June 25, 2013 – RI Future

June 25, 2013June 25, 2013

Budget hole big enough to drive a bus through

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

In Brazil a twenty cent increase in the bus fare is sufficient to start a revolution. Rhode Island lawmakers are lucky that the public here is more sedate, because their inability to find a sustainable financing solution for the Rhode Island Public Transit Authority’s structural deficit in this year’s budget will lead to either a drastic reduction in RIPTA service or a major increase in fare prices, maybe both.

The FY13 deficit for the transit agency stands at $2.2 million, and the FY14 deficit, which the budget proposal has done next to nothing to address, is projected to be over $10 million.

$10 million is about 20% of RIPTA’s operating budget, and that is where RIPTA will have to look to balance its books sometime before its cash flow runs out near the end of the year. It would be a miracle if the necessary cuts comprise less than 10% of current service [For instance, a four million dollar deficit a few years ago translated into 10% proposed service reductions.] It’s more likely that RIPTA will soon be holding public hearings with discussions of 20% cuts.

Never mind for the moment the impact to our environment or to the people who rely on transit as a lifeline, imagine the impact to the economy if 1 in 5 buses disappears from Rhode Island’s roads. How many people who can’t drive or can’t afford a car won’t be able to get to work? How many won’t be able to make it out to the store to engage in commerce? Thousands.

I can already picture the hearings, filled to over capacity with angry and terrified riders testifying about the hardship that the cuts will mean. There will no doubt be protests in the street over it (though not quite like Brazil), and legislators will predictably make statements to the press about how important transit service is and how the cuts could not have been foreseen.

Despite such feigned ignorance, RIPTA’s plight is well known in the Statehouse. Speaker Fox has maintained that finding sustainable funding for the buses is one of his top three priorities this session. Dozens of members of the House have even signed a letter calling on the Speaker to live up to this stated priority. There has been sustained advocacy on the issue for as far back as legislators memories can stretch, advocacy from the environmental, social service, public health, senior, disabled, youth, labor, and business communities. What will it take?

I suspect in the end that it may require the people in the street in the lead up to next year’s elections to finally see a solution. In the meantime, the public will suffer and whatever economic development policies that lawmakers manage to get through will be entirely undermined.

June 25, 2013June 25, 2013

Left and right agree on 38 Studio bond payment

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

Perhaps the most telling tale of the 2013 budget process is not about what we do or don’t invest in, but rather the uncommon affiliations one such spending decision has brought to light. Many on the left (progressives) and the right (Republicans) seem to disagree with the majority of moderate Democrats that Rhode Island should pay 38 Studios bondholders.

This was first illustrated by Randall Rose and Occupy Providence’s great effort to put together a panel of diverse local experts, moderated by WJAR, to discuss the issue. Occupy Providence has long opposed paying on the bonds and it partnered with the Stephen Hopkins Center, a grassroots local libertarian group to call attention to the matter by having economists, college professors and bond buyers vet the pros and cons. Meanwhile, the legislature hosted a one-sided lecture on the merits of repayment.

House Republicans responded by vowing to vote against the budget bill today if the $2.5 million line item is included. Whether this is a principled stand against Wall Street-centric economic policy or simply political gamesmanship over the budget remains to be seen. Nobody, not even the ratings agencies, know which is the more fiscally-prudent path at this point and anyone claiming to support or oppose the $2.5 million line item based on such knowledge either doesn’t get it, or is lying (what some politics).

But now Sam Bell and Gus Uht, two influential members of the Rhode Island Progressive Democrats, have called upon liberal lawmakers to reject the budget proposal as well. Read their pieces here and here. They both mention the 38 Studios bonds, but also cite several other issues progressives have with the budget bill, such as cuts to RIte Care, pension payments and municipal aid.

The progressive caucus in the House has at least twice the membership as does the Republican Party. So if both these caucuses come together to oppose the budget, leadership would all of a sudden have a legitimate math problem on its hands. Which won’t happen, of course, because the progressive caucus is more closely-aligned with moderate Democrats in politics if not in economic theory.

What’s been really interesting to me is that pundits on both the left and right have used similar logic to call for default.

Here’s what Uht wrote in a previous post:

“Moral Obligation” bonds are a fabrication of Wall Street, created to satisfy its greed. The Economic Development Corporation, not the state, issued such bonds for 38 Studios … 38 Studios was not described as a sound investment to either the prospective investors or the insurer, yet they signed on anyway. They gambled and lost. This is not Rhode Island’s responsibility, but in the vague, smoky-back-room fashion of “moral obligation” bonds, it might hurt our reputation for being a good bond issuer if we don’t obligingly, voluntarily make it our responsibility.

Andrew Morse takes the debate one step further writing that the electorate should not even vote for politicians who support the payment (according to the headline).

This idea of government will be imposed upon Rhode Islanders by their state officials and Wall Street working together, unless Rhode Islanders are willing to reject politicians who use their offices to enforce the finance industry’s extra-legal understandings of how debt should work, and reward those who work to make sure that the finance industry lives under the same constitution and laws that everyone else does.

I agree with both Uht’s and Morse’s sentiments, but don’t think we should take such a severe stand for these values on either the budget bill or the next election. I do however think legislators have a moral obligation to oppose the budget bill based on the cuts to RIte Care, and if you read Tom Sgouros’ post from yesterday you probably do too.

But with respect to the 38 Studios bond payment, Imost Rhode Islanders probably agree with what progressive Rep. Art Handy told ABC6’s Mark Curtis:

I am of the opinion that we probably should pay it. I actually emotionally kind of think we shouldn’t. But intellectually I think I am at a place now where I feel like we probably should.

Me, I’m still standing behind what I wrote in a piece called “On moral obligations” back on April 18:

…I’m really hoping it ends up being financially advantageous not to pay the bondholders – that way we can save money AND we’ll see who in Rhode Island is a real small government conservative and who is acting like a friend to the taxpayer when they are secretly just advocating for Wall Street and corporate America’s interest in our state government.

June 25, 2013July 1, 2013

Out-fox Fox: vote ‘NO’ on the House budget bill

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

The state budgeting process has once again turned into a farce. This has been particularly true under Speaker Fox’s leadership. However, unlike previous years, the forced House rubber-stamping of the budget is in serious doubt. And that’s a good thing.

The 38 Studios’ bond repayment debacle seems to be the catalyst for the public’s and much of the House membership’s revulsion at the proposed FY2014 budget. But it’s not the only stinker in the budget. Among others, there is also the lack of an extension of family planning services to all low-income women. But the problem is much bigger than just the monetary impacts of the budget.

The House leadership has conducted a widespread pattern of bait-and-switching of many important bills put forward in good faith by the rank-and-file of the House. This is true even of bills that the leadership purported to support during the 2012 campaign. In particular the gun control bills that had widespread support have been gutted to the point of worthlessness. The NRA won. (Which reminds me: did you know that Speaker Fox received $2,200 from the NRA in political contributions during 2010-2012? Other House members also profited.)

The repeal of the Voter ID act was also sculpted behind the scenes by the leadership to be worse than what was in effect for the 2012 elections, a far cry from a repeal.

Now, despite what your feelings are about the above bills, pro or con, I think we can all safely agree on the farcical nature of the budget process in the House. From this year’s hit parade of what would otherwise be laughable elements of the process, we have the following[1]:

The Governor’s budget of January was revised behind closed doors by just two or three legislators.
The House Finance Committee only received an overview of the budget literally a few hours before the Committee met to vote on it.
Even more ludicrous was that the Committee did not see the actual budget, with the all-important details, until just before the relevant part of the budget was discussed during the meeting. The poor staff were running continuously between the meeting room and the copier and back to keep up.
At one point, for the final Section considered, the Appropriations’ section, which was also the longest (over a hundred pages), the staff couldn’t handle the volume and Chairman Melo had to pause the proceedings for some time until the Committee members got their copies.
The fiscal staff spent about 5 minutes, plus-or-minus, of the two-hour-long meeting describing the Appropriations’ section and its changes.
The main negative point brought up by committee members, especially Reps. Newberry and Ferri, was the presence of the 38 Studios bonds repayment in the budget.
After all that, the clout of the House leadership truly became apparent. The vote was to pass the budget 12-0-2: all Democrats in favor, no committee member opposed, and two abstentions, both from Republicans (even they couldn’t say an outright ‘NO’).

The Speaker wants, and so far is, controlling everything that goes on in the House. But he cannot be trusted. See yesterday’s Nesi’s Notes for evidence of Speaker Fox’s lying about 38 Studios and what the House knew, or rather didn’t know, before voting for the relevant approval bill in 2010.

It’s time for Rhode Islanders to say “Enough is enough! Vote ‘NO’ on the budget!” Put yourselves back in charge. I’m making a Call for Action to anyone and everyone who has some time today. Come to the State House at about 1 PM and talk to your Representative before the debate and vote on the budget that starts at 2 PM. For those who’ve never been there, you first go through security on the side of the statehouse farthest from Providence Place, then go up the rotunda stairs (or the elevator) to the second floor. The House entrance is there. There are also visitor galleys on the third floor. Lastly, all House sessions are televised and shown in both real-time both on the web and on cable, and later-on on the web.

I know that’s a bad time for many of us, and perhaps that’s why it was scheduled then, two hours early, but this is a rare perhaps even once-in-a-lifetime moment when your voice can truly be heard and recognized.

If you can’t come in person, see if you can find time to call your Representative in the morning/afternoon/evening (they’ll probably be there for a while). See here to determine who your Representative is, and here to look up her/his phone number. Don’t know what they look like? Go here and click his/her name. Still need help? I’ll be around and do my best. I’ll be the guy with a sign on his back.

I hope to see you at the Capitol.

Keep the faith.

—-Gus Uht

[1] You can see the (long) session for yourself on Capitol Television; look for 6-18-2013, Parts 1 and 2. A shorter version of the highlights was given by Rep. Newberry on Newsmakers June 21.

June 25, 2013July 1, 2013

Progressives should vote against the budget

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

Progressives have always had a complicated relationship with House Speaker Gordon Fox. Though deeply concerned that Fox’s very conservative economic policies are destroying our state, we have always supported the House leadership team because Fox’s likely successors, Helio Melo and Nick Mattiello, are even more conservative than he is.

When Speaker Fox faced the progressive voters of the East Side in November, they were angry—angry at the bevy of red-state legislation Fox had actively pushed for. Fox promised to change. He promised to sunset the ALEC-backed voter ID law he supported, a law he passed even though the chairwoman of the national Democratic Party called him to beg him to reconsider. He promised to consider not bailing out Wall Street on the 38 Studios deal he helped orchestrate. He promised to work with progressives on scaling back the tax cuts for the rich, tax cuts he had once promised would create jobs. He promised, in essence, to govern like the Democrat he once was. It has now become clear that he does not intend to honor those pledges. Jolting sharply to the right, Fox has launched a campaign against Democratic values. Here is a sample of his recent right-wing moves:

He is handing Newport Grand a million-dollar bailout.

He is forcing through a much, much larger bailout of the 38 Studios bondholders.

He is throwing 6,500 Rhode Islanders off Medicaid.

He is skipping a pension fund payment, in a gratuitous middle finger to labor.

He is refusing to roll back some of the tax cuts for the rich and instead raising taxes on the middle class through steep tolls on the Sakonnet River Bridge.

He is paring back Chafee’s already minuscule municipal aid package, forcing the City of Woonsocket into receivership.

He is blocking the family planning expansion under ObamaCare.

Like the US Senate’s filibustering Republicans, he is refusing to let an assault weapons ban or background checks reporting get a vote.

Finally, not only did he break his promise to sunset the voter ID law, he snuck in a provision to tighten voting restrictions even further. Telling the members of the Judiciary Committee that they were voting to freeze the current law to prevent the harsher 2014 restrictions from coming into effect, they refused to release the actual bill in time for everyone to read it. A violation of the trust the statehouse runs on, this move tricked many pro-voting committee members to vote for this red-state-style assault on our democracy.

When she was the Executive Director of the Rhode Island GOP, Ann Clanton famously admitted, “We have a lot of Democrats who we know are Republican but run as a Democrat — basically so they can win.” Progressives cannot help but look at Gordon Fox’s recent record and conclude that he is indeed one of those Republicans hiding in the Democratic Party. We urge the General Assembly to stand up for Rhode Island values and stop this conservative onslaught.

We are not the only ones who are angry. We have heard from a large and growing body of furious Representatives that there will be a serious effort to vote down the budget to stop the 38 Studios bailout. If the progressive bloc in the House breaks away from leadership on this issue, we can block this right-wing budget and force something a little more reasonable.

So we call on progressives to vote this budget down. We understand the power of leadership and all the practicalities that entails, but if any progressives are forced to vote against their conscience, we sincerely hope that it is in exchange for a more moderate budget. And we call on Gordon Fox to return to the principles he ran on.