What's this? A Book!
Or buy here: Light Publications, Powell's, or Bn, Amazon A look at the lousy situation Rhode Island is in, how we got here, and how we might be able to get out. Featuring
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AboutThe 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. Responsibility: Tom Sgouros
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Mon, 19 Dec 2005
An interesting (and alarming) article in Sunday's Journal (front page, above the fold) was about the exploding costs of health care for state government retirees. Since the deal was made under the DiPrete administration, costs have exploded. This part is a familiar story.
But there's worse in store:
As a result of a new public-sector accounting rule, Rhode Island -- along with every other state, city, and town, water, sewer and school district in the nation -- will soon have to disclose to its taxpayers and bondholders the total value of its retiree health-care promises.
The way it should read is:
...will soon have to disclose to its taxpayers and bondholders the total value of its retiree health-care promises with accounting rules designed for the private sector.
The exploding cost of health care is a huge problem for everyone, not only retired government employees. To single them out like this is kind of strange. Air pollution is a real problem for retired government employees, too. (And it probably pushes up the cost of their health insurance, besides.) But that's not how I'd usually think of the problem.
But worse, the article conflates that problem with an accounting change ordered by GASB (Government Accounting Standards Board). The important difference between a private business and a government is that a private business can go bankrupt and disappear. In that case, it's important that there be financial backing to the commitments it has made to its customers and employees. This is why it's inappropriate for a private business to pay for pension costs out of current revenues, and why a corporation's "unfunded liability" -- the difference between what they owe and the cash they have on hand -- is such a big deal.
The same is not true of a government. Social Security, for example, has happily paid benefits out of current revenues for decades, and there's no reason it can't continue into the foreseeable future. But this accounting rule change will make this kind of perfectly responsible fiscal management appear to be mismanagement, and will cause thousands of governments across the country to raise taxes or cut services in order to pack away huge sums of money so they can appear more "fiscally responsible" than they really need to be. A hardship for all of us and a windfall for people whose business is to invest those funds, but I'm sure that had nothing to do with the changes.
09:39 - 19 Dec 2005 [/y5/de]
Tue, 13 Dec 2005
A couple of weeks ago we held the first of the Stink tank House of Unrepresentatives policy forums (fora?), on affordable housing, and it was quite an interesting event. People came to discuss affordable housing in a way that rarely happens. We heard proposals about inclusionary zoning, and about restrictions on rental conversions for section 8 housing, two ideas worth serious consideration to help ease the housing crisis.
Join us for the next meetings, in 2006. I neglected to post this schedule before, but here it is. The next forum will be January 18, at 5:30, and will be about educational "adequacy": How much is too little? How little is too much? The witnesses and panels will be announced in January.
10:30 - 13 Dec 2005 [/y5/de]
Our new International Standard Serial Number (ISSN): 1557-5675. Granted by the Library of Congress National Serials Data Program. Oh, the sweet smell of legitimacy.
10:22 - 13 Dec 2005 [/y5/de]
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