus: another progressive organization

Open post for full audio.

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Chris Maxwell: Tolls – Connecticut’s Governor Continues to Stumble and Bumble Like a Fox

First Circuit Court Decision Stokes Urgency to Pass Truck-Only Tolls and Begin Gantry Roll-Out

Dead wrong as she may be, at least Governor Gina Raimondo made a decision and stuck with a plan. Her indecisive counterpart next door in the Nutmeg State, Ned Lamont, seems to change his mind on how and who he will toll on a weekly basis.

Governor Lamont’s latest maneuver has Connecticut poised to pass truck-only tolls as emergency legislation in the wake of the 1st U.S. Circuit Court of Appeals decision last week giving jurisdiction on the American Trucking Associations’ challenge to RhodeWorks truck-only tolls back to the federal court.

In an interview Sunday, WTNH’s Chief Political Correspondent, Mark Davis, asked Lamont the following:

One year ago today, five weeks after the election, I asked you if you were still committed to the trucks only tolls, you said you were. About six or eight weeks later you changed your mind and included passenger cars. Last month, you went back to trucks only. Don’t you think that’s a problem for a Governor and a politician?

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New Gas Tax: The Governor’s Unwelcome Holiday “Gift” to be Announced This Week

If the Raimondo administration gets its way and bypasses the General Assembly to sign on to a new regional carbon-tax scheme, called the Transportation and Climate Initiative (TCI), Rhode Island motorists will find a plan to increase gasoline taxes in their stockings this year.

The TCI gas tax is a cap-and-trade tax on gasoline proposed by environmental extremists who purposely want gasoline to become so expensive — estimated at an extra 24 cents per gallon — that you will be financially forced to walk or bike to work and around town. We’re expecting an important announcement this week on the new tax…stay tuned.