Rhode Island Policy Reporter

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A look at the lousy situation Rhode Island is in, how we got here, and how we might be able to get out.

Budget Demystification!
Fiscal Derring-Do!
Economic Jiggery-Pokery!

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RIPR is a (paper) newsletter and a weekly column appearing in ten of Rhode Island's finer newspapers. The goal is to look at local, state and federal policy issues that affect life here in the Ocean State, concentrating on action, not intentions or talk.

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whole site RIPR back issues

Available Back Issues:

  • Aug 09 (38) - How your government's economic policies have worked against you. What a fake nineteenth century nun can teach us about the tea party protests.
  • Jun 09 (37) - Statistics of optimism, the real cost of your government. Judith Reilly on renewable tax credits. Review of Akerlof and Shiller on behavioral economics.
  • Apr 09 (36) - Cap and trade, the truth behind the card check controversy, review of Governor's tax policy workgroup final report.
  • Feb 09 (35) - The many varieties of market failures, and what classic economics has to say about them, review of Nixonland by Rick Perlstein.
  • Dec 08 (34) - Can "Housing First" end homelessness? The perils of TIF. Review of You Can't Be President by John MacArthur.
  • Oct 08 (33) - Wage stagnation, financial innovation and deregulation: creating the financial crisis, the political rhetoric of the Medicaid waiver.
  • Jul 08 (32) - Where has the money gone? Could suburban sprawl be part of our fiscal problem? Review of Bad Money by Kevin Phillips, news trivia or trivial news.
  • Apr 08 (31) - Understanding homelessness in RI, by Eric Hirsch, market segmentation and the housing market, the economics of irrationality.
  • Feb 08 (30) - IRS migration data, and what it says about RI, a close look at "entitlements", historic credit taxonomy, an investment banking sub-primer.
  • Dec 07 (29) - A look at the state's underinsured, economic geography with IRS data.
  • Oct 07 (28) - Choosing the most expensive ways to fight crime, bait and switch tax cuts, review of Against Prediction, about the perils of using statistics to fight crime.
  • Aug 07 (27) - Sub-prime mortgages fall heaviest on some neighborhoods, biotech patents in decline, no photo IDs for voting, review of Al Gore's Against Reason
  • Jun 07 (26) - Education funding, budget secrecy, book review of Boomsday and the Social Security Trustees' Report
  • May 07 (25) - Municipal finance: could citizen mobility cause high property taxes? What some Depression-era economists had to say on investment, and why it's relevant today, again.
  • Mar 07 (24) - The state budget disaster and how we got here. Structural deficit, health care, borrowing, unfunded liabilities, the works.
  • Jan 07 (23) - The impact of real estate speculation on housing prices, reshaping the electoral college. Book review of Blocking the Courthouse Door on tort "reform."
  • Dec 06 (22) - State deficit: What's so responsible about this? DOT bonding madness, Quonset, again, Massachusetts budget comparison.
  • Oct 06 (21) - Book review: Out of Iraq by Geo. McGovern and William Polk, New rules about supervisors undercut unions, New Hampshire comparisons, and November referenda guide.
  • Aug 06 (20) - Measuring teacher quality, anti-planning referenda and the conspiracy to promote them, affordable housing in the suburbs, union elections v. card checks.
  • Jun 06 (19) - Education report, Do tax cut really shrink government?, Casinos and constitutions, State historic tax credit: who uses it.
  • May 06 (18) - Distribution analysis of property taxes by town, critique of RIEDC statistics, how to reform health care, and how not to.
  • Mar 06 (17) - Critique of commonly used statistics: RI/MA rich people disparity, median income, etc. Our economic dependence on high health care spending. Review of Crashing the Gate
  • Feb 06 (16) - Unnecessary accounting changes mean disaster ahead for state and towns, reforming property tax assessment, random state budget notes.
  • Jan 06 (15) - Educational equity, estimating the amount of real estate speculation in Rhode Island, interview with Thom Deller, Providence's chief planner.
  • Nov 05 (14) - The distribution of affordable houses and people who need them, a look at RI's affordable housing laws.
  • Sep 05 (13) - A solution to pension strife, review of J.K. Galbraith biography and why we should care.
  • Jul 05 (12) - Kelo v. New London: Eminent Domain, and what's between the lines in New London.
  • Jun 05 (11) - Teacher salaries, Veterinarian salaries and the minimum wage. Book review: Confessions of an Economic Hit Man
  • Apr 05 (10) - Choosing a crisis: Tax fairness and school funding, suggestions for reform. Book review: business location and tax incentives.
  • Feb 05 (9) - State and teacher pension costs kept artificially high. Miscellaneous tax suggestions for balancing the state budget.
  • Dec 04 (8) - Welfare applications and the iconography of welfare department logos. The reality of the Social Security trust fund.
  • Oct 04 (7) - RIPTA and DOT, who's really in crisis?
  • Aug 04 (6) - MTBE and well pollution, Mathematical problems with property taxes
  • May 04 (5) - A look at food-safety issues: mad cows, genetic engineering, disappearing farmland.
  • Mar 04 (4) - FY05 RI State Budget Critique.
  • Feb 04 (3) - A close look at the Blue Cross of RI annual statement.
  • Oct 03 (2) - Taxing matters, a historical overview of tax burdens in Rhode Island
  • Oct 03 Appendix - Methodology notes and sources for October issue
  • Apr 03 (1) - FY04 RI State Budget critique
Issues are issued in paper. They are archived irregularly here.

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The Rhode Island Policy Reporter is an independent news source that specializes in the technical issues of public policy that matter so much to all our lives, but that also tend not to be reported very well or even at all. The publication is owned and operated by Tom Sgouros, who has written all the text you'll find on this site, except for the articles with actual bylines.


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Mon, 27 Feb 2006

Inequality watch

The paper mentioned by Paul Krugman's column today is here. In it, the authors argue that virtually all the benefits of productivity growth in the US economy over the last 40 years, has accrued to the top 10% of the income distribution, with the top 1% taking by far the lion's share of that. So if you're wondering why your wages don't keep up with the cost of living, well, the reason is that someone else is taking the gains that would have helped you do it.

Via this blog, I also learned about this study, which is an international comparison of income distributions and their changes over time. English-speaking countries have seen an explosion in the top end over the last 30 years, not shared by other European countries. What's also interesting is that the top end is now occupied by wage earners, instead of capital-gains takers. In other words, CEOs and other denizens of the highest rungs of the corporate management ladder.

09:28 - 27 Feb 2006 [/y6/fe]

Tue, 14 Feb 2006

New issue out


  • Accounting changes mean bad news ahead in state and city budgets.
  • A sampling of what you'll find in the Governor's FY07 budget.
  • Reforming property tax assessment (by David Segal, City Council member in Providence)

The issue is at the printer's now, and will be mailed on Thursday. Wouldn't now be a great time to subscribe?

13:43 - 14 Feb 2006 [/y6/fe]

Mon, 13 Feb 2006

More tax calculations

The arrival of the Governor's budget may have rendered the House tax cut proposal inoperative, but time will tell. But here is a little more information about what they proposed.

The data isn't public to make this very precise, but I can put a reasonable minimum on the numbers. The following is based on the assumption that the stated cost of next year's income tax cut is about right. The proposal, to recap, is to allow the wealthy to choose between our current system, and a "flat" system like they use in Massachusetts. The proposal starts the alternative tax at 7.5%, but then lowers it in successive years. The table contains my estimate of how much revenue is lost compared to the current system, with the tax set at different levels.

"Flat" RateCost in tax revenue
7.5% $9 million
7.0% $26 million
6.5% $43 million
6.0% $62 million
5.5% $104 million
5.1% $131 million

Given all the uncertainties involved, the error in the above is about 20-25%. So that $131 million could be $100 million, or it could be $160 million.

12:30 - 13 Feb 2006 [/y6/fe]

Wed, 08 Feb 2006

Social Security reform redux

President Bush has finally come up with a proposal to "fix" Social Security. A press release? An announcement? A mention in the State of the Union address? Nope. But it's there in the budget waiting for approval in Congress.

Read here.

16:50 - 08 Feb 2006 [/y6/fe]

Fri, 03 Feb 2006

How much will this cost?

Calming down a bit, I whipped out the ol' statistics of incomes spreadsheets and did a little figuring. Making only conservative estimates, as much as a third of the income tax Rhode Island collects is collected from people who earn more than $200,000 in AGI. (This is the top 2% of taxpayers, and in 2003, they had about 18% of the total AGI in the state.) Since we collect about a billion dollars in income tax overall, this means that a one-percent cut for these people will cost us about $3 million.

The press release and the press so far describe what is proposed as a $10 million cut in taxes on the wealthy. I can't tell yet from the press and the press release exactly how to calculate the changes, but if we're talking about a 10% cut for the wealthy, that's a $30 million hit, not $10 million.

Possibility 1: They are only proposing a 3% cut in the taxes on the top 2% of taxpayers. I which case, I'm not sure why bother. It's hard to imagine a 3% cut as much of an incentive to anything.

Possibility 2: They are full of, um, incorrectitude.

08:54 - 03 Feb 2006 [/y6/fe]

Thu, 02 Feb 2006


The House leadership today announced that they are going to be proposing a large package of tax cuts this year. This is pretty funny, since the word is that the state deficit is supposed to be huge this year. We haven't even seen the Governor's budget yet (two weeks late) but that normally energetic tax-cutter is said to be foregoing proposing tax cuts this year, because there isn't enough money.

One wonders where they think they'll get the money for tax cuts, when they can't manage to find money for affordable housing, health care for poor children, heating assistance and all that. Not to mention the disaster of funding for our schools, and the over-reliance on property taxes.

At the press conference announcing this travesty, Gordon Fox, the House Majority Leader, said "I'm supporting this and I'm a liberal Democrat." I'd suggest instead that self-identification isn't always the most reliable. That is, I know someone who considers himself witty and charming. No one will tell him that the important factor isn't his own judgment on the point, and the weight of evidence isn't really in his favor.

23:34 - 02 Feb 2006 [/y6/fe]

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