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.

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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.


Creative Commons License Tom Sgouros

Wed, 18 Nov 2009

Letter from the Mayors

In my mailbox this morning. They're exactly right.

The one quibble I have is that there's nothing wrong with binding arbitration. The binding arbitration rules in, for example, Connecticut are quite clear about what are the proper reasons an arbitrator can use to rule one way or the other in a dispute. It's possible to draw those rules to favor unions, and it's possible to draw them to favor management. We should adopt binding arbitration, and then argue about what are the proper grounds for a ruling, but that's a far smarter course than just throwing the whole idea out the window.

Coalition of RI mayors: Best medicine for RI is smart state funding policy

Prescribing a "crash diet" to 39 people you have never met will make some more healthy, make others sick and will kill a handful. Doctors don't prescribe in this way, for obvious reasons. Instead, they base their recommendations on detailed individual histories and a strong understanding of the symptoms. They know who they're dealing with, they see what's wrong and they follow the best practices for fixing the problem.

Everyone knows that Rhode Island's economy is not well. Recently, we have seen signs of courageous and incisive state and municipal leadership, for instance, on education and pension reform. However, when it comes to overall state funding policy, many elected officials - including the governor - are still prescribing a blanket crash diet for Rhode Island's 39 cities and towns. This is not a way to lead our state back to fiscal health. Rhode Island's 39 municipalities have dramatically different fiscal profiles. Only by taking a detailed history can we understand how they got this way and how we might go about fixing it. A history of poor fiscal management in some of our municipalities has resulted in wild deviations between similar communities: some have lifetime Blue Cross insurance for teachers and their spouses while others do not; some have as much as 50 percent more police officers per capita than others; some have millions of dollars more in pension liabilities than others.

Binding arbitration, including the proposed teacher contract legislation, is an example of state policy that will continue to widen the gap between efficient and inefficient communities. These inequities were arguably brought on by the cities and towns themselves or have been the result of wayward binding arbitration decisions, which favored labor unions. But the state is not blameless in that it has, for decades, failed to incentivize good fiscal behavior - indeed it has often done just the opposite. And in other important respects, gross fiscal inequities have been created between similar cities and towns by poor state policy dating back several decades. Three attributes mark good governmental funding policy at any level: 1) the funding is equitable; 2) it's transparent; and 3) it rewards the right kinds of behavior. Our current state funding policies bear none of these hallmarks.

Anyone who feels compelled to weigh in on the issue of state funding to cities and towns should at the very least have a fundamental understanding of each community's budget and should be well versed in the two major funding policies that determine how 75 percent of the shrinking pot of state aid, millions less than the often reported $1.1 billion, is distributed. Many taxpayers could not name these two funding sources. They are the education funding policy, which distributes $700 million to school districts and the "vehicle excise phase out" funding policy, which allocates $140 million to municipalities. More troubling, most local and state elected officials as well as the media would not be able to explain how these funding programs work: that is, what rules govern the distribution of funding to Rhode Island's cities and towns. Efforts to regionalize municipal services will be much more effective if these two funding policies are reformed.

Every Rhode Islander should adopt the slogan, "My student is my student! My car is my car!" State funding for education to any municipality should be based on the actual students in its district schools. State aid in a vehicle tax program should be based on the assessed value of the cars owned by the citizens of a city or town. Believe it or not, this is not how it works in Rhode Island. As a result, we have inequitable distributions of revenue to cities and towns, to the tune of tens of millions of dollars going to the wrong places.

Consider this: a main reason that Rhode Island is one of the highest spending and lowest performing states in the nation on education is because we fail, time and again, to get the right amount of money to the right places at the right time. A strong education funding policy would be based on individual student need, establishing the base level of state support every student requires and providing additional support through an equitable and transparent formula for special needs that require costly additional services. This measurable amount of funding would follow a child to any Rhode Island public school parents choose. Only in this way can we get taxpayer's dollars where they were intended to go. Only in this way can we avoid the practically comic system under which we now live, where a district can continue to receive tens of millions of dollars for thousands of students who no longer attend its schools or, in many cases, even live in the district, while another district can face an influx of costly students and not receive one additional dime in state aid. Only in this way can the state stop providing fiscal incentives for bad results like high dropout rates.

Likewise, an intelligent vehicle tax policy would be based on one state vehicle tax rate. State policy aside, a 2004 Ford Explorer parked in a driveway in Barrington is worth the same amount of money as when it is parked in a driveway in Warwick. Currently the state allocates funding to communities based on vehicle tax rates, frozen in 1998, rewarding communities with the highest tax rates and penalizing communities with the lowest tax rates. Depending on where the Explorer is registered cities and towns can receive checks as low as $59 or as high as $460. Some may call this policy property tax relief but no one can defend it as fair tax relief. That this has to be explained reveals what a mess the state of Rhode Island has gotten itself into. This is not about pitting one community against another. As municipal leaders we are ready to live with a state system that is fair and well thought out. That system would aid us based on who we, as communities, really are, rather than based on who we were a quarter century ago. Fair and well thought out. That's the best medicine. Prescribe it to us and we'll take it, and live with it and make it work.

Daniel J. McKee Mayor of Cumberland This letter was written for a coalition of the following officials supporting funding-policy reform: Lincoln Town Administrator T. Joseph Almond Warwick Mayor Scott Avedisian Providence Mayor David N. Cicilline Pawtucket Mayor James E. Doyle Smithfield Town Manager Dennis G. Finlay Cranston Mayor Allan W. Fung Tiverton Town Administrator James Goncalco North Smithfield Town Administrator Paulette D. Hamilton Westerly Town Manager Steven T. Hartford East Greenwich Town Council President Michael B. Isaacs North Providence Mayor Charles A. Lombardi Central Falls Mayor Charles D. Moreau Johnston Mayor Joseph M. Polisena

08:19 - 18 Nov 2009 [/y9/no]

Mon, 02 Nov 2009


Orrin Hatch on the dreadful scenario of passing health care reform:

"And if they get there, of course, you're going to have a very rough time having a two-party system in this country, because almost everybody's going to say, 'All we ever were, all we ever are, all we ever hope to be depends on the Democratic Party,' " Hatch said during an interview with the conservative CNSNews.com.

"That's their goal," Hatch added. "That's what keeps Democrats in power."

That is, we fear a party that can actually do things that people want.

15:10 - 02 Nov 2009 [/y9/no]

Sun, 01 Nov 2009

They really are like that

The doctrinaire libertarian pole of the health care reform debate is occupied by real, prominent, people. It may sound like a cartoon, but the people behind it seem to be serious.

19:06 - 01 Nov 2009 [/y9/no]

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