Raimondo, Taveras Support Payday Lending Reform


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Rep. Frank Ferri testifies on his bill that would reform paypay loans in RI. In the background is former Bill Murphy, former House speaker, who opposes the bill.

Treasurer Gina Raimondo and Providence Mayor Angel Taveras have joined the calls for payday lending reform efforts, and both will participate in a roundtable discussion on the issue.

“The time has come to protect Rhode Islanders from the economic threat of predatory lending,” Raimondo wrote to the Senate committee that recently took up a bill on the matter. “The payday lending industry may argue that payday lending is a necessary component of  a state’s economy, yet Rhode Island is the only state in New England that allows the practice. They also claim that payday loans are intended as one-off transactions, yet the  majority of loans are issued to repeat borrowers.”

Taveras has been a member of the Coalition for Payday Lending Reform since he took office.

“Payday loans are debt traps that harm many Rhode Islanders struggling to keep their heads above water by catching them in an unintended cycle of high-interest, long-term borrowing,” he said in a statement. “It’s time for Rhode Island to join our fellow New England states in reducing the interest rate that many payday lenders charge and addressing the most concerning aspects of payday lending practices.”

Other participants include Rep. Frank Ferri and Sen. Juan Pichardo, who are each sponsoring bills in their respective chambers that would lower the average annual interest rate on payday loans from 260 percent to 36.

The roundtable discussion is being put on by the Coalition for Payday Lending Reform, which will release polling data on the percentage of Rhode Islanders who support reform of the predatory payday loans.

“The poll speaks to the fact that RI voters overwhelmingly support a 36% rate cap on payday lending,” said Margaux Morisseau the director of Community Building for NeighborWorks Blackstone River Valley.  “It is time for our elected officials to listen to their constituents over the lobbyists and pass Senator Pichardo and Representative Ferri’s payday lending reform bill this year.”

The roundtable is Tuesday, 2 p.m. at the West Elmwood Housing Development Corporation, Westfield Lofts Community Room, 224 Dexter St. in Providence.

 

Celebrate Rhode Island’s Taxes


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Did you know you live in a low-tax state?  According to the Tax Foundation, average taxes per person in Rhode Island are lower than in any other northeast state besides Maine, and lower than Utah, Nevada, Wyoming, Delaware, and Virginia.

Each year, you see, the tribunes of wealth and privilege who run the Tax Foundation calculate the date of “Tax Freedom Day” to make a point about how much our nation pays in taxes. The idea is that your pay from January 1 until tax freedom day goes to federal, state, and local taxes and the rest of the year is for you. It’s a perfect expression of our national tax allergy, since TF day comes without a trace of a mention of what we get for that money. Nope, the Tax Foundation is all about the price of government, not about its value.

But put that kind of scoffing aside, what do they show?  According to their calculations, TF day comes on April 15 in Rhode Island, compared to April 22 in Massachusetts, May 1 in New York, April 11 in Texas, April 23 in Wyoming, April 17 in Utah, April 17 in Delaware, and April 18 in Nevada. The only state north and east of West Virginia that has an earlier TF day is Maine (April 8). Hooray for low taxes!

Of course my experience with the Tax Foundation says that you can trust their numbers, but it always pays to read the footnotes so you know what those numbers actually are because they are seldom what you think. In the footnotes and cross-references, you learn, for example, that their calculations of state taxes usually include the state taxes you pay to other states. No joke.  For example, some small fraction of the gas you buy comes (or could come) from Alaska, some small fraction of every dollar you spend on gasoline winds up funding the State of Alaska Permanent Fund. And people from Rhode Island often pay sales taxes to Massachusetts or Connecticut when they shop there, so that counts, too.

This gets to the heart of my complaint about the Tax Foundation. When I’m looking at economic or tax data I don’t just want information. I want information relevant to the decisions before us. The Tax Foundation specializes in information that isn’t relevant to any particular decision. Why do I care how much of my money goes to other states when I’m discussing tax policy in Rhode Island?  And why do I care about average taxes paid per person when I know very well that there aren’t any average people?  The taxes we pay vary according to your wealth and according to where you live. Over the past 20 years, we’ve shifted the load from people who have money and live in the suburbs to people who don’t have much money and who live in cities. To think that some kind of overall average can capture that dynamic is absurd and makes this kind of comparison with other states not just meaningless, but counter-productive.

What is useful about this kind of report is that it puts the lie to claims that there’s anything especially egregious about the level of Rhode Island taxes. We don’t live in a “tax hell,” more highly taxed than other states. We live in a place where inadequate understanding of the economics of taxation has led our leaders to make some really bad decisions about who can afford what, and the result is perpetual cuts in taxes on rich people and increases in taxes on less rich people. That’s all.


As an aside, there’s also an interesting chart on the tax freedom page (look for the heading that says “Historical Tax Freedom Day”). It shows movements in taxes versus movements in the deficit, and you can see from it that before 1980 the two tended to move in sync and since then they’ve moved in anti-sync.  I wrote about a chart very much like that in 2006, when the late director of the Cato Institute, William Niskanen, wrote an article to say that low taxes do not lead to a decrease in the size of government and that real conservatives should stop pretending that they do. Find that article here.


The Tax Foundation had some comments to make about this article, and I responded to them.  Find a link to the Tax Foundation’s comment and my response here.

Poor Portents in Prospect Park for Anthony Gemma


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Prospect Terrace Park (via Wikipedia)

Having attended Anthony Gemma’s news statement in Providence’s Prospect Terrace Park, I’ll say this right off the bat: I went expecting a more polished candidate than appeared in 2010. I was disappointed.

Let’s get to the big part of it right away: fleeing the conference almost as soon as he was done. By 6:21 pm Mr. Gemma was gone from an event that had started at six o’clock. Many of his supporters had not even gotten to meet the man. He briefly took a photo with a small child, then shook hands with some of Providence’s local politicians before hopping into his SUV and driving off.

This accomplished one thing: it pissed off the media. One veteran reporter said she’d never seen never seen any politician behave that way at a campaign event in nearly two decades of reporting. The moment he stepped into that tinted-window truck, Mr. Gemma had given up two opportunities; winning over reporters and schmoozing with his own supporters. These were people who turned out at 6:00 pm on a Sunday for him; when most are eating with their families. The least he could’ve done was say hello to as many as he could. If that meant taking questions from reporters, well, so be it. That’s being a politician.

Mr. Gemma needs the press more than they need him. For instance, his primary opponent, sitting U.S. Congressman David Cicilline, has actually reached out to the press, inviting WPRI’s “Newsmakers” to enter his home to interview him. He also issues posts on this website.

In 2010, Mr. Gemma won only 23.1% of the vote in the Democratic primary, merely 3% over his nearest rival, David Segal, who had less money to spend. Now that Mr. Cicilline has begun apologizing very publicly for saying Providence was in “excellent fiscal condition” during his last campaign, it’s likely that Segal voters will be keener to jump to Mr. Cicilline’s defense, rather than staying home. Without press coverage, Mr. Gemma loses much of the ability to get out his message other than through advertising. And without making friends of the press, Mr. Gemma makes it that much more difficult to garner positive coverage.

Mr. Gemma was clearly attempting to set himself up as the frontrunner in this race on Sunday. He attacked Brendan Doherty by name, and never explicitly mentioned David Cicilline. I’d say it’s wise for Mr. Gemma not to attack Mr. Cicilline while he’s apologizing (it makes you look like a bully) but Mr. Gemma did make veiled reference to Mr. Cicilline’s apology by attacking it as something he wouldn’t do, completely negating that strategy.

What seems reasonably intelligent is the collection of Providence politicians Mr. Gemma’s gathered; John Lombardi, Davian Sanchez, Wilbur Jennings… though all are problematic. Providence will play a major part in this race. Last time, nearly a quarter of all of David Cicilline’s votes came from Providence. Mr. Gemma placed a distant third in the capital city. Both candidates have to walk a tight path here: Mr. Cicilline’s fate is tied to Providence’s, in many ways. But Mr. Gemma cannot blast the city without alienating its voters, many of whom proudly voted for David Cicilline, some of them twice.

Rep. John Paul Kvale (Farmer-Labor—MN), who once held the deciding vote in the U.S. House.

Beyond that, the clear lack of specifics and the empty rhetoric in the speech betrayed a problematic candidate. Mr. Gemma was the “quirky” candidate in the race last time, sounding like he was running for Governor rather than U.S. Congressman. Let’s be clear: the “control of the House may come down to one seat” argument is unconvincing. It’s only happened once before: in the 72nd Congress when 19 representatives-elect died before taking office and 14 flipped to the Democrats, leaving a sole Farmer-Labor Party member as the deciding vote. This seems unlikely to happen again. However, Mr. Gemma immediately undercut the notion of being a strong Democrat by saying he was willing to buck his party on certain issues.

Mr. Gemma had some intelligent moments. He focused on jobs, though he just said he knew how to create them. But smartest of all, he avoided divisive social issues where he could easily lose support among Democratic partisans. However, since issues like reproductive rights are about to enter center stage in Rhode Island, he must find a way to prevent himself from being lumped into the same category as Brendan Doherty in Democratic minds.

Given both his inability to work the crowd and press, and his occasional stumbles during his speech, Mr. Gemma is clearly an imperfect candidate. Perhaps he has a touch of stage fright. He does not win the award for “most improved” since 2010. That doesn’t go to anyone. There were dark clouds hanging over the Park as Mr. Gemma made his announcement. There’s a dark cloud hanging over this whole race. Democrats should be very worried. Both their candidates are flawed, deeply, but in different ways. Republicans now have their greatest chance to take one of the most liberal districts in the country.

RI Progress Report: Patriot’s Day/ Buffett Rule Edition


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Mayors Don Grebien, of Pawtucket, and Leo Fontaine, of Woonsocket, write an op/ed together in today’s Projo about their lawsuit against the state that contends that RIDE should move quicker to bridge the giant funding gap that exists between the affluent suburbs and the poorer inner cities in Rhode Island. It’s an issue that we’ve covered at length (see here and here) and one that not only explains why RI public schools as a whole don’t perform better, but also why the state in general doesn’t as well.

In a smart move that plays to the state’s natural advantages, Rhode Island is using the arts as an economic engine.

“Let’s be clear: State socialism created the suburbs. That migration – of educated, middle class workers away from the cities and mill villages – limited tax revenues and job opportunities in city centers across the state.” – Daniel Lawlor.

Why is Gina Raimondo trying to undercut Gov. Chafee’s efforts to help out struggling cities and towns? Here’s why.

If Anthony Gemma took his candidacy for Congress more seriously so would the media. But, then again, if he wasn’t such a joke, neither would be his campaign.

It’s Marathon Monday in Massachusetts today, when the Red Sox play their annual 11 am home game in conjunction with the Boston Marathon, but it’s also Patriot’s Day, marking the anniversary of the Battle of Lexington and Concord, the first actual military skirmish of the American Revolution, which Ralph Waldo Emerson dubbed “the shot heard ’round the world.”

It’s also the day the Senate is slated to take its first vote on the Buffett Rule … check out our coverage here.

This page may be updated throughout the day. Click HERE for an archive of the RI Progress Report.

Whitehouse’s Buffett Rule Up for Senate Vote Today


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Sen Whitehouse at a recent rally for the Buffett Rule. (Photo courtesy of Whitehouse office)

After a solid week of Democrats making Sheldon Whitehouse’s Buffett Rule bill the biggest legislative priority in the country, the Senate today will take up the proposal. Seems as if the efforts may pay off as a new Gallup Poll shows that 60 percent of Americans support it.

Today’s vote is a motion to proceed and needs to pass with a 60 vote super majority in order to move to a vote on the bill itself. In other words, Democrats will have to convince at least seven Republicans to vote to allow the bill to come up for a floor vote. That is expected to happen sometime around 5 and 7 p.m. The Senate is scheduled to take up the matter at 2 p.m. Here’s the video from Whitehouse’s floor speech today:

In the meantime, we’ve included a Twitter widget below so you can follow along with what Washington DC and beyond are saying about the Buffett Rule and here are some useful links for catching up to speed:

Sen. Sheldon Whitehouse’s op/ed in RI Future on the Buffett Bill. Here’s another op/ed he wrote for the Projo a few days later.

Whitehouse tell me that Wall Street lobbyists will be biggest hurdle to passage. Congressman Cicilline also supports the Buffett Rule. Whitehouse talks about the Buffett Rule with the Center for American Progress.

The Times has a great overview page on the Buffett Rule, with an archive of their coverage. And here’s a link to the President’s weekly address in which he again advocates for it.