The Method Is the Message, in RI Recovery
When we look at the 2007 Per Capita Personal Income for RI, MA and CT we find the following: Rhode Island is $39,829, far less than Massachusetts ($48,995) and Connecticut ($54,981). The per capita personal income of MA is a little more than 23% than that of RI. Likewise, the PCPI of CT is 38% more than RI. With these numbers, it’s easy to see why general expenditures per $1,000 of PI is higher in RI than in MA and CT. There are fewer “$1,000s of personal income” here to support the government’s expenditures.
Does this make the expenditures more expensive, or even less necessary? No. It just means that, as a society, we earn less money than our neighbors to fund these services. All things being equal, if we raised the per capita personal income in the state, then the spending per $1,000 of personal income would decrease. We should aim for that!
An interesting tidbit of information that I learned from Tom Sgouros, in his book “Ten Things You Don’t Know about Rhode Island,” is that blue-collar, working-class jobs in the state pay much less than comparable jobs in MA and CT. This is in contrast to the relative equivalent salaries earned by professional, white-collar jobs (even though RI still earns a little less). And this helps explain why RI earns less, but that’s a discussion for another day.
His heavy reliance on Tom Sgouros notwithstanding, Hull presumably does not buy into the idea that our problems require the reduction of spending through consolidation and the like. After all, consolidation, of itself, will not prime the job-creation machine, and it will not bring Rhode Island salaries up to the levels of our neighboring state. It is not, in other words, the reason that Rhode Island fares so much more poorly than the states by which we’re engulfed. Since the problem is too few $1,000s — not who holds them — the answer cannot be that our tax structure doesn’t take enough from the rich (which is nonsense, anyway).
If he asks the right questions, Hull may be dangerously close to agreement with we who believe that Rhode Island’s government must get out of the way of its economy. Schemes that allow for continued regulations and mandates and wealth redistribution will fail. Have failed. We cannot mandate that people have more money. We have to allow them to make it.