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HealthSource and Defrauding of Taxpayers

Ted Nesi reports that HealthSource RI — the state’s ObamaCare health benefits exchange — wouldn’t accept two lower-cost plans from Neighborhood Health.  Even on its surface the decision is an outrageous scam:

A Kaiser Family Foundation analysis, which originally included the two Neighborhood plans rejected by HealthSource, suggested they would have lowered the average premium for HealthSource’s second-cheapest mid-tier plan by 14% in 2017. Instead that number will only decrease by 0.5%, according to HealthSource.

But HealthSource officials said their decision was driven by the federal formula for premium subsidies, which are provided to about 90% of the Rhode Islanders who buy insurance through the marketplace.

In other words, Rhode Island officials didn’t want prices to go down too much because they want to force federal taxpayers (ultimately through debt) to pay $17 million more for Rhode Islanders’ health care than they ought to.  The openness with which “HealthSource officials” admit this shows they believe Rhode Islanders are happy to have their government stealing on their behalf, but some of us aren’t so immoral.  As a side benefit to local government agents, the after-tax cost of the exchange’s average health plan would have gone up 42% if they didn’t rig the market, making the exchange look even worse in the public eye.

And that’s not all.  Earlier this month, we learned that Neighborhood initially set its prices too high because its inexperience in the market left the organization no good basis by which to set prices.  So, they ended up refunding $2 million to members, probably with much of it simply a transfer of money taken from taxpayers as subsidies.

In summary, Neighborhood Health, which was arguably more like a quasi-public welfare agency before ObamaCare, overcharged its customers from the start, which forced us all to pay more in subsidies in our capacity as United States citizens.  It then refunded a chunk of the excess to its members, none to taxpayers.

Now, state government officials have refused to allow Neighborhood to charge less for plans in order to steal more money from taxpayers.  This action may very well result in another big transfer of wealth to Neighborhood members through another refund next year.

And on it will go.  If a private organization behaved like this, politicians and pundits would be declaring it scandalous.


You Mean People Make Money by Selling Drugs?

Sometimes following the news makes one feel as if everybody else is willfully living in some sort of fantasy.  Today’s Providence Journal article on the profits of medical marijuana in the state, by Jennifer Bogdan and Tom Mooney, gives me that sensation:

Medical marijuana is big business in Rhode Island. It wasn’t intended to be.

Advocates wanted dispensaries to provide a safe, ample supply of medicine for those who needed it. But the program has proliferated virtually unchecked, offering yes, relief for the ill, but also opportunity for investors who can operate behind the opaque screen surrounding Rhode Island’s three dispensaries. …

There were so many questions that they couldn’t answer at the time [legislation was crafted]. “I mean who knew?” How should the dispensaries operate? How much marijuana should they be allowed to grow? Would the legislature be more receptive if dispensaries weren’t influenced by shareholders?

“We said they were supposed to be nonprofits. Why? Well, first of all, we didn’t want them to be in it for the money.”

Oh, come on.  Are people really that unable to break down issues to their core components and categorize them properly in order to predict outcomes?  With medical marijuana, our (famously corrupt) state gave oligopoly authorization to three entities to sell an otherwise illegal product.  As I put it in 2011, the state was estimating that each dispensary would be “an instant $20 million business facilitated by the Department of Health.”  According to today’s article, the profits appear to be smaller and not quite so instant, and yet, the article presents 78% growth over a year, to $17 million for all three dispensaries, as if it’s unexpected and suspicious.

To the extent that the organizations aren’t making big returns on their investments, the article expresses suspicion about other ways in which participants are trying to make money.  It never fails to surprise that people really believe that those who work for non-profits can’t be “in it for the money” and that government power tends to breed corruption.

Look, there’s nothing wrong with making a profit.  Money is just an indication of value, and our economic system is supposed to determine what people value and provide it — whether that means innovating to create new products or building new capacity to produce and supply existing products.  People value drugs, but it takes an investment to get the industry over a start-up hump, and then it takes the flow of money to prove the consumer interest.  (As a society, we love to harvest the fruits of investment, but we never want to pay the reward.)

The way in which Rhode Island legalized marijuana was almost expressly designed to ensure that the government maintained pent-up demand in order to drive up prices and increase the tax take.  That’s been obvious along; people who are surprised really need to go back and review the assumptions that they have about the way things work and reevaluate how they believe government should behave.


Enough Of The Insider Machine

It is a result of the failed status quo of increased government intervention in our personal and business lives that the Ocean State ranks so poorly on so many national indexes. It is not acceptable that we rank 50th with the worst business climate in the nation, 48th on the national Family Prosperity Index, and 48th on the Center’s Jobs & Opportunity Index. It is up to voters to review all the data, and decide whether or not to hold lawmakers accountable for their voting records this November.

This week, the Center released a new voter guide for the upcoming ballot questions. In heaping over $321,000,000 of additional debt burden on Rhode Island families, as well as on future generations, we are recommending to voters that they “reject” bond Questions #4-7. Just like families who must tighten their credit card debt and avoid luxuries they cannot afford, voters should reject the exorbitant spending proposed by the state, much of which is earmarked to benefit special interest insiders. Only Question #2 – to amend the state constitution restore Ethics Commission authority – received an “Approve” recommendation from the Center.

Haven’t you had enough of the broken status quo here in the Ocean State? We have seen over and over again that the special interest thinking is failing the people of Rhode Island, while enriching the elites. You and your family deserve more. The headlines are full of examples of regular people being kept out of the process and silenced. It is time to stand up to the same old way of doing things here in our state. It will be up to voters to decide this November if they want to continue down the path our state is on or to change things here in Rhode Island.

I think Rhode Islanders have had enough of the insider machine. It is time to make a complete turnaround from the poor scores and last place rankings. We must adopt the free market reforms that can make our state a place where our families can be prosperous. You are powerful. You do not have to tolerate the cronyism and elitist attitude any longer. Don’t be on the sidelines. The rigged system in the Ocean State has kept too many people out of the process. Now is the time for you to speak out and make sure your legislator does more to make Rhode Island a place where our families can achieve their hopes and dreams.


Take-Aways from the Blockbuster Curt Schilling Interview?

Rhode Islanders for the first time this morning started getting some straight answers about the 38 Studios debacle that put us all on the hook for $89,000,000 as 38 Studios founder and CEO Curt Schilling broke his silence for three riveting hours on the John Depetro Show on WPRO.

So many interesting items came out of the interview. Two of the bigger ones – but by no means the only big ones – for me are:

1.) Gordon Fox crony Michael Corso played a huge role in putting the deal together and acted as traffic cop for the lucrative contracts that arose from the company coming to Rhode Island. Were all of his actions legal? And were the Rhode Island State Police permitted to conduct an adequate investigation of this question? Or was it … um, shepherded by the Attorney General so as to narrow its scope?

2.) Rhode Island and Providence have some of the most onerous building and fire code requirements in the country. Yet the newly built-out 38 Studios headquarters NEVER OBTAINED A CERTIFICATE OF OCCUPANCY because at least in part, Schilling said, he signed autographs for people. (Editorial comment: We pass highly intrusive laws and they don’t get enforced??? ARGH!!!)

Ahem. What were your take-aways?


Anti-Tolling Rally Tomorrow!

At the truck stop in West Greenwich off Route 95: 849 Victory Highway, West Greenwich, RI 02817. Tuesday, October 18, at 11:00 am. (No question, a bit of a tough time of day for a lot of us working folks.)

The Rhode Island Trucking Association and NATSO, the national association representing travel plazas and truckstops, announced today that they will host an informational rally and press conference Oct. 18 to discuss the devastating effects that “RhodeWorks” — the Rhode Island Department of Transportation’s truck-only tolling plan — will have on local businesses and commercial truck drivers that operate within the state of Rhode Island.

The small group of state officials advocating for truck tolls say that they are necessary because the money to repair our bridges cannot be found within the budget. Like most of the data and talking points that accompanied the passage of truck-only tolls, this is a flat-out lie. This money can be found in the budget. Remember also that, under Governor Gina Raimondo’s highly destructive RhodeWorks toll plan, shepherded through the General Assembly by a flip-flopping Speaker Nicholas Mattiello, hundreds of millions of dollars would be completely squandered on items other than bridge repairs: gantries, toll fees, interest – meaning that hundreds of millions of dollars would be coming out of the pockets of truckers and all Rhode Islanders and going down a rat hole rather than into infrastructure repair.

Adding urgency and danger to the situation, a recent federal court ruling in New York has brought tolls on cars in Rhode Island one giant step closer. As WPRO’s John Loughlin correctly pointed out on air Saturday morning, this is almost certainly why the start of work on the 6/10 Connector was rushed. Governor Raimondo and her organized labor supporters want to be sure to sink their toll claws into the state as quickly as possible by getting projects hooked on this destructive new revenue source ahead of a court ruling. (“Oh darn. The courts ruled that we can’t toll just trucks. We have no choice but to toll cars because look at all of the borrowing and construction that we rushed through … er, that is now underway.”)

In addition to the big red flag of the federal court ruling in New York, it is important to note that no other state tolls only trucks. From the beginning, this posed an enormous constitutional flaw in the RhodeWorks toll law. (For more on this, check out Rep Blake Filippi’s excellent op-ed in Thursday’s Providence Journal.) Accordingly, any state leader or legislator who voted for truck tolls in February took the unnecessary and very dangerous step of inviting the toll vampire into all of our homes. If state leaders don’t wise up and rescind truck tolls, it is now just about impossible to envision a scenario by which the toll vampire doesn’t turn to feast on the blood … er, wallets of car owners. It is critical, therefore, that state legislators who voted for tolls be held accountable. Please go here to see how General Assembly incumbents voted on tolls, where their challengers stand on the matter and vote for the candidate who did NOT invite the toll vampire to Rhode Island.

And if you’re able to get away from work for an hour tomorrow, please also stop by this rally. Garlic is optional. But your presence at the rally and, especially, your anti-toll vote on November 8, would send an important message against the toll vampire.


There are Better Solutions Than Rhode Island’s Status Quo Public Policy Environment

Does anyone trust that an elite cabal of political cronies should centrally engineer our economy? Or do we place more trust in the great people of Rhode Island to be able to unleash their suppressed capacity in a fair and free-market economy, via major tax and regulatory reductions across the board? The top down ideas being presented in the upcoming election would be harmful to our state. It is up to voters to decide for themselves if Rhode Island will be a place where our families can prosper.

There are many examples. We have proven in our Freedom Index that the status quo is moving our state in the wrong direction. Led by Rep. Patricia Morgan and Sen. Elaine Morgan, only 11 of 113 lawmakers earned positive scores on our 2016 Freedom Index. The Sheeple Index, released in partnership with WatchdogRI, shows that there is a dangerous pattern of lawmakers blindly following the leader.


What a Fair Tax System Would Look Like

In a recent Prager University video, historian Amity Shlaes articulates a pretty straightforward position for many of us on the right end of the political spectrum: In taxation, percentages are implicitly fair and inherently progressive.

Unfortunately, she also correctly points out the difficulty facing those who would return the tax code to fairness:

… reversing a century of progressivity won’t be easy. For when you cut taxes for all in a progressive rate structure, the rich necessarily get a larger tax break. That is so because they pay a greater share to begin with, and advocating “larger breaks for the rich” is not a popular political move, to put it mildly.

She then goes on to touch on a theme that’s popping up in a variety of contexts.  We need to stop attempting reform by addition and make it, well, reform.  In other words, adding more and more tax credits for this group or that group in an effort to get back to what’s fair, we should intelligently assess what we have and simply revise it.

Of course, talking about intelligence in policy and politics has become just about a sign of insanity in modern America.


In Rhode Island, Nothing’s Certain but Death and Taxes

Well, the policies of the State of Rhode Island aren’t getting you to shop, earn, or do business as much as the government expected, but at least you’re dying!

According to an Office of Revenue Analysis report, sales and use taxes came in 0.9% lower than expected, personal income taxes came in 0.6% short, and business corporations taxes missed their estimate by a whopping 12.1%.  That’s $35 million you didn’t produce for your lords in Providence.

The good news is that you’re drinking, dying, and letting the state keep your unclaimed property more than expected, which more than made up the difference ($47 million).  But if that doesn’t sound like a healthy or sustainable way for a government to pay its bills, well, it isn’t.

Comparing the 2016 fiscal year to the year before, of the three sources of tax revenue that would indicate real economic health, only the sales tax went up.  (Patrick Anderson has the income tax wrong in today’s Providence Journal.)  Income taxes were down $10 million (0.8%); business corporation taxes were down $13 million (8.8%); and sales and use taxes were up only $8 million (0.9%).  The net change of all three was a decrease of $15 million.

If it weren’t for dying Rhode Islanders, the state government would have seen its revenue go down from one year to the next, and more than analysts had expected.  That doesn’t bode well for the deficits that the state estimates growing into the future.  The Providence Journal headline, “Rhode Island ends fiscal year with more money than expected,” does us a civic disservice.  We need to acknowledge that the current strategy of our state is not working so that we can change it.


The 2016 Rhode Island General Assembly Freedom Index

It is a result of the failed status quo of increased government intervention in our personal and business lives that the Ocean State ranks so poorly on so many national indexes. It is not acceptable that we rank 50th with the worst business climate in the nation, 48th on the national Family Prosperity Index, and 47th on the Center’s Jobs & Opportunity Index. It is up to voters to review all the data, and decide whether or not to hold lawmakers accountable for their voting records this November. This trend is exemplified by continued deeply negative overall General Assembly scores on our 2016 Freedom Index.

Loaded with information that will be useful to voters this fall, the Freedom Index is part of our larger transparency initiative. The index examines legislators’ votes in terms of their likely effect on the freedom in the Ocean State.


Social Services & Negotiating How Much to Take from Others

Sometimes it’s helpful to put stories in chronological order, rather than news-report order, as with this one, from today’s Providence Journal, concerning panhandling and homelessness in Providence:

Complaints about vagrancy, open drug-dealing and drinking exploded after Mayor Jorge O. Elorza decided months ago to stop enforcing ordinances against aggressive panhandling and loitering.

And now the news is that we’ve got Democrat Joseph Paolino getting the heartless 1% treatment because he’s only looking to get $100,000 from the Downtown Improvement District for social workers, along with jobs for two panhandlers, a free apartment for use of a homeless shelter, and up to $5 million in state taxpayer money, in combination with a whole new ordinance that would be even broader than the ones the mayor isn’t enforcing (stopping all transactions through a car window).  The activists protesting Paolino’s PR event have a more comprehensive list:

Less enforcement of minor criminal offenses against people who are poor; more jobs for panhandlers; funding for 150 housing vouchers; drug and alcohol treatment; and amenities such as a day center, public bathrooms and free food distribution. They want the Rhode Island Public Transportation Authority bus terminal to remain.

The core of this proposal is to double down on the policy approach that created the controversy (non-enforcement) and to add into the mix amenities that will draw even more vagrants, dealers, and loiterers to the area.  The protesters chanted, “Whose city? Our city!,” and they sure want it to be evident in the public square each and every day.

In short, the only solutions on the table, apparently, involve a negotiation over how much taxpayers have to pay for how much additional imposition.  Both parts of the plan are sure to exacerbate the underlying problem: namely, a domineering government that strangles the private sector and creates incentives not to work or bring behavior within a tolerable range.

We need another approach that doesn’t treat people as categories or as social-workers’ statistics, but as free individuals (from independent families) who can determine their own destinies in a community of mutual respect and charity.  The longer we deny this necessary change of perspective, the more the government plaque will build up in society’s arteries, making it more and more difficult to clear them.


And Now on to the General Election and More Debt

With the general election now the next big event (if the primaries in Rhode Island can even be said to be a big event), I took a look at the bonds that will be on the November ballot.  In total, we’ve got $227.5 million (nearly a quarter-billion dollars) in new debt that Rhode Islanders will likely approve, not including the tens of millions more that municipalities are surely seeking.

That’s crazy.  Government bonds are one area of democratic action that make me mildly sympathetic to progressive inclinations to limit the franchise to those with some basic knowledge.  They’re also a reason I wonder if progressives might be incorrect to assume a more-educated electorate would tend in their direction.  What might voters do differently if they understood that debt isn’t just free money to spend on feel-good projects?

Making matters worse, these bonds aren’t just desperate attempts to gain money to build things for which the state should have budgeted with regular revenue; some of them are clearly policy issues.  How many voters, I wonder, would really want to supply the state government with borrowed money to buy up even more property in the state?

Would voters really fall for these schemes if they took the time to consider just how much of it will (or at least can) become subsidies for private businesses — from the URI “innovation campuses” to help private businesses use public-university research to come up with new products and services for a profit to the government purchase and discounted resale of farmland to improvement of ports that benefit a limited number of businesses at public expense?  All of these things benefit narrow groups at the expense of everybody else.

Even more concerning is that, when you add them all together, the picture becomes one not of a few included groups siphoning off public resources, but a comprehensive system that ultimately excludes those who don’t receive some sort of public aid.  If you’re an ordinary Rhode Islander who wants to know who those excluded parties are, take a look at your latest selfie.

Apparently every hyper-informed person in every ideological group believes that the public would agree with his or her beliefs if only people were better educated, but I can’t help but think that my ideological group is correct in that belief.  As the saying goes, everybody’s conservative when it comes to the things he or she knows best.  I simply don’t believe that people who’d been shown the corrupt, incestuous connections building into a web that ensnares our freedom and opportunity would continue to support such things… or the politicians and organizations who work so hard to make them a reality.


Warwick and RI Can’t Be Generous While Shrinking

The Warwick school department is considering closing up to three schools, and predictably, people aren’t happy about it:

So far, the city has fielded complaints of traffic jams, unfinished construction projects and overcrowding at Warwick’s high schools.

And in an excellent civics lesson, democracy is producing candidates implying they’ll make all the problems go away if elected:

School committee candidate Dean Johnson said he lives nearby and sees the problems every day.

“Nothing but traffic,” he said. “It was 15 minutes from Benny’s to Pilgrim – it was absolutely ridiculous.”

Fellow school committee candidate Nathan Cornell is just 18 years old and said he still has friends in high school.

“At the first day, I called them and say, ‘how was school for you,’” he said. “And they told me it was crowded, especially the lunchrooms.”

Rhode Islanders want to run things as if the state is economically healthy and growing.  It’s not.  When I looked at Warwick’s population in 2012, it had dropped nearly 4% from the 2000 Census to the 2010 Census.  This May, I wondered how the school department could be considering any raises at all (let alone the 10% per year the teachers union reportedly wanted) with a smaller, less-working population with shrunken house values, and what justification there could be when the under-performing district had seen its enrollment drop 34% since the 2000-2001 school year.

Look, if you want neighborhood schools, you need the population and the enrollment to support them.  If you want small class sizes, you need to control the costs of teachers.  Rhode Islanders can’t keep up the economy-strangling approach to government and the union-gorging approach to employees and expect to maintain the quality of life they’ve enjoyed.  It is not paradoxical to observe that when you let government take more money from you and your neighbors and to limit your freedoms, you wind up getting less from government.

What will it take to make Rhode Islanders realize this?  Or more precisely, what will it take to make Rhode Islanders realize this and then change things rather than simply move away?


Inching Progress on JOI (Jobs & Opportunity Index) Is Not Enough

There has only been one way of doing things in Rhode Island for far too long. We have seen the results in our state’s failed rankings. Yet, the insiders and elitists love to point to the rising employment figure to justify their status quo ideas. For this reason the Center has developed the Jobs & Opportunity Index (JOI). If our elected leaders are to craft and advance legislation that removes barriers to the creation of meaningful work and that provides broader economic opportunities for all Rhode Island families, it is important that lawmakers are provided with a deeper measure of economic well-being.

While on the July Jobs & Opportunity Index Rhode Island edged past New York to claim the rank of 47th out of 50 states in the nation, this slow progress is not enough. Rhode Island families deserve more than these bottom results.


How Much to Lure High-Tech Company into Low-Tech Building?

When I hear that Internet innovator PayPal is considering a move into the Providence Superman Building — which has been vacant for so long, if I recall correctly, in part because it lacks capacity for the technology of modern companies — I can’t help but wonder what the dollar amounts will be.  Here are Ted Nesi and Dan McGowan:

Matt Sheaff, a spokesman for the R.I. Commerce Corporation, declined Wednesday to comment specifically on whether PayPal is looking at the building but confirmed that state officials remain in active discussions with the company about potentially expanding into Rhode Island. …

One sticking point on a PayPal-Superman deal could be cost. [Owner David] Sweetser has repeatedly argued the building needs significant renovations that cannot be funded without government assistance.

Oh, and don’t forget: “Any transaction would also likely require a break on Providence property taxes, which are among the highest in the country for commercial real estate.”

So Rhode Island’s economic development strategy is to create an environment in which businesses have difficulty operating and “iconic” old buildings can’t find non-government investment to bring them up to date.  Then the governor goes out looking for big companies that would represent, as the article puts it, “a major coup” and promises to give them money taken from the  residents and businesses who are still able to manage to survive in the state, somehow.

This approach may do wonders for political insiders and corporate big-wigs looking for crony relationships.  For the rest of us — particularly those of us struggling to get ahead in the world — not so much.


Don’t Like Tax Competition? Be the Shelter.

This was pretty much my response upon hearing that the European Union wants Ireland to charge Apple more taxes, as Kevin Williamson articulates it:

We could decry overseas tax shelters for the next decade or two, and change absolutely nothing, or we could — here’s a crazy idea — be the tax shelter. You know what Ireland, Norway, and Sweden all have in common? Within living memory, all were desperately poor. That’s why there are more Irish Americans than Irish nationals, more Norwegian Americans than Norwegians, and more Swedish Americans than Swedes. Hunger will make you get on a boat. Sweden grew wealthy under a form of laissez-faire capitalism strikingly different from the EU norm today, with lower taxes and a smaller public sector than its European counterparts. Norway did much the same thing, helped along by a great deal of oil (which can be both a blessing and a curse). Ireland eventually got sick of being poor and followed a similar program.

As Williamson goes on to suggest, our tax system is shot through with deliberate loopholes and special deals; we should just make it low across the board.  If that requires some reduction in government spending, even better.

I’ve written before that the approach government in Rhode Island takes to economic development proves one thing conclusively:  Progressives are interested in economic development only insofar as it does not interfere with government’s heavy hand.  The want the economy to grow as much as it possibly can… with heavy regulations, taxes, and government spending remaining intact.  That is, those other things come first; they’re prior to the wealth and well-being of residents.

(The same goes for education, by the way.  Labor unions and indoctrination take priority over the prospects of actual students.)


Frias Calls on Speaker to Ban 38 Studios-Type Moral Obligation Bonds

The following was just blasted out via e-mail.


Cranston, RI – Last week, Rhode Island reached a settlement with Wells Fargo Securities and Barclays for approximately $26 million, but taxpayers are still expected to pay millions for the 38 Studios moral obligation bonds. The former Economic Development Corporation issued moral obligation bonds as a result of 2010 legislation supported by Nicholas Mattiello when he was House Majority Leader. Recently, in a commentary, Scott MacKay, of Rhode Island Public Radio, asked “Why Won’t Pols Who Gave Us 38 Studios Pledge No More Moral Obligation Bonds?”

Steven Frias, Republican candidate for Rep. District 15, commented: “I have been campaigning for two months on a platform calling for the end of moral obligations in order to prevent a repeat of 38 Studios.


Check out Your Legislator on the “38 Studios Legislator Scorecard”

The public is outraged that there has been zero accountability on the 38 Studios issue. The insiders have failed to provide any transparency by releasing the 38 Studios documents. The Center is now offering our own version of transparency by publishing a new scorecard that tracks and grades the voting records of lawmakers on the 38 Studios affair. Many people consider it extremely hypocritical for any lawmaker who rated an F or D on this scorecard for their past record to now jump on the band-wagon by calling for the Attorney General or Governor to release the documents.

Despite the johnny-come-lately calls from many lawmakers for the release of documents from the government’s 38 Studios Investigation, 81 of the 113 sitting General Assembly lawmakers graded an “F” on their related voting records. On the scorecard, we documented and scored legislative votes on 15 related bills, amendments, and budgets since 2010 related to the 38 Studios disaster. There have been many missed opportunities for transparency. Why do they feel they have to protect the political machine?

As we approach the November elections, we’re providing voters with the voting records of their elected officials so they can decide whether or not to hold them accountable. It is up to you to choose if you want to change the Ocean State. Overall, of the 178 lawmakers, 132 graded an F, 10 a D, 8 a C, 6 a B, and 14 an A. You can see the full scorecard by clicking here now.

Rhode Islanders have had enough of the insider machine. It is time to make a complete turnaround. We must adopt an open and transparent public policy culture that can make our state a place where our families can be prosperous. The 38 Studios disaster is the perfect example of everything wrong with the way our state is being run. You do not have to tolerate the cronyism and elitist attitude any longer. Don’t be on the sidelines. The rigged system in the Ocean State has kept too many people out of the process. Now is the time for you to speak out and demand that the status quo changes.

[Mike Stenhouse is the CEO of the RI Center for Freedom and Prosperity.]


A Culture Of Silence In The Ocean State

In America, we must all remain free to voice our opinions without fear of state-sponsored persecution. It is reprehensible for any political elitists to collude to prosecute those who disagree with them on policy. For this reason, the Center is assisting a national nonprofit organization in a lawsuit demanding that the Rhode Island Office of the Attorney General release documents they have refused to make public. We believe that General Kilmartin, and his fellow enemies of debate, are seeking to maintain a cloak of invisibility over the national AG group’s attempt to crush dissent by those who disagree with their radical climate change agenda.

In June, the Center published an energy report that demonstrated how oppressive state renewable energy mandates, as part of the national climate change agenda, will cost taxpayers and ratepayers hundreds of millions of dollars. These mandates will cause job losses in the thousands, and artificially raise local electricity rates. It is research and advocacy such as this that Kilmartin and his AG group are seeking to muzzle and potentially prosecute as criminal. No matter where you stand in the climate change debate, citizens must have the right to speak freely.

This culture of silence in the Ocean State is chilling. Why do so many elected officials and prominent people want you to be quiet? The rigged system protects the corrupt insiders. As we saw in the recent 38 Studios political whitewash, the machine will do what it takes to keep you from knowing the truth. Rhode Islanders want a government that works for everyone not just the chosen few. Things do not have to be this way in our state. We can have an open state government that serves the real needs of our families, and protects our freedom to achieve our dreams.

Elected officials saying things are getting better in Rhode Island is not enough, they must take action. We need action. Unless the Ocean State adopts the proven free market reforms that can transform our state, we will continue to see the negative trends continue. You can change the status quo. You must not allow anyone to silence you. By speaking out on the issues that affect your family, you can make a powerful statement to the insiders that you have had enough. Now is the time to be bold, and have our public policy culture make a complete turnaround.

[Mike Stenhouse is the CEO of the Rhode Island Center for Freedom and Prosperity.]


Bike Paths, Lights, Sustainability – RhodeWorks Tolls Turn into Huge Bait-And-Switch

Am I going crazy? (Don’t answer that!) Didn’t Governor Gina Raimondo sell us on her unnecessary and highly destructive RhodeWorks toll plan by saying that the money would go to repair our very unsafe (oh so unsafe; most unsafe in this quadrant of the galaxy) bridges? But look at this RhodeWorks Quarterly Report!

Bike paths, lights, guardrails, road re-paving, something called “I-95 Sustainability” – RhodeWorks is being spent on all kinds of projects, not just bridge repair. Remarkably, there is even a RIDOT sign that CONFIRMS money from the RhodeWorks/Toll Project is being spent on a bike path!

What the heck??? Tolls were supposed to go to our unsafe bridges! Where did all of these other projects come from?


Belling the Taxpayer Cat

In Aesop’s fable about the council of mice, a colony of murines gets together to figure out what to do about the household cat, which is obviously an impediment to their comfort and happiness.  A young mouse suggests that they place a bell around the feline’s neck, and then they will always have warning as it approaches.  The council agrees that it is a brilliant idea until an old mouse hobbles forward and asks who is going to bell the cat.

We can safely assume that Aesop did not have public-sector pensions in mind when he wrote his fable some two-and-a-half millennia ago, but the moral of the tale clearly applies to the situation that George Will describes in Illinois and across the country:

Illinois is a leading indicator of increasing national childishness — an unwillingness to will the means for the ends that it wills. Nationally, state and local governments’ pensions have somewhere between $1 trillion and $4 trillion in unfunded pension liabilities, depending on, among other things, assumptions about returns on pension funds’ investments. The Wall Street Journal reports that in 2001, the 20-year median return was 12.3 percent, and every percentage-point decline in returns increases liabilities by 12 percent. Last year, the largest fund, California Public Employees’ Retirement System, which assumes 7.5 percent returns, instead gained 0.6 percent. This, in the sixth year of the recovery from the 2008–09 crisis, was the worst performance since then — and another recession will surely happen.

Nationally, neither party is eager to talk about the rickety structure of the entitlement state, although the Democratic platform promises to make matters worse. Although scheduled Social Security benefits vastly exceed the value of worker and employer contributions plus interest, the platform, a case study in reactionary liberalism, opposes even raising the retirement age. This, even though benefits are available at 62, three years younger than when the system was created in 1935, when life expectancy at 65 was 12.5 years. Today, it is 19.3 years for men and 21.6 for women. If in 1935 Congress had indexed the age of Social Security eligibility to life expectancy, the age today would be 72.

The council of big-government mice has concluded that the brilliant solution for maintaining the support of powerful labor unions and for gathering the votes of the older citizens who are most inclined to head to the polls and the poor who not only may be driven to the polls, but also make for compelling guilt-trip propaganda, is simply to proclaim payments to them.  So far, they’ve gotten away with pretending that these unsustainable systems will continue to work indefinitely, but they do not wish to acknowledge fiscal reality, much less bell the American people with more taxes.


ME vs. RI: A State Works by Making Work Work

In The Daily Signal, Rachel Sheffield highlights some states that have taken the lead in reconnecting welfare programs (notably SNAP, or “food stamps”), with the inclusion of New England’s own Maine:

The decline in food stamp rolls between March and April of this year follows the re-establishment of work requirements in a number of states. On Jan. 1, 22 states had to reinstate the federal work requirement for areas of the state or the entire state because their waivers expired.

Some states did not wait until their waiver to end, however. Instead, they took a proactive approach to ensure that able-bodied adults were encouraged toward work.

Maine, one of the most proactive states in reinstating work requirements for food stamps, saw its caseload of able-bodied adults without dependents decrease by 80 percent within just a few months after re-establishing the work requirement.

Readers who’ve paid attention to the RI Center for Freedom & Prosperity’s Jobs & Opportunity Index (JOI) won’t find Maine’s inclusion surprising.  From 2012 to the latest report, Maine has climbed from 32nd in the country on the index (for which SNAP enrollment is one of 13 indicators), and second-to-last in New England, to 17th in the country, which is second best in New England.  Overall, Maine’s SNAP enrollment dropped 24% over that period (60,441 people), compared with a 5% (8,592 people) reduction in Rhode Island.

Starting with the year of Maine’s SNAP policy change (2014), Mainers have benefited from a 16% reduction in state and local taxes, while Rhode Islanders have endured a 10% increase, according to U.S. Census data.

These differences are starting to make a real difference to the people of the respective states.  Per the underlying data for JOI, the first six months of this year have brought Maine a nine-times-larger increase in employment, compared with Rhode Island, while jobs in the state have increased there, while decreasing here.  Personal income in Maine is up 2.36%, compared with only 1.85% in Rhode Island.

Whether these comparisons — like comparisons with states that have implemented right-to-work policies — will show an expanding disparity between a state that is making positive, small-government, free-market reforms and one that is not, those of us who live in Rhode Island should begin demanding that we no longer be the control group for these tests of economic policy.


In Rhode Island, the Government Is Taking Away Our JOI

The RI Center for Freedom & Prosperity today released its Jobs & Opportunity Index (JOI) report covering the month of June, and even with nine of the 13 underlying datapoints being updated, Rhode Island couldn’t budget out of 48th place.  Indeed, if more states than two trailed the Ocean State, we probably would have sunk a bit.

For this post, though, I’ll focus on a finding from within the calculations of the index.  The following charts show the ratio of personal income to local, state, and federal taxes for Rhode Island, New England, and the United States, first from 2005 to the latest-available month and then zooming in with a starting point of 2012.



The first takeaway from these charts, of course, is how much more Rhode Island takes from its people in taxes.  The Rhode Islanders’ income is around 10 times the total tax take.  For our region and our nation, however, the average is more like 13.5 times.  In the Ocean State, in other words, personal income is about 26% lower than it would be to support the same tax burden in the average state.  From the other direction, the state simply taxes its people too much given their income.

The second takeaway is that Rhode Island moves to increase its tax take as quickly or more quickly than people increase their income.  There’s no reason the government at any level must grow to reflect the income of the people.  Government provides a limited set of services, and they aren’t entirely income dependent.  Indeed, the wealthier a society is, the less it should need or want government to do.

After the income-to-tax ratio grew steadily from 2007/2008 to 2012, it dropped nationwide.  In the first six months of this year, anyway, the United States and, even more, New England have seen an uptick, while Rhode Island remains mired at its 10x.

We hear a great deal about fixing Rhode Island’s economy by giving money to government that it can give away to favored private interests.  The charts above illustrate one reason many of us believe that is exactly the wrong approach.


​How Does the Governor Reconcile Her Support for Lower Electric Costs with Her Push for Renewable Energy?

All eyes on Philadelpha and the Democrat convention, of course. Thanks to Wikileaks, by the way, for furnishing an interesting Rhode Island connection for us all to speculate on.

Meanwhile, it’s important not to totally lose sight of stuff going on back in Rhode Island. The debate about a natural-gas powered electric plant proposed for Burrillville, for example, moved into the arena of the PUC this week.

The hearings are set to run Monday, Tuesday and Wednesday and will differ markedly from the public hearings that have been held so far on the application, which gave Burrillville residents and others the opportunity to air their opinions and concerns about the power plant but didn’t allow for any back and forth.

On Thursday, Governor Raimondo called into the WHJJ Morning News with Ron St. Pierre to defend her support of the plant. (Podcast.) In doing so, she said

Well, I support natural gas because I support lower energy costs and lower electricity costs for Rhode Island.

That’s a pretty categorical statement. Yet only seven months ago, the Governor signed an Executive Order

… committing state agencies to get 100 percent of its power from renewable sources by 2025

Further, in February,

A bipartisan group of 17 governors, including Governor Raimondo, have signed a pact agreeing to work together to build modern, sophisticated transmission grids and to advance clean energy and transportation technologies. Called the Governors Accord for New Energy, the agreement includes commitments to diversify energy generation and expand clean energy sources

All of these actions by Governor Raimondo are a big problem for everyone’s electric bill and a huge conflict with what she said on WHJJ. Because the dirty little not-so-secret about renewable energy is that it is far more expensive than conventional energy. Further and worse, as an important new report by the Rhode Island Center for Freedom and Prosperity demonstrates, the state’s continued pursuit of renewable energy would come at a high cost to ratepayers and taxpayers while providing an extremely poor return on greenhouse gases abated BY THE EPA’S OWN STANDARDS. In fact, the cost of renewable energy to Rhode Islanders could be as much as five times higher than the EPA recommends.

The Governor seems to want to manage her stance on energy in silos. “I’ll support the gas powered energy plant and say that I support lower electric rates and that will cover me with a lot of Rhode Islanders. Meanwhile, I’ll aggressively push renewable energy mandates onto ratepayers and taxpayers and that will satisfy the environmentalists.”

But it does not work that way, on any level. Firstly, the walls of the silos are not opaque. So everyone, whether inside a silo or outside of it, can see what she is doing in all of them. Far more importantly, the effect of her actions in one silo do not remain contained therein: what she does in one – the renewable energy silo, in this case – will most definitely have the effect – higher electric rates – that she claims to deplore as she’s standing in another.

Her words, to phrase it more plainly, do not match her actions. And that’s a real problem for the ratepayers (let’s remember, this category includes businesses) of a state that has some of the highest electric rates in the country. They very much need her actions – a wholesale repeal, not an expansion, of very expensive renewable energy mandates – to match her words when they open their electric bills every month.


When the High-Tax Advocates Feel Free to Speak Their Minds

If the Town Council follows through with the Budget Committee’s threat to end trash pickup in Tiverton (or charge extra for it), it will be because elected officials and their supporters want to teach taxpayers not to attempt to control their taxes.  But the real lesson will be that we must be more careful about whom we elect to office.

At the May 21 financial town referendum (FTR), 1,224 voters out of 2,210 approved Budget #2, for a 0.9% tax increase, resulting in zero increase in the property tax rate.  That made supporters of a much-bigger tax increase angry; here are some examples of things that they wrote on the Facebook page of the local activist group Tiverton 1st:

  • May 21. Budget Committee member Deborah Scanlon Janick: “Make sure you all personally thank Justin Katz when you lose the services you are used to.” (Somebody even printed up business cards at this time, telling people to call my cell phone and complain.)
  • May 22. Former Town Council Vice President Joanne Arruda: “First thing… snow plowing… I know this is awful, but those people who put in this budget out there and had their minions vote for it will have to be affected.”
  • May 22. Tiverton 1st organizer Mike Silvia: “… in this town, the uninformed and greedy followers who outnumber the community-minded aren’t smart enough to know they’re being played.”
  • May 26: Tiverton 1st activist, school department employee, and school committee candidate Linda Larsen: “Unfortunately, [voters] won’t care until they feel pain. … It won’t make a difference unless it becomes personal.”
  • May 26: Tiverton 1st organizer Kelly Anne Levesque: “I would like to see trash pickup removed which will require you to schlep your maroon bags to the dump or hire a private company.”
  • June 7: Deborah Scanlon Janick: “The residents of Tiverton will pay the price for voting for Budget 2 or for not voting at all.”

Continue reading on Tiverton Fact Check.