Re: Taking Over Municipalities: The Governor’s New Toy

Rhode Island’s Director of Revenue provided a simple explanation to Projo reporters John Hill and Bryan Rourke about why the state has suspended municipal democracy in East Providence: It was necessary to make a “statement to Wall Street” to help East Providence get loans…

The appointment of a state budget commission with complete financial control of the city’s budget was more a statement to Wall Street than a reaction to any new problems that the state has found in the city’s finances, a state official said Wednesday.
State Director of Revenue Rosemary Booth Gallogly said the move was needed after a week that saw one of the nation’s major bond-rating services drop the city’s credit rating to junk-bond status and then, two days later, Bank of America backing out of a plan to loan the city $20 million next month.
Apparently, the statement is that Rhode Island’s governing class is willing to suspend democracy, if financiers think that that’s better for their business.
However, a quote from later in the article suggests a more substantive reason for the suspension of a democratically elected government…
In November, Booth Gallogly said she was optimistic that the overseer stage was all that would be needed. There was a deficit, she said, but the city had a broad and diverse tax base.
Serious questions should be raised when an official involved with replacing an elected taxing authority with non-elected appointees starts talking about “a broad and diverse tax base”; a primary question in this particular situation is what will the officials insulated from the people who pay the aforementioned taxes be charged with doing — that the accountable officials weren’t expected to — in order to make the state’s “statement” to Wall Street?
Last year, Anchor Rising put a question addressing exactly this situation to the administration of Governor Lincoln Chafee…
One set of criteria in the new fiscal stabilization law that can trigger a municipal takeover by the state involves decisions made by bond-rating agencies….Do we now live in a society that believes that financial-industry needs take precedence over democratic voice?
The answer from the Chafee administration was…
We do not agree with the premise of these questions.
Events have demonstrated that this is not now and never was an adequate answer. The question of whether Governor Chafee believes that representative democracy is the central organizing principle of the government he is part of, or instead believes that representative democracy is a luxury that common people can be allowed to play at, once the real groups that government is accountable to have been satisfied (including being sent the right “statements”, of course) remains both open and important, and needs to be addressed before Rhode Island slides irreparably away from democratic practice.

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Justin Katz
Justin Katz
10 years ago

whether Governor Chafee believes that representative democracy is the central organizing principle of the government he is part of, or instead believes that representative democracy is a luxury that common people can be allowed to play at, once the real groups that government is accountable to have been satisfied

Darn. Wish I’d thought to put it like that!
Of course, with Chafee we know which it is. The blueblood set in Rhode Island has little knowledge of nor respect for the aptitudes of the voting population.

Bucket Chick
Bucket Chick
10 years ago

The phrase that comes to mind is, “taxation without representation.” It’s kind of scary, actually.

Tommy Cranston
Tommy Cranston
10 years ago

“taxation without representation.”
Some of you people need to grow up. We live in a federal system. The federal government is sovereign and each state is sovereign. Cities and towns by contrast are dust- artificial creatures of the state and can be restricted and abolished at the whim of the state.
We have plenty of elected representation in the Governor and the GA. Lousy representation, but that is our fault for tolerating a one party state longer than the Soviet Union.

Bill
Bill
10 years ago

Wait a minute. This is Rhode Island. We lost representative government a long time ago. Utterly uneducated, stupid, corrupt, and bought-off legislature members and municipal “leaders.”
Better the state get involved, and even better the feds. Granted, neither the state nor the feds have good track records recently when it comes to their finances, but at least take these problems away from the hands of the locals.

Monique
Editor
10 years ago

” for tolerating a one party state longer than the Soviet Union.”
Very good, Tommy C.
“The Governor’s New Toy”
Indeed. No one better tell the governor that Oonsocket-way just had its onds-bay downgraded to unk-jay atus-stay.
My question about the receivership process is, why does the state have to be involved at all? Why couldn’t the city/town council put itself into receivership and let a judge hack up the contracts and pensions (like countless times in the real world when there’s no money and like Flanders did in C.F.) while the council retains its powers?

ANTHONY
ANTHONY
10 years ago

RI has become the laboratory for failed govt. The beautiful state is swirling down the drain desperately grasping for a solution. History repeats itself as the “leaders” lurch at socialism and dictatorship as a counter measure. Missing Linc is ill suited for a common sense solution. His priorities are gay marriage, medical mary-jane and benefits for illegals. Apathy from the voters breeds incompetence.

Max D
Max D
10 years ago

“RI has become the laboratory for failed govt.
Did you mean lavatory? Laboratory connotes a place of exploration, learning and problem solving. The lavatory connotes Rhode Island.

Max D
Max D
10 years ago

Does anyone find it odd that the state would appoint a trooper to be a financial overseer in the first place. The guy Chafee sent is a top notch member of the command staff with a JD but what really qualified him to do that work? Wouldn’t it have been nice to have sent someone with real public administration education and experience or is that asking too much?

Monique
Editor
10 years ago

“We do not agree with the premise of these questions.”
What a great non-answer, by the way, when someone asks you something that they won’t like the answer to; e.g.,
Q: Did you eat the last chocolate truffle?
A: I don’t agree with the premise of your question.

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