Chafee: State Aid Cuts Put Poor Towns in Peril


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Governor Chafee said state aid cuts to cities and towns is a primary reason Rhode Island's poorest communities are struggling.

Governor Chafee said former Governor Don Carcieri and the General Assembly put struggling communities in peril when they cut some $195 million in state aid to cities and towns.

“It’s no wonder Providence is in trouble, it’s no wonder Pawtucket is having a trouble making payroll, it’s no wonder Central Falls went into bankruptcy,”  he said after speaking at a conference on the state’s economy at Bryant University today. “They just couldn’t sustain those kinds of cuts. There is no property tax base to transfer those kinds of cuts onto.”

Chafee said Carcieri and the General Assembly essentially balanced the state’s budget by taking money away from cities and towns – a move that he said the state’s wealthy communities could withstand but the poorer communities could not.

“I thought it was the path of least resistance,” he said. “That way they could go and say we didn’t raise taxes but at the same time they did raise taxes on the property tax payers of those communities. It was a little disingenuous to say we’re not raising taxes when you are passing it down to the property tax payers of the distressed communities.”

He said he would be unveiling a bill “later this week” that will help Rhode Island’s cities and towns. In addition to including enabling legislation that will allow cities and towns to rework annual pension increases as well as addition funding for local school districts. The additional school spending, he hopes, will be paid for by his proposed increase in the meals and beverage tax.

His bill will also include, he said, relief from state mandates for some of the state’s poorest communities, such as Providence, Pawtucket, Woonsocket and West Warwick. Other communities could be included as well, but he indicated it would not provide mandate relief for every community in the state.

He wouldn’t say which mandates would be included.

“It’s the usual suspects,” he said. “They are the ones that many of the town managers and mayors have been talking about for decades.”

Popular Proposal on Smith Hill: Tax Equity Bills


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Add Rep. Scott Guthrie, D – Coventry, to the list of legislators hoping to find additional revenue for the state through an increase in income taxes on Rhode Island’s richest residents.

“By instituting a fourth tax bracket we could solve many of our immediate budget problems, the ones that include deciding if we should cut more services for the needy or force classroom teachers, first responders and other public servants to take pay cuts and layoffs in order to balance budgets,” he said in a pres release issued today.

He’s got four proposals submitted, and while none of them would raise as much revenue as the so-called Cimini-Miller bill, one of them may be more politically practical given that leadership has vowed to fight against any increased taxes on the rich.

From his release:

2012-H 7305 would impose an additional one percent tax increase for all personal income over $500,000. Doing that would bring in an additional $18.4 million in Fiscal Year 2013 and an extra $19.5 million in 2014, according to a State Fiscal Note provided by the Budget Office of the Department of Administration.

2012-H 7379 would impose an additional one percent tax increase for all personal income over $250,000. That would result in an additional $32.4 million in tax revenue in FY 2013 and an extra $34.3 million the following year.

2112-H 7382 provides for an additional two percent tax increase on personal income over $500,000. The added revenue would be $37.3 million for FY 2013 and $39.4 million for FY 2014.

Finally, 2012-H 7381 provides for an additional two percent tax increase on personal income over $250,000. Added revenue is projected by the Budget Office at $65.3 for fiscal year 2013 and $69.2 million for the following fiscal year.

Guthrie added, “We need a shift back to a more fair tax policy. Trickle down doesn’t work. We’ve tried it for years and all the benefits continue to trickle up. As the state budget deficit continues to loom large, for yet another year, one phrase continues to remain popular from elected officials – shared sacrifice. Well, I see municipalities sacrificing, as well as many of the residents of those communities. I see sacrifices from the poorest and neediest in Rhode Island, the results of continued trimming in the social services funding. What I don’t see is sacrifice from the wealthiest members of our society who could most easily afford to give a little more to help their many neighbors and fellow citizens who are suffering.”

Last week, Speaker Gordon Fox told me he doesn’t see any of the tax equity bills going anywhere during this session, noting that this will be the first year in which the new tax rates, which were pushed by former Gov. Don Carcieri, will be factored into the budget.

Darth Flanders Sets Sights on CF Mayoral Office


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It turns out there’s at least one more job Central Falls receiver Bob “Lord of the Pink Slip” Flanders would like to eliminate from the financially struggling city: mayor. As if temporarily eliminating democracy from Central Falls wasn’t enough, now he wants to permanently eliminate democratically elected mayors and replace the position with an appointed city manager.

Flanders told the ProJo he would like to create a local charter review commission to look into the merits of switching from a mayoral form of government, in which the highest position in government is elected, to a city manager form, in which the highest position is appointed.

The article says “state and local officials are exploring the possibility,” but the only local official cited is Albert Romanowicz, who was appointed by Flanders to run the local jail. All the other local officials in the article – such as the mayor, not surprisingly – are against it.

Forget, for a moment, that mayors are less expensive than managers – in Rhode Island, the average municipal manager makes $101,480 a year and the average mayor makes $84,800 (meanwhile, average receiver makes in excess of $360,000 a year).

The really troubling issue here is that Darth Flanders is again going too far in his role as receiver.

Flanders has already over-stepped his bounds when he tried to institute an overnight parking ban in Central Falls. Sure, this would have made money, but that’s because he would have made it a violation to park where residents park in Central Falls, on the road. Few, if any, in Central Falls have three car garages, like Flanders does at his house in East Greenwich. While he pushed the idea through over the objection of the residents, Gov. Chafee had him rescind the idea the next day.

Similarly, the governor should tell Flanders to back off on his vision of permanently restructuring of the government by eliminating elected officials.

Central Falls does not suffer from too many elected officials, it suffers from poverty. There isn’t a high enough tax base to pay for the services that are needed. To that end, the receiver is well within the parameters of his responsibilities to shrink the size of government – though a better solution would be to work on expanding the tax base.

Either way, someone charged with financial oversight shouldn’t take action toward eliminating elected positions. It’s just unseemly, and it smacks of punishing the people of Central Falls for being too poor to pay for their services.

According to the Projo, “Flanders and his staff insist that the mayoral form of government invites patronage and cronyism.” But I’m not sure the same can’t be said of an appointed manager. At least mayors can be voted out of office. In fact, the very underlying principle of a democracy is that elected officials are held accountable by the people.

Evidently, Flanders doesn’t think this is working so well in Central Falls. “Let’s put it this way,” he told the Projo. The mayoral form of government “hasn’t served the populace very well to date.’’

If this is the case, Flanders could use the power of his position to create a community dialogue about these issues, or start a training academy for young local leaders.  Both of these ideas would better eliminate cronyism from government than simply trading a mayor for a manager, as well as have many other positive effects on the city.

But it seems as if Flanders is so hyper-focused on being the Lord of the Pink Slip that he forgot he actually has a once-in-a-lifetime opportunity to do something much bigger and more meaningful than just eliminate positions and divvy out haircuts.

Brendan Doherty and ‘Right to Work’ in Rhode Island


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Brendan Doherty, it turns out, thinks Rhode Island would be well-served by making Rhode Island a “Right to Work” state. “Right to Work” is an exemption to federal labor laws that allow employees to enjoy union benefits without being a member.

“I believe in a right to work state” Doherty told the Barrington Republican Committee last weekend, according to this video on Barrington Patch. “I believe times have changed and we’re in tough times in this country and we need to make changes.”

“Right to Work” laws may sound benevolent, but they are bad for the middle class. According to a 2011 report from The Economic Policy Institute, wages are 3.2 percent lower in Right to Work states.

Indeed, the “Right to Work” rule isn’t about fair wages (or the right to work, for that matter) but rather about trying to break the backs of organized labor.

“‘Right to Work’ is nothing more than code for union busting,” RI Democratic Party Chairman Ed Pacheco, said in an email. “Collective bargaining allows workers to come together and fight for an honest wage for an honest day’s work to support their family. Passing a Right-to-Work law obstructs that ability to ensure proper pay and working conditions.”

If any of the Democratic candidates for the 1st Congressional District seat (of which there could be three, if David Segal decides to throw his hat into the ring) want to let us know what they think of Right to Work laws, please leave us a comment below…

Speaker Fox Says Tax Equity Bill DOA


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Despite nearly half of the House signing onto a bill that would raise taxes on the richest Rhode Islanders, Speaker Gordon Fox said he intends to keep his promise not to touch the income tax structure in this budget cycle.

“At this point I’m closing the door on doing anything with income tax until we have a little more historical evidence about what’s going with the reforms we did a few years ago,” he said.

In 2010, the General Assembly passed a budget proposal put forward by then Governor Don Carcieri to lower the tax rate on those who make more than $100,000 from 9.9 to 5.9. Fox said this will be the first budget year that the General Assembly can see how those tax cuts affect the state’s budget (people are now filing taxes for 2011, the first year the restructured rate was in place). He also said a number of tax exemptions were eliminated when the overall rate was reduced.

“When given all the information I think that a significant number members will support my position on this,” Fox said.

But some legislators, speaking on background, said the bill that would roll back the Carcieri tax cuts for those who make more than $250,000 a year, still has life – though it could look much different if it does pass.

Even Fox, who has described himself as a fiscally conservative Democrat, would not rule out taking another look at the tax code in future budget cycles.

“As we get the empirical data going forward what we’ll do,” he said, “I never want to make any predictions about what we would do in the future, but we’ll see.”

Flight of the Earls Mythology Debunked


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A sculpture in Ireland depicts the original "Flight of the Earls" during which some affluent Irish in the early 1600's left for mainland Europe to recruit sympathizers against the British crown.

You can bet that as the General Assembly debates raises taxes on Rhode Island’s richest residents, we’re sure to hear much about the “Flight of the Earls.”

In fact, almost any time you talk taxes with a local conservative you are bound to hear a story about someone moving out of state because of the high costs of living here. This false narrative, known as the Flight of the Earls, is meant to scare the state out of taxing the rich with the threat that they will simply move to Fall River or Florida if we do.

My question: Who are these foolish rich people who would so disrupt their lives and spend thousands of dollars to relocate in order to save a few hundred bucks in taxes, and why do we care if they leave? After all people who would employ such flawed economic logic can’t really be expected to create many jobs, let alone figure out how to pay their tax bill…

Of course, no one moves to save money on taxes – that would be like buying a new car to avoid oil changes – and a new report from the Economic Progress Institute proves as much.

The Flight of the Earls theory, the reports states, “ignores the fact that moving – selling a home, hiring movers, buying a new home – is very costly, even for wealthy households. And leaving a place filled with family, friends, business associates and other connections, in addition to changing schools, imposes substantial burdens.”

Authored by Jeffrey Thompson, a research professor at the Political Economy Research Institute, the report goes on to suggest that the very reason the right says the rich will leave is actually a reason they are likely to stay.

“The wealthy drive better cars,” writes Thompson, “but they drive them on public streets. Even if affluent families send children to private schools, the businesses they own hire workers who graduate from local schools. And upper-income families value the services of fire and police as much as any other family.”

His research found that so few people actually move, less than 2 percent of households between 2008 and 2009, that migration has almost no effect on tax revenue collected. “Income has only a very weak impact on the chance of moving to a different state, with the likelihood actually dropping for the highest income households,” he wrote.

Thompson cites a New Jersey study that found the wealthy were no more prone to move out of state after a tax increase than they were before.

Of course, what really happens is people decide to move for lifestyle or career considerations and if they were the type to complain about Rhode Island in the first place, they will suggest that their complaints are actually the reason for their exodus.

But even when the rich do move away, they typically sell their homes to people in a similar tax bracket. It’s the cheap homes, not the expensive ones, that are sitting idle on the market. And for the few rich folks who are fleeing Rhode Island because of taxes, we can take heart that they will likely be replaced by people who wouldn’t make such an illogical life choices.

Rhode Islanders Rally for Tax Equity Bill


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

Rhode Islanders for Tax Equity held court in the rotunda of the State House this afternoon, explaining why it’s good for the state’s economy – as well as a moral imperative in tough economic times – to raise taxes on the rich.

The bill would raise the income tax rate for those making more than $250,000 – the richest 2 percent of the state – from 5.99 percent to 9.99 percent, with the caveat that for every one percentage point the unemployment rate drops so too would the tax increase, and the group estimates it could bring in $118 million in new revenue for the ailing state coffers.

Rhode Islanders for Tax Equity Meets Today


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There’s a broad-based coalition building around a bill that would raise income taxes on the wealthiest Rhode Islanders. The coalition includes legislators, labor leaders, small business owners, parents, college students and a at least one mayor.

Pawtucket Mayor Don Grebian will join the other members of this coalition, called Rhode Islanders for Tax Equity, today at 3:30 at the State House for a press conference to answer questions about the new tax proposal that would raise income taxes on those who make more than $250,000 a year.

“RITE is advocating for a tax policy that will take the burden off of the middle class and ensure the most privileged Rhode Islanders are paying their fair share,” said the group in a press release.

The group estimates the bill could yield $118 million in revenue for the state budget.

Rep. Maria Cimini, a Providence Democrat who sponsored the bill in the House, previously told RI Future: “We’ve really called on low and middle income Rhode Islanders to feel the pain of this recession. I don’t feel that we’ve called on upper income Rhode Islanders to feel that pain or share that sacrifice.”

Cimini will be at the event today, as will the bill’s sponsor in the Senate, Josh Miller, D- Cranston.

Cimini said the bill is different from other tax the rich proposals because the increase would drop commiserate with the state’s unemployment rate. In that way, it will serve as an incentive for the job creator class to actually create jobs.

State Cuts Also Cause for City’s Fiscal Woes


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It’s certainly fashionable to blame retirees and their generous post-employment benefits for Providence’s fiscal problems. But for other causal factors, look to the state of Rhode Island and former Governor Don Carcieri.

Tom Sgouros, in his ongoing series dissecting the state budget, reports this morning that in 2008 the capital city was expecting $65 million in state aid from the General Assembly. But over the next two budget cycles Carcieri cut so much from aid to cities and towns that he effectively striped Providence of 10 percent of its annual operating capital.

Libby Kimzey, a frequent contributor to RI Future who is running for a seat in the State House to represent Federal Hill and Olneyville, put it pretty bluntly a few weeks back when giving a presentation about state budget cuts to Providence:

“Right now the State of Rhode Island is being a jerk to Providence,” she said, noting that the state cut some $28 million to the capital city over the past three years. Interestingly, that’s more than the city would need to be back in the black financially. “If you think about it, that is really in the same ballpark as that $22.5 million that is in the papers right now.”

“That is money that the city was counting on from the state,” she said. “Those are decision that state lawmakers have made that put the city in the position of closing schools and we’re having this whole conversation about cutting retirees benefits and it just gets me really worked up.”

Promise Breakers: Taveras, Raimondo and Flanders


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Providence Mayor Angel Taveras from the State of the City speech.

Providence Mayor Angel Taveras now joins General Treasurer Gina Raimondo and Central Falls receiver Bob Flanders in a very exclusive group of Rhode Islanders. You’ve heard of the Promise Keepers, right? Well, these three are the promise breakers.

All three have asked retirees, in no uncertain terms, to give up a portion of the post-employment benefits that they previously negotiated for and agreed upon. They asked for a contractual mulligan, if you will.

Not that Taveras, Raimondo and Flanders don’t each have difficult situations to deal with – they do. But while fiscal health is important, so is being known as a community that keeps its word. And at this rate, Rhode Island is in grave danger of being known as the state where contracts are made to be broken.

This won’t serve the state well in any future negotiation, even if it’s with a big company looking for a tax incentive to relocate here. If we did it to the people who served and protected us, they might reason, why would they not also do it to us?

But on a more elemental level, faith in government is really all that holds us together as a civic community. Once we can’t trust our government to keep its word, all bets (and social contracts) are off. I’m not saying we’re there, or even close, but we should certainly do whatever we can do to avoid that path altogether.

Give Taveras credit here. Of the three promise breakers, he has leaned the least on the contractual mulligan strategy. Before going to the retirees, he raised taxes significantly and fought hard to raise revenue through other means, most notably by begging the colleges and hospitals to ante up as well.

And he has been pretty honest about his ask. When I asked him prior to Saturday how he felt about asking for such concessions, he was pretty blunt about it: “A lot of people have gone forward based on promises that have been made and most of them have kept their side of the bargain. Obviously the city is at this point saying we need to change our side of the bargain and that is always a difficult thing.”

At his plea to retirees on Saturday, he repeated several times, I’m told, that his ask was by no means fair. He repeated it to Ted Nesi later in the day.

Raimondo, on the other hand, sold her pension-cutting plan under the banner of being fair, that is when she wasn’t fist-pumping to the pro-business crowd. And Flanders … well, I’d be surprised if the concept of fair ever even occurred to him. He simply threatened to behead retirees if they didn’t agree to his pension-slashing terms. Seriously, he told them “a hair cut is better than a beheading.”

In the short term, Taveras’ more humanistic approach may save fewer dollars. But it’s little wonder he’s the most popular pol in the state. And in the long run, that kind of political capital can get you a lot more concessions than deception or decapitation.

Your Tax Dollars At Work


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Check this out.

This is a really cool map of the US, showing where federal tax dollars are going. That is, to which parts of the country. It has a number of different categories, such as Social Security, Medicare, Medicaid, Income Support, Unemployment,  plus an overall picture.

Guess which parts of the country are hoovering up most of the federal tax dollars? Think it’s the welfare queens in NYC, Chicago, and LA?

Nope.

It’s the south. As in, the Red States, the ones most likely to support candidates who are screaming the loudest about the tax burden and the need to cut taxes.

The other irony is that the states receiving the most fed money tend to be on the lower end of state taxes.  Take a state like South Carolina.  SC already has a Republican Legislature, Governor, low taxes, a friendly business climate, the sorts of conditions conservatives are advocating for RI.

Guess what?  They get more back from the fed government than they pay. What this means is that Blue States, like NY and California and NJ are subsidizing low taxes in the south.

I have addressed this theme before. I apologize for any redundancy, but this situation continues.

The fact is that the sorts of policies that conservatives advocate don’t work. Last I checked, SC’s unemployment rate was pretty much up there with RI’s rate.  IIRC, they were one place behind us.

Look at the map, see the concentration of benefits in Alabama, Mississippi, Kentucky, Tennessee, and Georgia, as well as highly rural parts of Washington, Oregon, New Mexico, Michigan, and Texas.

The problem we face as a state is not something that can be solved on a state level. It’s too big. It’s a national problem. Forbes Mag recently had libertarian paradise New Hampshire as a state facing one of the biggest budget shortfalls in the nation.

We need investment in our country as a whole.  The whole country needs to address this. Cutting taxes in RI won’t solve anything. It will just make us more like South Carolina.

 

 

Care providers feel sting of state cuts to disabled


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A Seven Hills facility in Mass. (photo courtesy of UMass. Medical School)

Employees of the Seven Hills developmentally disabled care facilities in Rhode Island are striking today to call attention to what their union representative says is an unfair attempt by management to cut their pay. The proposed pay cuts, he said, are a direct result of losing $26 million in state funding in the current year budget.

“While we think what the employer is doing is wrong,” Jack Callici said, “The governor has completely turned his back on the developmentally disabled by not restoring one penny that was cut last year.”

He said the 250 union members he represents at the 17 Seven Hills facilities in Rhode Island and southeast Mass. have been asked to accept a 5 percent pay cut as well as a 10 percent increase health insurance costs.

“These are $10 an hour workers,” Callici said. “They can’t afford this. They will either reduce their coverage down, or drop it altogether.”

He said the budget cuts would be more easily absorbed by Seven Hills employees who have much higher pay grades. Noting that the union pay cuts would save about $100,000 and CEO David Jordan earned more than $500,000 in 2009, Callici said, “if that poor guy brought in just $400,000, it would pay for all the cuts.”

Seven Hills isn’t the only facility for the developmentally disabled in Rhode Island reeling from state budget cuts. Many facilities, according to Callici, have cut service to people with developmental disabilities from eight hours a day to six.

“Eight hours is important so people can go to work,” he said.

Rhode Island Federation of Teachers and Health Care Workers union rep Jim Parisi said the Trudeau Center in Warwick has also cut service from eight to six hours. He said employees he represents there could have their hours reduced to part-time, which would “will cost them thousands if they have medical insurance.”

OP protests Pfizer, ALEC joining 7 N.E. Occupies


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Members of Occupy Providence protest Pfizer in Groton, Conn. on Wednesday.

Despite the cold rainy weather, about a half a dozen Occupy Providence members took part in the #F29 Shut Down the Corporations at Pfizer in Groton, CT. The national action was called by Occupy Portland to protest members of ALEC, the American Legislative Exchange Council, a front group that writes model pro-corporate legislation.

The coordinated inter-occupy direct action against ALEC and Pfizer in Groton resulted in a civil disobedience where 8 people were arrested after Pfizer refused to send a representative out to discuss their ALEC initiatives. It was a success by any standard. The coalition, which consisted of occupiers from Occupy New London, Occupy Shoreline (CT), Occupy Hartford, Occupy Worcester, Occupy New Haven, Occupy Boston, Occupy Providence and more, gathered in Groton to march to the Pfizer facility, and then participated in a dynamic teach-in to work on ways to build non-violent protest in the Occupy movement.

Occupy Providence’s Susan Walker said, “We couldn’t believe how many police cars and officers were there. It was a little intimidating at first. But we walked right up to the crowd and joined about 100 other protesters in mike checks about Pfizer and ALEC. The energy was great. The costumes and signs were creative- an activist costumed as Big Bird with a sign ‘Hey Pfizer, Test This Bird’ was my favorite.”

CT residents were angry because Pfizer negotiated $161 million in tax incentives to build the facility, bulldozed a residential neighborhood, and then laid off 1500 local workers once the tax incentives abated. Not only that, but they resented that Pfizer is a heavy hitter with ALEC in legislating for corporate greed.

The march ended back at the main gate where access was denied. Several Occupiers approached the gatehouse and asked for a representative to come out and speak to us as was requested in an advance letter that was sent. They were denied.  The group decided to march around the facility and approach all the gates and ask to speak to a Pfizer representative.

The police had painted a blue line demarcating a boundary protesters weren’t supposed to cross. One protester later mused “blue line from the blue pill (Viagra) company- did Pfizer plan it that way?”

In unified action of civil disobedience, the whole group crossed the line, and got within 20 feet of the heavily guarded gate. Eight protesters then walked straight up to the gate house, linked arms, refused to leave, and were arrested one by one.

Civil Disobedience arrestees were singing Solidarity Forever as the paddy wagon hauled them away. Occupiers chanted and mike checked for a little longer.

Walker noted, “I found the vibe of the police presence really interesting. It was intimidating at first.  I think it was almost a 1:1 ratio of officers to occupiers. Early on occupiers had chanted, “The Police Need a Raise! The Police Need a Raise!” which was a pressing local issue.  The officers were respectful and seemed to have our safety in mind.”

As the march around the facility continued, police made sure we stayed on the sidewalk, that traffic could flow, and even blocked traffic so we could cross streets.

Walker continued, “I’m willing to bet some of the officers know families who were hurt by Pfizer’s layoffs, or who were displaced when they built the facility in the first place.  But these are guesses, not facts.  It’s a fact that those arrested were treated well and released promptly. I really got the feeling some of the officers felt like they were marching with us.”

After a break, the group reconvened at the New London All Souls Unitarian Church for a teach-in by a War Resisters League member from Voluntown, CT.  In the workshop,  an energized 30-40 people from over 7 different occupations worked together to develop a stronger, more effective movement.  It included 3 first time occupiers whose excitement was palpable, one commented, “This is the most empowering day of my life.”

After protesters introduced themselves, CT Brian led the group reading off  #F29 highlights from around the country from Twitter, starting with a report from Tucson, where they forced a G4S prison deportation bus to cut a hole in their own fence to get the deportees on the road.

This an interesting snapshot video of a twitter reading at 3:15 ET.

#F29-#CT #OP-Snapshot-3:15 National Actions http://youtu.be/1cC4BhIpFxQ

The facilitator broke down the elements of successful activism into 8 components- constructive work/alternatives, common understanding, non-violence discipline, demonstrations, allies, negotiation, research/Info gathering, and legislative/electoral reform and let the participants break into groups to work on the aspect most resonant to them.

Then each study group was given a list of questions, like for the demonstrations sub-group focused on “how we can best demonstrate our concern”.

Each small group reported back to the whole group their observations. The demonstration group reported that they felt the ALEC protester was a good model as it was focused on a key issue that connected with the central messages of Occupy.  A person from one of the last standing of the New England encampment, Occupy New Haven camp resident Danielle DiGirolamo, reported on Alternatives- that much of this has started with natural medicine and alternative energy becoming more mainstream and Susan Walker added that “basically we feel there are a lot of alternatives to what the corporations are spoon feeding us.”

Then the group was asked to order the different parts of a campaign with respect to the sequence they should occur in. They selected- Common understanding, Research, Allies, combined Training/Education, create Constructive alternatives, Negotiation, Non Violent Discipline, Legislative Action, to which the facilitator commented, not the usual order but  “I’d say that’s perfect.” At the end materials on non-violent training were distributed.

Protesters nationally were successful in raising awareness about ALEC a legislative shadow organization as Occupies around the world united for systemic change.

Check out the embedded video from the Occupy Portand Video Collective.

The large  Anti-Corporate greed protest in LA included masked Anarchists and possible young actress marching behind a banner of People  Over Profits in the middle of a large crowd. One tweet reported that- when the March arrived at Walmart, many workers from WalMart stepped outside. The police responded by telling them to go back to work or risk arrest.  An interesting accidental exposure of the Police bias to protect corporate property before people.

Perhaps the management had called.  A t that time the LAPD was not threatening the protesters with arrest, only the Walmart workers, seeming to be more of an  attempt to suppress worker solidarity with any movement that dares to unite people behind pro-worker programs- living wage, right to organize, right to strike to name a few. Had Walmart succeeded in forming the Grass Roots Union they sought, management wouldn’t have been so quick to suppress what could have been interpreted as a walkout.

Walker summed up her experience this way. ” It’s inspirational that Occupy Providence got to participate in a national coordinated day of action against ALEC. The bottom line: retailers, for-profit prisons and pharmaceuticals are writing legislation, and paying legislators to get it passed. The prisons are writing the laws? Really?  It’s not OK. “

By Robert Malin & Susan Walker

Senator Whitehouse explains the Buffett Rule


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Senator Sheldon Whitehouse, sponsor the so-called Buffett Rule, sat down with the Center for American Progress to discuss his bill for a mandatory income tax rate of 30 percent for millionaires.

“Regular folks,” he said, think politics has become rigged to favor the richest Americans “and that’s a bad framework for people to be looking at this United States government from. Unfortunately in a lot of ways, it’s a very accurate framework, and the tax code is one of the ways to prove that is really the case right now.”

The substantial change to the tax code, he said, would be that capital gains would be taxed just like any other kind of income for those who make more than a million dollars in a year. So a CEO who gets paid in stock options, would still have to pay taxes on that if they earned more than a million.

He said the proposal could come up for a vote “in the three or four  months on either side of the New Year” when Democrats will could be negotiating from a position of strength because of the expiration of the Bush tax cuts. Right now, he said, the bill isn’t likely to get substantial floor time, unless the American people demand it.

Prompted by a question at the very end of the discussion, Whitehouse, who it turns out was once considered a candidate for the Supreme Court, threw a jab at the Citizens United decision: “Corporations are not people. I think the decision claiming that they were will go down in history as one of most grievous errors of the Supreme Court.”

Interestingly, Ted Nesi reports this morning that National Journal recently ranked Whitehouse as the 19th most liberal senator after two consecutive years of being ranked as the most liberal.

Senator: ‘Darth Flanders bit’ insults Central Falls


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In a post yesterday about Bob Flanders poking fun of his role as the “lord of the pink slip” in Central Falls (check out the video of Flanders singing if you haven’t yet), I mentioned that it wasn’t in good taste for Flanders to make jokes about a situation that has dire consequences to already-struggling Rhode Islanders. Evidently, Sen. Elizabeth Crowley, a Democrat who represents the people of CF that Flanders gave a haircut to, agreed and wrote an op/ed about it. She even used the nickname I coined for the receiver: “Darth Flanders.”

Here’s Senator Crowley’s piece:

Residents at the Central Falls City Council meeting I attended Friday evening raised a pretty good question: where was Robert Flanders, the state-appointed receiver. While about 40 members of the public sought to have their questions addressed, the receiver and his chief of staff, Gayle Corrigan, were nowhere to be found.

So what did receiver Flanders deem so important that it kept him from meeting with the public on Friday evening? He was busy at another function, dressing up as an executioner, comparing himself to Darth Vader, and poking fun at both the city and its residents, who have been seriously harmed through the actions he has overseen.

Former Judge Flanders was the “Mystery Guest” at the Providence Newspaper Guild’ annual “Follies,” an irreverent take on all things Rhode Island, especially politics. The Mystery Guest is a well-known figure who typically engages in harmless self-deprecating humor to close out the evening. The problem this year is that the situation that makes receiver Flanders so well known is no laughing matter, and his jokes were anything but harmless.

First and foremost, Judge Flanders should have been at the City Council meeting, not at a social gathering poking fun of the very people he was snubbing. The people of Central Falls appeared before a powerless Council because they were seeking answers on Friday evening, and their mood was summed up nicely with the resounding applause they gave to a Council member who questioned where the receiver was.

Judge Flanders, meanwhile, was singing to the tune of John Lennon’s “Imagine”:

“Imagine there’s no mayors. It’s easy for true believers. No City Council below them. Above us only receivers. Imagine all the pensioners living with haircuts and co-pays.”

It certainly isn’t hard for us in Central Falls to imagine a world in such a dictatorship. We were robbed of our democratic representation when the city entered receivership. The state-appointed receiver collects his salary, a bill we in Central Falls will ultimately pay, but he is accountable to no one here in the city. Indeed there is no local elected official who wields any power, all of which is vested in a receiver who thinks so little of us that he goes off and makes fun of the pensioners whose livelihoods were devastated.

Judge Flanders, of all people, should be cognizant of the pain being borne by the people of Central Falls as we undergo receivership. It was he who presided over the slashing of what were already, for the most part, very meager pensions. Did he not notice the devastation written in the strained faces of elderly women and in the tears of retired men as they witnessed the security they had worked a lifetime to achieve taken from them? It is positively disgusting that Judge Flanders, who should know better than anyone how painful this situation is, would dub himself “Lord of the Pink Slip” and make light of people losing their representative democracy, losing their jobs, and losing their retirement benefits.

We the people of Central Falls will not tolerate being the butt of anyone’s jokes. Our city is a vibrant, tight-knit community, not a laughing stock. We deserve better than to be ignored and made fun of by the person appointed by the state to provide sound fiscal management.

Rep. James McLaughlin and Rep. Agostinho Silva – my colleagues in the Central Falls delegation to the State House – and I will be meeting with the Governor to discuss our concerns with the way in which the city is being run, and the lack of accountability to the people of Central Falls. We will stand strong to see that the people of Central Falls get their city back. In the meantime, it would be nice to see Judge Flanders acknowledge that he exercised some pretty lousy judgment on Friday night.

Bill would raise minimum wage in Rhode Island


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You’ll often hear the mantra that Rhode Island has one of the highest tax rates in New England. Well, on the other side of economic spectrum, we also have the second lowest minimum wage in New England.

But Rep. David Bennett, D-Warwick, sponsored a bill that would raise Rhode Island’s minimum wage from $7.40 to $7.75. It will be heard by the House Labor Committee tonight after the regular session.

“You try living on that,” Bennett said. “You can’t do it.”

While the increase would only mean another $14 a week for employees making the minimum wage, annually that is enough to make a mortgage or rent payment. Or at least pay some utility bills.

Still, the increase would only put Rhode Island at the second lowest rate in New England. Currently, only New Hampshire has a lower minimum wage at $7.25 and the proposed increase would vault RI ahead of Maine, which has a minimum wage of $7.50. Vermont has the highest minimum wage in New England at $8.46.

“If someone can make an extra dollar an hour by taking a similar job in Vermont,” Bennett said, “they might just do that.”

Nationally, Rhode Island falls right in the middle of the pack with the 26th lowest minimum wage in the country. Most of the state that have a lower minimum wage are in the midwest, where the cost of living is much lower than on the coasts. New Jersey and Maryland both have a minimum wage of $7.25, which is the lowest it can be according to federal law.

If the bill becomes law, Rhode Island’s minimum wage would increase annually starting in 2014 in conjunction with the Northeast Consumer Price Index.

Occupy PVD to protest Pfizer, ALEC today


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An Occupy Providence protester at an action against Pfizer in Groton Conn. (photo courtesy Occupy Providence)

Occupy Providence crosses state lines today for a protest at a Pfizer facility in Groton, Conn. The action is being endorsed by several Occupy groups from Connecticut and Massachusetts, and will include “protest, street theater, puppetry, teach-ins, speakers, music, food, and more,” according to a press release sent this morning.

“Pfizer feels it is their right to control our government with money, have their interests held above the interests of the people,” according to the press release. “Now it is our time to show them we want our cities, our state, and our country back. Plans are being made to show Pfizer we are no longer silent, and refuse to allow their horrors to continue any longer.”

The protest is part of a national day of action designed to target corporations that are involved with ALEC, the American Legislative Exchange Council. Funded by companies like Pfizer, Exxon Mobil and Koch Industries, ALEC writes and then, through local supporters, advocates for legislation at the state level.

“It is no coincidence that so many state legislatures have spent the last year taking the same destructive actions: making it harder for minorities and other groups that support Democrats to vote, obstructing health care reform, weakening environmental regulations and breaking the spines of public- and private-sector unions,” according to a New York Times editorial earlier this month. “All of these efforts are being backed — in some cases, orchestrated — by a little-known conservative organization financed by millions of corporate dollars.”

The Times wrote that ALEC “had been involved with” writing a bill in Virginia that would “require voters to show a form of identification.” A similar bill passed in Rhode Island last legislative session and its sponsor, Rep Jon Brien, D-Woonsocket, has been identified as one of two state chairmen of ALEC in Rhode Island by SourceWatch.org.

“ALEC that has modeled hideous anti-consumer protection laws, anti-democracy voter suppression laws and even disinformation programs about global warming,” according to the Occupy Providence press release. “We call on people to target corporations that are part of the American Legislative Exchange Council which is a prime example of the way corporations buy off legislators and craft legislation that serves the interests of corporations and not people.”

Proposal to tax the richest Rhode Islanders


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Rep. Maria Cimini, D-Providence. (photo courtesy of Rhode Island College)

As Rhode Island struggles to pull itself out of the recession many have been asked to sacrifice. Cities and towns have seen drastic cuts in state aid, schools have had their budgets cut, the poor have endured program cuts and public sector employees have had their benefits slashed.

Now it’s time to ask Rhode Island’s wealthiest residents to help out, too.

There are a number of bills before the General Assembly this year that would do this by creating new tax brackets for the state’s wealthiest residents with the most interesting one being a bill sponsored by Maria Cimini, D- Providence.

“We’ve really called on low and middle income Rhode Islanders to feel the pain of this recession,” Cimini said. “I don’t feel that we’ve called on upper income Rhode Islanders to feel that pain or share that sacrifice.”

Her bill, H7729, would increase the amount of income taxes people pay who make more than $250,000 a year from 5.99 percent to 9.99%.

“What this bill does is calls upon people who are better off to chip in during this time of economic crisis,” she said.

A similar bill proposed by Rep. Larry Valencia in the previous legislation was estimated to bring in about $130 million to the state coffers. That’s about a third as much as the landmark pension reform bill passed in the fall saved the state.

The bill would actual restore the tax rate to the exact level that former Governor Donald Carcieri cut it from (at the time, Carcieri said doing so would spur economic development in the state), except instead of being applied to everyone making more than $125,000 – or the richest 20 percent of Rhode Island – it would only apply to those who make more than $250,000 – or the richest 4 percent of the state.

Cimini’s bill also offers an economic incentive for the so-called job creators to actually creating jobs in the state. According to Cimini, the tax rate increase proposed in her bill would drop by one percentage point with every percentage point that the state unemployment rate drops. So if the unemployment rate drops from 10 percent to 9 percent, the tax rate increase would drop from 4 percent to 3 percent. The potential decrease would be capped at the same amount as the proposed increase.

“What this bill does if you do hire people and you do help to lower unemployment in Rhode Island,” she said, “we will recognize those efforts.”

Cimini said there are 37 co-sponsors of the bill – that’s almost half of the 75-member House of Representatives. On the Senate side, Josh Miller, D- Cranston, is expected to introduce similar legislation.

Similarly, Sen. Harold Metts, D-Prov, has introduced a bill that would increase income taxes on people making more than $500,000 by 3 percent. Even Gary Sasse, who helped orchestrate the Carcieri tax cuts, has said that he thinks taxes should be raised on Rhode Island’s wealthiest. But he suggested only raising taxes by less than 1 percent on those who earn more than $400,000 annually, which would only mean an additional $10 million in state revenue.

Budgeting for Disaster – Part I


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FY2013 budget

FY2013 budgetOne of the problems of political journalism is trying to parse the difference between what’s really going on and what is said about it. Press releases are misleading as often as they are informative, and interviews seldom get at any matters beyond the superficial.

That’s the secret pleasure behind budget analysis. A budget document is the policy choices of the government made manifest. You don’t have to ask someone what the policy is, it’s there in the sums. There are, of course, ways to obscure policy within a budget, and not all budgets are presented well, but these problems pale before trying to decipher what some people mean when they talk about policy issues. What does it mean to “cut” a program? What does “level funding” mean? Is some program really “new?”

The problem with open government is that sometimes there is altogether too much information available. You can go to the RI Open Government site now and learn how much any department spent on postage last month. That’s fine, but once you know that, what do you really know? The state budget is something similar. The budget documents for the state of Rhode Island are a large and ungainly set of documents. They are seven volumes, and even the Executive Summary has a hundred pages, plus five appendices. It’s hard to know where to begin.

Here, then, is the beginning of an entirely desultory tour through the state budget—and the state budget documents. For the next several weeks, I’ll post an article every few days (and every Monday) about different parts of the budget, and eventually we should be able to get within shouting distance of most of it. Obviously some subjects will get short shrift, but there will be room to cover plenty of the controversies. I’ll monitor the comments for suggestions, directions, and corrections, and will happily accept them via email as well.

Through the same period, the House Finance Committee will be conducting hearings about the various pieces of the budget proposal, but they are unlikely to do anything about any of it until after the beginning of May, when the estimates come in for tax receipts and social service expenses.

Volumes

The budget documents have been rearranged slightly this year, and they consist of the following volumes (and my abbreviations).  All these are available at the link above:

  • Executive Summary (ES) contains text descriptions of the budget and its changes. It also has a description of the economic outlook, summary schedules, tables of municipal aid and education aid, and the planning values used.
  • Budget, volume I (B1) contains the budget for the General Goverment departments, like Administration and the Legislature, and the quasi-public agencies like RIPTA and the Airport.
  • Budget, volume II (B2) has all the Human Services agencies (Health, DCYF, and Behavioral Healthcare, Developmental Disabilities and Hospitals, and so on)
  • Budget, volume III (B3) covers all the Education departments, both Elementary and Secondary, and the state higher education institutions.
  • Budget, volume IV (B4) is for Public Safety, Transportation, and Natural Resources.
  • Capital Budget (C) has all kinds of exciting tables about how much is borrowed and what for.
  • The Technical Appendix (TA) is where dollar figures for detailed accounts are published, and includes the accounting codes, which helps when you want to get specific answers later.
  • There’s usually a small Budget as Enacted document that toddles along a month or so after the budget is passed. It’s not much more than a restatement of the schedules in the various department budgets; its numbers become part of the next year’s presentation.

In addition to these, the word “Budget” can also refer to the Appropriations Act itself. This is the law that actually gets passed by the legislature and signed by the Governor, and this year it’s been introduced to the House as bill 2012-H7323. All the numbers presented in the seven volumes are in Article 1, and the other articles contain the necessary legal changes to make the numbers work. Of course, the budget is a must-pass piece of legislation, so by the time the budget hits the floor of the House for debate, the articles will often include some hidden delights, too.

So let’s begin.

Austerity

To begin with, let it be clear from the outset that this is an austerity budget. Governor Chafee is getting lots of flack from the usual sources about his high spending and his tax increases, blah blah blah. What these people don’t want you to know is that this is a budget with many savage cuts in it. Chafee claims $45 million in program cuts in his transmission letter (beginning of ES), and the overall budget is down by 2.8%, to $7.943 billion from $8.173 billion in FY12. Federal funds are to be cut $271 million, largely due to the expiration of the stimulus funds.

For a little perspective, the state’s economy is expected to be a hair less than $50 billion in 2012, so the state budget is about 16% of everything. Municipal expenses add another $2 billion or so, so together we’re talking about a fifth of the state economy under very tight constraint. Recovery from our downturn can happen under these circumstances, but the austerity we’re seeing in government is roughly the opposite of stimulus, so it’s not as if the state is helping dig the economy out of its hole.

Why is the Governor’s budget so stingy? Because the Legislature told him that’s what they wanted. Last year, Governor Chafee proposed some changes in the sales tax to give his budget a modestly expansionary flavor. The state has to balance its budget, so we can’t do wholesale stimulus; the idea was only to keep from slashing everything, and to prevent a situation where government was laying people off during a recession. Any tax at all, of course, was anathema to the business “community” and the legislature duly shot it down, in peremptory fashion. House Speaker Gordon Fox essentially foreclosed the tax change before the budget even got to the behind-closed-door phase. So most towns enacted a property tax increase, and this year we have more austerity and cities going bankrupt. It’s really a pretty simple connection, even though lots of people want you to think it’s complex.

You have likely already heard lots of righteous-sounding arguments about how we ought to balance the government’s checkbook just like we balance a household’s. The analogy hides that fact that the austerity we feel is self-imposed, with much of it due to ill-advised tax cuts in the recent past.  Second, and more important, it would have us imagine that paving roads, jailing criminals, and providing universal public education is somehow comparable to buying groceries and paying rent. Yes, the accounting can be made to look similar, but does the analogy stretch any further than that? The benefit of my groceries goes to me. The benefit of public education and roads doesn’t accrue to the state government in any but the most indirect sense. There is a difference between public goods and private ones that the accounting cannot reach and that many fiscal “conservatives” apparently cannot see. But more about all of this further down the road.

Next: “Assistance, Grants, and Benefits” — 44.6% of the budget?

Dr. Supply-Side, or: How We Learned to Stop Worrying and Love the Stimulus


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Some people — including a Presidential front-runner and many leading Democrats in the RI General Assembly — love to insist that government spending does not create jobs, and that therefore we should continue cutting taxes for the wealthy in order to generate economic growth. The problem with the trickle-down argument, other than the fact that there is little evidence to support it, is that the opposite is actually true – especially when it comes to getting out of a recession. In fact, history shows us that:

when economic times are bleak, there are doable steps that a government can take that make a difference to get the economy back on a path of growth and job creation.

For a really good example of exactly how this works, we don’t even have to go back to the Great Depression, nor do we have to travel to Detroit (even though I really love cars and trees that are the right height). Here’s a personal story from right here in Rhode Island — my own.

In the fall of 2009, we bought our first home — a small bungalow that was built in the 1920s. We got an FHA-insured mortgage, and we knew that when we filed our taxes for that year, we would be eligible for a first-time home-buyers’ tax credit of $8,000. With a baby on the way, we were motivated to buy a home — but if the tax credit hadn’t been offered, I doubt we would have been able to do it as quickly. It took some Keynes to help get our keys on closing day.

During the run-up to closing, we hired a home inspector and a lead inspector. When it came time to move, we needed movers to carry most of the big stuff (and I won’t lie, they carried plenty of the small and medium stuff, too). We called the cable company and got our new house wired up. We installed a new stove, and a washer & dryer — and had the broken-down old ones removed.

We had to buy furniture to prepare a room for our daughter, as well as one for visiting grandparents. Got a good price on a truckload of wood for the fireplace which we planned — and still plan someday — on converting to wood-stove insert. Not to mention countless trips to the hardware store for tools and materials for DIY projects (and as big as my tool set has grown, it still feels like the tool I use the most is my wallet). Suffice to say, the $8,000 credit meant a lot that first year.

Our house still had some of its original windows, with layers of lead paint and and potentially dangerous friction zones. So we just kept those windows shut until the spring of 2011, when we looked into finding a lead-safe contractor to replace them. We learned about an energy efficiency tax credit that reimbursed some of the cost of new windows – and so we got the work done.

Then in the late summer, we saw some news about a Home Energy Audit that we could get — for free — to determine what areas of our home need more insulation and where we could stop air from leaking out/in. If we decided to contract with someone to do the work, not only would we save on future energy bills, but about 75% of the total cost of insulation work and air leakage sealing would be paid for. (The program also replaced — at no cost to us — our old incandescent bulbs with CFL bulbs, saving us more money.)

During the energy audit, the inspector also discovered some old knob and tube wiring that would become a fire hazard, were we to cover it with insulation. Before we could proceed with the insulation work, we had to replace that wiring. Now we have hired a licensed electrician to do this work — because while I like to keep up with current events, I don’t want to become one.

And with every check we wrote, and with every swipe of the debit (and occasionally the credit) card, knowing that tax credits were coming or that we were only paying a fraction of the cost made it easier to make the purchase. Each time we did — SURPRISE! — there were actual workers with actual jobs getting actual paychecks who did the work.  And though I can’t tell you exactly where each of them spent their money, I’m fairly certain it was a lot closer to Broad St. than it was to Wall St. – creating ripple effect throughout our state’s economy.

(As a side note: in addition to the broader economic benefits that our spending generated, from a purely selfish standpoint, these home upgrades have helped protect my family’s health and safety, and they will save us money in the long run, too.  So thanks, Uncle Sam!)

Ours is just one example, but there are many other families and individuals in Rhode Island that have been making made similar decisions. And I’m willing to bet that our actions — spurred by government policies and investments — have actually created more jobs and economic growth in our state than all of the recent tax cuts that the richest Rhode Islanders received from the General Assembly or the ones that they got from Bush.

You won’t create jobs or growth by cutting spending. The best way to create jobs is, quite simply, to create jobs — like  our grandparents did with the Works Progress Administration.  So instead of continuing to ride Dr. Supply-Side’s bomb, our elected leaders ought to learn from history, and choose policies and investments that help bring us out of our own Great Depression.

I’ll bet you $10,000 it will work.


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