My weekly call-in on John DePetro’s WNRI 1380 AM/95.1 FM show, this week, was about the many new fees and taxes in the governor’s budget, a progressive’s alleged embezzlement, the significance of an abortion poll, and the multiple candidates for RIGOP chair.
Along with her budget’s request to increase fees for beaches and Rhode Island parks, Democrat Governor Gina Raimondo is rolling out the usual message about “investing” in our state:
“Our beaches and parks are such a special part of who we are as Rhode Islanders, and we need to preserve them for future generations,” said Governor Gina M. Raimondo. “The study DEM commissioned recently makes clear that we’re not doing enough now. It’s critical that we commit to long-term investments in our parks and beaches. Let’s make sure our kids have the same opportunities that we did.”
The study noted that Rhode Island exhibits high park use and low investment compared with the rest of the nation – ranking 1st in visits per park acre but 47th in state spending per visit. The study calls on the State to make a strategic, sustained, long-term investment to increase the self-sufficiency and economic potential of the park system, protect infrastructure, enhance programs, and bolster operations and staffing.
The missing statistic in that summary is anything gauging Rhode Island’s tax burden. Especially in the messaging of our current governor, everything is an “investment.” The problem is that we’re already making those investments. We’re just not getting much for them, whether in terms of infrastructure, economic development, or education.
Another budgetary favorite of Raimondo’s emphasizes the point: budget scoops. When the governor’s office makes a regular practice of “scooping up” money from restricted funds, which are often driven by fees of one sort of another, it sends the message that it’s all really about finding new sources of revenue.
In other words, she’s actually looking for investments in more of the same old insider deals that have drained money away from things Rhode Islanders actually value.
My weekly call-in on John DePetro’s WNRI 1380 AM/95.1 FM show, this week, was about the exit of the Chafee family, a metaphoric threat to a rep, the governor’s quest for revenue, and the left’s cult of abortion.
Well, this minor controversy looks pretty obvious to me:
The dispute centers on the sales tax exemption that state law provides writers, composers and artists residing in Rhode lsland who sell their own “original and creative work.”
Much to the dismay of nonfiction writers like the prolific Paul Caranci — the former North Providence councilman who went undercover for the FBI — the state tax department has decided that nonfiction does not qualify as an “original″ work of art, eligible for an exemption from Rhode Island’s 7 percent sales tax.
The ACLU is on the case, arguing that the Division of Taxation should not be authorized to judge literary works for their creativity. A much more obvious line could be drawn between books and, say, “works for hire,” or generally technical documents drafted as part of a job. (Of course, it’s difficult to see why such works would become subject to the sales tax, anyway.)
If only the ACLU would broaden its views, though. If the government cannot differentiate non-fiction from fiction, how can it differentiate political non-fiction from other forms? That is, campaign finance regulations, particularly those requiring the publication of the financial backers of a publisher (so to speak) cannot be applied only to a particular type of speech.
Here’s some legislation that would be a reward for the SEIU for all of its political donations during last year’s election. Unsurprisingly, the bill summary is misleading:
This act would expand the tiered-rate structure for the childcare assistance program to meet the federal benchmark for access to high-quality childcare for all age groups of children, with higher rates paid to licensed child care centers that have achieved higher quality ratings in “BrightStars”, the state’s quality rating and improvement system. A requirement that childcare providers must raise tuition rates for all other public or private paying families in order to receive higher state rates is removed.
The law already provides for tiered payment rates. All this bill would do is dramatically increase the amount that taxpayers are required to pay.
Taking the taxpayer’s point of view puts another light on the section removing a “requirement that childcare providers must raise tuition rates for all other public or private paying families in order to receive higher state rates.” Right now, the law simply states that taxpayers won’t pay more than child care providers charge their unsubsidized customers. This bill would allow providers to charge those families who pay for their own care less.
One consequence of this change in incentives is obvious: To the extent that the market rate for child care is less than the government’s rate, providers will have incentive to fill up available space with subsidized customers unless families can pay more. If this creates a crisis, then (from the Big Government perspective) so much the better. The politicians will be able to cash in on the promise of giving away “free” care to everybody.
Gov. Gina Raimondo has sharply lowered her forecast of how much money truck tolls will generate this year because they are getting and running more slowly than initially expected.
The budget proposal Raimondo released earlier this month projects that tolls will generate $7 million in the current 2018-19 budget year, which is $34 million less than was expected when the budget passed last June.
If you’ve watched the toll discussion and rollout even casually, you will know that this development is actually not at all a surprise.
Is the Governor’s budget pointing our state in the right direction? On Monday, I attended the Martin Luther King Jr. Day breakfast hosted by the RI Ministers’ Alliance. At the breakfast, the Governor said that the country is moving backward, and that she is committed to moving RI ‘forward’ and in the opposite direction. What planet is the Governor living on?
Instead of seeking to shape Rhode Island’s future with the proven ideals of a free-society, Governor Raimondo’s proposed 2019-2020 budget is a stunning departure from America’s core values and, instead, would put our state on a “Rhode to Serfdom.”
The Governor’s regressive budget points us 180 degrees in the opposite direction of where we need to head, and would stifle any opportunity for growth.
Is the governor a recklessly spending profligate or a moral puritan looking to punish her subjects for their moral impurities while bringing them to kneel before government?
Last week I wrote about the constraints that Massachusetts placed on its school districts nearly 40 years ago. Under the same constraints, South Kingstown spending (since the year 2000) would have trended very differently. Each year, SKSD is spending $10mm to $12mm more than if normal inflation been applied over the last 20 years. For now, ignore the additional factor that enrollment literally dropped by a third over the same time period.
A federal judge recently ruled that Obamacare is unconstitutional because the individual mandate, repealed in the 2017 federal Tax Cuts and Jobs Act, is no longer in force. Even though existing federal health-care laws will remain in effect during the appeals process, states should not panic and codify Obamacare into state law, as it is not certain how long federal subsidies will remain intact.
While the courts hear the appeals, and with Democrats winning back control of the U.S. House of Representatives largely on the health-care issue, another furious debate is about to unfold.
Democrats will probably introduce some kind of government-centric plan, while Republicans are poised to introduce their own free-enterprise solution. What we all want are simply more choices at lower net costs.
In 1980, the State of Massachusetts recognized the limitations and threats of relying too heavily on expanding property taxes to fund our public education systems. Proposition 2 ½ was passed to limit the increases a town could levy through its property taxes each year. Named for the enacted cap of 2.5%, any town that needed to increase its levy beyond it could do so, but only through a town wide referendum. For the last 35 years or so, Massachusetts has tamed its property taxes and runaway school spending.
Rhode Island enacted our own, lighter version, of a tax cap. Unfortunately we chose 4% as our limit and waited almost 30 years to implement it. During the lead up to the cap, can you imagine what districts did? In South Kingstown, we ramped our baseline spending up between 6% to 12% each year despite losing about 100 kids per year from our enrollment.
The chart here shows how this played out over the last 2 decades.
Happy New Year from everyone at the Center! Do you want to start winning conservative victories in 2019? It is my view that conservatives in our state MUST boldly and relentlessly stand for the core values that have always bonded Americans together, and translate those values into kitchen-table issues that benefit families.
Our vision is based upon the core values of love of country, freedom of religion, self-sufficiency, and preservation of the individual rights granted by God to every American, as defined in our constitution.
Merry Christmas! Imagine Rhode Island as a more attractive home and destination of choice for families. We could be a state that offers financial security now and opportunity for prosperity in the future. We could have a policy culture where individuals and business are successful in increasing the overall wealth of our state’s economy, and enhancing the quality of life for every Rhode Islander.
As we jump into the latest unsavory development in the state’s shady, deliberately ignorant roll-out of truck tolls, this preamble is the most important take-away: tolls on any vehicles in Rhode Island are completely unnecessary. The spending to repair Rhode Island’s bridges can be found within the annual budget – and without throwing 30% of the revenue away on gantry construction and toll fees.
RIDOT has announced today that they received federal approval for the balance of the gantries and that the contractor has been issued notice to proceed with construction, with the first new gantry expected to go live in May of 2019.
This flies in the face of Governor Gina Raimondo’s repeated statements that any more gantries would wait until the lawsuit and the legality of truck-only tolls is decided. Just one instance was on Dan Yorke State of Mind earlier this year (starting at Minute 06:00):
Yorke: You said, “If we lose the litigation, we don’t put the tolls up”.
Governor: “We’re going to start with one in February. We assume there will be litigation which we will then have to defend and then we’ll see.”
Governor: “We gotta do one, we gotta see how it goes and then we’ll move to the next one.”
To not proceed with the construction of the balance of the gantries until their legality had been threshed out was a significant undertaking and also the prudent course on behalf of taxpayers and residents.
The implications for Rhode Island residents of her breaking her word and doing a highly irresponsible one eighty are significant. We have received repeated assurances that these gantries will be used only to toll trucks. But what happens if the court rules truck-only tolls illegal? The most innocuous – and actually not that innocuous – implication of her action in erecting gantries for a use that may be legally vacated is that she has very irresponsibly opened state taxpayers to a significant, unnecessary expense; i.e., putting us all on the hook for the cost of these gantries.
A far more ominous implication is that, by proceeding with the construction of all gantries before a court ruling, she is actively positioning the state for all-vehicle tolling. In a recent interview with WTNH, Governor Ned Lamont said that Governor Raimondo told him she is “highly confident” that the lawsuit will be found in the state’s favor – and “later this spring”, no less. (This attitude strikes me not only as baseless, extreme legal optimism but also quite disrespectful of the judge presiding over the case.).
The governor’s highly quizzical legal prognosticating to one side, it is impossible to predict the lawsuit’s outcome. A ruling against truck-only tolling doesn’t mean that tolls themselves have to go away, only their discriminatory assessment. By going back on her word on gantry construction, Governor Raimondo may be telescoping the time it takes to spread the – remember, completely unnecessary – toll cancer to all vehicles.
[Monique has been a contributor to the Ocean State Current for over ten years, has been a volunteer for StopTollsRI.com, a grassroots citizens group opposed to all tolls, for four years, and began working for the Rhode Island Trucking Association as a staff member in September of last year.]
Gary Sasse is, without a doubt, one of the foremost authorities on the tax situation in Rhode Island. Still, one can’t help but feel that his essay on GoLocalProv started with the conclusion and tried to fill in the text from there, without quite completing the circle:
In his 2009 State of the State Address Governor Donald Carcieri told the General Assembly, “I am tired of people writing stories that Rhode Island is tax hell.” Perceptions linger, but today it is inaccurate to characterize the Ocean State as a non-competitive tax outlier, much less tax hell.
The real tell that something is off comes with his assurance that the Providence region’s ranking on tax burden by one measure “was as close to the middle as the bottom.” You know another way of saying that? Around the bottom quarter.
The following chart just takes the ranks that Sasse cited, so it misses a lot of important caveats. Still, proclaiming the end of a “tax hell” seems premature, to say the least.
Consider where the Ocean State does best. If our sales tax is low per capita, it could that Rhode Islanders and non-Rhode Islanders go elsewhere for their shopping. (These numbers probably don’t include the new taxes on Internet purchases.) If our income tax is middle of the pack, it could have something to do with the fact that our median income is about 20% lower than our neighboring states. Those two factors could combine to produce our best ranking, sales tax per income.
The fact remains that we’re in the worst quarter of states for total taxes, whether per capita or as a ratio with income. As Sasse notes, our property tax is high per capita, but that’s something one can only escape by leaving the state.
The bottom line is that taxes are still too high in Rhode Island. The next essay that Sasse writes should explain why he thinks it’s important to cast a rosier light on them.
According to a Katie Davis story on channel 10, the State of Rhode Island has decided that prayer cards and cremation urns are taxable and are hitting funeral homes up for huge retroactive bills:
… State law exempts caskets and burial garments from sales tax. Urns aren’t specifically listed in the law, but funeral directors say for decades, they never collected sales tax on them.
“Since the 50s, none of us had,” Ted said. “The State of Rhode Island, when we were audited, never asked or required or looked for any information pertaining to any of that.”
But now, state tax officials are taking a second look at the law and adding up what’s owed.
Manning-Heffern is one of at least six Rhode Island funeral homes hit with a bill for back taxes.
Well, that’s one way to find a windfall for a government that is overspending its budget. One can’t help but think that it’s a harmful approach in the long run, though. What other salable items and, similarly, regulations might exist that a go-getting taxman might find and target?
People go for decades with the understanding that the container for a deceased person’s ashes falls under the same tax definition as a container for an uncremated body, and rather than put in legislation clarifying for future purposes, the government sends an eye-popping bill. I guess the state had to make up for the even-more-eye-popping bill a state college has to pay for an administrator’s vacation Internet bill.
Writing about public policy day in and day out, one can forget that not everybody follows every argument with close attention. Broad philosophical points of view and underlying intentions can therefore be lost.
Just so, I almost didn’t bother reading a brief essay in which Michael Tanner promotes and summarizes his forthcoming book offering a broad explanation of a conservative policy response to poverty. It’s worth reading, though, because he summarizes some conservative policies specifically in terms of their human objectives:
- Keeping people out of jail can promote work and stable families.
- Breaking up “the government education monopoly and limit[ing] the power of teachers’ unions” is rightly seen as an “anti-poverty program.”
- Preventing government from driving up the cost of living, especially housing, will give poorer families a chance to get their feet on the ground.
- Policies that discourage savings also discourage healthy financial habits.
- A heavy hand in regulating the economy tends to target economic growth toward the rich and powerful.
As he concludes:
An anti-poverty agenda built on empowering poor people and allowing them to take greater control of their own lives offers the chance for a new bipartisan consensus that rejects the current paternalism of both Left and Right. More important, it is an agenda that will do far more than our current failed welfare state to actually lift millions of Americans out of poverty.
My only objection is that I’m not sure that the “paternalism of the Right” is a view that conservatives actually hold rather than a caricature that the Left spreads about us. Of course, the fault is arguably ours, if we don’t often enough express our real intentions.
On Tuesday, November 27, 2018, I attended the South Kingstown School Committee meeting. The recently elected Vice Chair, Sarah Markey, is also the Assistant Executive Director for the National Education Association of Rhode Island (NEARI). The vast majority of the employees working in the South Kingstown School Department are represented by this labor union.
Last year, Markey attempted to get appointed to a vacant school committee position.
When state agencies put forward the “painful” actions they’d supposedly have to take if elected officials to catch their budgets up to their actual spending, taxpayers should look at the actual spending.
This year was a GREAT year for worker freedom across the country, and here in the Ocean State. Early in the summer, the SCOTUS decision in the historic Janus case determined that state and local governments are forbidden from forcing their employees to join unions as a condition of employment. The ruling means union leaders can no longer automatically plunder the pocketbooks of public employees to fund the unions’ political agendas.
In August, we launched our MyPayMySayRI.com campaign to educate public servants about their restored First Amendment rights.
But the insiders want to keep workers in the dark, and in the unions… at any cost.
Unfortunately, we have to admit that this is nothing new:
Overspending by state agencies has opened up a $42-million hole in this year’s budget, according to new estimates from the state budget office.
The state departments of Children, Youth and Families; Behavioral Healthcare, Developmental Disabilities and Hospitals; Labor and Training; and Revenue were among eight agencies over budget in the first quarter of the fiscal year that started July 1, according to a memo from State Budget Officer Thomas Mullaney on Thursday.
Some doubt is arising, however, whether we can really claim that these agencies are “overspending.” When departments regularly spend more than their budgets and the governor and General Assembly simply add money in a supplemental budget as the books come to a close and then audits come in much lower, it begins to look as if the departments are simply following the ordinary course of operation.
For fiscal years 2012 through 2017, the state government increased its supplemental budget by an average of 2.4% and then actually spent an average of 4.7% less than that. Every year, the state estimates that it is overspending and adds money to the supplemental budget. The local news media for some reason tends to trumpet the increase from the supplemental amount to the next year’s final, which looks more reasonable because the bulk of the increase is in the supplemental. All of this happens with plenty of fluff above the actual spending of the state, with a reliable 2.6% annual increase.
Here’s an odd moment in a Scott MacKay essay on The Public’s Radio, about Amazon’s choice of our nation’s two bases of power — New York City and Washington, D.C. — for its new headquarters:
Luring 21st century innovation jobs to Rhode Island and southeastern Massachusetts will require changes in economic development thinking. These companies aren’t going to places that rely on the traditional metrics, such as low-taxes, low rents and cheap labor. “They aren’t going to low-cost places, right to work states,” says Michael Goodman, director of public policy at the University of Massachusetts Dartmouth. “Nowadays brains matter much more than brawn.”
That’s music to MacKay’s ears, because his a big union and high-tax guy, but it’s weird that he would present a behemoth establishment player like Amazon as an archetype of “innovation jobs.” The choice of NYC and Washington for its new locations is an indicator that Amazon is shifting into robber baron mode, which means using the power of the media and government to suppress competition and secure its advantages.
Of course the company is fine with high taxes and organized labor. Its executives want to be sit in a room with other powerful people who can tell their constituents or members what to do. The freedom of low taxes and a right to work makes things unpredictable for the power brokers.
But the real innovators will go to places where they aren’t inhibited by these legacy systems, meaning places where they can try new things and reinvest what they earn. Mix that economic flexibility with a culturally intriguing location (characterized, I’d suggest, by the freedom and character that come from a government that doesn’t meddle in people’s lives), and we’d have something powerful in Rhode Island.
Unfortunately, that’s a big “if” and a big lift in Rhode Island.
Sometimes when one follows the news it seems like the lessons are right in front of us, yet never heeded. Such is the case with Diana Pinzon’s WPRI article about the explosion of microbreweries in Rhode Island:
In 2016, the General Assembly voted to allow breweries and distilleries to sell limited amounts of their products to plant visitors for sampling and off-site consumption. Prior to that change in law, only wineries were allowed to do that.
Since that change was made, the number of microbreweries nearly quadrupled in the two years, according to the R.I. Department of Business Regulation.
One of the construction companies for which I worked had its shop a few units down from Newport Storm brewery, and when they had their weekly tours (with sampling), there would always be a line. But expanding the ability to serve customers directly from the brewery wasn’t the only regulatory change, and the state reduced the targeted taxes and fees on brewers, as well:
Earlier this year, two additional beer industry bills were signed into law by Gov. Gina Raimondo.
The first eliminated the so-called “Keg Tax” that required brewers to pay sales tax on kegs they purchase to fill with beer and then sell to distributors. The second piece of legislation reduced the alcoholic beverage manufacturing and wholesale licensing fee from $3,000 to $500.
What if we took the same hands-off approach across our economy? Existing businesses would expand, and we can only guess how many innovations might emerge that lawmakers can’t even imagine, let alone be aware that Rhode Island’s regulatory regime is blocking.
Rhode Island is in desperate need of leadership that will step up and take the Progressive agenda head-on. For too long, the far-left has schemed to take the people of Rhode Island backwards. They want to move us further away from the pro-family and pro-business reforms our state desperately needs.
Because I looked into the concept when Democrat Governor Gina Raimondo attempted to corrupt it into a statewide tax on high-end vacation homes, the new “non-utilization tax” in Providence that Madeleine List describes in the Providence Journal caught my eye. The policy rationale from the city is to make it expensive to leave property deteriorating into blight:
“It is in the best interest of all Providence residents that we address the vacant and abandoned properties that negatively impact the quality of life in our communities,” Elorza said in a statement. “The non-utilization fee aligns with our EveryHome program by holding property owners accountable while encouraging them to rehabilitate properties into productive reuse. This powerful tool will help us to support stronger, more vibrant neighborhoods throughout the capital city.”
The legal rationale, as I explained my understanding back in 2015, is as follows:
With the nonutilization tax, the General Assembly of the 1980s was saying that doing nothing with land is essentially holding it for some other purpose, like an investment, which is a financial “use” that can be taxed separately from ownership.
While I can understand the impulse for this approach, I’m not a fan. Especially, in the city, people don’t just buy property to sit on it. If they’re not using it for some productive purpose, something is probably preventing them from doing so, and there are a range of policy solutions a local government could pursue.
The problem is that the politics of our day create this us-versus-them mentality whereby politicians pledge to impose pain on those rich slumlords to get them to change their ways, rather than see the property owners as people who might be grappling with some problem… perhaps a problem that originates with the politicians. Maybe some tax is too high, making the property difficult to sell. Maybe the person just hasn’t thought of the property as a potential source of value. Maybe some special zoning plan could help somebody make use of the property while the other person owns it.
Or maybe — stop me if this sounds crazy — the local government could concentrate on getting out of the way of the economy so the property becomes valuable enough to prompt a sale.
On Tuesday, you and I have a chance to make a big difference! I am personally encouraging you to vote… to exercise your precious right and to vote for candidates who support a pro-growth, pro-business, and pro-taxpayer agenda!
The RI Center for Freedom & Prosperity has released a statement against all three ballot questions for more debt:
Broadly, Rhode Island is relying too heavily on debt to cover its bills. The Mercatus Center at George Mason University puts Rhode Island’s long-term liabilities at 90% of the state’s assets, which is higher than the average state. Truth in Accounting’s State Data Lab gives Rhode Island a D for finances, with $8,288,881,000 in bonds and other liabilities, plus another $4,316,527,000 in pension and other retirement liabilities. A recent Rhode Island Public Expenditures Council (RIPEC) report finds Rhode Island already among the worst states when it comes to debt per capita and debt per income.
More debt is not the answer to the Ocean State’s problems; it is a major problem in itself. Adding $589,462,045 in principal and interest by passing the three ballot questions will make it worse.
The State of Rhode Island and its municipalities must be more prudent with the tax dollars they already collect — for example, prioritizing school-building maintenance over more frivolous projects.
Every election brings this same issue. It’s just too easy for people to tally up the promised benefits and not consider the costs. Meanwhile, the special interests — from the construction unions to the environmentalist groups — have huge incentive to advocate for the debt. (Contrast that, by the way, with the dangers of advocating for a bigger piece of existing spending, which might go up against other special interests who want to keep what they’ve got.)
This is another area where the public needs more education on the issues and all too few people have any incentive to provide it.
Rhode Island remains trapped at the bottom of the pack on the Center’s Jobs & Opportunity Index. The Ocean State comes in 46th place amongst the worst in the country trailing behind our neighbors.
I’ll provide more depth with my usual employment post and Jobs & Opportunity Index (JOI) write-up after all the data becomes available tomorrow, but at first glance, it looks like the national recovery might be stalling out in Rhode Island:
The number of employed RI residents was 539,800, an increase of 200 from the August figure of 539,600. …
The RI labor force totaled 561,900 in September 2018, down 300 from August 2018 but up 6,000 from September 2017 (555,900).
… In September, the number of Rhode Island-based jobs was unchanged from the August revised employment level of 502,100. Overall, Rhode Island’s job count is up 7,000 from September 2017.
Keep in mind that these numbers are all seasonally adjusted, so one can’t cite the end of our summer season as the reason that RI-based jobs have stagnated, employment growth has slowed, and the trend of fewer people looking for work has resumed. If this is a slowdown, then maybe Rhode Island is a leading indicator for the rest of the country, or maybe our approach to policy has become so different from that of the federal government and other states that the Ocean State is now unable to capitalize on economic growth, period.
Tangential to this topic, I’ve seen murmurs here and there blaming the Republican tax cuts for current deficit problems at the national level. Yeah, well, I kind of wonder about that:
The Treasury Department reported this week that individual income tax collections for FY 2018 totaled $1.7 trillion. That’s up $14 billion from fiscal 2017, and an all-time high. And that’s despite the fact that individual income tax rates got a significant cut this year as part of President Donald Trump’s tax reform plan. …
Other major sources of revenue climbed as well, as the overall economy revived. FICA tax collections rose by more than 3%. Excise taxes jumped 13%.
The only category that was down? Corporate income taxes, which dropped by 31%.
Overall, federal revenues came in slightly higher in FY 2018 — up 0.5%.
Spending, on the other hand, was $127 billion higher in fiscal 2018. As a result, deficits for 2018 climbed $113 billion.
The U.S. economy sits atop of the World Economic Forum’s annual global competitiveness survey for the first time since the 2007-2009 financial crisis, benefiting from a new ranking methodology this year, the Swiss body said on Tuesday.
We are the economy — you and me. Our activity is the economy. The progressive approach to economic development that Rhode Island pursues is to control what we do in a way that powerful people believe is best, which includes taxing us so the government can redistribute the wealth. Stop doing that, and our economy will soar; government revenue should be secondary.