Same Old Story…
The new RI Report website juxtaposes the release of the Tax Foundation‘s report showing Rhode Island’s tax-burden to be fourth highest in the nation with census bureau data showing population in the Providence-New Bedford metro area to have declined since 2004, implicitly implying a connection. Actually, there’s one other factor needed to complete the chain. When taxes are high and the quality of services they pay for is low, then people have great incentive to leave and resettle in a part of the country where they can pay less to receive more.
Here’s a concrete example — literally — of the collapsed state of public services in Rhode Island. According to the Federal Department of Transportation, the percentage of RI bridges that are “functionally obsolete or structurally deficient” is one of the highest in the nation. What level of fiscal mismanagement does it take to push the state with the fourth highest tax-burden AND the smallest geographic footprint to near-last place in bridge quality? Where does all the tax money go?
>>What level of fiscal mismanagement does it take to push the state with the fourth highest tax-burden AND the smallest geographic footprint to near-last place in bridge quality? Where does all the tax money go?
Pensions.
Patronage.
“Poverty” programs.
Public-sector unionization (warping the governing process both by union officials holding office and recycling workers’ mandatory dues money into Democrats’ election campaigns – thus the public sector unions simultaneously sit on the “management” side of the table and “negotiate” with themselves).
Tom:
I couldn’t have said it better myself!
If RI were a business, it would be facing Chapter 7, not even Chapter 11, bankruptcy!
I agree that RI has overspent and has missed out on the recovery.
But I can’t agree with Carl’s assessment that RI would be filing bankruptcy. RI’s bond rating is still doing fine. Last time I checked, Fitch gave a “AA” rating to RI, stating that the rating-
“reflects a history of responsible action to protect its debt and financial position. The state’s economy has grown and diversified away from manufacturing, making it less vulnerable to economic cyclicality, although growth has lagged in the recovery. Reserves continue to be fully funded at the statutory maximum of 3% of revenues. Debt levels are well below historical highs.”
Our problem is about where we go from here. The General Assembly can either choose to make the cutbacks necessary to maintain the state’s bond rating or it can opt to spend at a rate that will result in a lower bond rating.
In the past, there were short-term fixes that allowed us not to have to address underlying problem of overspending. Now the state has no choice.
We’re at a fork in the road. The question is whether RI’s leaders will follow the financially prudent route or attempt to satisfy special interests while trying to buy time in the hopes that another short-term fix can be found.
This isn’t an enviable position to face while other state are experiencing budget surpluses, but it’s far from facing bankrupcty.
Anthony,
Who is kidding who? The questions being asked today, are the same questions that have been asked for the last 25 years. In light of that, it would be foolish to think anything will change soon.
Jim,
Since the mid-90’s, RI has been able to afford its spending habits. While fiscal conservatives may have thought RI was overspending, there was always a way out. Tobacco funds and other short-term fixes worked to prolong any reform.
The difference now is that RI has no immiment short-term fix, so things are different than they’ve been in the past 25 years.
Speaking of the last 25 years, RI is still in much better financial shape today than it was in the early 90’s.
>>Speaking of the last 25 years, RI is still in much better financial shape today than it was in the early 90’s.
Oh, what a relief!
For a while there I was really starting to worry about RI’s $4-5 billion unfunded pension liability (worst per capita unfunded liability in the country)and the yet-to-be-disclosed unfunded liability for state employee / teacher retiree health benefits … not to mention those of the cities and towns.
I dedicate today’s Non Sequitur cartoon to Anthony. Projo April 10, 2007 page F2 or follow this link…
http://www.gocomics.com/nonsequitur/
Perry,
I try not to drink the Kool-Aid.
The firms that issue bond ratings have a far more objective opinion of a city or state’s financial condition than politically motivated, financially ignorant people–Republican or Democrat. Just ask Steve Laffey, I’m sure he would be the first agree.
When I challenge statements like “RI is near bankrupcty and Chapter 7 not even Chapter 11” it is because they are simply incorrect.
I agree that the General Assembly has made poor choices and that overspending must be addressed.
But making hyperbolized and exaggerated assertions don’t help support an argument. They discredit an argument.
I blame the Republicans.
They have failed, year after year after year to come up with a platform which offers the people a better deal than the Public Employee-ocrats.
It would be fairly simple to devise a platform which would reduce the sales tax and cap property taxes to the rate of inflation. This would have to be coupled with trimmed state/municipal payrolls, 401K pensions, benefit cuts, ending fraudulen disability claims and making all workers work till 62.
This platform would be a winner. The “me-too” Republicanism of John Holmes, Mike Levesque, Lila Sapinsley, Susan Farmer, Lincoln Almond, Claudine Schneider, etc has FAILED. Carcieri is definitely a little better-but just a little.
The people are crying out for a platform of reduced taxes and reduced payrolls. They have not gotten it. For all the whining (much of it justified) about “welfare” the real problem is the number of, and payment to, state and municipal workers.
mike,
It’s tough to blame Republicans when they have so little power. Republicans have introduced much of what you talk about and it has been included on various platforms. The problem is that the platforms have never been communicated to the voters or that the voters have just rejected it.
I don’t see voters “crying out” for anything. I see most voters as apathetic.
This year is the last chance for Carcieri to make meaningful reform. Gubernatorial candidates will begin emerging by this time next year and Carcieri will be a lame duck.
Anthony:
The Republicans need to create a PERMANENT platform tying specific tax cuts and limitations with specific state/municipal benefit cuts and reductions in force. They have never done this. They never will with Jackvony, Avedesian and the other “me-too moderates” I named above.
The people are not as stupid as the Democrats think or the Republicans fear. They have continiously elected Republican governors and rejected 2-1 the 25% hack employment promoting casino despite a $20 million PR campaign.
A few things-
I agree with you on the need for a permanent platform. Most Rhode Islanders still think Republicans are for the rich and Democrats are for the poor. Until that changes, the GOP won’t ever grow in RI. A consistent platform that is effectively communicated to the public is the best way to change that perception.
Avedisian is a moderate, but I never got the impression that Jackvony was anything but conservative. You may think of him as an insider, but from what I recall of his brief run for governor, he held conservative positions on every issue.
Most of the winning Republicans in RI have been moderates or at least conservatives who ran as moderate. Even Carcieri ran to the center when he was in the general election. Don’t forget, Carcieri was open about saying he was an independent, not a Republican, until he decided to run for governor. He also downplayed some of his conservative postions.
So strangely, I disagree with your analysis of the problem, but fully support your solution to it.
The RI GOP’s biggest problem is that it tries to win 2, 4, 6, 8 (or name a different number) of House and/or Senate seats every year. In reality, the party can’t have much of an influence on Assembly races. It’s up to candidates to win or lose.
The best way the party could help candidates would be to promote a consistent, permanent agenda.
Democrat or Republican everyone at the statehouse should be ousted. They added 1% to food and bev tax, they spent the tobacco money they increased lottery money, anything to keep spending. That is just in plain english “stupid” We are being led by a bunch of crimminals. They do not care what the public thinks unless they are on the perverbial TIT