Coming up in Committee: Twenty-Three Sets of Bills Being Heard by the RI General Assembly, Today, June 18

June 18, 2014/by Carroll Andrew Morse

1. H8343: Amends the budget, to create some kind of carve-out for a particular “healthcare corporation” or set of corporations in this year’s budget. (H Finance; Wed, Jun 18) Initially submitted yesterday, this is the same process that was used to renege on the original language concerning bridge tolls in last year’s budget.

2. S2565: Imposes an additional $46 fee for a marriage license, $44 of which is to be provided to the Rhode Island Coalition against Domestic Violence to fund domestic violence prevention programs. (S Judiciary; Wed, Jun 18) The Department of Justice reports that “intimate partner violence” rates for married women are significantly lower than are the rates for never married or divorced/widowed women, yet a bunch of RI legislators think it’s a good idea to make couples who are taking basic steps towards responsible commitment pay for the bad acts of everyone. This bill really creates the impression that our state’s dour progressives don’t like marriage very much.

3. S2014: Requires teachers to be notified of layoffs due to “fiscal exigency or program reorganization” by June 1. (Currently, layoff notices of any kind must be sent by March 1). (S Labor; Wed, Jun 18)

4. H7819: Creates a panel operated under the leadership of the healthcare commissioner (“referred to herein this chapter as ‘the authority’”) charged with creating a plan for making “HealthSourceRI the sole hub for securing insurance or health services coverage for all Rhode Island residents”, aggregating all medical funding for health insurance and/or health care services through HealthSourceRI, establishing “global spending targets” for the provision of healthcare, and developing a plan to pay for it all that includes a payroll tax. (H Finance; Wed, Jun 18)

Coming up in Committee: Four Sets of Bills Being Heard by the RI General Assembly, Today, June 17

June 17, 2014/by Carroll Andrew Morse

1. H7939: Provides for information related to mental-health related involuntarily commitments to be added to the National Instant Criminal Background Check (NICS) database used for conducting firearms purchase background checks. The records sent to database will be from cases where there has been a demonstration of “clear and convincing evidence that the subject of the hearing is in need of care and treatment in a facility, and…continued unsupervised presence in the community would, by reason of mental disability, create a likelihood of serious harm”. (S Judiciary; Tue, Jun 17)

2. S3056: Makes authorization of casino gaming Newport Grand contingent upon the approval of the constitutional amendment that requires any changes in location of existing gaming facilities to be approved by local voters. (S Finance; Tue, Jun 17)

3. H7681: Prohibits the use of hand-held cell phones while driving commercial motor vehicles. (S Judiciary; Tue, Jun 17)

4. H7771/S2229: Pin-pricking Rhode Island with the needle: Allows the town of Richmond to set a maximum $10 fee to operate a business there. (H Municipal Government; Tue, Jun 17)

Ranking Indeterminate: H8206: Requires continuity in the unemployment insurance rate paid by a business going through bankruptcy, in cases where “there is common ownership, management or control” amongst the pre- and post-bankruptcy employers.

Local Impact: Cranston.

Missed One: Undoing Follow-the-Student in the Funding Formula, to Punish Charter Schools

June 16, 2014/by Carroll Andrew Morse

H7808: Converts Rhode Island’s current education “funding formula” away from a follow-the-student basis, into a politically-rigged formula intended to punish schools for not being managed by traditional district-level bureaucracies. (H Finance; Mon, Jun 16)

Coming up in Committee: Thirty-Four Sets of Bills Being Heard by the RI General Assembly, Today, June 16

June 16, 2014/by Carroll Andrew Morse

1. H8326/S2824: Sort of restores the jurisdiction of the Ethics commission over state legislators, but allows a trial in the regular courts for “any person against whom the commission finds a violation of the code of ethics” (in all cases, not just legislators). (H Judiciary; Mon, Jun, 16)

2. S3103: “In the general election to be held on November 4, 2014, in order to avoid a multiple page statewide ballot, given the number of public questions to be submitted to the electors at such general election, the secretary of state may prepare the ballot in such manner that the statewide public questions involving the issuance of bonds or other evidence of indebtedness, or other long-term financial obligation shall appear on the ballot with only a caption and the amount of financial obligation to be incurred, but without the clear and concise statement of each question, as otherwise required”. (S Judiciary; Mon, Jun, 16)

3. H8006: The annual extension of eligibility of anyone already named by the judicial nominating commission for appointment to a judgeship for another year. (H Judiciary; Mon, Jun, 16)

4. H7194 sets the minimum wage at $9 per hour for 2015, $10 per hour for 2016 and automatically adjusts it upward for inflation after that; S2249 provides a one-time raise in the minimum wage to $9 per-hour. (H Labor; Mon, Jun, 16)

5. S2853: Eliminates the the tax on ride-sharing services (such as Uber) by exempting rides that are “prearranged, and for which the rate is disclosed to the passenger in advance through a software application” from the public motor-vehicle tax. (S Commerce; Mon, Jun, 16)

Budget Growth and Household Income

June 13, 2014/by Justin Katz

Working with the federal government, the state government of Rhode Island has managed to keep its budget growing more quickly than inflation. The people of Rhode Island, however, have not been so lucky.

Five Minutes to Prove There Are No Rules in the House

June 12, 2014/by Justin Katz

Seeing all the House budget-night fun on my Twitter feed, I tuned in on Capitol TV for a few minutes. That was all it took for me to see Majority Leader John DeSimone (D, Providence) kinda sorta make a motion to rule an amendment by Michael Chippendale (R, Coventry, Foster, Glocester) out of order. (I say “kinda sorta” because he never made a motion. He just mumbled some stuff as if he were clarifying the amendment and then asked what the ruling of the speaker was.)

Speaker Nicholas Mattiello (D, Cranston) proceeded to discuss the matter off microphone and then declared that Chippendale’s amendment was indeed out of order, because for some reason, he thought that changing the gas tax rate for a year had no business in an article labeled “Relating to Revenues.” Instead, DeSimone had said the amendment should have been made to Article 21, which would raise the gas tax next year for the purpose of the transportation fund and the Sakonnet River Bridge tolls. By contrast, Chippendale’s proposal was to switch out the 38 Studios bond fund for some gas tax relief… obviously not related to the transportation fund or the toll in any way.

Chippendale challenged the ruling, but a near unanimous chamber agreed that an amendment relating to revenue was not germane to an article relating to revenue.

Does anybody really need any more proof that the entire budget process — the entire legislative process — is a sham? Either the other reps were not willing to go against the speaker or (maybe more likely) they all are painfully aware of how useless amendments are and figured the ruling was an easy way to end the phony show of representative democracy a little earlier than usual.

Tax Foundation & RI-STAMP on Tax Reform Differences

June 10, 2014/by Justin Katz

Tax Foundation rankings and RI-STAMP projections show that the RI House’s budget might game some rankings a little, but legislators still aren’t willing to make substantive changes to improve the lives of workaday Rhode Islanders.

The Lesson of the Tolls, Maybe

June 10, 2014/by Justin Katz

There’s still time for surprises before the General Assembly ends its session, probably within a couple of weeks, but it looks like I was wrong to conclude that the toll on the Sakonnet River Bridge would not be removed, and that the legislative push for alternative transportation funding was in large part a “distraction dance” to make it seem as if the legislators from the East Bay were doing everything they could in that futile cause. So what went wrong? Or rather, what went right that made me wrong?

One obvious factor is that the East Bay representatives got lucky inasmuch as a surprise change of leadership gave them negotiating power during the campaign for speaker. I’ve been saying all along that the legislators had to become single-issue voters, pledging not to support any legislation by any peers who would not support ending the tolls. When Nicholas Mattiello became rapidly interested in the single issue of his own election to the chair at the front of the House chamber, support for that one proposal became as politically valuable as a session full of “nay” votes.

Another thing that the change in leadership did was to paint a line between the vote to implement the toll and the vote to remove it. Even though Mattiello was a lead proponent of the toll on the night that it passed, he was so as the majority leader under Speaker Gordon Fox. Because the membership of the General Assembly is pretty much the same as it was, that line is hardly a barrier, but it makes a political difference when the public learns that the state government spent nearly $5 million to set up the toll and, by halting it, will only have collected about $700,000 and that there’s potentially another million due as a termination fee to the company with which the state contracted.

Another error I apparently made was in overestimating how much legislators from other parts of the state would care about a plan that raises gas taxes and various automobile fees on their constituents. With the toll a done deal and only the local senators and representatives able to be reached by the affected voters, I didn’t expect all of the rest to agree to more nickle-and-diming of their constituents during an election year.

In that regard, it appears that my massive cynicism was still not enough, at least when it comes to the degree to which legislators really do see their neighbors as an endless source of funds.

Coming up in Committee: Thirty-One Sets of Bills Being Heard by the RI General Assembly, June 10 – June 11 (But No Thursday Senate Calendars Have Been Posted Yet)

June 9, 2014/by Carroll Andrew Morse

1A. H7248: “The [Economic Development Corporation or its successor], the state and any subdivisions of the state shall not make payment on the moral obligation bonds related to 38 Studios”. (H Finance; Tue, Jun 10)

1B. H7295: creates a commission “consisting of nine (9) citizens of the state for the purpose of conducting an inquiry into the creation and administration of loan guarantee programs funded or managed by the state of Rhode Island, its municipalities, or quasi-public agencies thereof; and the failure of entities of government which might have prevented the loss of taxpayer dollars related thereto” not just to investigate 38 Studios, but also the recreational building authority, the CAPCO steel company, the role state officials may have played in the administration of the various loan guarantee programs, and transactions at the economic development corporation which may have resulted from improper and/or insider influence and/or information. (H Finance; Tue, Jun 10) It’s never too late to give the public reliable, factual knowledge about how well (or not) its government is working.

2. S2774: Provides for information related to mental-health related involuntarily commitments to be added to the National Instant Criminal Background Check (NICS) database used for conducting firearms purchase background checks. The records sent to database will be from cases where there has been a demonstration of “clear and convincing evidence that the subject of the hearing is in need of care and treatment in a facility, and…continued unsupervised presence in the community would, by reason of mental disability, create a likelihood of serious harm”. (S Judiciary; Tue, Jun 10)

3. S3080: The annual blanket-extension of eligibility for appointment to a judgeship for another year. (S Judiciary; Tue, Jun 10)

4. H8294 makes authorization of casino gaming Newport Grand contingent upon the approval of the constitutional amendment that requires any changes in location of existing gaming facilities to be approved by local voters. (H Judiciary; Tue, Jun 10); S3013: “Twin River may extend interest-free, unsecured credit to its patrons for the sole purpose of such patrons making wagers at table games and/or video lottery terminals at the Twin River facility”; the bill also establishes rules for such extensions of credit. (S Finance; Tue, Jun 10); S3014 adds “the real property of any person having debts secured by casino-issued lines of credit” to the list of property “exempt from attachment on any warrant of distress or on any other writ”. (S Finance; Tue, Jun 10)

5. On Tuesday, June 10 the Senate Judiciary Committee will hold its confirmation hearing on Richard Licht’s appointment to the Superior Court as an Associate Justice.

10 News Conference Wingmen, Episode 34 (General Assembly Budget)

June 6, 2014/by Justin Katz

Justin and Bob Plain discuss the General Assembly’s budget and whether all money in a society belongs to the government, so that letting people keep it is the same as giving it away.

Len Lardaro’s Hints of Technocracy

June 4, 2014/by Justin Katz

URI economics professor Len Lardaro’s suggestions about how Rhode Island government should develop its economic policies takes a rosy view of experts and misses the critical structures of a democratic republic.

Coming up in Committee: Forty-One Sets of Bills Being Heard by the RI General Assembly, June 3 – June 5

June 2, 2014/by Carroll Andrew Morse

1. S2898: $39M of “state investment” into the Superman building, in the form of a $19,500,000 “direct allocation to the owner” in the second year of the program, “and then payments of $9,750,000 in each of the following fiscal years”, with the condition that “following the funding of the fourth and final payment, upon a capital event resulting from the sale or refinancing of the project, any amount paid to the owner under this program above thirty percent (30%) of QREs shall be repaid to the state of Rhode Island prior to the owner realizing any return over the actual amounts invested in the project”. (S Finance; Tue, Jun 3)

2. S2950: Mandates that the RI Board of Education adopt “a competency-based/proficiency-based learning policy and a model district policy designed to increase programmatic opportunities for students to earn credits through demonstrations of competency”. (S Education; Wed, Jun 4)

3. H7939: Provides for information related to mental-health related involuntarily commitments to be added to the National Instant Criminal Background Check (NICS) database used for conducting firearms purchase background checks. The records sent to database will be from cases where there has been a demonstration of “clear and convincing evidence that the subject of the hearing is in need of care and treatment in a facility, and…continued unsupervised presence in the community would, by reason of mental disability, create a likelihood of serious harm”. (H Judiciary; Tue, Jun 3)

4. S2801: New insurance requirements for “mental health and substance use disorders”, including a requirement that they be covered “under the same terms and conditions as…provided for other illnesses and diseases” and a ban on annual or lifetime limits on their coverage. (H Corporations; Tue, Jun 3)

5. S2009: Prohibits funds from the restricted-receipt account used to pay legal costs for the state retirement system from being used to pay for litigation not directly based on a state retirement board decision. (S Finance; Tue, Jun 3)

6A. S2379: Legalizes certain uses of marijuana beginning with “actually and constructively using, obtaining, purchasing, transporting, or possessing one ounce (1 oz.) or less of marijuana, not including hashish” and “actually and constructively using, obtaining, purchasing, transporting, or possessing marijuana products, including up to five (5) grams or less of hashish, sixteen (16) ounces of marijuana-infused product in solid form and seventy-two (72) ounces of marijuana-infused product in liquid form”…

Sorting Out the Rationale for Sinking Millions in HealthSource RI

May 30, 2014/by Justin Katz

At the May 28, 2014, hearing of the House Finance Committee regarding legislation to switch to a federal health benefits exchange, advocates for HealthSource RI left the impression that their arguments aren’t quite in line with the facts or with their intentions.

Ethics Jurisdiction Over Legislature Paired With a Legislative Role in Selecting Ethics Commission Members

May 29, 2014/by Carroll Andrew Morse

A constitutional amendment to place state legislators under the jurisdiction of the Ethics Commission is scheduled to come before the Senate Judiciary committee this afternoon, and Katherine Gregg wrote this morning in the Projo that Senate President Teresa Paiva-Weed expects it to be voted on today.

According to the Projo story, the final version of the bill has not yet been unveiled. The version officially pending in the Senate offers a compromise to the legislature’s Ethics Commission skeptics* who are worried about ceding too much authority to an outside body; four members of the commission will be appointed by the Governor from lists created by General Assembly members…

Ethics commission composition. — The ethics commission shall be composed of nine (9) members appointed by the governor; provided, that the president of the senate, the minority leader of the senate, the speaker of the house of representatives, the majority leader of the house of representatives, and the minority leader of the house of representatives shall each submit to the governor a list of names of at least five (5) individuals from which the governor shall appoint one individual from each of the lists so submitted, and four (4) individuals without regard to the lists submitted by the legislative leaders. The terms of service for the appointed members shall be as provided by law.

Two factors that likely account for the sudden re-appearance of ethics legislation at this time are…

Rhode Island legislators in search of some kind of good-government achievement to talk about on the 2014 campaign trail, in the wake of the GA’s likely capitulation to Wall Street and the 38 Studios bondholders, and…
The possibility of a standalone bill on this subject dampening public support for constitutional convention, by taking off of the table one of the most visible issues that can unite the people of Rhode Island versus the governing class.

(*However, I doubt that the new appointment process will do much to convince Ethics Commission skeptics amongst this blog’s contributors).

John Loughlin: Exactly What the Oversight Committee Needs to Subpoena to Secure Direct Evidence that Leadership Lied To The House To Pass 38 Studios

May 28, 2014/by Engaged Citizen

This is a long but important post about 38 Studios.

It names names, and dates, and should be very helpful to the Oversight Committee which is investigating 38 Studios. It contains questions and comments that would be of zero interest to law enforcement BUT should be of interest to all state lawmakers and anyone who cares that the vote of their State Rep was actually stolen.

As far as the RI House is concerned, the smoking gun is May 25, 2010.

Coming up in Committee: Twenty-Eight Sets of Bills Being Heard by the RI General Assembly, May 27 – May 29

May 27, 2014/by Carroll Andrew Morse

1. H7817: Eliminates the Rhode Island Health Benefits Exchange and transfers its responsibilities to the Federal Government. (H Finance; Wed, May 28)

2. S2988: Reduces the corporate tax rate in Rhode Island from 9% to 7%, while implementing “combined reporting”. (S Finance; Tue, May 27)

3. S2143: Increases the estate tax threshold from $850K to $1.5M, but continues the practice of taxing the entire amount of an estate with a value greater than the threshold, and not just the amount above the threshold. (S Finance; Tue, May 27)

4. H7433: “The percentage of a charter public school’s housing costs reimbursed with state aid shall be equal to the percentage of school housing costs reimbursed with state aid for the municipality where a charter public school is located”. (H Finance; Tue, May 27)

5. S2976: The Comprehensive Community-Police Relationship Act of 2014 which, among other things, outlaws stop-and-frisk procedures, requires specific, detailed information to be logged about motor vehicle or pedestrian stops, requires many motor vehicle stops to be directly recorded, and extends warrant requirements to searches involving juveniles (S Judiciary; Tue, May 27)

6. H7983: Allows the division of taxation to enter into contracts with private organizations (or individual people), providing them with tax-credits in return “for engaging in certified rehabilitation of a manufacturing facility”. (H Finance; Tue, May 27) Implementing a system where people can change their tax liability by dealing directly with a government bureaucracy seems like an odd way to approach the problem of tax-incentives, and one that has substantial potential for unintended consequences. Is this kind of system used anywhere else?

Can’t Rank This One Until It’s Known What Projects It’s Targeted At: S2989: Substantial package of tax-incentives for the “substantial rehabilitation” of buildings in an economic micro-zone. Micro-zones would be designated by town/city governments within their borders, and the RI Commerce Corporation would approve projects for incentives, according to criteria laid out in the law, within a designated micro-zone. (S Finance; Thu, May 29)

Sudden Deficits and a Need for Better Decision Making

May 21, 2014/by Justin Katz

The surplus with which the Rhode Island government ended last fiscal year has turned into a deficit, this year, according to a story by Randal Edgar in yesterday’s Providence Journal. Why? Well, here’s a big reason:

The rising Medicaid costs are the result of increased enrollment under the Affordable Care Act, as well as a smaller-than-expected savings in Rite Care, the state’s health program for poor families, after the state reduced the income eligibility threshold from 175 percent of the federal poverty level to 133 percent.

Also contributing are delayed eligibility reviews for Medicaid enrollees. State officials say the federal government encouraged the delay with the advent of the Affordable Care Act, thinking states were already busy with the Obamacare rollout. The reviews typically identify cases in which recipients are no longer eligible, for reasons ranging from a rise in income to death, so the delay is adding to the state’s costs.

This is really no surprise. The RI Center for Freedom & Prosperity pointed out the costs of the ACA back when Rhode Island could have avoided them. There is surprisingly little interest in debating decisions (like the expansion of Medicaid) as they’re made, which is indicative of the degree to which Rhode Island government suffers from a short-term-thinking approach.

An unsigned editorial calling for Rhode Island’s health benefits exchange to be transferred to the federal government points to another one:

As a further benefit to taxpayers, the federal website appears to be much more efficient than the Rhode Island one, covering people for a much lower cost per applicant. And there are other costs associated with the state program. According to Mr. Alexander, a related initiative, the Unified Health Infrastructure Project, is projected to cost state taxpayers more than $51.3 million between now and 2020.

The cost of implementing UHIP is only the beginning. The project is designed to link social-service programs together, increasing bureaucrats’ ability to find non-paying customers. Don’t be surprised when the state government finds we suddenly have new deficits and less money to spend on things that government really ought to be doing, like maintaining infrastructure.

Did Scott MacKay Misinterpret His Own Data?

May 20, 2014/by Patrick Laverty

RIPR’s Scott MacKay tries to make the case that just because all parts of Providence used the master lever in the last two elections, it’s not any specific district. Also interesting is that no one has made the case that it’s just one part of the state that uses it. It’s used in all parts of the state, but let’s take another look at the data. What happens in presidential election years compared to mid-term elections? How is the master lever used then?

Coming up in the Senate Finance Committee on Thursday, May 22: Don’t Worry; It Says Right in the Law that These Bonds Aren’t Debts of the State!

May 19, 2014/by Carroll Andrew Morse

1. S2196: Creates a 5-year pilot program for “social impact bonds”. (S Finance; Thu, May 22)

What’s a social impact bond? The bill says that…

According to this model, investors contract with a government agency to purchase social impact bonds, the proceeds from which are dispersed to a nonprofit organization service provider. The nonprofit organization is then required to deliver services to the target population. If the results of the services provided by the nonprofit organization meets pre-determined, defined financial and social outcomes, the government agency repays the bonds with financial returns to the private investors.

Note that this law doesn’t say that the bonds are to be repaid specifically with money that’s saved; it only says that if “pre-determined, defined financial and social outcomes” are achieved, investors will receive “financial returns”.

Later on, the bill says…

The debt obligation of the state shall be limited to the amount of public sector savings realized from the social impact bond program. If additional funds are required to secure the bonds, the department shall identify additional funding sources, such as those that can be provided by philanthropic organizations.

And, of course, there’s the “boilerplate”…

The provisions of any other law, rule, regulation or order to the contrary notwithstanding, the bonds, refunding bonds or other obligations of the department issued for the purposes set forth in this chapter shall be special and limited obligations of the department, payable from and secured by such funds and moneys as determined by the department and shall not be in any way a debt of liability of the state or of any political subdivision thereof, except as otherwise provided in this section, and shall not create or constitute any indebtedness, liability or obligation of the state or of any political subdivision thereof, either legal, moral or otherwise, and nothing contained in the provisions of this chapter shall be construed to authorize the department to incur any indebtedness on behalf of or in any way to obligate the state or any political subdivision thereof, and all bonds and refunding bonds issued by the department in connection therewith shall contain on the face thereof a statement to that effect.

Anyone who is favor of creating social impact bonds and in favor of paying the 38 studios bonds cannot honestly support this bill, until they get some clarification on the meaningfulness of the boilerplate, and perhaps amend the bill accordingly.

If a project funded with social impact bonds fails, will the outstanding debt be treated as state debt? That will strongly depend upon whether RI legislators (and other policymakers) intend to follow what the law says about what constitutes real state debt, or to look elsewhere when making this determination. Legislators who believe that pronouncements from of outside-of-government organizations can outweigh the plain text of the law in issuing and allocating debt and who support social impact bonds should insist upon amending this bill, 1) striking any language about SI bonds not being state debt and 2) requiring that SI bonds which create more than $50,000 in debt be submitted to the constitutionally-mandated referendum process, in order to be fully honest with the public.

And all advocates for social impact bonds have a responsibility to do their due diligence and tell the public whether they believe there are conditions under which these bonds could become state debts, but this time before they borrow the money.

Coming up in the Senate Education Committee on Wednesday, May 21: One Small Step Towards Proficiency-Based Learning

May 19, 2014/by Carroll Andrew Morse

2. S2950: Mandates that the RI Board of Education adopt “a competency-based/proficiency-based learning policy and a model district policy designed to increase programmatic opportunities for students to earn credits through demonstrations of competency”. (S Education; Wed, May 21)

We seem to be going through a particularly acute postmodernist words-mean-whatever-you-want-them-to-mean phase of education policy right now, largely resulting from some bad ideas about how to “market” the Common Core. With that disclaimer, “proficiency-based learning” usually means that students are “promoted” once they show they’ve mastered an area of knowledge, without being required to remain at a certain “grade level” in a curriculum area for an inflexible amount of time.

Proficiency based learning, effectively implemented, could be an effective outside-of-the-box solution for a host of education problems. It’s most significant difference from factory-model education is that very concrete incentives are created for students to learn academic material and demonstrate their mastery of it as quickly as they can, so that they can spend more time advancing in the subject areas they’d prefer to study while in school, or even complete school altogether in less time.

Coming up in Committee: Seventeen Sets of Bills Being Heard by the RI General Assembly, May 20 – May 22

May 19, 2014/by Carroll Andrew Morse

3. S2657: “The information contained in a portable electronic device shall not be subject to search by a law enforcement officer incident to a lawful custodial arrest except pursuant to a warrant”. (S Judiciary; Tue, May 20) The same bill was vetoed by Governor Chafee two years ago and, according to the Wall Street Journal, Governor Jerry Brown recently vetoed a similar bill in California, telling “the legislature not to require warrants for cellphone searches, saying the issue belongs in the courts”. We’ll see what happens in RI this session.

4. S2985: Allows “a health care facility licensed as an organized ambulatory care facility” to operate at multiple locations without having to seek an individual license for each site. (S Health and Human Services; Tue, May 20)

5. S2208: Extends full state school-housing facilities support (which I believe means state aid to assist with capital construction costs) from district-sponsored charter schools to any Rhode Island charter school, e.g. Mayoral academies. (S Finance; Thu, May 22)

6. S3014: Adds “the real property of any person having debts secured by casino-issued lines of credit” to the list of property “exempt from attachment on any warrant of distress or on any other writ”. (S Finance; Thu, May 22)

7. S2072: If the annual gross receipts of a Rhode Island C-Corp or LLC are less than $500, the corporation gets an automatic tax-refund in the amount of the difference between its gross receipts and the $500 corporate minimum tax it would have to pay… (S Finance; Tue, May 20) …i.e. changes the corporate minimum tax from a tax that certain corporations owe to the government just for existing, to requirement that certain corporations pay the government the first $500 they make each year in the form of corporate income tax.

10 News Conference Wingmen, Episode 31 (38 Studios Bonds)

May 16, 2014/by Justin Katz

Justin and Bob Plain take up the question of to pay or not to pay the 38 Studios bonds.

The 38 Studios Bond Payment: Expecting a Penalty is Reasonable; Expecting Punishment is Not

May 14, 2014/by Carroll Andrew Morse

Are worries about punishment by the ratings agencies and the bond market worries about individual decisions in a legitimate marketplace, or worries about collusion? If the answer to this question is based upon a fear that investors may decide amongst themselves to turn down money-making opportunities, to impose a boycott or to fix prices above a certain interest rate in order to make Rhode Island an “example”, then the answer is headed towards an allegation of illegal activity.

Those who have expressed concerned about “punishment” should be absolutely clear with the public about the mechanisms by which they expect individual, profit-seeking bond holders to leave money on the table, in order to make an example of Rhode Island, because it will never be cost-efficient, or moral, or in the best interests of the people of this state to accept either illegal collusion or leaders who would tolerate it.

Stepping into Progressives’ Harmful Propaganda

May 14, 2014/by Justin Katz

Samuel Bell’s op-ed in today’s Providence Journal is hard to take seriously, but it must be taken seriously, because its like is doing terrible harm to the people of Rhode Island.

Being Clear About the Cards with Government Bonds

May 13, 2014/by Justin Katz

Calls to be “prudent” and pay the 38 Studios bonds miss the cost of allowing schemes that trap responsible people into paying other people’s commitments to work.

38 Studios Repayment

May 12, 2014/by Patrick Laverty

About a month ago, I wrote here about whether the 38 Studios bondholders should be repaid. At the time, I didn’t think so. In part because I believed the insurance would cover it, but later found out the policy is held by the bond buyers, not the state. Also because it was a moral obligation […]

Many Ways to Change the Politics of the State

May 12, 2014/by Justin Katz

During my appearance, in the last hour, on the Dan Yorke Show (podcast here), the conversation kept coming back to the organizations that hover in the orbit of government, like RI Hospitality Association, with its peculiar position opposing a tax cut that would directly benefit all of its members. When the show ended, it occurred to me that this is a point that probably can’t be emphasized enough: Our political system is broken, in Rhode Island, and there are more ways to repair it than just through elections.

A society doesn’t get to Rhode Island’s level of hopeless rigidity (where Hope is just a village in Scituate) without all of the mechanisms to which people would turn for a repair being broken, as well.

Before I was on, Dan was talking about the Gallup poll finding that 42% of Rhode Islanders would leave the state if they could. Gallup published related polls finding that 70% of Rhode Islanders are negative about the state’s tax system (5th worst in the nation), and only 40% have at least a fair amount of trust in state government (2nd worst in the nation).

People don’t just live like that. They join organizations to change things; they become, in effect, special interests at the table. Like RI Hospitality.

The problem that is increasingly clear to me is that those organizations get to the point that they rely more directly on the status quo in government than on actually improving things for their members. The association, chamber, or whatever simply becomes the government’s liaison to a particular “community,” and away to neutralize any unrest that arises.

I’d argue that’s why people are leaving. Nothing seems to work.

But the problem is also an opportunity. Long before new candidates could be groomed and put into office, the heads of these organizations could be made to go to lunch with their inside-government pals and give them the bad news that: “I’m not going to be able to play the game anymore, unless…” And that “unless” could be as dramatic as the membership’s dissatisfaction.

Coming up in Committee: Twenty-Seven Sets of Bills Being Heard by the RI General Assembly, May 13 – May 15

May 12, 2014/by Carroll Andrew Morse

1A. On Tuesday, May 13, SJ Advisors presents their report on payment of the 38 Studios moral obligation bonds to the House Finance Committee.

1B. S2694: “…neither the general assembly nor any governmental or quasi-governmental entity created by it shall issue any bonds, commonly called ‘moral obligation’ bonds in excess of fifty thousand dollars…” (S Finance; Tue, May 13) While the purpose of this bill makes sense, “moral obligation” bonds were themselves created to make a practice clearly prohibited (issuing bonds without voter approval) appear to be legal by renaming it. How would a law like this guarantee that a future legislature wouldn’t get around it, simply by coming up with yet another name for issuing debt without voter consent?

2. S2345: Writes into law in-state tuition at RI public colleges and universities for students, including illegal aliens (but not non-immigrant aliens) who graduated from a Rhode Island high school that they spent three years at, including illegal aliens who have applied for citizenship, provided that the Federal government has provides a pathway to citizenship as part of an amnesty law. (S Finance; Tue, May 13)

3. S2332: Establishes a floor for the Central Falls pension settlement such that, for 2016, “no retiree shall receive less than” 75.6% of their pre-bankruptcy pension amount, and raising that floor to 100% over the following 20 years. (The bankruptcy settlement initially cut a number of pensions to 55% of their original amount, though the state authorized “transition” funds to raise that to 75% for five years). Unlike the version submitted to the House, this bill does not expressly make the state responsible for the pension. (S Finance; Thu, May 15) So where will the difference between the 55% and the rising scale that starts at 75% come from? The bill doesn’t say.

4. S2074: Sets the threshold for the RI estate tax at $2M (annually adjusting it upwards for inflation) and assesses the tax only on the amount over the threshold. (S Finance; Tue, May 13)

5. S2077/S2148: Bases car-tax assessments on trade-in instead of retail value. (S Finance; Tue, May 13)

38 Studios Bonds: Investors and the State Defrauding Taxpayers

May 9, 2014/by Justin Katz

Under the rationale being offered for repaying the 38 Studios “moral obligation” bonds, Rhode Islanders would be justified in believing that the General Assembly and the financial ratings agencies are guilty of fraud against them.

Moral Obligations on Our Permanent Record

May 9, 2014/by Justin Katz

I know there are more (and better) clips I could have used, but just for Friday afternoon fun, following up on Andrew’s post, earlier:

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