April 18, 2008
Stop the Bleeding
Almost as if it's a coordinated emphasis on ignorance, the criticisms of my op-ed have done two things: 1) doggedly held to 2005 data, and 2) insisted that I haven't proven causation. The argument is that people aren't leaving, and there could be other explanations for their flight. Well, contradictions happen.
The reality is that I'm less concerned with the "why" than the "what now," and whether they're being crushed by taxes — which I consider to be more one of several underlying causes than a decisive and proximate one — or can't find housing or a job, this sort of trend, from a story in today's business section, is entirely in keeping with my argument and has to be arrested:
The state unemployment rate climbed two-tenths of a percentage point to 6.1 percent, a full percentage point higher than the national average rate of 5.1 percent, according to the state Department of Labor and Training.Meanwhile, neighboring Massachusetts reported a 2,900-job gain, and its unemployment rate edged down to 4.4 percent. ...
The professional and business-service sector, which includes temporary help agencies, declined nationally and in Rhode Island, but added jobs in Massachusetts. The sector is closely watched by economists because temporary employees are considered to be a predictor of which way the economy is headed. Jobs there tend to rise when the economy is growing, and shrink when it is contracting.
Last month, Massachusetts reported that the sector added 1,000 jobs, following a 3,100-job gain in February. By contrast, Rhode Island's professional and business-services sector during the last three months has shed 1,600 jobs. (Nationally, the sector lost 35,000 jobs.)
We have to make Rhode Island more attractive to those who don't need or want public assistance. Otherwise, we won't be able to help anybody. And we have to close our ears to the melodious sound of Rhode Island's undertakers whistling past the graveyard.
Yes, the high taxes and government corruption are major incentives to move out of Rhode Island.
A welfare state will naturally attract clients, and naturally repel wealthy and middle class taxpayers. The General Assembly knows this, and they act on it. This policy is not by accident. It is one of their strategic goals.
Theresa Paiva-Weed calls it "constituency building." A large percentage of your elected officials in the RI General Assembly are lawyers by trade, including Paiva-Weed. Given that fact, and given how notorious the GA is for acting in its self interest, catering to special interests, and allegedly behaving in a generally corrupt manner (Celona, Martineau, Irons, Harwood, etc) --you also have to seriously wonder if the lawmakers are seeking to import/ recruit potential clients for immigration or other legal services. They have made it clear about their desire to roll out the red carpet to illegal aliens for the purpose of obtaining votes ("constituency building") but no nefarious plot is beyond the GA. I don't trust those people AT ALL.
Posted by: Citizen Critic at April 18, 2008 3:11 PMJustin,
The governor made a proposal to limit Historic Tax Credits and the GA made their own proposals to limit thus helping to balance the budget. In essence what Smith Hill passed was to stop the program for the next two years (retro to JAN 1, 2008), lower tax credit payback and to require up front tax monies on existing projects investors don’t know if they will finish or continue due to lower credit return. Also the state must create a trust fund up to $280 million to cover obligations to developments already in the pipeline. Expected savings only $40 million
So essentially the program is dead for the next two years. In a time when RI needed all the economic activity it could sustain a program that was keeping RI on its feet and alive has been severely limited to those documented in brfore JAN 1, 2008 and shut down to any others for next two years.
Looking through the trees at the forest “Each $1.0 million of State tax credits in fact leverages $5.35 million in total economic output. For the 5-year period since enactment (2002-2007), more than $78 million in federal historic tax credits have been awarded to Rhode Island projects—an increase of 700%.
• Economic Impact - The total direct construction employment generated by the $1.53 billion investment in historic rehabilitation is estimated at approximately 17,725 jobs earning $677.54 million in wages. Indirect employment impact within the State during the construction period is estimated at 8,436 jobs earning an estimated $277.52 million in wages. Total permanent employment at these locations is anticipated to be over 7,200 jobs earning $321.02 million annually. The 277 projects are forecast to generate a total of $2.46 billion in economic activity throughout the State. During the first five years of the Historic Tax Credit program (2002 through 2006), Rhode Island experienced more investment in historic rehabilitation than in the previous 25 years combined” per 2007 Economic & Fiscal Impact Analysis.
Source:
State of Rhode Island Historical Preservation & Heritage Commission Tax Credits & Loans: Commercial & State: About the HPITC
http://www.preservation.ri.gov/credits/commstate_about.php
Independent Studies: Economic & Fiscal Impact Analysis 2005; 2007.
Derelict fire-trap properties were being put back on the property tax rolls as commercial and created housing for low, middle and upper luxury incomes. Already investors have publicly indicated some or all of their state-wide projects will be put on hold or canceled as they contemplate moving to another state.
The affected working class is blue collar craftsmen, carpenters, trades people, architects, design engineers, building construction suppliers, transportation, heavy and light equipment operators and suppliers to name a few. There is a greater probability now that RI union and non-union carpenters and trades people will be laid off from working jobs joining the increasing unemployment and welfare lines thus wiping out the $40 million projected budget savings.
So if you get laid off in the near future, thank Smith Hill.