Non-Essential Spending in RI: How to Pay for Tax Cuts

Non-Essential Spending

in the Ocean State

Budget Savings vs Job Creation

February 24, 2014

Report Preview (check back in March for complete report)

With the state of Rhode Island in economic crisis, and with massive structural budget deficits projected for years to come, Ocean State lawmakers have the opportunity to both grow the economy and reduce deficits by trimming non-essential spending and cutting taxes in the FY2015 state budget.

Good government is about setting spending priorities, so that opportunities exist for those who wish to succeed. Creating jobs and savings for Rhode Island families while reducing the crushing tax burden on the state’s business sector must be weighed against the excessive and often wasteful spending for projects that produce little or no benefit to the average resident.

Developed in cooperation with the national Taxpayers Protection Alliance, the full Spotlight on Wasteful Spending report, which will be released in March by our Center, will outline over two-hundred million dollars in opportunities for savings without cutting budgets for essential services such as education, public assistance programs, aid to cities and towns, or infrastructure. Examples of pork spending projects that can be repealed or rolled-back in order to effect tax reform,  include:

With the Ocean State’s economy burning all around us, politicians just keep fiddling the same old spend-and-tax tune

• $38 million to defund HealthsourceRI and transfer the exchange to the federal government
• $26 million to privatize the money-losing Convention Center Authority
• $14 million for higher education ‘capital’ projects
• $12 million to forgo payment of the 38 Studios ‘moral obligation’ bond
• $9 million in corporate welfare handouts
• $8 million in often crony spending from the Governor’s Workforce Board
• $8 million in Community Service Grants from the legislature
• $5 million in waste and fraud from SNAP
• $3 million from the Facilities Management budget
• $2.5 million for a sailing center
• $1 million in Legislative Grants

These items, plus an additional $100 million or so in dubious spending and other savings opportunities will be discussed in the upcoming March report. Other areas where non-essential budget savings can be realized include: state government operations and excessive overtime compensation; occupational licensing management costs; non-vital commissions and other bureaucratic entities; historical preservation projects; arts & culture subsidies and film incentives; and more.

It is a myth, often perpetuated by those who defend the status quo spending levels, that tax reform ideas that are non revenue-neutral would result in cuts to critical state services. This report clearly shows otherwise – that frivolous spending is rampant. In reality, tax and budget reforms can happen if proper spending priorities are considered.

To help ensure that unnecessary spending practices will not re-emerge, the Center’s full report will also recommend creation of a fully-empowered Office of the Inspector General. The Center also supports the concept of an “Office of the Repealer”, which would have  the sole responsibility of making recommendations to the legislature in areas of government waste, duplication and out-of-date regulations that should be removed from the state law. Related ‘repealer’ legislation is before the RI General Assembly in 2014.

When it comes to tax and budget reforms that will help Rhode Island families and businesses, public debate must ask the critical question:

Are keeping non-essential spending items worth denying renewed economic opportunities for Rhode Island families?