March 7, 2013 – RI Future

March 7, 2013March 7, 2013

George Nee Still On EDC

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George Nee and Gordon Fox — George Nee talks with House Speaker Gordon Fox. (Photo by Bob Plain)

I was curious how the game of EDC board membership chicken between Gov. Chafee and George Nee was going to play out.

Was Chafee going to raise the stakes by demanding, rather than simply asking for, Nee’s resignation (a win for the media and loss for all other parties involved: labor, the governor, the people of Rhode Island)? Or would Chafee just capitulate and let him stay (everyone wins except the press)?

The better part of me says good for you, Governor, for doing what was in the most people’s best interest.

Here’s the statement Chafee put out today:

“The Board of EDC made a historically poor decision to invest taxpayer dollars into 38 Studios. Its collapse led me to ask for many resignations from the Board. I felt strongly that anyone who voted in favor of the 38 Studios deal should resign from the EDC Board.

Obviously, there was a difference of opinion there between me and George Nee.

As time has passed, I have been able to work with George on the Board and have a number of private discussions with him regarding 38 Studios. I believe that George agrees with me that the process was not performed in the proper way and that 38 Studios was a mistake.”

Nee could not be reached for comment, but you can read this profile we ran on him last week here. Or you can watch this video that Dave Fisher got of him the other day at the State House invoking the great Woodie Guthrie in sticking up for the non-union workers who had a days’ pay taken from them.

March 7, 2013

Smithfield Street Named For Klansman Stays Same

In a piece of legislative legerdemain worthy of Houdini the Smithfield Town Council seems to have resolved the controversy surrounding the street named for a notorious Rhode Island Ku Klux Klan leader by changing the name of Domin Avenue to Domin Avenue.

That’s not a typo.

Former Smithfield resident and amateur historian Roger Schenk suggested changing the name after discovering late last summer that the street was named for John Algernon Domin, an Exalted Cyclops of the Roger Williams Klavern in the 1920s. Domin was no rank and file member of the Klan, he was a leader, who in 1928 was called before the General Assembly to testify about his involvement in a Klan lead military coup. Domin was a terrorist and an insurrectionist.

Surprisingly, the majority of Domin Avenue residents resisted changing the name of the street, citing the onerous and costly process of an address change. Some felt that the Klan history was long over and best forgotten, but a small minority of residents objected to the street name on the grounds that it celebrated, however unintentionally, a man who dedicated at least part of his life to race hatred and terrorism.

According to the Valley Breeze, Smithfield Town manager Dennis Finlay agonized “for months” over the issue, searching for a compromise that would satisfy all the residents. In the meantime, there was an election, and the Smithfield Town Council changed leadership and substituted many members, inheriting the issue from their predecessors.

Finlay’s big idea is that Domin Ave will be from no on named for all members of the Domin family, (except for, I presume, John Algernon Domin) pointing out that lots of streets are named for prominent families, not just individuals. According to the Valley Breeze:

The council’s resolution says the name has been “changed” with “the understanding that it now refers to all families named Domin.”

The resolution passed unanimously. Though it seems unsatisfying, perhaps this is, after all, the only politically viable solution.

March 7, 2013

Former Prisoner Facing ‘Backlash’ For Pursuing Education

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This post, by TTEF President Andres Idarraga on behalf of the Board of Directors, originally appeared on TTEF’s blog.

The recent controversy surrounding a young man pursuing his education at the University of Rhode Island raises several societal issues. (“One student’s journey from state prison to URI sparks inquiry,” Katherine Gregg, 2/24/13). Should we encourage all Rhode Islanders to pursue an education, regardless of background? How do we encourage the formerly incarcerated to successfully re-enter society and assume their rights and responsibilities as citizens?

I am co-founder and president of the Transcending Through Education Foundation. The Foundation was founded last year to encourage and support people who are incarcerated and were formerly incarcerated in pursuing higher education. We believe education is the most effective tool in helping people live productive lives and become better citizens. Postsecondary education has proven to lead to greater civic participation and higher earnings.

URI and other institutions of higher education should of course consider the background of applicants and the safety of students and faculty when making admissions decisions, whether the applicant has a criminal record or not. However, in this case, URI did not have the benefit of assessing Mr. Jones’s criminal record in making its decision because the alternate admission application he filled out did not request the information.

URI states that normally they review applicants with a criminal record on a “case-by-case” basis. We support case-by-case reviews and commend URI for having such a review process. We also encourage URI and other institutions of higher-learning to continue to develop criteria that assess more than a person’s criminal record when making an admission decision. Relevant criteria should be developed from a thoughtful and knowledgeable position that can withstand the occasional controversy.

As Rhode Island’s flagship public university, URI has a role in educating all Rhode Islanders. This includes qualified applicants from the over 20,000 Rhode Islanders living in the community on probation or parole and the many more who have a criminal record. Educational institutions serve a historical role in providing people with a way out of challenging circumstances, whether they are born into them or are responsible for them through a series of bad decisions. If universities relied solely on criminal background checks, they would practically foreclose a vital pathway to a better life for many people. And we would collectively reinforce a cycle of poverty and struggle, sometimes leading to prison, for the same population.

Without knowing Malcolm Jones’s specific circumstances, we know that he decided to pursue his education, most likely as a way to better his life, as many other citizens also do. We should encourage more people to do the same and support the efforts of our institutions of higher education in providing people with that opportunity.

Sincerely,

Andres Idarraga

President

Transcending Through Education Foundation

March 7, 2013March 7, 2013

Do RI Corporations Really Need A Tax Break?

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The Senate Finance Committee hears tax code amendments proposing to drop the corporate income tax rate by 2 percent over the next three years. (Photo: Dave Fisher)

This week, both the House and Senate finance committees considered legislation that would reduce the corporate income tax from 9 percent to 7 percent over the next three years.

The move, as always, is touted as a way to make Rhode Island’s business climate more competitive with our neighboring states’. While Rhode Island’s corporate tax rate is the highest in New England, as I posted yesterday, the real-world ramifications of a 2 percent state tax reduction means little to most of our businesses, due to the fact that the majority of the tax burden on Rhode Island’s businesses are borne of local property, sewer, and tangible asset taxes.

The vast majority of our businesses, y’know, the small ones that legislators tout as the “lifeblood of Rhode Island’s economy” report income of less than $249,999 on their tax returns. Even at the top of that tier, a business that reports earnings of $249,999 pays $22,499 in taxes to the state at 9 percent. At a rate of 7 percent, that same business would pay 17,499; a net gain of $5,000 which could easily be eaten up by those local taxes, especially if that business made capital improvements to its structure or purchased new equipment.

Check out this chart of the combined corporate income and taxes collected by the state for FY 2010 from the R.I. Division of Revenue.

As you can see, the 42,929 businesses that reported a loss/or $249,999 or under in income paid just under $29 million, even though the combined adjusted income of these entities was actually a loss of over $370 billion.

At the other end of the spectrum, the 152 businesses that reported income of $500 million or over, whose adjusted taxable income was just over $212 billion – a 580 billion dollar increase from the low end of the tier – paid just under $25 million, or $4 million less than the nearly 43,000 businesses who posted either a loss or income of $249,999 or less.

A policy brief issued by the Economic Progress Institute stated,

“With a price tag of almost $90 million over five years, the proposed corporate income tax reduction could backfire if public services that businesses rely on are cut as a result of revenue losses. Furthermore, the proposal will do nothing to help the majority of local businesses that do not pay the corporate income tax. Finally, research suggests that corporate tax cuts do little to stimulate economic growth.”

Once again, our small businesses get hosed by the tax code. It seems that even when it comes to corporate “people”, the 1 percent ride the backs of the 99 percent. And to top it all off, many of these 152 top-tier businesses get cushy tax breaks on property and tangible assets from the cities and towns that they call home.

Tax equity anyone?