General Assembly – Page 4

May 20, 2012May 21, 2012

Tax Debate: Back to Future for Business Community

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Back in June 2009, there was a strong push for the state to make changes to the tax structure. Organizing from the grassroots was highlighting the inequity of what was then called the “flat tax.” Boring you with all the details now isn’t the point, but reminding you of the rhetoric from the business community is.

On June 12, 2009, leaders of the business community, including Alex Taylor of FGXI (Foster Grant sunglasses), John Muggeridge of Fidelity, and Mark Higgins, dean of the Business School at URI, penned an op-ed in The Providence Journal, pleading with the leadership of the General Assembly to stay to the course and not abandon the flat tax. (The Journal archive will not let me link to the story.)

The businessmen describe Rhode Island at an “economic crossroads.” Our “significantly higher” unemployment rate (at the time, a seasonally adjusted 10.9 %) and our “dropping” economy are, if we follow the crossroad metaphor, down one path, and prosperity, jobs, and a better business climate are down the other path. The key, according to the businessmen, is to not tinker with the flat tax. In their words : “Now it’s time for state leaders to give the cure time to work.”

According to the last available data, Rhode Island’s seasonally adjusted unemployment rate was 11.2%.

I think it is crucial to revisit this 2009 op-ed from these leaders in the business community now in 2012 as we are debating a proposal to once again revisit our tax structure in Rhode Island. And once again, the business community is asking the General Assembly to “give the cure time to work.” Writing in another op-ed column for the Journal, R. Kelly Sheridan, legislative counsel for the Greater Providence Chamber of Commerce, said “It would extremely unwise to dismantle the 2010 reform before the first returns are evaluated.” Sound familiar?

The real key from the 2009 op-ed from the business community leaders is how the view the original tax reform. It is very clear from the rhetoric there is a direct correlation between tax cuts for the wealthy and job creation for the working class. They write “With it (the flat tax), private-sector business leaders can make decisions regarding the location of their facilities on the basis of workforce and real-estate availability, not on the variables of the personal-income-tax structure.” Again, according to RIDLT, unemployment in Rhode Island was 5.1% in June of 2006.

The economic strategies advocated by the business community simply have not worked for Rhode Island. For years now their only answer to critics of their approach has been “just give it more time.” But during that time more jobs are lost, more businesses close, and, ironically, taxes increase on working and middle class people at the local level in the form of property taxes and fees. All the while vital public services are cut. There has to be a better way because the business community’s cure for what ills Rhode Island seems certainly worse than the disease.

May 8, 2012May 9, 2012

Valencia Bill Shows Momentum for Tax Equity

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Long before the Occupy movement and Warren Buffett made the idea of taxing the rich politically popular, Rep Larry Valencia, a progressive Democrat from Charlestown, introduced just such a bill in the previous legislative session.

This year, although it hasn’t received the media attention the Miller-Cimini proposal has, he introduced the same bill again. And, because he recognizes there still isn’t a preponderance of political will to tax the rich in the fiscally conservative-leaning General Assembly, he said he’ll do so again next year too, if need be.

“I think it’s important to keep these ideas in the spotlight,” he said. His bill, the model for the Miller-Cimini version but it doesn’t include a reduction tied to the unemployment rate, will be heard by the powerful House Finance Committee this afternoon. Families earning more than $250,000 would pay an additional 4 percent on income above that amount and individuals would do so at $200,000. It would raise about $140 million for the state, he said.

While both Chairman Helio Melo and Speaker Gordon Fox told me earlier this session they don’t support changes to the tax code this session (Valencia’s bill didn’t make it out of committee last year) some in leadership now do. Majority Whip Pat O’Neil, a Pawtucket Democrat and potential rival to Fox for the speaker’s gavel, is a co-sponsor this year.

“I think we are slowly building a consensus,” Valencia said, noting that he’s picked up several additional supporters this session. “We know from national polls that people are sympathetic to the ideas of taxing high income earners at a higher rate.”

Although he’s a co-signer of the Miller-Cimini bill, he thinks his is better legislation because it isn’t tied to the unemployment rate, which would cause fiscal fluctuations from year to year.

May 4, 2012May 4, 2012

Organize for Equality

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UPDATE: This training has been postponed and will be rescheduled for a later date. More information to come…

It’s getting close to crunch time in the General Assembly and we’re about to turn up the heat.

In order to continue being as effective as we can be, we need your help. And so I’m inviting you to take part in MERI’s first ever “Organizing for Equality” training on Saturday, May 5, 2012 where we’ll bring together some top notch politicos to teach you everything you need to know about how to motivate our state representatives and senators in support of the Equality Agenda.

This training is free and open to all equality supporters. No experience is necessary. All you need is an open mind and the willingness to work towards creating change. We’ll show you how to do the rest.

Here’s some of the things we’ll discuss:
Legislative briefings on our Equality Agenda: The Equal Access to Marriage Act,
The Equal Access to Family Court Act, and The Equal Religious Protection Act
Navigating the State House: Talking to your legislator about supporting marriage equality and the entire Equality Agenda
Being an effective online organizer: Using social media and how to write a winning email
The Ground Game: How to run phone bank and door knocking efforts in your neighborhood
The 2012 Elections: What you can do to support pro-equality candidates (of any party) to the General Assembly
Registration is from 8:30 to 9:00 am and we expect to wrap up around 2:00. Light breakfast fare and a box lunch will be provided. The Organizing for Equality Training will be held at the offices of SEIU Local 1199 (294 West Exchange Street, Providence, RI).

It comes down to this: we need an army of equality supporters to step up and help us do what needs to be done to win marriage equality. If you’ve ever felt frustrated by slow progress, or by Smith Hill politicians who are out of touch, and you want to do something about it, then this training is for you.

April 29, 2012April 29, 2012

The Not-So-Curious Divide

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A few days ago, David Scharfenberg of the Phoenix wrote a blog post entitled “The Curious Divide” noticing the distinct difference between Rhode Island’s liberal federal delegation and its state legislature, which skews moderate (and as one reader has pointed out, significantly to the right of most Democratic state legislatures, with some Democrats more conservative than some Republicans). Mr. Scharfenberg explains his view:

the split vote – elect a moderate local rep and a liberal federal one – seems to perfectly capture Rhode Island’s deep unease with its own politics: it is a liberal state uncomfortable with its liberalism.

I’d agree, but I don’t think it’s exactly right. Take the last election. In the race for Governor, Lincoln Chafee’s advantage mainly came from two places; the cities of Providence and Pawtucket and a group I like to think of as “Bay Progressives” (though there were probably liberal Republicans in there as well). These are also places where David Cicilline did extremely well against John Loughlin II, though he was weaker in the Narragansett Bay communities than Mr. Chafee. Mr. Cicilline’s advantage in Providence and Pawtucket overcame the lion’s share of his deficits elsewhere and pushed him to victory. These are also the same places where David Segal performed well in the CD1 Democratic primary.

Basically, the central urban areas, with their minority and working class populations, tend to be strongest for liberal voters, and they can push elections to liberal candidates. The bay area also attracts large concentrations of well-off, highly-educated elites (as do the well-off portions of Providence and Pawtucket). They tend to be strong on green issues and liberal on social issues. This Urban-Bay coalition is a key part of the progressives who dominate federal politics. Their enthusiasm can make or break a liberal candidate running for statewide or federal office.

This isn’t to say there aren’t urban progressives in Newport or Woonsocket or North Providence, nor that there aren’t equally important progressives in the more woodland areas of South County. But their margins of support are less overwhelming, and there are fewer of them. Providence tends to make up the deficit.

Boss Brayton — Charles R. Brayton, founder of Rhode Island's machine politics

There’s the actual tension. It’s not that the state is uncomfortable with its liberalism, it’s the historical tension that’s existed between urban core and country since the Industrial Revolution poured Italian, Irish, Portuguese, and Quebecois into the cities. It’s where Rhode Island’s corrupt political machine politics got their foundation; then under the control of Republican “Blind Boss” Charles Brayton, the countryside prevented the working poor and immigrants in Rhode Island’s cities from getting the amount of political representation they deserved. This is not a secret, the General Assembly’s own history makes this pretty clear (and is a pretty amazing narrative of that body until about 1994).

Now, of course, Providence’s representation is roughly proportionate to its population; but that tension lingers. The well-off countryside can easily view the urban areas as basically a charity basket-case. No wonder they vote for more conservative legislatures. The problem is exacerbated by the largely assimilated white countryside and the as-yet unassimilated immigrant and second-generation Americans who inhabit the cities.

Taken collectively, our state skews liberal; both because it actually is (even our Republicans are more liberal than their peers in other states), but also because the cities have a powerful voting constituency. In the General Assembly, the towns and villages have more distinct representation, the conservative ones can largely counterbalance the liberalism of the urban core. Their own progressives can be outvoted by the larger numbers of conservative voters. When progressives and liberals unite across the state, they’re a very powerful constituency.

And that’s why I think our federal politicians are so different from our state politicians.

P.S. This analysis has missed moderates, and that’s largely because moderates don’t pull the Assembly one way or the other.

April 26, 2012April 27, 2012

Taxpayers Are Funding Legislators’ ALEC Memberships

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Rhode Islanders taxpayers are funding legislators’ memberships in ALEC, the American Legislative Exchange Council, said House spokesman Larry Berman. He said the state paid $800 in January for eight new members (more than 20 percent of the legislature are members) that Rep. Jon Brien, a conservative Democrat from Woonsocket who was recently put on the group’s national board of directors, recently signed up.

“A payment is made annually,” Berman said.

Brien said he doesn’t have an issue with taxpayers funding legislators’ membership in the group that pairs corporate interests with state lawmakers.

“Why is this any different than paying for a membership to the NCSL,” Brien said.

The National Conference of State Legislatures, according to it website, “is a bipartisan organization that serves the legislators and staffs of the nation’s 50 states. NCSL provides research, technical assistance and opportunities for policymakers to exchange ideas on the most pressing state issues.”

According to ALEC’s website, the group “works to advance the fundamental principles of free-market enterprise, limited government, and federalism at the state level through a nonpartisan public-private partnership of America’s state legislators, members of the private sector and the general public.”

Two of the new ALEC members said they didn’t sign up for ALEC. Rep John Edwards, a moderate Democrat from Portsmouth, said Brien signed him up and Rep. Sam Azzinaro, of Westerly, said he didn’t know he was a member of ALEC, even though he was on a list provided by Brien. Brien said he would provide their membership forms that will show otherwise.

John Marion, of Common Cause Rhode Island, said taxpayers shouldn’t be funding ALEC memberships.

“There is no reason the General Assembly should paying for these memberships in the first place, and paying for people who may not even want to have joined is almost comical,” he said. “Clearly there need to be better controls in place for these sorts of requests from legislators.”

April 26, 2012April 26, 2012

Chafee, Brien Explain Need for Municipal Aid Bills

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Gov. Chafee and Rep. Jon Brien, chairman of the House Municipal Government Committee, kicked off the House Finance Committee meeting by addressing the need to pass the governor’s municipal aid package.

Brien, from Woonsocket, has a particular interest in the bills’ passage as they would greatly benefit his community.

In this video, they both explain why the bills are so important to the poorest communities in Rhode Island.

April 25, 2012April 25, 2012

Budgeting for Disaster: How Budgets Are Cut

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I was at the hearing at House Finance last night, talking about tax cuts for rich people. The remarkable thing about all the tax cuts we’ve given over the past 16 years is not that we’ve given them, but how we’ve paid for them.

As we saw in the last installment, the story of the past 16 years has been relentless cuts in state income taxes on the top 1% of taxpayers. The cuts have come in several different forms, but the result has been the same: dramatically lower taxes on the top end, much smaller changes for everyone else.

That’s bad enough, but the real tragedy of the tax cutting of the past 16 years is that not a single one of the tax cuts passed by the General Assembly was paid for. The income tax cut of 1997, the car tax cut of the same year, the capital gains tax cut of 2001, and the flat tax cut of 2006 were all “phased in” to avoid having to make the tough decisions people are always talking about.

But the reduced state revenue had to be made up somehow. How did we do it? Over that time, we haven’t cut any major programs. So does this mean that government was too fat? Do we owe a debt of gratitude to the Almond and Carcieri administrations for finally starving the beast down to an affordable size? I’d like to share with you my observations of the five different ways to cut a budget, only the first of which has any claim to being a hard choice:

Terminate a program or benefit.
Supply a program or benefit in a more efficient fashion.
Supply a program or benefit in a shoddier fashion.
Borrow to hide the shortfall.
Foist the cost onto somebody with another source of income.

In my review of state budget cuts over the past decade, I find very few examples of the first method, though there are some. Certainly the Medicaid program is somewhat less generous than it was a decade ago. We cut services for legal immigrant children and pregnant women, for example. But how many other examples are there? I don’t support Governor Chafee’s proposal to terminate funding of WSBE television, but I applaud him for having the temerity to actually propose ending a fairly popular program.

For the second method, there are a few good examples. The recent reorganization at DMV might qualify. Though it also required some new personnel, they are now providing better service with not too many more people. DOT’s proposal to get designs and buildings from the same contractor has promise in this regard, and the construction of the new train station in Wickford seems to have turned out well.

Unfortunately, too many of these border on examples of the third category: just doing a shoddier job. The General Assembly has, over the years, been not at all deferential to the judgment of department heads and experts about what is actually possible within the budget constraints presented, with disaster or shoddy service frequently resulting. The transfer of 17-year-olds from the Training School to the ACI a few years ago is an example, and last year’s cut to BHDDH funding is another. A couple of years ago, delays in food stamp processing were so great that the state lost a class-action suit on the issue.

The Department of Transportation’s shameful neglect of maintenance is still another example. Seventeen homes and four businesses in Tiverton are gone today because DOT didn’t maintain the Sakonnet Bridge adequately and they were in the way of the replacement bridge. Nor are they alone in their neglect of maintenance, as any visit to a state facility will attest. A few years ago, URI estimated the cost of deferred maintenance on their campus to be over $400 million, not so much less than a year’s budget.

Category four is excessive borrowing, and DOT has been a prime offender in the category, and so have the colleges, creating fancy new buildings while cutting back on the staff and projects that should be filling them. Governor Chafee has proposed cutting back the DOT borrowing.

It’s probably the fifth category that has seen the most exercise. In the drive to cut taxes on rich people, the state has cut funding to: municipal governments and school departments who have to make it up with property taxes; to colleges who have to make it up with tuitions; to Medicaid recipients who have to make it up with co-pays; to everyone who fishes, drives, or runs a hospital who have to make it up with increased license fees, and to many more. We’ve even taken it from prisoners, for heaven’s sake, with parole fees, home confinement fees and medical co-pays. Property tax payers, students, poor people, and prisoners have paid for the tax cuts of the last 16 years.

One important point about these categories, is that numbers three and four are only the illusion of cutting costs, and generally make things more expensive in the long run. And number five doesn’t cut costs at all, either. If you want an explanation of why government in Rhode Island is expensive, look here.

Let’s be clear: courage is not foisting costs off onto others, nor is it insisting the state do its job badly. It is not borrowing to hide shortfalls or pushing costs into the next year. Calling for efficiency is laudable, but it is not courage, either. (Nor should it be confused with actually finding efficiencies.)

Courage means honesty. It means assessing with honesty our past policies, and not hiding behind some claim that we have to wait and see the effect of tax cuts we’ve been waiting for over a decade to see. It means honestly assessing claims that rose petals will fall from the sky if only we can avoid asking rich people to pay their fair share. It means honestly assessing what our state needs to do and finding a fair way to raise all the revenue with which to do it. Honesty is hard, the reason it’s equivalent to courage.

So listen skeptically when you hear someone — a member of the legislature, an anti-tax activist, or a friend — talking about making those tough choices. Are they talking about categories two through five? Those aren’t tough, so don’t let them hide there.

April 25, 2012April 25, 2012

VIDEO: Three Perspectives on Income Tax Equity Bill

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At a hearing last night, many spoke in favor of Rep. Maria Cimini’s legislation that would raise income taxes on Rhode Island’s richest residents as a way to raise revenue and encourage job creators to lower the state’s unemployment rate, and I chose three to feature because they represent a wide variety of reasons why it makes sense for Rhode Island to take proactive steps to better fund government.

The bill would raise the income tax on those who earn more than $250,000 from 5.99 to 9.99 and that rate would decrease by one percentage point for each percentage point that the state’s unemployment rate drops. It would raise some $132 million in additional revenue.

April 24, 2012April 24, 2012

Tax Equity Bill Before House Finance Commitee

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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.

The tax equity legislation will get a public debate at the State House today as Rep. Maria Cimini’s bill that would raise income taxes on Rhode Island’s richest until the unemployment rate drops will be heard by the House Finance Committee tonight after the regular session.

“I’m looking forward to making a the case for a fair ways to raise revenue,” Cimini said. “We are at a crossroads. Either we are a state that fulfills its public needs or we are not.”

The bill would raise the income tax rate on those who earn more than $250,000 a year from 5.9 to 9.9 percent and for each percentage point the state unemployment rate fell that tax bracket would reduce by one percent until it reaches 5.9 again. The tax rate for those who earned more than $100,000 was 9.9 until it began gradually being reduced over the past several years. The bill would add $131 million in new revenue.

Also testifying tomorrow will be economist Chuck Collins, a “senior scholar” with the Institute for Policy Studies, as well as several others.

Rhode Islanders for Tax Equity, a coalition of unions and other grassroots activists formed to support the bill, “plan to ask legislators whose side they are on–the side of hard-working, middle class Rhode Islanders or the side of political insiders and wealthy Rhode Islanders? Citing a stubbornly high unemployment rate that coincides with the lowering of tax rates on the rich,” according to a statement.

Earlier this session, the group released this chart that shows that as the tax rate for the richest Rhode Islanders has dropped the unemployment rat has gone up:

And this video showing how decreased top income tax rates have contributed to Rhode Island’s economic slowdown:

Cimini said she doesn’t think the bill will pass as is, but remains “cautiously optimistic” that parts of it will make this year’s budget proposal. She plans to meet with Speaker Gordon Fox about the bill in the near future, she said.

Occupy Providence plans to rally outside the State House to help bring attention to the bill. According to a press release, “The march will show how Rhode Islanders are fed up with politicians damaging our economy by giving tax breaks to the rich.”

April 24, 2012April 24, 2012

Budgeting for Disaster: Taxing History

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Is it really too soon to modify our tax code?

In the discussions of taxes at the State House, one line you hear a lot this year is that our state’s new income tax code is new and we should give it time to see how it works out. That’s what House Speaker Gordon Fox has said, and I’m hearing that it’s the line of the day on Smith Hill, available from any of the House or Senate leadership.

This is, of course, a silly point to make. The tax changes made last year basically just baked in the low taxes on rich people offered by the “flat tax” alternative. It used to be that a rich person could choose whether to pay tax under the tax code everyone else uses or using the flat tax limit, and now the flat tax limit is part of the code everyone else uses. This part may be new, but the overall “strategy” at issue — lower taxes on rich people, expect economy to get better — has been the order of the day in Rhode Island for a long time. To illustrate what’s really been going on in Rhode Island tax policy, I put together the following graph.

The blue line is the effective RI income tax rate on a fairly typical taxpayer in the top 1% over the last 16 years, with the various cuts that taxpayer has received indicated. These cuts don’t count tax credits like the film production or historic structures credits, which are typically only available to high-income individuals and which make the effective rate even lower. The black line indicates the effective tax rate on the median taxpayer (the 50th percentile). You can see a slight decline in the 1997-2002 period, but the other changes didn’t do much of anything for them.

The unemployment rate, of course, has nothing to do with the tax rate, except as a rhetorical club used to beat people about the head and neck. There is no evidence that it has any causal relationship with the state tax rate (in either direction), but the relationship between taxes and “job creators” is commonly invoked to persuade lawmakers to support lower taxes. I’ve included the unemployment rate on the graph as a service, so you can see how little is has to do with the movement of taxes.

One more thing you should know about this graph. There is some evidence available that the 2012 tax changes raised taxes substantially on the middle percentiles of taxpayers. Unfortunately, it’s premature to say more than that, since the data won’t be available until later this year, at the earliest.

The House Finance Committee is holding a hearing on several bills designed to raise taxes on the top 1% Tuesday afternoon at 4:30pm in State House room 35. Rep. Maria Cimini (D-Providence) is the prime sponsor (with 36 co-sponsors) of a bill to raise the taxes on people earning more than $250,000 per year by four percentage points, with that top rate coming down as the unemployment rate also goes down. Think of it as a “pay for performance” clause for rich people. There are also bills by Rep. Larry Valencia (D-Charlestown, Exeter, Richmond) and Scott Guthrie (D-Coventry) that will have more or less the same effect, though the income limits and tax changes are slightly different (neither of those bills have the unemployment clause).

April 5, 2012April 5, 2012

Secretaries Shouldn’t Pay More Than Millionaires

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What’s wrong with our tax structure in Rhode Island?

If you’re part of the 98% of Rhode Islanders making under $250,000 a year you’re paying your fair share and more. So why does the General Assembly say we don’t have the revenue to invest in affordable housing for all Rhode Islanders, making college affordable, or school breakfast programs in our public schools?

The problem is the way we’re raising revenue.

Rhode Island’s tax structure is inherently regressive, that means the poorer you are the higher share of your income you’re paying in taxes. And the numbers are astonishing!

When you combine all the taxes we pay, sales, property, income and car taxes, the 20% of Rhode Islanders who are living on $18,000 a year or less are forking over 11.9% of their annual income in taxes. For the top 1%, the people making over $390,000 a year it’s just 5.6%.

Think of it this way. If Warren Buffet and his secretary both go buy the same toaster and they both pay 7% sales tax on it, that flat tax rate means a lot more to his secretary. Its money that she can’t spend on basic necessities, but for Warren Buffet it doesn’t even make a dent.

We can start fixing our regressive tax structure this year with the Miller Cimini Tax Equity bill, and we need your help to do it!

Tell the General Assembly to stop balancing the budget on the backs of the middle and working class workers! Secretaries shouldn’t pay higher taxes than millionaires!

March 16, 2012

Chafee’s Municipal Plan Helps Poorest Towns Most

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It’s hard to be happy about something that will hurt so many working class retirees across Rhode Island, as would Governor Chafee’s proposed bills to help cities and towns. But Chafee designed his suite of legislation to help the most cash-strapped communities the most, which is the right way to handle the state’s municipal fiscal crisis that is disproportionately plaguing the poor.

Rather than giving every community the ability to suspend annual pension increases, Chafee’s proposal would only allow those with pension funds less than 60 percent funded to exercise this tool, reports the Providence Journal. While no retiree deserves to have the deal they struck changed, at least this wasn’t a blanket exemption.

Chafee also made a number of cost-saving tools only available to the “most distressed” communities. As we reported earlier this week, those four communities are Providence, Pawtucket, Woonsocket and West Warwick. Ian Donnis has a good list of the relief measures offered to these cities and towns.

While Ted Nesi notes that former Governor Carcieri offered some of the same mandate exemptions that Chafee proposed yesterday, the big difference is Chafee’s bottom-up approach. Carcieri’s proposal was a blanket exemption to every municipality and Chafee’s is need-based. RI Future has held the former governor’s feet to the fire for cutting so much money from cities and towns that had so little. So did Chafee earlier this week.

Here’s hoping that Chafee’s proposal sparks a big debate in the General Assembly about the disparity between the haves and have-not communities in Rhode Island as this is arguably the biggest affliction affecting the entire state. After all, no one is talking about how rough it is for East Greenwich, Barrington and South Kingstown have it. Rather it’s the plight of Central Falls, Woonsocket, West Warwick, Pawtucket and Providence that is pulling our state down.

March 13, 2012March 13, 2012

Chafee: State Aid Cuts Put Poor Towns in Peril

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chafee_bryant — 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.”

March 12, 2012March 12, 2012

Budgeting for Disaster Part V: Granting a Problem

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Our tour of the state budget documents continues. We leave the Executive Summary for the time being (we’ll be back for the all-important schedules and for the invaluable predictions of the future), and move into Volume I.

Volume I covers “General Government”, which includes the offices of all the elected officials, and the departments of Revenue, Business Regulation, and Labor and Training. Plus the Department of Administration which holds all the central functions. It’s also got all the quasi-public agencies like the Economic Development Corporation, RIPTA, the Airport Corporation, and Resource Recovery, who runs the state Central Landfill. For each department and agency, there is a summary page, and then a page for each of the major divisions. This is the part of the tour where the guide is supposed to tell funny jokes to fill up the travel time as you cruise from one interesting locale to the next.

The legislature’s budget is in this volume, so let’s look there first. The overall budget for the Assembly is about $41 million this year, and the Governor is proposing to cut it by a little more than $1 million, about half from supplies and expenses and the rest from the grants budget. There’s no change in the number of personnel, and it looks like they’re anticipating a 3% raise for most everyone, and — what’s this? — it’s the rising cost of health care, just like everywhere else. Remember, no matter what you’ve been told, it’s rising health care costs that are pushing up the cost of your government more than anything else.

Legislative grants

Oh, wait, did you want to hear about the infamous grants budget? This is the source of the legislative grants, random bits of money awarded by the leadership to reward this or that legislator for helping out around the place. It mostly goes to non-profits in the legislator’s home district, like say, Dan Doyle’s Institute for International Sport that we’re hearing so much about these days. They apparently got $575,000 in 2007 for a fabulous building on the URI campus that remains unfinished today.

There are also plenty of excellent, well-run non-profits who get support this way. The problem is that the way these grants are awarded has a lot to do with ring-kissing and begging and maybe not so much to do with merit. Lots of ring-kissers have other merits, but when merit isn’t the main criteria, you’ll undoubtedly get some who are better at the kissing than the service. (This makes the occasional screw-up like the Institute into the fault of some specific person, though no one seems to be saying who just yet.)

How much does it cost? On paper, you’ll see a grant budget line item of $2.8 million in the current year, and the Governor is proposing to cut it back to $2.3 million. The way the system works, though, there is much more than that available. The way it works is that lots of the dollars will wind up as line items on the budget of some agency whose mission is vaguely related to the non-profit’s. So a theatre might get a grant and it would come directly from the RISCA budget, not from this line item. This is a problem both because it provides less money for the agency mission, something that you can’t see from the budget documents, and because counting all those grants isn’t possible from the outside.

What else? One can’t help but notice that despite the modest cut Governor Chafee has proposed, the legislature’s budget is up a healthy 42% in ten years, 2003-2012, about 3.5% per year. This is somewhat less than overall state expenses, which are up 48%, but it’s embarrassingly close to the 42% rise over that time in the statewide property tax levy. One thing you’ll hear if you wander around the halls of the State House and talk to legislators is complaints about out-of-control municipal budgets. What those legislators don’t seem to understand is that the town councils and mayors are doing pretty much as good a job as the legislators.

It’s easy to understand legislators not noticing this. What’s less forgivable is the way they keep voting to cut taxes without cutting their own budget. Over that decade 2003-2012, we saw a capital gains tax cut, an income tax cut for rich people, and several high-profile tax credits pass the Assembly. At none of those times did anyone propose a proportional cut in the Assembly’s own budget. Cuts for thee and not for me. If you care about controlling costs in government, this is the kind of behavior that has to be rendered embarrassing (or at least politically dangerous) for elected officials.

Time to move on. Next stop: DMV!
Read the previous posts in this series.

March 7, 2012March 7, 2012

Racial Profiling, Vehicle Checkpoints Bills Heard Today

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Last week here on RI Future, I shared a short podcast about Racial Profiling in RI from the perspective of youth and community organizers working with Providence Youth Student Movement. Here is an extended series of excerpts from my conversation on Sonic Watermelons with Sangress Xiong and Yonara Alvarado, and Franny Choi.

Xiong, Alvarado, and Choi are among community members, law enforcement officials and members of the legislature who will gather today at the State House for a meeting of the House Committee on Judiciary; the Comprehensive Racial Profiling Prevention Act of 2012 (H-7256) is one of the bills to be discussed.

All of tonight’s agenda items deal with “Motor and Other Vehicles,” and most are about motorists driving under the influence. A couple other bills that might be of interest to RI Future readers include H-7222, which “would authorize a bail commissioner to order that a person’s license be suspended immediately upon the report of a law enforcement officer that the person has refused a chemical test for driving while under the influence of alcohol” and H-7203 which, if passed, would “bar checkpoints as a means to detect motorists under the influence.”

For more information about today’s hearing, click here. To read more about my interview with Xiong, Alvarado, and Choi, click here.

***

Hear Sonic Watermelons live every Wednesday
6-8 PM (EST) on www.bsrlive.com.

March 5, 2012March 8, 2012

Budgeting for Disaster – Part III

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We continue our tour of state budget documents. The Executive Summary has a lot of useful information, but the parts that I find myself referring to most often are not the text descriptions of the Governor’s program for the various departments, but the numbers in the back: the summary tables, the planning values the Budget Office used to predict the future, the wonderfully informative appendix C, which shows how much state aid each Rhode Island city or town gets, and appendix D, which does the same for education aid.

In a state with one bankrupt city and several more threatening to dive into bankruptcy, these are the focus of a lot of my attention. What deserves at least as much attention are the same sections from previous years. Let’s start with Appendix C.

The first thing you’ll notice if you flip, click, scroll, or slide to Appendix C is that local aid comes in lots of different forms. There is “appropriated aid”, which comes out of the general state taxes (called “general revenue” in the budget), and “shared” (or “pass-through”) aid, which is money the state collects on behalf of a city or town. For example, “payment in lieu of taxes” (PILOT) money is paid to a town instead of taxes on state property, and is appropriated in the budget, while the meals and beverage tax is a portion of the sales tax, collected on behalf of a city or town and passed on to them.

The meals and beverage tax collected in Providence restaurants goes to Providence and the tax collected in Newport restaurants goes to Newport, and so on. The numbers in the appropriated aid represent actual decisions made by legislators and the governor. The shared aid numbers are just estimates of how much those taxes will bring in.

There are a couple of things worth noticing about these numbers. One is that the state is planning to give the cities and towns $61 million in appropriated aid in 2013, which is exactly the same amount budgeted for 2012. Level funding sounds like a cold shower, but compared to recent history, it’s a warm bath. In 2008, appropriated state aid amounted to about $250 million. Or well, it would have, except the legislature cut $10 million halfway through that fiscal year. Providence got a $2.4 million cut, Pawtucket lost $850,000, and Woonsocket lost $600,000. Central Falls was hit for $250,000.

These are cuts in the neighborhood of 1%, which doesn’t seem that big a deal, although they came halfway through the fiscal year, so the cities and towns had to cut around 2% of their expenses to make up for the lost time. For cities under financial stress, this hurt.

For 2009, the Governor proposed a slight increase in aid, back up to $244 million. But once again, this was cut halfway through the fiscal year, to $215 million. Providence was cut $5.7 million, Pawtucket $2 million, Woonsocket $1.4 million, and Central Falls $600,000. Again, the cuts came along well into the fiscal year, making them at least twice as hard to deal with. For Central Falls, this worked out to cutting more than 7% of the annual municipal budget in a few months.

The pretense of maintaining the level of aid was burst by this point, so the Governor proposed cutting municipal aid by 14% for fiscal year 2010, to $184 million. Are you keeping track? To recap: In September 2007, Central Falls was on track to get $3.6 million from the state, or a bit less than a fifth of their budget. By May of 2009, the Governor was suggesting they get by with half that amount, a 10% cut in their budget.

But even that cut wasn’t enough, and with only months to go in the 2010 fiscal year, the state slashed total aid yet again, from $184 million to $118 million. Providence saw a $12 million cut, Pawtucket $5.1 million, Woonsocket $2.8 million, and Central Falls $750,000. This time, quite a bit of the cut came in the last quarter of the year, leaving virtually no time to make up the cuts. And for the 2011 budget Carcieri proposed to cut total municipal aid all the way down to $49 million. That year, insurgents in the Assembly pressured the leadership to put a little aid back in the budget, but it still only got up to $60 million, down 76% from just three years before.

I’m sure it was a coincidence that Central Falls went into receivership in May of 2010. At least the way everyone talks about Central Falls, their bankruptcy was all the fault of their unions and retirees, and the state played no part besides offering them a receiver to work out their issues. Their annual budget was $18.9 million in 2008, of which $3.6 million was state aid. In 2010, they were promised only $1.8 million, but got only $1.1 million. And in 2011 they didn’t even get half of that.

In 2008, Providence expected to get $65 million from the state, to help with its $302 million municipal (non-education) budget. In 2009, it went down to $57 million, and in 2010, the city still expected to see $49 million, but got $29 million instead. Over two short years, the state cut 10% of the Providence budget, and each time it happened well after the fiscal year was underway. But it’s fashionable to blame David Cicilline for Providence’s fiscal crisis, so apparently there’s no point in asking Governor Carcieri or any of the Assembly leadership what made them think the municipal budgets could withstand this kind of abuse without cracking.

Here’s the part that makes it all a bit worse. A lot of the aid cut technically did not go to the city or town itself, but to you. In the fall of 2009, towns expected $133 million of state aid to reduce the property tax on your car in fiscal 2010. The state was paying a portion of your taxes for you. The towns only got half of that, and almost all the rest was cut for fiscal 2011. Essentialy, the state was telling the cities and towns to make up the difference from property taxes on cars—now! Some did send out new car tax bills, but many just sucked it up and made cuts.

You see a lot of people wringing their hands about Rhode Island’s municipal fiscal crisis—How will we pay for all those retirees? What were those Mayors thinking? Can you believe those unions?—but how often do you see the story of the state budget included in the saga?

When I describe this sequence of events to people, they will point out that state revenues plunged in 2009, so the state had no choice. But this is an absurd position to take. After all, during each year of these huge municipal aid cuts, Rhode Island was increasing the amount of a generous tax cut granted to the richest taxpayers in the state. That is, taxes were cut further each year at the same time aid was slashed to all the cities and towns. Governor Carcieri and Assembly leaders felt that lower taxes on rich people were important enough to slash aid to cities and towns—a position they still hold.

Next: Education (really)

March 2, 2012March 2, 2012

‘Access 2011’ Looks at General Assembly

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The General Assembly complied with the state Open Meetings law nearly 100 percent of the time last year, according to our new “Access 2011” report.

House compliance rose from 94 percent in 2010 to a record 97 percent last year. Senate compliance increased from 90 percent to 99 percent over the same time period. The Senate’s mark equaled the record it set in 1999 during the administration of former Secretary of State Jim Langevin, who introduced the first “Access” report in 1997.

“A critical measure of government’s commitment to keeping the public informed about its activities is accountability.”

The state’s Open Meetings law requires most governmental bodies to post meeting notices and agendas at least 48 hours in advance. While the General Assembly is exempt from the law, the House and the Senate do issue meeting notices in accordance with their own rules.

As in previous years, nearly all the violations occurred during the last days of the session. Nineteen of the 20 total Open Meetings violations occurred during the two days before the General Assembly recessed on July 1. In 2010, there were 28 last-minute violations.

February 8, 2012February 8, 2012

Why Getting Tough Is Weak

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This week the Senate Judiciary voted to eliminate Good Time for people convicted of murder or serious sex offenses (1st degree child molestation, 2nd degree child molestation, kidnapping of a minor, and 1st degree sexual assault). (Good Time is the 10 days per month a prisoner receives for good conduct. In a month where the prisoner gets in trouble, they get no Good TIme, and will get 1-3 months worth of Good Time subtracted from their total.) At the same time, as blogged by Tom Sgouros, A.G. Kilmartin let Wall Street off the hook on the foreclosure crisis. The Attorney General also has a “White Collar Crime” proposed bill that isn’t about white collar crime- it is about corrupt public officials exclusively. He has absolutely no response to the financial crisis that is rampant with actual criminal activity.

It has long been accepted that White Collar crime is more serious than street crime. Even the political debates, which focus on fear and leave rationality behind, don’t have space to waste on street crime- but the Bailout, foreclosure crimes, and mass healthcare fraud make the cut. Yet when it comes to taking action and making the world a safe and secure place, we come back to the tried-and-true.

The “Woodmansee” legislation will put more pressure on the parole board to either release someone, or serve a long and costly incarceration. As prisoners age they get more expensive. Rhode Island will find out. Still unwilling to do something as little as make marijuana possession a civil penalty, the General Assembly’s thirst for prisoners may never cease. Even as the state crumbles around them. It is understandable to want to kill those who have committed terrible crimes, or in lieu of that, lock them up forever. Two factors need to be factored into that impulse: money and morality.

Plea bargains do as much, if not more, for the taxpayers than they do for the accused. It is no small thing to plead guilty to a serious offense, to give up any slim hope of exoneration, or being convicted of a lesser charge. Pleading guilty means admitting to the facts laid out by the Attorney General, and these are not agreed upon in the bargain. They may be inaccurate, and they may come back to haunt someone who is looking for work years later. Pleading guilty also means saving the taxpayers the cost of a trial. Lawyers on both sides should be spending dozens of hours in preparation for a trial. Their investigators would be spending days in preparation. Expert witnesses would be found, and paid. Although the Attorney General’s office and Public Defender are salaried, rather than hourly, enough trials would bring the entire system to a halt. More staff would be hired at a few more million per year. And to avoid this, the Attorney General offers a seemingly lighter sentence than would be had from a judge angry at the audacity of taking it to trial.

Judging by the Attorney General’s attitude towards prisoners, that they all should serve as long a sentence as legally possible (and in some cases, such as Woodmansee’s, spitting in the law’s face)… it is impossible to see any space for rehabilitation in the Attorney General worldview. This is not particular to him. A.G. Lynch, and most A.G.’s around the country, also have lobbyists who fight against any relaxation in the street crime laws, and also actively pursue increases in these laws. Thus, they should not be taken seriously when engaging in, or talking about, reentry or rehabilitation.

Eliminating Good Time based on someone’s crime reinforces the notion that someone will always be the sum of a single day. That they can not change. That they are their crime. This analysis is rampant throughout the criminal justice system, and is not very useful in assessing rehabilitative needs. As someone who has been out for nearly seven years from a second degree murder conviction, I would still be on parole if not for Good Time. And that is assuming the parole board would have looked as favorably on my situation, if my release date were September, 2013.

I’ve been asked recently if the Woodmansee Law, which will surely go through (yet not affect Michael Woodmansee, of course) will be applied retroactively. It is not uncommon for states to feel that court decisions, including those ruled by the U.S. Supreme Court, do not bind them. So it is possible that RI will apply this rule to several hundred prisoners at the ACI. It will not hold up in court however, as prisoners have a “liberty interest” in Good Time credits; once given, they cannot be arbitrarily revoked.

Rhode Island has not hit rock bottom on “Getting Tough” on street crime. It may take more budget, more staff, more prisons. There is some debate of whether anything political can change course without a cataclysmic event. Whereas a minority of the General Assembly do bring some wisdom to the table rather than a “base mobilizing” approach to extremist positions, we shall see.

January 8, 2012January 8, 2012

Is Rhode Island Afraid of Young People?

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Not in the slightest – we keep electing them into office!

In the weeks since I’ve announced my candidacy for Providence’s State Representative District 8 (Federal Hill, Olneyville), I have fielded a lot of questions from friends, family and neighbors. One that keeps popping up, along with “are you nuts?” and “what do state reps even do?” is the one about my age: “aren’t you too young for that?”

Anyone who has worked with me knows I love a good spreadsheet. So I put one together on this question. I’m likely missing several examples of people under 35 elected to the RI General Assembly, but the list was more inclusive than I expected, and is certainly enough to prove a point – Rhode Island likes them young.

And at a glance, it even seems fairly representative of the larger General Assembly in terms of male/female and Providence/Northern RI/West Bay/East Bay.

I’d be interested to see someone else continue asking questions: are young people elected more or less often than their older peers? Who is the youngest person to successfully challenge an RI incumbent legislator? And of course, there’s all the data on the other end of the spectrum. In 2009 when I was around the State House a lot as a volunteer lobbyist for Fair Elections, Representative Peter Martin would joke with me that he was the oldest freshman that year, at 67 years old. What does the historical competition for that honor look like?

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