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General Assembly Must Step In – Tolls Have Taken A Dangerous Turn

Below is a statement that StopTollsRI.com (for which I am spokesperson) placed on its Facebook page last night. The R.I. Trucking Association and the American Trucking Association have announced that they would wait until all 30+ toll gantries were installed before they would challenge the legality of truck tolls in court. This alarming development first came to light Thursday night in testimony before House Finance. See Mike Collins’ testimony starting at approximately minute 1:52:40.

Tolls have taken a dangerous turn for Rhode Island residents and taxpayers. It is now imperative that state legislators and General Assembly leadership step in for the good of the state and end the truck toll program.

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Payroll Counts and Totals Under Governor Raimondo

A couple of days ago, Rhode Island House Minority Leader Patricia Morgan (R, Coventry, Warwick, West Warwick) was complaining to Tara Granahan on 630AM/99.7FM that Democrat Governor Gina Raimondo’s administration was dragging its heels on providing Morgan with information about new hires since the start of her administration.

As Tara and Patricia were saying on air, that should be an easy request for the administration to fulfill.  Filter all employees to the appropriate hire dates, and there you go.

Unfortunately, I don’t have access to that tool, but for some overall sense of what the response will look like when it comes, I visited the state’s transparency site and downloaded the payroll for the relevant years.  Note that this data is by fiscal year, and the fiscal year 2017 dollar totals are projected “annual” pay and may vary in actuality, what with overtime and that sort of thing.  Also note that this is the entire state government, so it captures everything from courts to colleges.

My method was to search for full names (including middle initial) that did or didn’t appear in each subsequent year of payroll, which isn’t perfect.  If the state for some reason had a typo on a name (skipping a middle initial) or if somebody got married, or something, these numbers will be a little off, but it does give a rough picture.

Treating fiscal year 2016 as Raimondo’s first (that’d be July 2015 through June 2016), the state government has added 458 more employees than it lost during the two years of budgets that were implemented under this governor.  Those new employees account for an additional $30,639,475 in annual pay.

new-payroll-hires-2015-2017

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Avoiding Unions for Innovation and Prudent Decisions

Wall Street Journal editorialist Allysia Finley conveys the perspective of Braidy Industries CEO Craig Bouchard, who is opening an aluminum mill in right-to-work Kentucky.  Regarding an earlier company, experience with which soured Bouchard on organized labor:

They sold it for $1.2 billion to the Russian steelmaker Severstal in 2008, shortly before the stock market and steel industry crashed. Thousands of workers subsequently lost their jobs. Mr. Bouchard blames the United Steelworkers. He had first tried to sell a partnership stake in Esmark to the Indian company Essar Steel. But the United Steelworkers sought to force a sale to Severstal, which the union perceived as more labor-friendly. Had the Essar deal been consummated, Mr. Bouchard says, “every one of those people would have their jobs today” because all of the company’s debt would have been paid off.

Obviously, this is one side of that story, but the moral from the CEO’s point of view is that business decisions should be left to business owners.  That includes other pitfalls of unionization, like work rules that constrain activities beyond what the employer and employee would accept if left to their own and other costs, like pensions.

The key part of the op-ed, though, may be the bigger picture.  Bouchard’s new company is built on innovation in the metallurgical sciences.  Our broader tax and regulatory regime slows down that sort of innovation.  Another culprit is an unhealthy aversion (across the ideological spectrum) to allowing “creative destruction” to usher out old technologies and ways of doing things and ushering in the new.

A society should provide leverage for workers as the capitalism charges forward, but labor unions, protectionism, and regulation don’t appear to be sufficiently effective.  What we need is something broader, more cultural — dare I say, more spiritual — that allows us to make individual decisions and negotiations within a framework of mutual respect and support.

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Maybe They Really Just Don’t Get It in the Public Sector

On Channel 10, we learn of the dozens of state employees, some with six-figure salaries, put on paid administrative leave for months on end, even more than a year.  Perhaps among thousands of employees, an organization will sometimes find it to be the most efficient thing to do to pay employees not to work while some issue is resolved, and in the case of government, the glacial pace of action is its own, distinct story.  Even so, when the number of such employees gets to be over fifty at a given time, doesn’t it begin to reveal an employment attitude in government that money is never really an issue and that the system is set up mainly for the benefit of employees?

Channel 12 has another example.  This time, in the evergreen field of government employees’ doing things that shock, it’s a Department of Transportation employee who (allegedly) regularly sleeps in his vehicle during working hours.  Department Director Peter Alviti (formerly a director for the Laborers’ union) displays that attitude again:

Alviti told us the engineering technician’s job was to inspect concrete at a Rhode Island plant, to make sure the mix had the required ratio of water and dry material. Alviti also said this case prompted him to personally address about 90 RIDOT employees who have similar access to state vehicles.

“The public sector is not an easy place to be, I reminded them,” said Alviti. “But it’s the place we chose to be employed. All of us. And with that comes some additional responsibilities, particularly when it comes to public perception.”

Yes, you read that right:  An employee is (allegedly) caught sleeping on the job, and the director’s response is that public sector employees are like martyrs of accountability.  A job that allows for regular midday naps is “not an easy place to be”?

Never mind “public perception.”  I think we ought to be more interested to learn about and understand the perception of those who work in government.

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Mild Nod to Pension Reality Shows the Scam

You have to laugh (lest you cry) at the gimmicks of state government financing.  Rhode Island General Treasurer Seth Magaziner is preparing to lead the state Retirement Board in reducing the pension fund’s discount rate (that is, the assumed investment return) from 7.5% to 7.0%.  For the record:

The pension’s investments lost 0.27 percent in fiscal 2015-2016 and have gained 5.75 percent over the prior five fiscal years and 4.8 percent over 10 years.

Our investment assumption should be no more than 4.5%, because this assumption is supposed to be what we can reasonably guarantee the investments will yield.  Unfortunately, the pension fund’s assumptions aren’t really meant to help the state plan accurately; they’re meant to hide the real cost of benefits that politicians have promised to unionized employees.  As I’ve gotten Tiverton’s investment advisors to admit, the high investment assumption actually has built into it the willingness of elected officials to increase taxes down the road to cover shortfalls.

Notice, for example, that the treasurer’s plan delays increased payments for a year.  That’s a political concession, not a financial one.  Again, making the pension system work in the way that has been sold to taxpayers and employees is not the primary goal.  Helping politicians get away with bad management and crony deals is.

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Jackson Caught Up in the Suck of Big Government

Reading Dan McGowan’s detailed background of Providence City Councilman Kevin Jackson’s travails, I couldn’t help but feel sorry for the guy:

On Tuesday Jackson could become the first councilperson in Providence history to be recalled from office. A group of his constituents in Ward 3 on the city’s East Side launched the campaign to remove him after he was arrested last May on charges that he embezzled from the youth sports organization he co-founded in 1978 and misused his political campaign account.

The guy’s been in city government for twenty-something years.  You can see how, over time, funds get mingled, and liberties get taken.  (I’d actually argue that the campaign finance rules ought to be eliminated, anyway.)

The moral, it seems to me, is the value of term limits.  Spending that long in a position that makes one feel righteous and powerful is corrupting.

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School Buses and Regulatory Truancy

Students in Tiverton and elsewhere are having difficulty getting to school on time and parents are being made late for work because of a bus driver shortage, as Marcia Pobzeznik reports in the Newport Daily News.  Here’s the bus company’s explanation:

The company has tried every way possible to attract potential drivers, [First Student Transportation General Manager Bill Roach] said. It has put up billboards at bus stops and advertised at movie theaters.

“We’ve gone to football games, local markets,” Roach said.

The efforts have succeeded in getting 56 candidates into the state’s 50-hour training program, he said. But it takes 20-30 days to get an appointment for a road test.

“It’s very discouraging. The road testing is the choke point,” Roach said.

There are just one full-time and two part-time road test agents for the entire state. They not only have to certify new drivers, but re-certify existing drivers, he said.

So, the state has set up an arduous regulatory regime for bus drivers.  That is, the state has artificially restricted the number of bus drivers by requiring candidates to be approved (and reapproved and reapproved) by the state.  And then the state doesn’t supply the road test agents (or some other system) to handle the demand for this mandatory service.

The state has to begin choosing its priorities, because from UHIP to the DMV to bus driver certification to infrastructure to everything, it isn’t accomplishing the basic tasks that it has set for itself.  Of course, there’s money for crony capitalist tax breaks, flashy videos promoting the governor, vote-buying schemes by legislators, and disproportionate pay and benefits for union employees.

Given the tax burden throughout the state, money cannot be the issue.  The issue is a government that claims for itself too much power and won’t use the bountiful resources it has to accomplish the tasks that it therefore must undertake.

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Even a Little Competitive Incentive Makes Schools Better

This, from Paul Crookston on National Review Online, is… not surprising:

Nine out of the top ten public high schools in the country are charter or magnet schools, according to the latest figures from U.S. News and World Report. In addition, charters and magnets account for 60 of the top 100 high schools. These statistics are even impressive when one considers that such schools constitute a relatively small percentage of the public schools around the country. …

Charters and magnets are unlike traditional public schools in that they must work to attract students, while traditional public schools do not have to. Charters also rely on greater accountability to parents rather than to regulatory regimes, which has spurred innovation.

The education establishment and teachers unions have the government school system figured out.  They elect allies (often current or retired teachers or other school employees) to school committees and legislatures.  Parents who rely on public schools are vulnerable to districts’ well-rehearsed (and well-financed) rhetoric deflecting blame for failure, and the substantial climb from no additional cost for education to paying private school tuition gives the education establishment the upper hand in any interaction.  (“Lunch shaming” illustrates the relationship well.)

This creates an environment in which the insiders work with each other to draw in additional money from taxpayers, which is actually easier if parents feel insecure about their children’s schools.  How could such a system not be easy to out-compete with just a little bit of choice?

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A State Without Children

Way down in his weekly roundup column, Ted Nesi highlights another point from the recent RI Kids Count report:

One statistic that stood out: Rhode Island now has the fifth-lowest birth rate in the country, following a 15% slide in the number of babies born here over the last decade. What does that mean for the state’s future? It’s already having an effect on the economy, with Care New England saying the decline in births is hurting revenue at Women & Infants.

That’s an understated example of the effect of this dynamic.  Indeed, it would be difficult to overstate the effects of an increasingly sterile population.

To touch on one narrow political matter: As I’ve pointed out in Tiverton and for the state as a whole, our public schools have generally lost about two full grade-levels worth of students in the last decade.  Picture no fourth and no fifth grade students in the entire state; that’s how much enrollment has decreased.  This leaves a bureaucratic, unionized, and expensive education establishment demanding increased budgets to educate fewer children, which its partisans do against a taxpaying public that has less and less actual use of the schools.  That battle alone will be huge in Rhode Island.

But even an issue of that magnitude is as nothing to the reorientation of a society with fewer children.  The way people think and interact with the world will change on that basis.  Indeed, not having children (or not having multiple children) takes pressure off of people to become full adults, making them more susceptible to the pitch of the “government plantation” advocates to look to central planners as parents to us all.  It also makes us vulnerable to people from other cultures in which Peter Pan has been held at bay.

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Leader Patricia Morgan Files Bill to Repeal (Clearly Unnecessary) Tolls

On behalf of all Rhode Islanders, thanks to Minority Leader Patricia Morgan for filing a bill to repeal RhodeWorks’ truck (wink) tolls. (See her statement after the jump.)

Governor Gina Raimondo asserted the need for tolls as a financial necessity to repair state bridges which were/are some of the worst in the country but, by golly, we just don’t have the will to find the money in the state budget (even though it’s a MAJOR public safety issue, danger, danger, Will Robinson).

However, the governor has decisively rebutted her own assertions about the fiscal necessity of tolls, as StopTollsRI.com (disclosure: I act as their spokesperson) pointed out in a letter to the Providence Journal on Sunday, by proposing a brand new, $30M/year spending program.

“Free” college tuition is at best nice to have (and it certainly would not solve the state’s employee skills gap, as the governor claims). If there is money in the budget for an expensive nice-to-have item, then it is clear that there is money for a less expensive vital service such as bridge repairs.

Legislators can now vote to repeal tolls, secure in the knowledge that public safety did not necessitate the passage of this highly destructive new revenue stream and confident that the money can be found in the budget to repair the state’s unsafe bridges. The governor has helpfully done this hard work for them.

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State House Report with John DePetro, No. 4: Flanders in the Outside Lane, Ruggerio on the Inside

For my weekly call-in on John DePetro’s WADK 1540 AM show, the topics were Robert Flanders’s play for the U.S. Senate, Raimondo’s tuition talking point, and Dominick Ruggerio’s insider senate presidency.
Click full post for audio.

I’ll be on again Tuesday, April 11, at 2:00 p.m.

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The Union’s Shocking Admission… Which Nobody Will Notice

Confessions of my naive idealism are becoming a theme for me, perhaps, but I still find casual admissions such as the following, from Ian Donnis’s weekly TGIF column on RIPR, partly shocking and partly comforting:

The National Education Association Rhode Island, a influential force in state politics, is likely to support Governor Raimondo for re-election next year. NEARI Executive Director Robert A. Walsh Jr. acknowledges that retired teachers are among those still fuming about the pension overhaul spearheaded by then-Treasurer Raimondo in 2011. Yet Walsh, speaking on RI Public Radio’s Bonus Q&A this week, offered this explanation for why the incumbent Democrat is likely to get NEARI’s support in 2018: “I think that the election of Donald Trump significantly changed the game in this state. It is imperative that the Democrats retain control of the governorship …. My approach to this is a very pragmatic one. You’ve heard me advertise for alternative candidates to the lieutenant governor — ‘come on down, we’ll help you run against Dan McKee [see #4].’ I am not advertising for alternative candidates to Gina Raimondo. We must retain the governorship and we must retain our Democrats elected in the Senate and in the United States Congress. And the Republicans are going to drop money in this state and go after us as a package, so it’s imperative that the team stays in place.”

Here’s one of your state’s two teachers unions: part of the Democrat “team.”  There is no line between the party and the labor union that takes taxpayer dollars and shuffles them back into political activism.

In a healthier society with a greater appreciation for the founding principles of the United States, this would be a scandal — the sort of thing that would be uncovered through an undercover investigative report.  Instead, it’s proclaimed proudly on a publicly subsidized radio station, and nobody in the state but an outré blogger will bat an eye.

I’ve said it before, but it merits repeating: Rhode Island isn’t fully a representative democracy anymore.

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Overcoming Confusion About Government and Unions

Crossing over the state line, I came across a curious essay by often-acerbic Fall River Herald columnist Marc Munroe Dion.  To some extent, I’m sure, his iconoclasm is just keeping him from fitting into standard political categories, but I can’t help but think that he’s a little confused.

Dion complains about the growing disparity between the plush deals of government workers and the hardships of those paying the bill.  He even asks a question that’s been on my conservative, small-government mind lately when he ends his column, “When can we call this looting?” But Dion also insists:

It isn’t so much that city employees are getting too much, as it is that the rest of us are getting too little.

I don’t want to see police officers NOT have a union. I want to see YOU have a union, too.

I want the average working person to have health care and a pension. I want you to retire at 55. It’s too late for me. I’m 59, and still showing up every day.

A city can’t prosper if the financial gap between citizens and city employees keeps widening.

You’ve got government employees’ continuing to get privileged status — such as retiring at age 55 — and Dion recognizes it isn’t affordable and that the cost is creating a dead end for economic advancement.  So, to whom, I wonder, does he think private-sector unions would be able to pass a similar bill?  The mystical, mythical Rich?  To the extent that they exist as an identifiable class in a city’s economy, they’ll just move their operations elsewhere or close up shop and go to work for somebody else.

The bottom line is that unions function for government employees because government can force people to pay.  The private businesses with which private-sector unions must work can’t do that.

The only solution is to back government up so it’s affordable and not obtrusive with regulations in order to give the private sector as long as it needs to find a local angle.  The ensuing growth will increase the leverage of private-sector workers and the margin for public-sector workers, too.

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Appropriate Context for Retiree Complaints

I’ve been surprised to find my opinion of the Providence Journal commentary pages falling under the editorship of Ed Achorn, but this is a terrific editorial note following a letter to the editor by a retiree in the state pension system, in which she complains about the unfairness of limited cost of living adjustments (COLAs):

The writer retired at 58 from the Bristol Warren Regional School District as a secretary, then went to work in the private sector for 11 years.

The context is especially relevant because in the letter Kathleen Moran insists: “If the governor has money to pay for tuition for students, who as well as their parents, are able to work, she should pay retirees COLA, as some are not able to work.”  To fill in some details, Moran retired in 2000 having contributed all of $22,011 toward her pension, and by the end of the 2014 fiscal year, she’d already collected $227,538.  That is, she was coming pretty close to getting back her total investment every single year.

Now, I don’t support the tuition plan, but mainly because Rhode Islanders shouldn’t succumb to the ideology that says government is their way to take what they want from other people.  Indeed, we’re overdue to get fed up with the sense of entitlement among those who already hold that belief.

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One Side Wants Both Public and Private Schools; the Other Wants a Monopoly

Denisha Merriweather has a powerful school choice story, as told by Alexandra DeSantis on National Review Online.  And it has made an advocate of her:

In her view, education policy ought to be a bipartisan issue, and she thinks the strength of the school-choice movement lies in its inclusive mindset. “I do feel like the public-school advocates or the teachers’ unions always want an ‘us or them’ mentality. In their minds, you can’t have both,” she explains.

“And we on the school-choice side are not saying that at all. We’re saying, ‘Let’s all be productive, and let’s all serve our children.’ That’s one thing that really sets us apart from those who are pushing for the public-school system,” Denisha continues. “Why can’t we have more choices, and all the choices? [The unions] can’t understand that we do want to keep the public schools. We just want all of these other choices, too.”

In some respects, she’s incorrect about that.  The unions, and the rest of the education establishment, have a different vision of what government schools should be — namely, the monopolistic control of all education, with only the exceptions that the very wealthy can carve out with their own money.  That’s what “both” means to them.

Where poor performance and high cost become so outrageous that a somnolent public begins to wake up to the problem, the establishment will concede very limited reforms, perhaps to the degree of setting up a private school system within government itself (that is, charter schools).  To rephrase Merriweather, it’s not that the establishment doesn’t believe that we can have both a public school sector and a healthy private school sector;  it’s that the establishment doesn’t want both to exist.

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Labor Unions, Less About Workers and More About Government

The American Interest offers what might be termed a labor thought for today if it hadn’t been sitting in my bookmarks for a week:

It’s significant that ground zero for public sector union reform is the upper-Midwest, once the capital of organized labor. Democrats try to cast such reforms as a betrayal of workers, but in a post-industrial age when half of union members are public employees whose demands for fatter benefits packages come at direct expense of the taxpayers, many voters don’t see it that way. As James Sherk noted in our pages last year, “A movement formed to defend blue-collar laborers now fights primarily to help white-collar workers expand government.”

That point cannot be sufficiently emphasized:  labor unions, overall, are now dominated by the public-sector subsegment, which has a very different model.

In the private sector, the union negotiates with management for the share of profits from sales to customers that goes to the workers.  In the public sector, the union helps elect management with whom it can conspire to take more money from taxpayers, who must either leave the area or pay up once the unions achieve political dominance, as they have in Rhode Island.  That is, in the public sector, it’s a process more resembling theft than negotiation.

Of course, one should note that the strength of unions in the private sector, such as it is, often comes with their ability to manipulate the law to force clients — mainly governments — to use union labor or to box competitors out of big markets — like government projects.  In that regard, even more of organized labor should properly be seen as existing in the public sector.

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Educational Efficiency Requires Lower Spending

Here’s an interesting study.  It’s from GEMS Educational Solutions, and I found it via a positive mention in a Guardian article, so we’re probably not talking a right-wing group, here.

The study compares certain educational statistics across countries, and one of its principles is that “inefficiency can be a result of either underpaying or overpaying teachers.”  By that measure, the United States would become more efficient (better managing results versus tax rates) by lowering salaries by five percent and increasing class sizes by 10%.

Rhode Island’s teacher salaries are top 10 for the country, so 5% would be too low for our state.  Also, the 15.3 student:teacher ratio listed on GEMS’s application compares with a Rhode Island average of 8.

To be clear, these are back-of-the-envelope comparisons.  A more-thorough review might require adjustments of the numbers (different years, different teacher roles included in the student ratios, etc.).  I come across people, though, especially locally, who find inconceivable the idea that less spending on anything government does might be bad.

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The Rigged System of Unions and Town Government

The cliché about the news media is that readers will always find reports in their own areas of expertise erroneous, and something similar applies to news reports from one’s own town:  What’s happening locally seems to prove the point of the whole broad world.

Even adjusting for that tendency, though, I have to say that Tiverton controversies are starting to feel as if we’ve come just an inch away from making it legal for town employees to walk into our homes and take our money. As I write on Tiverton Fact Check:

Such proclamations become more difficult to believe each time it appears that town employees are learning the lesson from former colleagues’ reaping the rewards of (alleged) bad behavior. We had Town Foreman Bob Martin and his pal, former Town Administrator Jim Goncalo. Last year, it was an entire shift of police officers led by overtime king Lieutenant Timothy Panell. And now it’s the fire department’s turn, with firefighter Patrick White:

The case of a firefighter who was terminated in early 2015 for allegedly abusing sick leave has been settled, with the town agreeing to pay $175,000.

That’s right. We paid him (and his union lawyer, naturally). The “neutral” arbitrator in the complaint sided with the union member.

One of the problems with settling is that neither side can claim vindication.  The institutional bias toward that sort of ambiguity, like union contracts and arbitration practices, is part of the problem.  Rhode Island has created a fundamentally dishonest system of government.

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A Deliberate Spectrum of Protest, from Riots Up

Overall, a Wall Street Journal article by Peter Nicholas and Carol Lee doesn’t exactly paint the picture of a White House in disarray, but rather of an ambitious president mixing things up and having to make adjustments in the process.  Those are very different stories, mostly of interest to those addicted to political news.

The more broadly significant, in my view, is this passage:

[Randy Bryce, political director of the local ironworkers union,]  learned through labor contacts the Secret Service had done a security check at a Harley factory in Menomonee Falls, Wis. He began organizing car pools and buses to bring demonstrators to the middle-class suburb in heavily Republican Waukesha County. Also, “we put up phone numbers for the [Harley] public-relations department and pretty much anybody we could get hold of,” Mr. Bryce said.

At Harley, which never acknowledged Mr. Trump planned a visit, executives became nervous about demonstrators, said a person familiar with their thinking. As word spread of the mounting protest, Mr. Trump’s appearance was canceled—at whose behest neither side has said.

Let’s stipulate that the labor union was planning a more-or-less standard union protest, maybe with some tense moments, but generally with a sense of control.  Even controlled protests, however, are now happening in an environment of potential riots, as seen at the University of California in Berkeley.

The first layer of threat against a company that takes the unextraordinary step of welcoming the President of the United States is that it will face organized boycotts and vitriol on social media.  If that isn’t sufficient, progressives have ensured a looming threat of property destruction, too.

Somehow, I don’t see this having the long-term effect that the activists want, but we’ll see.

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