STATEMENT: Childcare Subsidies Will Enrich Labor Unions

STATEMENT
June 16, 2015

Childcare Subsidies Will Enrich Labor Unions
Non-transparent process leads to added taxpayer burden

As the Rhode Island Center for Freedom and Prosperity predicted in 2013, the non-transparent process surrounding union negotiations for childcare subsidies will enrich labor unions while adding to taxpayers’ burden. In another budget cycle during which the state government is hunting for every dollar it can find, Governor Raimondo and the General Assembly have made dues to the Service Employees International Union (SEIU) a priority.

As Katherine Gregg has reported in the Providence Journal, the budget on which the Rhode Island House will vote tonight includes $2.15 million in raises for independent childcare providers whose clients receive state subsidies. The expense to taxpayers is the only indication that the state has given that it has a first-ever agreement with the SEIU local representing the private providers.

In 2013, the General Assembly and Governor Lincoln Chafee changed state law in order to allow the childcare providers, who are not government employees, to unionize in order to negotiate rates with the state. In a short time frame, and through a process tainted with controversy, the SEIU won the right to represent the approximately 540 providers.

Despite a related ruling from the U.S. Supreme Court that the Rhode Island Center for Freedom and Prosperity believes renders the state law unconstitutional, the Chafee and Raimondo administrations continued negotiations. Now, at the conclusion of the completely non-transparent process, elected officials are poised to pass the costs on to the heavily burdened people of Rhode Island.

“With our unhealthy economy and projections of government deficits on into the future, Rhode Islanders have to start catching on to the game, here,” said Justin Katz, Research Director for the Center. “If needy families are having trouble finding providers because the subsidies are too low, the General Assembly could have increased the rates without the involvement of an expensive labor union.”

Details of the agreement still have not been made public. Based on budget numbers provided by the House Speaker’s office and the Center’s review of similar contracts in other states, the amount of the increase going entirely to the labor union could be around $1 million – about half of the total raise.

The state should immediately release details of the agreement so the people of Rhode Island and their elected officials can make informed decisions prior to budget votes.

Media Contact:
Justin Katz, Research Director
401.835.7156 | info@rifreedom.org

About the Center
The nonpartisan RI Center for Freedom & Prosperity is Rhode Island’s premiere free-enterprise think tank. The mission of the 501c3 nonprofit organization is to return government to the people by opposing special-interest politics and advancing proven free-market solutions that can transform lives by restoring economic competitiveness, increasing educational opportunities, and protecting individual freedoms.