May 16, 2007
Re: Preliminary School-Financing Plan (or "The Coming Train Wreck")
I don’t see how the education funding report that Marc just noted fits with all that's come before into a sustainable plan for the future.
We know that officials from both urban and suburban communities seem to have convinced themselves that the purpose of new state education “funding formula” is to provide a bigger share of aid to their communities. They can’t all be right.
We also know that the state is in a $450 million dollar budget hole for next year. As a result, the legislature is apparently seriously considering flat-funding education aid. The deficit is structural, meaning it’s going to be there next year and the year after, unless there is a either a fundamental restructuring of programs to reduce costs, or a tax increase that will push Rhode Island towards becoming the most highly taxed state in the nation.
Lately, the legislature has been averse to tax-increases.
But according to Jennifer Jordan's Projo article, even though it can’t afford a simple 3% increase in education aid this year, the legislature is moving forward with a proposal that would increase the state's share of spending on education and maybe increase education spending overall.
It adds up to three obvious possibilities for the near future of Rhode Island…
- The legislature is now being pulled in so many contradictory directions, it’s going to get paralyzed and change nothing.
- There’s a honking-big tax increase being planned.
- One set of communities is going to grab a whole bunch of state aid away from another set of communities and hide it under layer upon layer of formulas and bureaucracy and tax-shifts, in the hope that the communities losing funding won’t notice until it is too late.
Paging Bob Walsh.
Paging Frank Montanaro.
Dr. Howard. Dr. Fine. Dr. Howard.
There's a patient in the back room with acute appendi-fiscalitis!
Wooo wooo wooo wooo wooo wooo!
Posted by: Tom W at May 16, 2007 10:55 AMTom W, sounds like something I'd read in the Valley Breeze....
And, if you read the report, you will notice that it included substantial reductions in property taxes in return for more state funding. Most people in RI would see a net taxe decrease.
But hey, never let logic get in your way, Carroll.
Pat,
You have to make complete arguments before you can accuse someone's logic of being flawed.
Which taxes will be raised, so that state revenue can be increased while property taxes are reduced?
If the plan isn't to give Providence, for example, a greater share of education revenue at the expense of the rest of the state, then why can't Providence, implement an in-community solution?
Let me help the Patucator out on formulating his answer to the tax question.
Let's see. We could raise the sales tax rate. Hmm.. RI already among the highest in the country. Well, then, let's just broaden the base, by taxing "luxury" items, like health club memberships.
Now let's move on to all those corporate tax loopholes. Let's close all of them too. Oops. Problem. So few C-Corps left in RI paying these taxes that loophole closure doesn't help much. Ah, but there's still money to be made from further squeezing Textron. I suppose. At least until it disappears in a private equity deal.
Well then, what about further squeezing evil semi-monopolies, like insurance companies and utilities. Might do, except for the fact that "you know who" runs Blue Cross. Guess that leaves National Grid.
What about those tax credits? Kate and Company say evil historical tax credits must go (lesson: when beloved "quality of place" meets "quantity of welfare benefits", former loses among Democrats in General Assembly).
Well now, let's add that all up -- does it cover the $450 million deficit and allow for that wonderful increase in minimum state aid to local education? Nope. Not even close.
Which inevitably brings us to income tax increases, right Pat? First we stop elimination of the capital gains tax. Then, rather than cutting the marginal tax rate on upper income Rhode Islanders, you want to raise it much, much higher (don't worry. Those lovely homes on the east side and our beautiful beaches will prevent them from leaving RI, and/or becoming Florida residents while still enjoying our state's charms for just under half the year). And while we're at it, let's bring back the car tax too.
However, as many Rhode Islanders know, apart from the folks at the Poverty Institute (who I respect, if don't agree with), the rest of state's progressives lack the cojones to clearly spell out where the money is going to come from, and why they believe that the tax increases they are aggressively advocating won't just speed up the train wreck now underway.
Right Pat?
Posted by: John at May 17, 2007 9:01 AM