November 7, 2008
Enough Talk... Cut
Neil Downing notes that Rhode Island's tax revenues are down in every category. Ed Mazze offers the same-old same-old:
Mazze, who is distinguished professor of business at the University of Rhode Island, and former dean of URI's College of Business Administration, said that one thing is clear: Rhode Island's budget gap for the current fiscal year will grow, and could reach $300 million or more.So what does that mean? "Other than continuing to cut programs, which we will have to do, we're going to have to look at taxes," he said.
But before raising taxes, the state should take other steps to try to spur the economy, he said. These include quick-starting road construction and other projects for which funds were approved on Tuesday through bond referenda, he said.
The measures should also include cutting costs at the state and local levels, he said. Among the steps he'd like to see taken: consolidating local government, including school districts, to save money.
If these measures don’t work, he said, the state should consider raising taxes, but only until the economy rebounds. At that point, any tax increases should be scrapped, he said.
In the meantime, government leaders should put together projects "that we're ready to roll on" as soon as the economy recovers, "so that Rhode Island is not the last state out of the recession," he said.
If we raise taxes now, we will guarantee that Rhode Island is the very last state out of recession, because residents will have an excuse to flee for an early spring with the first hint of recovery elsewhere. Rhode Island needs to cut the government, get it out of the way, put the people and the businesses first.
Freeze all state-worker salaries and trim benefits. Plenty of Rhode Islanders need work if the unions can't take it.
Pull back on government hand-outs. To help those in need, give exchangeable tax credits to charities, whether secular or religious.
Go through Rhode Island law and pluck out all unnecessary licensing and business requirements. Tone down all necessary regulations to the bare minimum.
The answers aren't as complicated as the economic summit folks were trying to make them. They're only difficult for lack of courage and willingness to listen.
"The answers aren't as complicated as the economic summit folks were trying to make them."
Well, that's right. Let's look to successful states and see what they are doing (other than those with an abundance of natural resources). It's a matter of cutting taxes and reducing regulations to the "bare minimum".
And just straight-forward tax cuts, please. Respectfully, the suggestion for a two-tier/trade-off bracket is exactly what we don't need. While it may cut taxes, it effectively adds yet another layer of regulation and a complication which directly translates into yet more precious time expended and a still larger accountant bill.
Posted by: Monique at November 7, 2008 2:02 PMIn the end it's not about sound economic policy, but about power.
The Democrat General Assembly and its union / welfare industry puppet-masters could give a rat's behind about the greater good and sound economic policy, for in the near term enhancing those would result in diminishing their own economic aggrandizement.
Until that changes, we can talk economic policy until we're blue in the face. The fact that none of the Democrat leadership even pretended to be interested in yesterday's confab by showing up tells the story.
The Democrats don't care about us or our well being. If they did, they wouldn't keep doing what they've been doing for decades now. Get over it.
They are parasites and will keep feeding off of the Rhode Island host, expecting to be able to keep up their feeding rate even as the host continues to weaken, and ultimately fatten up and exit before the host dies.
We either drive them out of office and so off of the host, or remain with the host as it goes terminal and brings us down with it.
Unfortunately, Rhode Island's voters continue to vote for the latter option.
Posted by: Tom W at November 7, 2008 5:12 PMIf RI continues looking at itself from within with same people that might be contributors to the current economic problem and continues trying to match what other larger neighboring states are doing that have greater resources, population, land mass at disposal and tax structure, I don’t think RI will be able to move forward. RI will never be or match Massachusetts or Connecticut.
The Island of Oahu, birthplace and childhood upbringing of President Elect Obama, is about 60% land mass of the whole state of RI. It is the seat of state government and is the most populated and metropolitan of all the Hawaiian Islands and nicknamed “The Gathering Place”.
Hawaii as a state is considered Democratic but has voted Republican in a number of elections so at times it’s hard to tell if the state is really true blue or red.
It has a Republican Governor and Democratic General Assembly and is one of the most heavily unionized states in the nation.
The state this year completed its “sustainability study” out to year “2050” which includes economic, education, environmental, job creation, protection of resources, alternate energy, local government, mass transit, population, objectives, goals and alternatives.
Hawaii is not worried about competing against California, Alaska, Washington, Nevada or Arizona.
The Governor had already put some freezes in place based on previous economic projections and studies and this year is requiring budget cuts, additional hiring freezes and department budget reductions. Last year Governor instituted some tax cuts. Because Hawaii has only one school district covering the 1,600 miles of islands The Department of Education of note was able to meet Governor’s 20% budget reduction without layoffs and program cuts. Hawaii teachers are NEA but are highly respected by local news media, government and population.
City of Honolulu and City Council also instituted same freezes, reductions and cuts.
Unemployment has risen drastically to 4.4% due to current economic times normally it is 2% or lower.
State GDP is projected to be about 1% in 2009 slowly rising as national economy strengthens.
City and County will start the long awaited 20 mile east/west (Kapolei to Waikiki Beach with spurs to University of Hawaii and Honolulu International Airport) light rail project which is now estimated to cost over $4 billion but the state have been collecting a 0.05% surcharge on the general excise tax since 2007 which has created a substantial nest egg to fund the project before the addition of federal funding is added. Estimated new jobs created are 11,000 starting in 2009.
There are over 3,000 ongoing major construction projects keeping the construction and supplier sectors busy and employed creating new government, public service. infrastructure, schools, medical facilities, military support, retail and commercial business office spaces.
The new City of Kapolei with industrial park and Ko Olina resort area in west Oahu is projected to create between 2008 and 2025 near 70,000 new jobs. Already over 1,200 business have created over 28,000 new jobs since inception with average salaries in $60.000 range.
Walt Disney is breaking ground 19 Nov 2008 for the first ever “out-of-theme-park” 800 room themed hotel/resort in Ko Olina which will result in 1,000 new Walt Disney jobs. More hotels and resorts are slated for construction in Ko Olina adding to the current six hotel/resort/timeshare towers constructed by JW Marriott resort and spa.
Hawaii has created tax incentives to ease the cost of doing business in Hawaii. Start-up costs are a big issue for companies looking to invest in new locations. Hawaii has a package of very attractive tax and other incentives to help lower Kapolei business operating costs.
Hawaii has created a Foreign Trade Zone www.ftz9.org The FTZ lies outside U.S. Customs territory, and is free of US import restrictions, and most state and local use and excise taxes. James Campbell Industrial Park in Kapolei, Hawaii is a designated FTZ. The FTZ program benefits companies that import and export dutiable components and products. In many cases, these companies are able to substantially reduce their customs and tax liabilities by participating in this program.
There is an Oahu Enterprise Zone www.enterprisehonolulu.com Kapolei is a designated Oahu enterprise zone, which means that eligible businesses can take advantage of state excise tax exemptions and income tax credits and local tax incentives in some cases for the first seven years of operation.
Hawaii has a High Technology aggressive incentives package that paves the way for dynamic growth and development of high technology industries in Hawaii. http://www.hitechhawaii.com/taxincentives.asp
Hawaii is the first state in nation to require solar hot water heaters be included on new residential single family housing built after 1 Jan 2009.
State of Hawaii has entered into written agreement with Hawaiian Electric Company and its subsidiaries to create a new power grid and distribution system encompassing Islands of Oahu, Maui, Lanai and Molokai which will allow for greater inclusion of alternate energy resources, single, multifamily, commercial and military shared electrical providers resulting in projected lowering of electric rates and meeting Governor’s request to lower Hawaii’s imported fossil fuel dependence 70% by year 2030.
Hawaii’s housing market and banks have not suffered like the mainland because very few subprime loans were active in the island market although housing and condominium prices have fallen about 10% average.
The above is just some of the "proactive" steps and initiatives State of Hawaii is doing to offset the economic problems.
In the end it's not about sound economic policy, but about power.
yep.
Posted by: johnpaycheck at November 8, 2008 3:34 PM