Rhode Island – Page 20

April 2, 2012April 2, 2012

RIPEC Report: State Cuts Strangled Struggling Cities

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ripec report state aid — Chart courtesy of RIPEC

A new report from the Rhode Island Public Expenditure Council confirms an idea that RI Future has been reporting on for a month now, namely that state cuts to cities and towns are a big factor in the state’s struggling cities inabilities to balance their budgets.

Since 2008, says the report, state aid to cities and towns has been slashed by more than $175 million, a reduction of 72.6 percent.

“Policy choices made by the state – specifically without accompanying mandate relief, and a provision for increasing state intervention for fiscally-stressed communities – increased the responsibility of municipalities to make changes to their fiscal structure,” reads the report. “In some cases, municipalities were able to effectively balance their budgets despite cuts to local aid. In other cases, however, municipalities made policy decisions to bridge budgetary gaps that did not result in long-term structural change.”

Ted Nesi reports this morning that the report backs up what RI Future has been reporting since early March.

“It lends credence to the argument made by Governor Chafee and others that much of the immediate crisis stemmed from the 73% reduction in non-education aid to cities and towns the General Assembly approved between 2007 and 2011.”

We first reported on this dynamic on March 5. A little more than a week later, we asked Governor Chafee about it, and he confirmed our theory. Here’s an excerpt from that story:

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.”

But no one put it more bluntly than RI Future’s Libby Kimzey, who is running for a seat in the House of Representatives to represent Providence. At a Pecha Kucha event in February said, “Right now the State of Rhode Island is being a jerk to Providence. Those are decisions 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.”

Here’s the video from that:

For too long in Rhode Island, we’ve allowed the right-wing to portray struggling cities’ budget problems as exclusively the result of unfunded pension liabilities. The reality is top-own cuts from the state are far more a factor in why cash-strapped municipalities are having a hard time paying their bills.

March 30, 2012March 30, 2012

Ultrasound Bill Bad Idea for Women, Dr.’s, RI

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Here at RI Future, we give the Providence Journal editorial board no small amount of grief for their reasoning and positions. But we were very pleased to see them take a strong stance against Rep. Karen MacBeth’s bill that will legislate mandatory ultrasounds for women who have decided to have an abortion.

“This approach is a very bad idea,” they wrote in their editorial on the bill this morning. “Doctors and women should be able to make these often difficult decisions with a measure of privacy, and without the cumbersome imposition of the state dictating what should be said and done. Regulations should be based on the health of patients, as much as reasonably possible, rather than on trying to enforce particular religious or moral views of politicians.”

We couldn’t agree more.

As Paula Hodges of Planned Parenthood told us when we first broke this story: “Politicians forcing doctors to use an ultrasound for political – and not medical – reasons is the very definition of government intrusion. Rhode Island lawmakers should not be interfering with personal, private medical decisions that should be best left to women and families and their doctors.”

The Projo points out, as we did last week, that doctors who don’t comply would be subject to fines starting at $100,000 and go up to $250,000. This is a ridiculously large fine, considering there is no medical issue here – only a political one. I suspect the high dollar amount is more about State House politics than anything else in that they might be able to get a few votes be negotiating down the fine.

That said, given the lack of support in the legislature for reproductive rights it might not be all that hard to win over votes on this bill. Less than a third of the Democratically-controlled General Assembly is on record as being pro-choice.

To that end, local women need everyone to let their elected officials know how they feel about this issue that seems to be doing little more than distracting government from dealing with the stuff that is really plaguing our society.

March 29, 2012March 29, 2012

Dear RI: Where’s the Work?

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For those who have never had a day of unemployment that they did not choose, there are no words which can describe the state. For those who, like me, have, you know the feelings. You know the self-loathing, the worthlessness, the despondence, the anger. But most of all, the fear. There is a special terror reserved for the jobless, a dark vicious terror that constantly lurks in the back of one’s mind. It is the terror that the bills will catch up with you. The terror that this may not be temporary, that you may never work again. That it will catch you, and in the end, kill you. And you carry that with you for months.

The job hunt is nearly as disheartening. Each letter sent out is a gamble, each interview a risk. Plenty will offer you tips, plenty will suggest you talk to so-and-so, plenty will say “perhaps if you tried here.” And you force yourself to nod, because you think to yourself, “I have done all of that already,” but you do not wish to get into a fight. But no one will treat you with respect; be it the callous souls who tell you, even in the midst of the worst economic catastrophe since the Great Depression, to “get a job,” or the people whom you are applying for a job with. You will be left on the line for weeks, sometimes without ever getting a response telling you someone else has been hired. Alternatively, they will send you some of the cruelest words in the English language, “thank you for your interest…”

I have sympathy for employers; it is not easy to pull the trigger and tell the job-seeker they will not be hired. But I have no sympathy for the politician who sees the suffering of their policies and yet continues with their madness. The politician says that they have imposed their policies so cities and towns “will get their fiscal house in order.” But they have not imposed fiscal order; they have imposed pain and suffering. Tell the victims of these policies that the political leadership has brought fiscal order. Tell the family who has abandoned their home and is living in their car because property taxes went too high, or the landlord forced to raise rents on tenants they know cannot afford it. Tell the vast majority of the people of this state who pay taxes at a rate nearly twice that of those who can most-afford it that we are bringing fiscal order. Our political leadership has a perverse definition of “order”.

Where’s the work that was promised? I was fortunate enough that I could work for free as a volunteer while I searched for a job. Most are not that lucky. They languish, in trouble, waiting for work that will end their weariness and replace it with accomplishment. Through this hell that has been imposed, they march onwards, driven by the idea of hope, our state motto. The motto so sacred to Rhode Islanders that we placed it on our flag so that it might symbolize us. The Statehouse should be the house that hope built. Instead, it is hope’s marble mausoleum.

The party in power names itself “democratic”. Perhaps they need a lesson in democracy. The word means the people rule. The people. Not the Speaker of the House nor the President of the Senate. If the representatives of the people delivers a bill, “democracy” means the leadership must consider it and bring it to vote by those same representatives, not hold it for further study, their epithet for saying they have killed it. This means that if the people cry out for fairness in our taxes, you cannot dismiss this cry as not having a chance. The people get to decide that, too.

But our “leadership” tells us that we must wait, that the tax policies they enacted six years ago during good times have not yet had their full effect. And yet, our unemployment rate has risen back to 11%, while the rest of the nation sees declines. Our “leadership” tells us we must not tax job creators, while the state loses the very jobs we are asking the creators to create. Our “leadership” tells us business favors tax consistency, but only if that consistency is going down. Our “leadership” tells us they want Rhode Island to be a place where anyone can live, but their policies force cities and towns to raise property taxes so high no one can live here.

I say this as a Rhode Islander. I say this as someone who only recently found a job in this state after nearly a year of trying, and I was not confining myself to only the state. I looked beyond our borders reluctantly, because deep in my heart, I know there is truly no other state for me. I am not ashamed or abashed to say I love Rhode Island, in all its oddities. I do not believe any true Rhode Islander can contemplate fleeing this state without any regret or sadness. And yet, that contemplation has been very real to me. And it is real to the thousands of Rhode Islanders who remain without work, many who have been searching longer than I have, many of whom are more deserving then I am.

There are those who will despise me for what I’ve written here. They will attack me, perhaps call me a demagogue. They will find fault with whatever I say, and seek to undermine my reputation. I do not care about my reputation though, I care about Rhode Island. The naysayers will point to our 11% unemployment rate and deride the citizens of this state as stupid for not abandoning it. They will insult the place of my birth, and me, not knowing or comprehending that the reason the unemployed stay is because as much as circumstances prevent them, they also have hope. They believe in this state. The naysayers look at an idea and say “we cannot do this,” and they will find such and such a reason to stop it. But those with hope will look at an idea and say, “how can we make this work” and search for ways until they have exhausted all possibilities.

We want to make our state work. We want to rebuild this state with our own sweat. We are not asking the politicians in the government to break a sweat, we will do that. We will work the hours, we will do the labor. We ask merely that the politicians on Smith Hill have the decency to relieve the pressures that prevent us from doing so, that they reverse their mistaken policies and free the people of this state to work. That they keep those already working employed. That they enforce policies that actually will bring the idle gainful work. That they take no more from those who have already sacrificed too much.

There is a dividing line between people. On one side are those who do not love this state, who cannot imagine a way out of this crisis, who call for it to be abandoned or else denigrate its people and its government. On the other are those who wish to give their lives for this state, who wish to improve it, who see its possibilities even in the midsts of its failures. I ask the leaders of this state to be the leaders that we know they can be, and lead this state to greatness. Where’s the work? It is before us.

March 27, 2012March 27, 2012

Dooley Takes Issue with Op/Ed on Tuition Increases

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It isn’t often that an editorial is so off-the-mark as to warrant news coverage, but such is evidently the case with the Projo’s take on tuition increases from Saturday morning.

In an article in today’s Journal about a Q&A session with URI president David Dooley, Gina Macris writes: “He spoke at length about the ‘great deal of misinformation’ about the causes of higher tuition and mounting student debt, singling out ‘misguided editorials like the one in The Providence Journal on Saturday.'”

Misguided indeed.

The editorial board seemed to be writing about the rising cost of tuition, then quickly veered into how college isn’t for everybody – almost as if this was part justification for the cost of college rising.

“For many years, college tuitions have risen at up to three times the general inflation rate,” Saturday’s editorial said. “This has happened as society’s leaders constantly harp on the importance for many young people of getting a college education. That idea is exaggerated in our view; for many people, obtaining a post-high-school vocational education would be considerably more useful than going to a liberal-arts college.”

It’s true that tuition is rising far faster than general inflation. And it’s true that our leaders “harp on” the importance of a higher education (as well they should). It’s also true college isn’t for everyone and many are better served with a vocational education. But to put those three statements together makes it seem as if the Projo thinks we are wasting our time trying to make college available to the masses and we might as well just send the smartest and richest and let the rest enjoy auto shop – or eat cake, as it were.

Dooley took issue with the Projo’s insistence that “curious courses” and high-paid staff were driving up costs at URI.

“A proliferation of curious courses is not a cost-driver at URI,” Macris said he said. And she also quoted him as saying, “we are driving up higher education costs because we are anxious to add higher-paid administrators is one of the sillier things that I’ve read.”

Dooley knows the real reason tuition is going up, and he explained it to me last week.

“Public higher education is increasingly seen really out of necessity I think in the view of a lot legislators as a discretionary part of the state budget,” he said. “They have long assumed … that if they fund higher education less and ask families to do more, Americans have such a strong belief in the value of higher education, particularly public higher education, that they will pay more and they have been willing to do that for two decades. ”

Dooley called this model “unsustainable.”

March 26, 2012April 1, 2012

Budgeting for Disaster: Medicaid in the Budget

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In volume II of the budget, you’ll find there the Executive Office of Health and Human Services (EOHHS), which contains the Departments of Children Youth and Families (DCYF), Health (DoH), Human Services (DHS), and Behavioral Healthcare, Developmental Disabilities, and Hospitals (BHDDH).

Collectively these departments spend over $3 billion, about 40% of the overall budget. In the Governor’s budget, only about 40% of that is actual tax dollars, and the rest is either federal money or restricted receipts, such as fees for service.

The big kahuna in the Human Services budget is, of course, Medicaid, so we may as well begin there. The expense for Medicaid has been moved from the DHS budget to the umbrella EOHHS. This, of course, means nothing to the budget’s bottom line, only that the accounting for that expense appears on page B2-118 for years before FY12 and before, and on B2-12 for FY13 and beyond.

So much for where to find it. How much is it? The Medicaid budget for next year is projected to be $1.66 billion, approximately the same as was originally budgeted for this year.

The same as this year? But what about the skyrocketing medical inflation? It’s there, but masked by offsetting cuts in service. The “Managed Care” portion of Medicaid that you see in the breakdown of the Medicaid costs is also known as RIte Care, and it has more than doubled in ten years, though it still amounts to only about a third of all the Medicaid. The annual cost increase for Managed Care has been about 7.5% each year. Eligibility rules tightened, but demand increased, so that includes a very minor decrease in enrollment over that time. What’s worse, federal reimbursement paid for 55 cents of every dollar in 2003, almost 64 cents in 2010 (part of the stimulus package) and only 51 cents in 2013.

In order to control these costs, the state has added or increased co-pays and restricted eligibility several times in recent years. Apart from that, there has been little more than some studies and planning from Lt. Governor Elizabeth Roberts in response to this ongoing disaster—remember, this affects everybody, not just the state budget—and this year is no different. The Governor’s 2013 budget will cut all dental care for adults to save $2.7 million. “Refinements to Medicaid managed care programs” will save another $2.5 million [ES-56]. Lots of these refinements involve cutting services, though some, like providing more care through “Patient-Centered Medical Homes” are potentially good ideas, depending on how they’re implemented.

One problem with the push for managed care is that in some cases it may well insert a new layer of bureaucracy where none is needed. A director of a residential care provider pointed out to me that his agency is already providing managed care for most of their residents. That is, with the advice of a consistent array of medical professionals, the agency selects care options for its residents. This is pretty much what the medical home concept suggests. If new requirements simply force them to add a layer of doctors to what they’re already doing, it won’t necessarily reduce any costs or improve any care. (It also calls into question the cost savings estimates for the managed care push.)

The other big component of cost saving in Medicaid is a proposal to save another $14 million by simply paying 4% less for the care.

Paying less? Who knew you could just solve the health care cost problem so easily. Why didn’t we think of this years ago? But yes, the Governor’s budget proposes paying 4.14% less for all Medicaid coverage that require a monthly per-person fee (“capitation”). This is mostly Neighborhood Health Plan, though United Health also has a share of that market. Neighborhood, though, has the misfortune of being in the business of serving the Medicaid population almost exclusively, so they will be much harder hit than the other two. Obviously any cost cutting reform has to start somewhere, but it’s hard to see how this will do the trick.

It’s worth an aside here to mention one of the factors in health care cost inflation that seems never to come up in serious discussions of the rising cost of health care. After all, what’s the fastest-growing component of a medical practice’s expenses? More likely than not, it’s health insurance for its employees. For all the fancy machinery of modern medicine, it’s still a labor-intensive business. A giant facility like Rhode Island Hospital puts more than half its budget towards salaries, and a small practice will see an even higher fraction, 70% or more.

A physician’s assistant earning $65,000 a year is probably receiving a health benefit worth around 20% of that if he or she has a family. What’s more, all those pharmaceutical firms, medical device manufacturers, and bandage makers also have to deal with rising health care costs. In other words, a significant part of what an increase in health care costs pays for is… an increase in health care costs.

This sounds like a dopey little irony, but engineers call this a feedback loop, and electronic systems with less feedback than this also spiral out of control. Obviously there are plenty of factors driving health care inflation—not least the vast number of people who see health care as a way to get rich—but at root, linking health care and employment creates an unstable system, prone to amplify increases. Could that not be worth some attention?

Next: Food inspection dereliction
Read more from this series

March 21, 2012March 21, 2012

Video: Why Flat Tax Hasn’t Worked For Rhode Island

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Rhode Islanders for Tax Equity release a powerful new video today that explains why un-flattening the income tax code and increasing the rate that the richest residents pay would help to solve many of the issues that are currently plaguing the state.

The group, made up of many unions and economic activist groups from around the state, is pushing for passage of the Cimini-Mill bill which would increase income taxes for those who make more than $250,000 a year.

You’ll notice the video says the tax rate was lowered in 2006. And if you’re a regular reader of RI Future, you’ll remember that House speaker Gordon Fox told me recently he wouldn’t consider this bill this session because it is the first year that the new tax rate was in place. In actuality, the tax rate has been getting flatter since 2007 and this is the first year it is completely flat at the top.

Here’s a chart showing unemployment going up as the top tax rate goes down:

RITE has an interesting slogan on its website: “Rebuild RI the RITE Way.” Not too far off from the Projo’s new series of the state of the state’s economy, “Reinvent RI.” Interestingly, both efforts are designed to help Rhode Island get out of the economic mess it is in.

George Nee, president of the AFLO-CIO and a member of the group, added in a press release that such a move would be a boon for Rhode Island’s struggling economy:

“Only the top 2% of income earners in Rhode Island will be affected by this bill. Our hope is that the other 98% will benefit through this increased revenue, which could be used to lower property taxes, help small business owners create jobs, stop college tuition increases, restore funding to programs for the neediest Rhode Islanders, and fix our roads and bridges. This is a bottom up campaign. We are hoping this video helps educate and motivate lower and middle-income Rhode Islanders and helps create a groundswell of support for this bill.”

March 21, 2012March 21, 2012

Committee Considers Legalized Marijuana

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Marijuana would be legal, and available at designated stores, if a bill being heard at the State House tonight were to become law.

“It would be a brave new world,” said Rep. Edith Ajello, a Providence Democrat who is sponsoring the legislation. “It would be taxed. There would be stores that sold marijuana, legally licensed by the state just as stores are licensed to sell alcohol.”

Ajello, it should be noted, doesn’t think that brave new world will come to fruition this session. Not only does she not think her bill would pass this year, she doesn’t think the federal government would allow the change.

But a related bill, which would decriminalize marijuana, might. This bill, she said, has healthy support in both chambers and is similar to the law in Massachusetts and Connecticut.

That decriminalize bill, sponsored by Rep. John Edwards, D- Tiverton, Portsmouth, would lessen the punishment for possession of less than an ounce of pot a ticket and a $150 fine. Oh yeah, and “forfeiture of the marijuana,” according to the bill that will also be heard tomorrow night.

Law enforcement is expected to oppose the legislation.

Maine, Massachusetts, Connecticut and New York have all decriminalized possession of small amounts of pot. In total, 13 states have such reduced penalties for possession.

Ajello said she expects marijuana will be legal in the near future once more people realize how harmless it is.

I do think it is where we will be,” she said. “Marijuana is not thought to be any more dangerous than alcohol and we have legalized and taxed alcohol. I think ultimately we can move through decriminalization to legalizing and taxing.”

March 19, 2012March 19, 2012

ACLU: Flanders Flouts Law By Delegating His Duties

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The Rhode Island ACLU filed a lawsuit today against Central Falls receiver Bob Flanders saying he is improperly delegating authority to his chief of staff Gayle Corrigan.

Flanders, ACLU attorney Jennifer Azevedo said, “is stepping in for the mayor and city council. If he is going to do that he should have to do what mayor and council do. He has no authority to pass off his duties to a third party.”

Corrigan presides over Central Falls public meetings and makes recommendations that Flanders later signs off on. Azevodo said Flanders has no more a right to pass off this responsibility to a third party than would a mayor and council. Her suit contends that by doing so, Flanders is violating the Financial Stability Act, the law that put a receiver in place in Central Falls.

“The citizens of Central Falls have had their mayor and council taken away from them they have no self government,” Azevedo said. “If receiver can’t turn up for meeting himself then the people essentially have no one listening to them at all.”

She said the Rhode Island Supreme Court case Moreau v. Flanders spoke to her case when a justice wrote, according to her press release, “the receiver may exercise the powers of an authority or office to the limits of that authority or office, and no further.” Flanders is a former member of the state Supreme Court.

Flanders told me “there is nothing that requires there to be meetings,” let alone that he attend them. He said the Financial Stability Act empowers the receiver to make decisions through orders and because it expressly says that it is to, as he said, “take precedence over any contrary laws” he can make orders without holding public meetings as a mayor and council would have to do.

In a letter to the ACLU dated January 30, he wrote:

“There seems to be a fundamental misunderstanding on your part that “third parties” are exercising the “extraordinary powers” ofthe receiver. Nothing could be further from the truth. With regarding to the parking ordinance, neither myself nor any member of my staff enacted any such ordinance at any public meeting. Whenever I exercise the powers ofthe Central Falls City Council, I do so by order, as R.I. Gen. Laws 45-9-20 requires me to do. I personally execute all orders of the receiver, and I assure you that I have never delegated that authority to anyone. In the case ofthe parking ordinance specifically, a copy of the order that I executed on January 6, 2012, is enclosed.”

The suit is expected to heard on March 30 in Superior Court. It could go before Judge Taft-Carter, who has seen many high-profile cases as of late, though it could also be moved to the business calendar and be heard by Judge Silverstein who has heard other cases relating to Central Falls.

March 19, 2012March 19, 2012

RI Progress Report: Reinvent RI, Receivers and OccupyURI

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The Providence Journal kicked off a great new series on Sunday called Reinvent RI in which the paper does a great job analyzing and identifying the problems with our economy. The Projo says the state’s downturn is a result of a slumping housing economy coupled with a transition away from manufacturing – not high taxes or union dominance as some would have you believe.

Kate Bramson details five priorities for Rhode Island, including taking better advantage of our ports, keeping our college graduates here in state, retraining our workforce and taking advantage of what Allen Tear of Betaspring called our “unfair lifestyle advantage, an unfair cool advantage.”

Of course, Rhode Island’s business climate was also cited as a priority, but Bramson keeps great perspective writing that RI must, “reach out to help traditional small companies and the innovative start-ups that are developing new technologies and will be future job creators.”

— Meanwhile, over on the editorial page, Darth Flanders penned an op/ed with Gary Sasse extolling the benefits of municipal bankruptcy. It read as if Flanders and Sasse were selling the idea of municipal receivers to mayors and managers across the state, even though they led off by saying, “If the reader takes one thing from this article, it is that only after exhausting all other options should financially troubled Rhode Island municipalities” consider bankruptcy. Of course the next sentence started with a big giant, “But…”

— In other financial news from this weekend, Ted Nesi made a great observation about Rhode Island’s economy. Namely that public sector unions aren’t nearly as powerful as people think, and Wall Street is much more so.

“For all the talk about labor unions’ power in Rhode Island, their influence over political leaders is still trumped by the might of another formidable institution: Wall Street. When Rhode Island’s leaders are faced with a choice between investors and public-sector union members, they consistently side with the former. The bondholders law, which explicitly protects creditors over pensioners, is one example of that; the suspension of democracy in Central Falls is another.”

— Economic inequality has become such the debate dejour that they are even talking about it in East Greenwich, home of Rhode Island’s largest concentration of the 1%. Lisa Sussman wrote a great piece for EG Patch about why this upscale suburban enclave really shouldn’t complain about Chafee’s municipal plan. Read the comments to see me get beat up for sticking my nose into the fray!

— Given all this gloomy news about the state of the state, what are we to do about it? Well, Occupy URI will be protesting at the Board of Governors for Higher Education meeting today at 5:30 at the URI Bay Campus “to object to the unrelenting diversion of funds from public education in Rhode Island, and to bring to the Board’s attention grave concerns regarding the constitutionality of those diversions,” according to a press release, which also says:

“In addition to being patently unconstitutional, the diversion of funds from education is morally reprehensible. Nevertheless, The RI Board of Governors, continuing a trend spanning decades, approved an explosive 9.5% tuition increase for the University of Rhode Island for the 2012-13 academic term. This has led to an unconscionable burden on those seeking the opportunities guaranteed to them in the RI Constitution.”

March 17, 2012March 17, 2012

Bishop Tobin on Gay Marriage: Not Christ Like

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In a not-very-Christ-like op-ed piece titled “Five Problems With Homosexual Marriage,” the leader of the Catholic Church in Rhode Island reaffirmed his objections to same sex relationship equality.

“It’s a sure sign of spring, as predictable as the Red Sox at spring training, the swallows returning to Capistrano, and the flowing of green beer on St. Patrick’s Day,” wrote Bishop Thomas Tobin. “I’m referring of course to the public re-appearance of the determined proponents of homosexual marriage.”

Yeah, nothing says warmer weather to come like people fighting for equal protection under the law. Most unfortunately, when it comes to the Catholic Church, it seems that hate springs eternal.

Not to fear though, Rev. Gene Dyszlewkski, chair of the Rhode Island Religious Coalition in Support of Marriage Equality quickly shot back.

“No Christian I know believes in discrimination,” he said in a statement rebuking the Bishop. “No Christian I know thinks it’s OK to deny basic human rights to a minority class of citizens. I think Bishop Tobin would do well to remember that. These continued attacks on our gay and lesbian brothers and sisters only further perpetuate the notion that some religious leaders are out of touch with members of their faith.”

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 15, 2012March 16, 2012

RI Mulls Reducing Payday Loan APR: 260% to 36%

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ferri_payday — Rep. FRank Ferri testifies at a hearing last night on his bill that would reform paypay loans in RI. In the background is former Bill Murphy, former House speaker, who opposes the bill.

Roger Paquette works at a bowling alley in Johnston and when needed some quick cash and he didn’t know where to turn. So he took out what’s known as a payday loan. It’s a decision he now regrets, he told a House subcommittee on Wednesday.

“It’s not good,” he said. “There’s no easy way out of it, unless you get lucky.”

Paquette was eventually able to clear his debt. But not before he paid $500 in fees on his $300 loan.

His employer, Rep. Frank Ferri, a Warwick Democrat, decided to do something about it. He has sponsored legislation that would trim the annual percentage rate for a payday loan in Rhode Island from a whopping 260 percent back to the previous rate of 36 percent.

“It’s a debt trap,” Ferri said, prior to the hearing.

Ferri said the rate used to be 36 percent, before the general assembly passed a law that effectively raised the rate to 391 percent. In 2005, it was lowered all the way down to 260 percent. That’s $1,300 in interest on a loan of $500, the maximum amount allowable under by law.

There were 143,201 payday loans made in Rhode Island last year for a total of more than $53 million, said Margaux Morisseau, with NeighborWorks Blackstone River Valley, a community-building non-profit based in Woonsocket.Only 2 percent of payday loans she said go to people who pay them all back and don’t take out another one.

“Payday lenders annually drain millions of dollars from Rhode Island families, mostly to out-of-state payday chains,” she told the House committee.

Morisseau said payday loans shops typically set up in the poorest areas of the state. They are illegal for military personnel, she said, as per a bill sponsored by Rhode Island’s own Senator Jack Reed because, as she put it, “they are seen as a threat to our national security.” Because these loans turn over quickly and carry such a high interest rate, they can be very stressful for those who choose them, she added.

Industry insiders at the hearing last night say such loans are the only way some people can get quick access to cash in an emergency. So did Rep. Peter Petrarca, D-Cranston, who exchanged heated words with Ferri.

But Moriseau said at last night’s hearing, “Safe, responsible, alternative products are now available to consumers. Nonprofits and Credit Unions have created easily accessed products that meet the needs of consumers at a reasonable interest rate.”

In an email, she provided these example:

Capitol Good Fund lends $2000 loans at 15% APR. Their customers have taken out CGF loans to help get out of the payday lending debt trap.
West Elmwood Housing Development Corporation is piloting the “Neighborhood Loan Store” that makes loans up to $1500 at 18-25% APR.
Navigant Credit Union also recently launched “Smart Start” a safe, easily accessed alternative product at all of their branches. They loan $600, with a 90 day term, no credit required.

March 15, 2012March 16, 2012

Synchronicity at SXSW

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If there is one word I can use to describe my experience so far down at South by Southwest, it would be synchronicity. On at least two occasions, I’ve mentioned people I wanted to see only to see them no more than 12 hours later, and I met a Rhode Islander working at a car company’s vendor booth!

For those that don’t know, I’m down at SXSW to enjoy the tunes and performances of some of my favorite performers and to conduct interviews for Rhode 2 Africa: Elect the Arts 2012 (R2A 2012). But for now, the pictures above show some of the fun I’ve been having with Riders Against the Storm, the Austin-based band (that used to live in RI) that I am interviewing for R2A 2012, other RI friends who are here, and some of the musicians I’ve caught, including Shane Hall, 5th Elament, and Queen Deelah.

If you want to follow other “Reza Rites at SXSW” updates, follow me on Twitter and Facebook @rezaclif. If you are interested in learning more about R2A 2012, visit www.rhode2africa.wordpress.com or follow the link below to donate toward travel, equipment, and staff supports.

March 15, 2012March 15, 2012

Woonsocket, and How Chafee’s Muni Bill Can Help

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Woonsocket High School (photo courtesy of Woonsocket School District)

The Woonsocket School Committee voted last night not to close schools early, which is good news all around. But guess what? Schools were never going to close early. If Woonsocket can’t come up with the money it needs to run them by April 5, which it probably cannot, the state will step in and keep the schools running. The state Constitution says it has to.

Furthermore, under the new state education funding formula, RIDE has all but admitted that it shortchanged the cash-strapped city under the previous funding formula to the tune of $4.6 million, an amount the state will pay to the school district over the next seven years. Woonsocket, along with Pawtucket, is suing the state saying it needs that money right away. Obviously, this isn’t a bluff.

Yes, Woonsocket could have managed its finances better. A lot better. But the state mismanaged how it funds education, too. Couple these blunders with the drastic cuts to cities and towns that occurred over the past several years and you have the recipe for disaster that was cooked for Woonsocket.

Governor Chafee’s municipal aid bill will help. It will not only allow cities and towns to save money by cutting annual pension increases for retirees, but Chafee said on Tuesday it will also allow Woonsocket (and Providence, Pawtucket and West Warwick) to ignore some of the state mandates that drive up expenses.

Providence Journal State House scribe Randal Edgar, who evidently obtained a copy of the legislation, has a little more on what those are: mayors and managers would be given the power to veto line items in school budgets; teacher pay increases will be suspended, bus monitors can be replaced with cameras and allow those communities to stop busing students to private schools.

But at some point, and hopefully sooner rather than later, this state has to come to terms with the fact that top-down policies adopted during the Carcieri era, and a seemingly utter disdain for its poorest communities, has created this problem to a far greater degree than have unfunded pension liabilities.

March 14, 2012March 16, 2012

Lawsuit vs. State Could Cut Woonsocket Deficit in Half

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Woonsocket may be taking heat for saying it might have to close schools, but the School District has a mighty strong hand in its negotiations with the state on how to close the budget deficit.

The Department of Education plans to pay Woonsocket $4.3 million in state aid that the cash-strapped city didn’t receive under the previous school funding formula, said Elliot Krieger, a spokesperson with RIDE.

“Woonsocket was one of the underfunded districts,” Krieger said.

Under the new formula, designed in part to re-compensate the money that some districts didn’t receive under the previous formula, the $4.3 million is to be “phased in” over the next seven years, he said.

“It would too much of a shock to the system to do it all in one year,” Krieger said.

But Woonsocket and Pawtucket are suing the state in Superior Court, contending that spreading the payments out over seven years is unfair to them given their fiscal constraints.

“The problem is with the funding formula,” said education lawyer Stephen Robinson, who is bringing the suit against the state. He represents school districts in Portsmouth, Pawtucket, Central Falls and Tiverton. “It’s not fair to the poor urban districts. The reality is Woonsocket does not have fiscal capacity to fund [education].”

While even if Robinson wins the case and Woonsocket gets all the money it is owed it still wouldn’t close the school district’s deficit of $10 million, the city does hold another ace in its hand. In Rhode Island, the state has ultimate responsibility over public education.

“It’s in Article 12 of the state Constitution,” said Tim Duffy, executive director of the Rhode Island Association of School Committees. “The state and federal government have now articulated standards that schools need to meet. In order to meet those standards they need to have funds to meet them.”

Duffy said the state could ask Woonsocket to implement a supplemental tax increase. But given that Governor Chafee said yesterday that state aid cuts to cities and towns disproportionately hurt poor urban communities like Woonsocket, it might not be the way he chooses to handle the matter.

Christine Hunsinger, a spokesperson for Chafee said Rosemary Booth Gallogly is working with Woonsocket Mayor Leo Fontaine and the city council to “better understand what potential options are out there.”

According to Chris Celeste, Woonsocket’s tax assessor, the city has raised property taxes in each of the last three years.In 2008-09, property taxes went up 4.75 percent, which was the maximum increase under state law. In 2009-10, the maximum increase was 4.5 percent and taxes went up “right about that,” he said. In 2010-11, property taxes went up 4.16 percent with the maximum increase being 4.25 percent.

March 14, 2012March 14, 2012

RI Progress Report: Central Falls disagrees, lottery logic, Chamber of Charity in SK, Mitt Romney and Goldman Sachs

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Seems the state and Central Falls are in disagreement once again. While Rosemary Booth Gallogly issued a three-pager exonerating CF receiver chief of staff Gail Corrigan of any wrongdoing when she let her mom volunteer in the city’s finance department and hired her lawyer’s daughter, the Central Falls City Council plans on doing its own investigation, TurnTo10 reports.

Meanwhile, CF residents are growing increasingly angry at receiver Bob Flanders. At a meeting last night, according to the Projo, after he and Corrigan got up to leave early, people shouted at them “coward” and “people are leaving without their questions being answered.” Really? You’re being paid $360,000 a year to forever alter a community and people’s lives and you can’t stay for the whole meeting?

— Boy, we sure are lucky Rhode Islanders keep winning the lottery. Or maybe it’s just the law of averages. After all, according to Ian Donnis, Rhode Islanders play the lottery more than others. And while this is good for state coffers, and every once in a while we get a good string of wins, per capita lottery players is another list Rhode Island doesn’t want to finish first in. “As I noted last week,” Donnis wrote, “the Tax Foundation calls lotteries a hidden tax that take a disproportionately heavy bite from poor people. The foundation also finds that lotteries divert money from retirement savings.”

— Mitt Romney on Planned Parenthood: “we’re going to get rid of that.” For more on the ridiculousness that has become the GOP nomination process, check out Samuel G. Howard’s post this morning.

— Call it a Chamber of Charity. Down in South Kingstown, the Town Council will debate tomorrow night whether or not to continue giving the local chamber of commerce a $7,000 tax abatement. The chamber has received the abatement for the past three years under an exemption for organizations engaged in “charitable purposes,” according to Narragansett/SK Patch. Chambers of commerce may do good work for their communities but there is a world of difference between what they do and charity.

— A great op/ed in the NY Times today by a Goldman Sachs executive who says he can no longer in good conscious work there. He writes: “The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.

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 13, 2012

Reza Rites and RI Future at SXSW in Austin, TX

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Heard of South by Southwest, but can’t be in Austin yourself? Pop in daily to “Take 5 with Reza Rites” on RIFuture.org for photos and live updates about her adventures at the annual festival – or follow her on Twitter and Facebook @rezaclif. Besides blogging for RI Future, Reza will be recording interviews and footage for an election-year multimedia project being released in June, “Rhode 2 Africa: Elect the Arts 2012.”

PROVIDENCE, RI & AUSTIN, TX – For those who don’t follow me or RI Future on Twitter (and I recommend that you do), you may have missed some pretty cool news: RI Future is going down to South by Southwest in Austin, TX – represented by me, Reza Rites!

Now, for those not quite sure about what SXSW is…

It’s only one of the biggest annual cultural festivals for techies, filmmakers, and musicians! And Reza Rites / RI Future won’t be the only New England folks there. So far I’ve received tips and tweets from peeps and tweeps about artists from Worcester, Providence, and Narragansett (Shane Hall, Soldiers of Life, Joe Fletcher and the Wrong Reasons, Boo City, and 5th Elament to name my current list) – and those are only local / regional folks!

I leave later this afternoon, but to get mentally prepared, I spent the last two weeks talking to representatives from Boo City and ERB about what to expect. To summarize their answers – it’ll be a big party.

So yes, I’ll be taking some of my music and dancing shoes out there because the DJ and music consumer in me can’t be silenced. But if you know me or have been following my posts here on RIFuture.org, then you know that I view music as more than just gateway to fun. And my participation in SXSW could be no better demonstration than this.

Not only will I be in Austin blogging for RI Future and capturing the “cool,” I’ll also be down there talking about politics and election year 2012. That is because this trip represents the final phase of filming for a a multimedia project I began in October called “Rhode 2 Africa: Elect the Arts 2012” (R2A 2012).

Below is an excerpt about the film/series; for additional information, visit www.Rhode2Africa.wordpress.com or click here to access the information page. To make a donation toward the project to help me with producer and artist travel costs, equipment purchases, or staff supports, click here.

***

Riders Against the Storm (RAS) is a husband-wife hip hop duo who relocated from Providence to Austin, bringing their political and social justice message right with them. They are participating in SXSW and they will be featured in Rhode 2 Africa: Elect The Arts 2012. Prior to moving, RAS participated in R2A Year One.

ABOUT RHODE 2 AFRICA: ELECT THE ARTS 2012

There is room at every election to hear and examine new voices and ideas. This year is no different. As a matter of fact, as protesters part of Occupy Wall Street, and break-off movements like Women Occupy and Occupy The Hood have demonstrated, citizens across this country have grown tired of never hearing from the variety of voices making up the “99%.” Still, if you pay attention to major news outlets, you would think that the only people who care about the November elections are the all-white Republican candidates and their party followers.

One place in which you can hear alternative voices and views on politics is within the music community. Besides being heads of households, tax-payers, insurance-holders, and voters, there are many performers who play at political events, directly and indirectly endorsing candidates; hip hop artists who “rap” about reform and rebellion; and emerging and established artists who’ve performed at The Whitehouse.

Rhode 2 Africa: Elect the Arts 2012 is about sharing the voices of Black musicians engaged in this type of work. Standing in contrast to the limited news coverage we see daily, R2A will provide election 2012 coverage and awareness through conversations on race, politics and music. Our goal is to make sure that diverse constituencies are motivated to vote in November and engaged in political conversations at the local, national, and global level.

***

CONTACT INFO

Reza Corinne Clifton:
“Reza Rites / Venus Sings / DJ Reza Wreckage”
rezaclif@gmail.com / 401-217-9680 / singsvenus@gmail.com

www.Rhode2Africa.wordpress.com / www.VenusSings.com /
www.RIFuture.org / www.IsisStorm.com /

Facebook & Twitter @rezaclif

NEXT STEPS

Learn more about R2A 2012 by clicking here and getting more information about the project, which is in-production and scheduled to be broadcast-ready and screening-ready in June, 2012.

Learn more about R2A Year One by clicking here to watch and listen to R2A Year One episodes.

Help fund the project by clicking here to make a donation toward the project to help with producer and artist travel costs, equipment purchases, and staff supports.

Tell a friend or potential sponsor/donor.

March 12, 2012March 12, 2012

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.

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.

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