2015 Legislative Alert
The 2015 General Assembly session is under way. OSTPA begins its weekly Legislative Alert to provide an assessment of activity in the State House and to bring legislation to your attention that we believe you should be aware of in order to take action.
WILL THE NEW GOVERNOR AND THE SPEAKER OF THE HOUSE JOIN FORCES TO CREATE A NEW VISION FOR RI?
The new legislative year begins and we hear the same mantra - jobs and the economy. Does that have any meaning to you after hearing it for so many years with very little action taken to reach the goal of jobs and improving RI's economy? Last year, CVS VP John Kennedy laid out the four pillars RI needed to look at to fix the state's economy. What the state produced instead was a social equity plan. At this point, RI is in dire need of an economic plan, and not the Regional Plan for Sustainable Development that the Statewide Planning Council recently adopted.
Will Speaker Mattiello and Governor Raimondo come together to forge that economic plan?
Only time will tell, but frankly, RI doesn't have a lot of time to figure it out. So many years have been wasted trying to 'move the needle' with inconsequential proposals. It's time to fish or cut bait. If Raimondo and Mattiello cannot create a landscape in which businesses want to flock here or entrepreneurs (in meaningful numbers) want to take a risk, there really will be no hope for the state. How many more middle class families can we afford to lose? How many more businesses can we afford to lose? Remember, it's not just the businesses that leave or close, but the opportunity cost of those businesses that don't start or that do not expand in the state.
How much more evidence do we need?
The move by CVS to expand in Massachusetts recently, rather than in RI, is a perfect and highly visible example of that. Sure, the economic numbers won't include the 'jobs that could have been', but it certainly impacts RI's economy every time a company makes the decision to not do business in RI. It's called opportunity cost. Certainly, given her education and business background, Raimondo understands that concept. But what is she going to do about it? More spending on infrastructure sounds great, but that must be coupled with reduced spending in our tiny state, not more growth in government.
Have you heard any plans for reduced spending from either Raimondo or Mattiello? So far, Speaker Mattiello has given a nod to the concept which in itself is a bit refreshing since no one has mentioned that in the past 4 years. While there are no specifics yet, we look forward to any proposals to significantly reduce RI's structural deficit.
If one considers the $1 billion in projected deficits over the next 4 years, it would seem clear that they really have no alternative but to cut spending. RI has been spending like a drunken sailor since the great recession began and to help offset the increases that the federal government didn't pay for, the answer has been to tax here and increase fees there. This cannot continue. We can't afford it.
Deficits and debt continue to loom large. In the coming year, the pension reform law will be tested in court. Imagine if that battle is lost? Hundreds of millions of dollars will be added to the deficits.That doesn't even consider the most recent report that our individual municipalities have accumulated $5 billion (yes, that's billion) in pension and healthcare benefits for retirees. Then there is the need to decide on the fate of the Insurance Exchange, HealthSource RI. Imagine creating this behemoth, with upwards of $100 million to start up, and then have absolutely no plan to pay for the ongoing costs they knew would be incurred in the future. HealthSource RI was the ultimate project where politicians thought only about what they wanted to accomplish at the moment and thought nothing about the future impact of that decision (sounds a little like historical public pension giveaways). And what about expanded Medicaid? Approximately 25% of our population is enrolled in Medicaid. We need to turn this state around and fast!
Utility Mandates - just another form of taxation Utility bills – A necessary 'evil' if you will. National Grid won the approval of PUC to increase the cost of electricity because, after all, PUC's hands were tied. By statute, National Grid has every right to pass on its costs to purchase power. Here's the kicker, your utility bill includes higher energy costs for renewables that have been mandated by the legislature. It also includes charges and fees that have been mandated by the legislature. To make matters more unaffordable for residents and businesses, more increases will be coming once the costs of the DeepWater Wind project begin to trickle through your bill. And if that's not enough of an increase, then there are always the increases that will come as a result of the big green energy bills that were passed in the 2014 legislative session. Those pieces of legislation mandate increases in utility costs by way of forcing National Grid to pay the higher costs of green energy and those costs must be passed down to the consumer. Nothing is free. The green energy legislation was just another form of taxation, only the tax is collected by National Grid, not the State of RI. But, the state gets its piece of the pie through taxes on increased costs to consumers!
The economic plan that wasn't.
And while we won't go into detail here, most of you are already keenly aware of RhodeMap RI (see numerous links for your edification below), the Regional Plan for Sustainable Development that we mentioned earlier. This plan, adopted last month by the Statewide Planning Council, has the potential to completely reengineer the way Rhode Islanders live, work and move about the state. And, in our view, not in a positive way. Those who believe that there should be an elite group of decision makers, accountable to no one, that know what is best for every individual and family, have created a plan that would seemingly add billions of dollars of debt to our state and local balance sheets and require significant increases in taxes.
While RhodeMap RI has an 'economic development component' as the document states, it is primarily focused on what the planners deem to be 'social equity' as a driving force for improving the economy. If you believe that reducing your freedom of choice, adding billions of dollars of debt and increasing taxes is the answer to what ails our state, then you will find RhodeMap RI to be an excellent plan.
If you believe that maintaining the sovereignty of your city or town or that growing state government larger than it is today, is not the answer, then you will find RhodeMap RI to be as destructive to our state as we do.
Currently, there is a movement afoot amongst the towns that recognize the destructive nature of this plan as they pass resolutions opposing its adoption and implementation.
If your town has not done so yet, you need to make it your New Year's Resolution to urge your town councils to pass a Resolution demanding that the General Assembly put a stop to or completely dismantle RhodeMap RI before local comprehensive plans must begin 'embodying the goals and policies' of the State Guide Plan, which includes the recently adopted RhodeMap RI.
The people of RI deserve a real economic plan. There are 10 towns that have passed Resolutions or written letters opposing RhodeMap RI. Is your town one of them? Coventry, E. Greenwich, Exeter, Foster, Hopkinton, Little Compton, Portsmouth, Tiverton, W. Greenwich and Scituate have taken action. Johnston's Mayor Polisena has declared his opposition to the plan as has Cranston's Mayor Fung. Opposition to the plan continues to grow as people and elected officials learn more about it. That alone is an indication that the plan must not be empowered by current statute and must be stopped.
The Wait and See Game.
So as the 2015 legislative session gets underway, we are eagerly anticipating the new Governor's budget. It will be evidence of her vision for RI. Will it include the $1 billion future deficits in a 5 year plan? Or, will she take aim at runaway state spending? Will she incorporate plans that address the 4 pillars that CVS's VP John Kennedy spoke about at last year's General Assembly economic workshop, but for which very little was done to address them legislatively?
In addition to the budget, OSTPA will be watching for legislation that dismantles RhodeMap RI. We will also inform you, as we have continually done, about proposed legislation that seeks to benefit special interests, or continues to provide more giveaways in an already heavily entitled state, or continues to subvert economic development. For example, one of the first bills introduced this legislative session, H 5074, is to increase the minimum wage for a fourth year in a row, now to $10.10, well above most other states. Or, the bill S 53 to allow drivers' licenses to illegal aliens, or H 5137 to increase child care subsidies yet again.
Are these a help or hindrance to RI's economy? In our view, this just represents more of the same policies that keep RI where we are. And we all recognize by now that RI cannot afford more of the same.
Links to RhodeMap RI information:
Div. of Planning Grant Application Submission for a Regional Plan for Sustainable Development
Politifact - Division of Planning hasn't told us the truth about RhodeMap RI
Local expert on HUD issues/RhodeMap RI - The problem with Community Development Block Grants
Dissecting the GrowSmart RI claims
A perspective on RhodeMap RI and its deconstruction of single family housing
All the Fuss about RhodeMap RI
Mayor Allan Fung's letter
Senator Marc Cote's statement and letter to Grow Smart RI
Representative Canario's letter