May 29, 2012 – RI Future

May 29, 2012May 30, 2012

House Democrats Offer Clues About Budget

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As House Democrats emerged from a closed-door caucus on Tuesday afternoon concerning the budget proposal, a picture began to develop of what might be included in the annual spending bill which will be released Thursday.

“There’s probably not going to be tax increases,” said Frank Ferri, a progressive Democrat from Warwick.

But he and other lawmakers said restoring funds cut last year for the developmentally disabled, DCYF and to nursing homes are being considered. One House member said in the closed-door caucus this year’s budget proposal was referred to as “the year of restoration.”

The big debate of this year’s budget meeting could be $2.6 million the governor’s office requested as part of the final settlement with Central Falls retirees. Part of the deal receiver Bob Flanders negotiated with the retirees called for the General Assembly to contribute to their retirement costs.

“My concern is it could be a slippery slope,” said Jamestown Democrat Deb Ruggerio. Several legislators told me they worry that it could set a precedent for other struggling communities to ask the state to appropriate funds as part of a deal with pensioners.

House Democrats also hope to include more money for public education, a Chafee initiative, to help expedite the new school funding formula. “It’s been a priority of the governor’s since Day One,” said Director of Administration Richard Licht.

It doesn’t seem like it will be funded by an increase in the meals tax, as was proposed by Chafee. “I’d say that’s dead,” one legislator told me after the caucus meeting.

Public transportation supporters made a big push for more operational money this year, but it seems, if anything, there will only be money for new buses.

Finance Committee Chairman Helio Melo, who has been logging long hours as of late putting together the budget proposal with staff, said this year’s bottom line will be helped by a one-time windfall from this year’s Poweball winners, which will inject an additional $15 million into state coffers for the next fiscal year.

The House Finance Committee will consider the budget on Thursday at the rise of the House. A summary of the proposal will be released earlier in the day.

May 29, 2012May 29, 2012

Gina, Chafee Also at Odds on Muni Pension Bills

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38 Studios isn’t the only matter of public policy that Gov. Chafee and Treasurer Gina Raimondo disagree about. There’s also the governor’s hotly-debated municipal pension reform proposal that Raimondo has given the cold shoulder to publicly.

While she said much of her work has been behind the scenes, and with municipal finance directors rather than mayors, twice Raimondo dodged the question when I asked her on Friday if she endorsed the governor’s pension proposal. On my third try, she said:

“Here’s what I would say: I certainly endorse the concept of giving municipalities more tools to help them do their work. This particular legislation is making its way through the legislative process, and this is like a legal hornets’ nest. The General Assembly, they are going to have to figure out the legal issues and the language to try and do that.”

Chafee, for his part, wishes Raimondo would have use her pension cred to help his municipal reform efforts this session. In fact, he told me he wanted her to fight harder for them during last year’s special session devoted to pension reform.

“We had a special session, with total focus on pension reform,” he said. “What are we waiting for? It’s time we get some energy behind this important area moving the state forward.”

Legislative leadership didn’t want the municipal reforms in the landmark reform bill last year. Chafee fought for it to be included and Raimondo not so much.

When pressed, she said the it won’t withstand a court challenge.

“Listen, if we could have figured out a constitutional, financially sound way to pass a statute that reformed these independent pension plans last year we would have done it. I wish we could have, I really do but there is no solution like that.”

She added, “We have to respect collective bargaining.”

It’s a fair point, and one that organized labor certainly agrees with. Pat Crowley of the NEA-RI has described the governor’s municipal package as, “Wisconsin heavy, not even Wisconsin light.” The bill would freeze annual raises for communities with underfunded pension plans, lower disability pensions and prevent cities and towns from offering more generous benefits than the state plan.

But details aside, with both municipal and statewide pension reform efforts, inevitable lawsuits will hinge on whether or not a contract has been broken, and if so if a financial catastrophe can be averted by doing so. A ruling last fall said that state workers have an implied contract with the state.

“That was a summary judgment so it remains to be seen,” said Raimondo. “We’ll see where it goes.”

Another theory is that Raimondo doesn’t want to anger municipal unions, which could prove critical if she runs for governor in 2014.

She vehemently ruled out politics playing into her decision not to endorse the governor’s municipal package, saying, “No, of course not. That’s not how I think about it.”

But she wasn’t so adamant when I asked her if she was, in fact, thinking of running for governor.

“Never rule anything out,” she said, “but I’m not thinking about it.”

Meanwhile, the next governor won’t be chosen for another two years and the first lawsuits over pension reform won’t be filed until the July or perhaps January, depending on when the reforms first affect workers and retirees.

But it’s the final few days of the legislative session and Chafee’s municipal aid package, including the municipal pension reform proposal, rests in the hands of the House Finance Committee. The Committee heard the bills earlier in the session and held them for further study. It would need to vote them out in the coming days in order for them to take effect this year.

May 29, 2012May 29, 2012

No Reckoning: The RI Corruption Video Game

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This morning, former Red Sox Pitcher Curt Schilling blamed the State of Rhode Island for the failure of his video game company. According to the Providence Journal, he blamed the state for not giving him more tax breaks. Additionally, the Journal reported, Schilling has lost “33 pounds in the past 45 days, which he calls a ‘surreal’ stretch.'”

What follows is an exercise in satire….

The State of Rhode Island is pleased to announce the creation of a new state-sponsored video game company, “Thirsty-Ate Studios.”

“After years of complaining about job creation and fiscal woes,” said Governor Lincoln Chafee, “we are finally investing tax payer dollars in something valuable—pixels!”

The new Massive Multiplayer Online game, which is based on the State’s trademarked “Little Rhody Corruption System,” (patent pending) offers every Rhode Islander a chance to earn as good a wage as a World of Warcraft gold farmer in China.

“Now, we can finally say that we are educating our children for the jobs of the future,” said Education Commissioner Deborah Gist. “Video game playing is profitable, and we’re going to be rolling out a new curriculum in the fall teaching every student that video game playing, like reading, is hard work. Of course there will be rigorous testing conducted every three days just to make sure that our teachers are doing their jobs.”

The Department of Education will be purchasing thousands of used and obsolete video game consoles at full price from the Extraordinary Rendition training division of Halliburton, a security company owned by former Vice President Dick Cheney.

According to former EDC director Keith Stokes, the new official state video game will be named, “No Reckoning—Escape from Responsibility.”

“Each player will become an elected official, whose goal will be to collect special interest funding and distribute perks, no-show jobs, and state contracts,” Stokes said. “Bonus points can be earned by making random speeches in ‘obfuscation’ mode and by kissing babies.”

The game will include the following stand-alone App modules:

Legislative Blockus: Senators and representatives vie to stall important bills from coming to the floor, and then force them through a vote at the last moment with as many hidden clauses as possible.
The Ferdinand St. Germain Running of the Pork: Intrepid politicians chase lobbyists in the shape of greased pigs through State House halls in search of a payoff.
The Ed DiPrete Dumpster Diving: where contestants search through trash bins for bags of cash.
The Vincent “Buddy” Cianci Pentathalon: including a burning log roll, marinara cook-off, creepy crony collection contest, RICO smackdown, and finally a free-for-all radio talk show comedy slam.
The David Cicilline Pass the Buck: A digital version of hot political potato. Whoever is the mayor when the timer goes off loses all credibility points.
The Joe Mollicone Bank Run: Get all your money out of the country before the credit unions collapse.
The Joseph Paolino Real Estate Swap: Like Monopoly. Collect as much property as you can in downtown. Keep it unoccupied so that the property taxes stay low. Wait until the government knocks down the highway to make it “prime waterfront” then collect your payoff.
The Donald Carcieri Ostrich Hide and Seek: You play a large preening flightless bird. Sqwaack loudly and give away millions of taxpayer dollars while complaining that poor people aren’t doing their fair share. Then bury your head in the sand and don’t say a peep. Maybe no one will notice.

While many of these modules are still in development, one current favorite is the Department of Motor Vehicle Paperwork Maze. Find your way to the only open office, get in line to get a number, and then see how many bureaucrats it takes before you are allowed to leave. There is no time limit.

“I’m really keen on that one,” said Governor Chafee. “Of course I usually ride my horse or get a lift in my chauffeured limo, but if I ever went to a bar and they asked me for my driver’s license, it would be a bit embarrassing to say that I never got one.”

In related news, former Red Sox Pitcher Curt Schilling has hit number one with his new bestseller, “How to Win the World Series, Bilk the Government for Millions, and Lose 33 pounds in 45 days.”

Mark Binder is an author and professional liar. His latest novella, “The Buddha Who Wore Keds” is available for Kindle at: http://amzn.to/buddha_kindle

May 29, 2012May 30, 2012

Tax Equity Still A Question for Impending Budget Bill

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rite rally — Sen. Josh Miller and Rep. Maria Cimini, sponsors of a bill that would raise taxes on the richest 2 percent of Rhode Islanders.

One of the key ingredients in this year’s impending proposed budget from the House Finance Committee will be how to pay for existing services that have already been cut to the bone in recent years.

There’s the governor’s proposed 1 or 2 percent meals tax increase, which would raise some $20 to $40 million for education. There’s also Rep. Edith Ajello’s proposed soda tax, which would net another $40 million in revenue.

But the most talked-about revenue-increasing mechanism debated this year has been increasing income taxes on Rhode Island’s richest residents. The Miller-Cimini bill would raise state income tax rate on Rhode Islanders who make more than $250,000 a year from 5.99 percent to 9.99 percent, but the percentage would drop with every one percentage point decrease in the unemployment rate. Rep. Larry Valencia’s proposal would make a similar increases without being tied to unemployment.

House Speaker Gordon Fox, who pushed for tax cuts for the wealthy as majority leader when former Gov. Don Carcieri first proposed the idea, doesn’t want to touch the tax rate this year, but Majority Whip Patrick O’Neil has signed onto the Miller-Cimini bill. Fox has told lawmakers he doesn’t want a floor amendment on a tax increase during the budget debate.

Some speculate that a compromise put forward by local fiscal guru Gary Sasse of raising the rate slightly and earmark those additional funds to economic development.

“I don’t think anyone in this room could really defend the difference between 5.9 and 6.2 percent among certain levels of income,” he told the House Finance Committee on April 24. “My conclusion is there’s some room to make a modest increase to the top rate.”

Whatever happens, Rhode Islanders for Tax Equity, a group made up of community activists and organized labor, knows well this is the time of year the bill is being scrutinized the most. So they’ve flooded the marketplace of ideas with advertisements. In addition to buying space with RI Future, the group also put together a radio ad and this TV spot:

The TV ad was only seen on ABC6, though … that’s because WJAR and WPRI didn’t air the ad. WPRI didn’t, according to a source familiar with production of the spot, because it prominently features their news staff. WJAR, the source said, didn’t because it prominently features WPRI’s news staff. Sales reps for both companies could not be reached for comment.

May 29, 2012May 29, 2012

RI Progress Report: Schilling Speaks, Woonsocket Asks for State Help, Senator Kerry’s Yacht Back in Newport

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The Providence Journal wins the exclusive first interview with Curt Schilling … and guess what: 38 Studios’ collapse wasn’t his fault, it was Chafee’s fault for scaring away investors by telling the public that the company didn’t have any money. If only Chafee could have scared away the state from investing way back when….

And, finally, an editorial on 38 Studios from the ProJo.

It seems as if smaller companies that received small loan guarantees from the state are faring much better than did 38 Studios and its huge $75 million loan guarantee, reports PBN.

Meanwhile, the spat between Gov. Chafee and Gina Raimondo continued on Friday with Chafee telling me Raimondo was the only general officer not to make it to a briefing on 38 Studios. Joy Fox, a spokesperson for Raimondo, told Ted Nesi that the treasurer didn’t know about the meeting but a spokesperson for the governor said she worked with Raimondo’s office on scheduling the meeting.

Not confident the General Assembly will approve a supplemental tax increase, the Woonsocket City Council asked the state to appoint a budget commission on Sunday night … something tells us this story is about to make much bigger headlines. Stay tuned.

John Kerry’s controversial yacht was back in Newport recently, according to the Boston Herald … but no word on whether Rhode Island gave the Massachusetts senator a loan guarantee to dock it here.

Picking up on Tom Sgouros’ theme from last week that conservatives aren’t necessarily fiscally responsible, Paul Krugman calls Mitt Romney, Paul Ryan and Chris Christie “fake deficit hawks.”