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The Budget: RI Government Seeks To Grow Itself, Not the Economy

Should the hopes, dreams, and aspirations of Rhode Island families be limited by an arbitrary, politically-driven budget number at the bottom of a spreadsheet? Unfortunately, our state is now suffering the consequences of such an approach, fueled by the progressive-left’s big-spending agenda.

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The Corporate Welfare Strategy Has Failed

The massive budget shortfall is proof that the state government’s corporate welfare strategy has failed. Rhode Island’s current corporate tax-credit economic development strategy is highly inefficient as it creates relatively few jobs at an extremely high cost per job to taxpayers. This targeted ‘advanced industry’ approach does little if anything to improve the overall business climate, which is necessary if organic entrepreneurial growth is to occur on its own. A 3.0% sales tax would disproportionately help low-income families.

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We Had the Logic, Now We Have an Example, Too

Rhode Islanders, especially, should heed the admonition of The American Interest that Puerto Rico may be a final warning lesson to states within the United States:

This [bankruptcy] could have been avoided by sensible and timely cuts, by turning a deaf ear to public sector union demands for wages and salaries, by a series of small but definite steps away from the blue model, welfare state governance. But the press, certainly including the NYT which is now reporting the disaster, would have attacked any politicians taking these steps as “harsh”, or “cruel to the poor”.

Now Puerto Rico is in a deeper hole, with much more suffering than any of the moderate cuts would have imposed.

Just look at the false rhetoric permeating the debate over some overly mild reforms to the disastrous ObamaCare entitlement system for a timely illustration.  Any restraint on government programs is declared to be a “draconian cut” that will hurt or kill people, marking politicians who support reforms as evil.  This will not end well, but just like junkies, supporters of big government just want that one more fix, and let tomorrow take care of itself, somehow.

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Congressional Health Care Bill and the Purpose of Government

Look, I get it.  It doesn’t do anybody any good (except maybe politicians) to caricature the opposition, and I understand that Big Government types believe, at some level, in the mission of government, and on that level, an equivalence between funding and policy goals is justified.  But reading news from up north, I can’t help but think a critical line of perspective has been crossed:

The health care bill that Congressional Republicans plan to bring to the House floor for a vote Thursday afternoon would result in “a massive loss of critical funds” for Massachusetts, Gov. Charlie Baker said. …

The potential loss of federal revenues, a major source of funds for the state budget, could compound budget problems associated with tax collections that for many months now have come in well short of the projections that Baker and legislative leaders have used to plan state spending.

Somewhere in this process of elected officials’ making statements and journalists’ reporting them, shouldn’t somebody have the role of putting front and center the key question, here, which is whether a particular policy is better for the people of the United States of America?  If ObamaCare crashes of its own weight, wouldn’t that be bad, too?  If so, wouldn’t that be worse than a state-level budget crunch?

(Yes, look, I get it… a health-industry collapse would just mean more money and power for the federal and state governments.  I’m being rhetorical, here.)

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Government Is Allowed to Change Bad Decisions (As on Medicaid)

Virgil Dickson, of Modern Healthcare, reminds us that government is allowed to rethink bad decisions, even when they relate to welfare entitlements:

Democratic lawmakers in Oregon are considering ending the state’s Medicaid expansion in an effort to address a $1.6 billion budget shortfall.

The state’s Ways and Means committee, which includes both senators and representatives, suggested cutting Medicaid expansion in an effort to curb Oregon’s $1.6 billion budget deficit.

As Kevin Mooney pointed out in this space in 2012, the Medicaid expansion was implemented in Rhode Island through administrative action and with little debate.  It was just assumed that we would and should do it.

It’s been a disaster.  In a policy brief from the RI Center for Freedom & Prosperity, we expected one in four Rhode Islanders to be on Medicaid by 2020.  Instead, we’re already nearing one in three and increasing every month.  Medicaid enrollment exploded as soon as the expansion and the health benefits exchange (HealthSource RI) came online, and it’s reaching the point that the exchange is shuffling its own paying customers onto Medicaid, undermining its own business model.

Legislators should admit that the expansion was a mistake and repeal it.

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Does ObamaCare Kill?

Here’s an interesting finding to ponder as we wrap up the work week, from Brian Frankie in The Federalist:

We know that the same year Obamacare’s insurance expansion provisions took effect, there was a pronounced, and statistically significant, surge in U.S. adult mortality. We know the surge in mortality remains after removing drug-related deaths, and other external morbidity causes, from the statistics. That is all we know. The rest is speculation. But it is fascinating speculation.

Has Obamacare, or some of the secondary effects of Obamacare, actually caused the negative impact in U.S. adult mortality so evident in the statistics? Is the improvement in public health that was assured turned out simply to be another false Obamacare promise, like being able to keep our doctors and health plans, or reducing our health costs?

As with the infamous ObamaStimulus metric of jobs “saved or created,” supporters of the O will insist that we cannot possibly know what mortality rates would have been like had ObamaCare never passed.  That’s a nifty trick to never have to truly subject one’s policies to real-world assessment, but serious discussion would require finding some evidence that an even bigger surge came in low.

I’m not saying I’ve got any answers on a Friday afternoon, but I certainly find it plausible that ObamaCare actually killed thousands of people (to put it in not-at-all-inflammatory terms).  Medicaid has worse health outcomes than private health insurance, even than no coverage at all, so people ushered onto Medicaid would be expected to increase mortality rates, especially if they’d planned to buy private health insurance through an exchange and discovered their eligibility for the free version.

Whatever the cause, we should certainly get past the simplistic public debate that saving ObamaCare saves lives and trying to eliminate (or even substantially reform) it is an inhumane goal.

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You Can Save Rhode Island From Progressive ANTI-JOBS Agenda!

As taxpayers continue to be asked to fund generous corporate subsidy programs, lawmakers are now dueling over two new spending ideas, reimbursing localities to phase-out the car tax and public funding for free college tuition, each of which would likely further raise taxes and fees on Rhode Islanders. But would these programs make Rhode Island a better state? Not only does cutting the sales tax to 3.0% make sense for improving our state’s troubled economy, it is also the cure to the dangerous progressive agenda.

The four major PROGRESSIVE legislative initiatives that Rhode Island families and business owners should be worried about are:

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The Cheese Sandwich Lesson for Socialism in Schools

It’s difficult to believe that Bob Plain isn’t trying his hand at parody with an interesting article on RI Future today about “lunch shaming”:

It’s known as lunch shaming. Students are subjected to special, sometimes embarrassing, treatment because their parents didn’t pay the school lunch bill. “Some provide kids an alternative lunch, like a cold cheese sandwich,” according to a recent NPR story. “Other schools sometimes will provide hot lunch, but require students do chores, have their hand stamped or wear a wristband showing they’re behind in payment. And, some schools will deny students lunch all together.”

The so-called cheese sandwich policy seems popular in suburban Rhode Island: Bristol/Warren, South Kingstown, and East Greenwich all use it.

From Bob’s article it appears that we’re talking debts in the amounts of $5 or $10, which seems like a paltry amount that districts could find some way to accommodate.  I’m trying to imagine a working-to-middle-class private school taking such steps.  In a transaction in which one side actually has the option to leave, other approaches have to be considered, whether a mandatory up-front fee, a deposit of some kind, a credit card on file, mandatory use of a payment processor that handles the collection, or a slight increase to all lunches in order to generate a reserve fund that provides a buffer for this sort of “debt.”

Putting aside the “what would the private sector do” comparison, though, think of what this little story says about the relationship of government to the people.  Adults in position of authority over school districts with budgets in the tens or even hundreds of millions of dollars are agonizing over ways to embarrass children so as to extract a few owed dollars from their parents.  That doesn’t indicate a mindset of provider-client or public-servant–beneficiary.  Rather, it indicates the dynamic of ruler-subject similar to a Dickensian orphanage.

Suffice to say it takes a series of monumentally bad social and public policy decisions to get us to the point at which the proverbial lunch lady is scornfully handing a child some bread and cheese over $5 owed.  We should start unraveling those decisions.

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Work Requirements for Medicaid in Maine

The Wall Street Journal’s Jennifer Levitz reports that the GOP-governed state of Maine is looking to add work requirements to the Medicaid program for those enrollees who are able-bodied adults.  When the state did the same with the food stamp (SNAP) program, enrollees dropped 90% and analysis suggested that the group of people who had been on food stamps actually saw an increase in wages.

The argument against such reforms shows the completely different starting point of each side:

But Maine’s approach is drawing criticism from advocates for the poor, who say jobs, volunteer positions and transportation to either of them can be hard to come by in rural pockets​with persistent unemployment. They say those losing the assistance turn to charities instead, increasing demand at food banks.

To which I would ask:  So?  Whether society provides food for the poor through a government program or private charity, we’re still supporting our neighbors.

The implied difference is that private charity has the feel of relying on the goodness of others while government programs have the feel of society’s handing over what it owes — an entitlement, in other words.  That difference is critical, and right in line with the work requirement.

What we owe each other is the chance of personal development and fulfillment, which comes from working, including being part of a self-supporting family team, even if not everybody within it works.  For those who really can’t work and who aren’t part of family that can address the greater challenges it faces, we should offer help in a way that shows genuine concern and community, not forced entitlement.

The attitudes and mechanics of welfare affect each other.  There’s a difference between the obligation to care for other people and a right to be cared for.  When a third party — government — asserts the authority to impose the obligation and bestow the right, it harms those who face adversity and deprives those who contribute of the benefits of being charitable.

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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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“Save RI”: The Antidote To The Progressive Agenda

Rhode Island families understand that our quality of life can only be improved if more and better businesses create more and better jobs! Yet, the progressive-left has a very different vision. They are openly promoting job-killing, anti-business, and anti-family policies. Their so-called “fair shot agenda” would transform our Ocean State into a liberal utopia … where businesses face even higher legal and financial risks, and where worker safety, absenteeism, and workplace productivity are compromised.

The Ocean State faces a stark choice.

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Rhode Island Does (or Did) Something Right

In its design (as opposed to its objective) Stephen Moore doesn’t much like Medicaid:

You’d be hard-pressed to find a more poorly designed program in the federal budget than Medicaid, the health insurance program for low-income Americans. The costs are shared between the states and the feds, which means that the more money a state wastes under Medicaid, the bigger the check Washington writes to the state. No wonder the program costs keep spiraling out of control.

Obamacare added nearly 20 million people to the Medicaid rolls, and the left considers that a policy victory. Federal and state budgets are swelling.

Oh, to return to the days when taking people off of welfare — not putting them on the dole — was the goal.

In an unusual experience, for a conservative, Moore cites Rhode Island as an example of a different way, referring back to a block-grant program implemented in the waning days of the President Bush and Governor Carcieri days.  Gary Alexander, who ran Health and Human Services in RI back then comments in Moore’s essay:

Alexander has become the Pied Piper for Medicaid waivers. “This is such a terrific solution because in Rhode Island we reduced costs and provided better care. When the state had an incentive to save money rather than spend it, this changed everything.” He added, “State waivers are the way out of the Medicaid crisis.”

Of course, elected officials in Rhode Island moved quickly to give away the budget slack in the Medicaid expansion and other constituent buy-offs, so clearly we have to work on step 2 of the “saving money” process (i.e., not immediately spending it on something else).  But it’d be nice to be recognized more often for innovative, smart policies.

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The Dead End of Rhode Island’s Government Plantation Model

The entitlement mentality in this state will be palpable as the federal government rolls back the Obama Administration’s give-aways. Lynn Arditi writes about the potential cost to Rhode Island if it refuses to change its Medicaid program to reflect federal spending under the Republican health care plan:

Predicting how much it might cost the state to cover the roughly 70,000 adults in the Medicaid expansion population under the Republican plan is especially difficult, health experts say, because people move on and off the rolls. If, for example, the job market weakened and people who had left the Medicaid rolls return, the lower federal cost-sharing rate means they’d be much more expensive to re-enroll.

“While certainly we’d support the state continuing to fund the Medicaid expansion population,” [Linda] Katz [of the Economic Progress Institute (no relation)] said, “the reality is … it would be very difficult to replace with state dollars the federal dollars and keep people insured.”

Rhode Island never should have signed on to the Medicaid expansion if this was possible, and the likes of the RI Center for Freedom & Prosperity were ignored when we warned that it was most definitely possible.  What everybody can see clearly now is that insiders and bureaucrats padded their budgets at great cost and risk to others.

And it’s not just Medicaid.  Dan McGowan reports from Providence for WPRI:

President Donald Trump’s proposal to eliminate the $3-billion Community Development Block Grant (CDBG) program would be a “devastating” blow to Rhode Island’s capital city, Mayor Jorge Elorza said Friday.

Trump’s proposed budget would do away with the 42-year-old CDBG program, which provides local governments across the country with funding for community centers, housing programs and neighborhood improvements.

None of these programs should ever be built into state government budgets or the local economy.  They should be treated as gravy on a healthy, independent economy.  Instead, we’ve allowed our elected officials to suffocate real industry and substitute a government plantation model premised on being able to bill the federal government and local taxpayers for government services for others.

Eventually, when you turn toward an obvious dead end, you reach it.

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