Not Just another Laundry List.
When it comes to providing expected government services, everyone knows that RI has not spent taxpayers' money in order of priority. RI's leaders have chosen to ignore our roads and bridges, they have placed a moratorium on building new schools, they have passed mandates that increase the cost of doing business, and, it looks like, at least in the City of Providence, they don't even provide adequate snow removal.These are basic services that we expect from government.
Yet, year after year, elected officials have chosen to increase the cost of government by providing more in welfare benefits, not the least of which has been through Medicaid.They have chosen to allow unfettered illegal immigration into the state with its attendant costs in our medical, housing and education systems. They have mandated higher costs for utilities. They have required municipalities to increase property taxes with mandates for low income housing.
Of course, the mandate that comes along with statutorily allowing public sector unions is a significant cost incurred at both the state and local level.This isn't just another laundry list of taxpayers' concerns, it's very real. So are the consequences.
Case in point: This Thursday, March 5th, two bills providing for binding arbitration and perpetual contracts will be heard in the House Labor Committee. For those of you who have followed these bills over the years – going back to the early days of Gordon Fox presiding as Speaker of the House and, (as it is today), Senate President Paiva Weed – public unions have shown that they will persist in bringing various and multiple forms of this legislation to committee. If passed, this would be the death knell of every property taxpayer in Rhode Island and most certainly would send a loud and clear message to business that our focus on jobs and the economy amount to nothing but lip service. We urge you to be at the State House this Thursday, show that you will not be worn down, testify or sign-up in opposition and call or write Labor Committee Chair Shekarchi, your own representative and the Speaker of the House. See below for details in the 'Legislative Hearings' section of this Legislative Alert.
Benevolent Government, Wrong Priorities
Our new Governor, with both immediate budget deficits and even larger looming deficits in the relatively near future, has found that there is "truth in numbers" in the budget just as she had found it in the pension data. The cost of expanded Medicaid and the historical fraud, waste and abuse in that and other welfare systems has come to the forefront. Governor Raimondo has been very vocal about the inability of the state to meet the financial demands of the Medicaid system that she agrees, is an outlier compared to other states. It would appear that she is very serious about addressing the Medicaid issue.
But beyond that, her platform when running for Governor called for more low income housing, more green energy and yes, drivers' licenses for illegal aliens. RI's problem all along has been that our elected officials, in their effort to be seen as benevolent, do not take into account the ultimate impact of these ideals. All of them come at a cost - both a financial cost and an opportunity cost. What the government spends in one area, cannot be spent in other areas. When a Governor mentions increasing the sales tax to 8%+, creating another area where RI will be an outlier, it should frighten all of us. It is a signal that the tough choices that need to be made are not on the table.
Talking the Talk but not Walking the Walk
The General Assembly this week alone introduced legislation to increase childcare subsidies again, increase pensions, increase green energy mandates and tax credits, and add to the health insurance mandates. That is on top of the bills introduced earlier this session to increase the minimum wage, add to state health benefits, add to the cost of the unemployment system, allow for binding arbitration and perpetual contracts, permanently appropriate millions for low income housing and increase the individual income tax rate.
It is also on top of the Regional Plan for Sustainable Development - RhodeMap RI, that part of the State Guide Plan, outrageously referred to as an economic development plan, that speaks to more low income housing (which puts pressure on property taxes), more green energy and more infrastructure costs than the plan's drafters could calculate.
One bright spot comes from the Republican Caucus: two bills were introduced last week to dismantle RhodeMap RI, H 5643 and H 5644.
Can't Cut Our Way to Prosperity…
The Governor said we can't cut our way to prosperity, but we can't increase taxes or toll our way to prosperity either. Fixing systems that are known to be outliers is the first step. This state is capable of doing more than one thing at a time. If we address Medicaid and welfare fraud, if we address the TDI and unemployment systems, if we put a moratorium on the funding and mandating of low income housing, if we clean up the regulatory environment, if we stop the unfettered illegal immigration, and if we put a moratorium on all of the past green energy mandates (including another look at DeepWater Wind), perhaps we might have a fighting chance to create a business friendly environment.
And Yes, It Could Be Another 38 Studios
That brings us to the concept of funding the Pawtucket Red Sox. While no details have been provided, other than the fact that they are definitely leaving Pawtucket and would like to call Providence home, the writing is on the proverbial wall. Pundits have interviewed people familiar with the workings of public/private partnerships with sports teams. Team owners will ultimately demand government subsidies in some form whether it be in credits, loan guarantees, etc. It is OSTPA's position that we simply don't have the bandwith to jump at this venture when the metrics have not been forthcoming.
If Providence or the State must subsidize part of this endeavor remember two things - first, we don't have the financial resources to do it, and, second, the opportunity cost means that if we find the money we will not be able to use it for other job creating ventures. And, of course, there is a third issue - land.
The I 195 parcel is a scarce resource that cannot be duplicated in the
future. It is finite. Once it is gone for the purpose of a ball field it is not available for job creation in the future. And although it seems like no one is currently interested in that land, if our elected officials ever find the political will to address all of the issues noted above, there will be interested parties in the future.
Education reform is part and parcel to RI's path toward prosperity. If you remember, at election time OSTPA pointed out that the governorship itself may not have much in the way of power amongst the three branches of government, but the office wields power through its appointments to important positions. The new administration has removed the Chair of the RI Board of Education, Eva Mancuso, and replaced her with Barbara Cottam, Executive Vice President of Citizens. What is her education perspective and in what direction does she intend to take education reform?
The Education Commissioner, Deborah Gist has accepted a job in another state. What does this mean for recent education reform in the state? Will advances be reversed? We know that the General Assembly already gutted some of the most important reform Gist worked towards, annual teacher evaluations and standardized testing as a graduation requirement, in spite of the success in Massachusetts. Who will be the next Commissioner and will it be someone who is student-centered? This is critical given that the Board of Education is beginning the process of a major re-write of its long-term
education plan. The Governor chose a union member to head the DOT, will she follow suit with a member of Labor or political sympathizer of public-sector unions for the Commissioner of Education?
The Case for School Choice
The RI Center for Freedom and Prosperity will be holding a School Choice Rally at the State House this Wednesday, March 4 at 3:00 pm.The Center has done extensive research on the issue. Not only will School Choice provide opportunities for the children attending the school that suits them, but School Choice has also been a catalyst for improving all schools, as one would expect, due to the competition created.
This Wednesday will kick off the start of a push for education dollars to follow the student. A recent survey found that 68% of Rhode Islanders said their first choice would be an education other than through traditional public schools. A whopping 60% of Rhode Islanders rate the state's public schools as only "fair" or "poor" and 60% say the public schools are on the wrong track. The Center has been working with legislators to introduce legislation that allows the money to follow the student, in spite of recently introduced legislation that looks to inhibit the pro choice movement. We hope to see you at the rally on Wednesday because RI's children deserve support from adults who are looking to help them succeed.
It's Happening This Week at the State House
This week's legislative hearings have more positives than negatives, highly unusual for an OSTPA Alert. There is legislation to create a commission to seriously look at the drivers of the high cost of energy, rather than just slapping lipstick on the pig by capping the rate increases. There are also bills that address issues you probably think already exist - things like looking at the state's budget as if it were a new organization and determining what resources it needs to carry out the important functions rather than just adding a couple of percentage point increase to the prior year budget. Then there is the bill that requires an impact analysis of any proposed business regulation, and bills to tighten up controls on our welfare systems, along with bills that provide subpoena power and tort reform. Some of these bills have been introduced in past sessions. Perhaps, they'll gain legs this session.
If you see a bill you like, write to the chairman and let him know. If you see a bill you don't think will move the state forward, write to both the chairman and the Speaker of the House and take a seat in the hearing, sign in on the sign-up sheet indicating your position and, if inclined, testify!
LEGISLATIVE HEARINGS 3/3/15 - 3/5/15
TUE, MAR 3
House Finance Chairman Gallison
Room 35, Rise (4:30 pm)
H 5060 Creates a commission to study the high energy costs in the state.
Sponsors: Morgan, Reilly, Lancia, Giarrusso, Chippendale
H 5235 Requires a zero-based budget, phased in over 5 years.
Sponsors: Lancia, Reilly, Newberry, Roberts, McLaughlin
H 5324 Requires a zero-based budget, phased in over 5 years.
Sponsors: Reilly, Lancia, Phillips, Newberry, Nunes
H 5277 Allows the Auditor General to pursue investigation of any matter within the scope of an audit and provides it with subpoena power.
Sponsors: Morgan, Chippendale, Filippi, Nardolillo, Reilly
H 5278 Requires an economic impact statement to accompany any proposed legislation affecting businesses operating in this state.
Sponsors: Morgan, Lancia, Chippendale, Reilly, Giarrusso
House Judiciary Chairman Keable
Room 101, Rise (4:30 pm)
H 5250 Prohibits the use of EBT cards (welfare assistance) for things like gambling, cruises, alcohol, tattoos, etc.
Sponsors: Morgan, Reilly, Giarrusso, Nardolillo, Roberts
H 5018 Prohibits the use of EBT cards for things like gambling, cruises, alcohol, tattoos, etc
Sponsors: Corvese, Melo, Edwards, Azzinaro, Malik
H 5249 Requires a photo ID to use EBT card and provides penalties for retailers who do not comply.
Sponsors: Morgan, Lancia, Reilly, Giarrusso, Nardolillo
H 5311 Increases monetary penalty for medical assistance fraud.
Sponsors: Morgan, Chippendale, Reilly, Giarrusso, Roberts
H 5247 Tort reform - prohibits anyone being held jointly liable if they are not at least 51% at fault.
Sponsors: Morgan, Chippendale, Giarrusso, Nardolillo, Roberts
H 5308 Empowers secretary of the oversight committee with supbooena power if agreed to by majority of the commission.
Sponsors: Morgan, Reilly, Price, Filippi, Lancia
WED, MAR 4
House Committee on Small Business Chairwoman Serpa
Room 205, Rise (4:30 pm)
Eric Godwin, Director of the Office of Regulatory Reform, will present an update on the department's work with regulatory reform.
THU, MAR 5
House Labor Chairman Shekarchi
Room 101, 3:30 (continued at the Rise)
H 5350 Provides for binding arbitration and a perpetual contract for municipal employees.
Sponsors: Carnevale, McKiernan, Hull, Slater, Bennett
H 5473 Includes platoon structure and shift schedule as items covered by collective bargaining for firefighters.
Sponsors: Carnevale, Johnston, Hull, Almeida, McKiernan
H 5475 Perpetual contracts for teachers.
Sponsors: Carnevale, McKiernan, O'Brien, Serpa, Amore
House Municipal Government Chairman Craven
Room 203, Rise (4:30 pm)
H 5317 Provides maximum differential between various classes of taxable property by 25% rather than the current 50%. This is not color coded for or against. Email OSTPA for explanation.
Sponsors: Morgan, Price, Chippendale, Giarrusso, Nardolillo
Senate Finance Chairman DaPonte
Room 211, 3:00 pm
S 19 Reduces the corporate minimum tax from $500 to $250
Sponsors: Walaska, Ciccone, Lombardo, Raptakis, Lombardi
S 103 Reduces minimum business corporate tax.
Sponsors: Raptakis, Felag, Cote, Ottiano, McCaffrey
S 110 Reduces the minimum business corporate tax.
Sponsors: Kettle, Ottiano, Gee, Algiere, Cote
S 230 Reduces the minimum business corporate tax.
Sponsors: Archambault, O'Neill, Ottiano, DiPalma, Lombardi