Rhode Island Employment Snapshot, April 2015: The Annual Wait for Realistic Numbers

[Click here for the printable one-page PDF of this post.]

In a news report that drifted into this author’s awareness, recently, an analyst explained Rhode Island’s employment boost in terms of seasonal changes. To the contrary, the numbers are supposed to be seasonally adjusted (to bring out underlying trends), and the pattern of this year looks a lot like the patter of last year. Rhode Island begins the first six months with an inexplicable jump in employment, which levels off or decreases and is followed by a substantial downward revision when the data for the year is in.

Therefore, as we assess the Ocean State’s 6.1% unemployment rate, as reported by the federal Bureau of Labor Statistics (BLS), which is now out of the bottom 10 nationally and is not the last in New England, we should be aware that we’re likely just in the (largely unrealistic) annual upswing.

According to the BLS, in March, a net 2,846 Rhode Islanders gained employment, while 1,826 joined the labor force. Those two variables are the basis for the unemployment rate. The first chart below shows that this year represents the start of a rebound in a long decline… if the numbers are correct.

The second chart shows how far Rhode Island is behind its neighbors. (Note that this month’s iteration has a different axis to accommodate Massachusetts’s growth.) Both Connecticut and Massachusetts are now well above their labor force and employment rates as of January 2007, while Rhode Island isn’t even close. Indeed, beginning in April, Massachusetts now has better growth in employment than in labor force.

The final chart shows the importance of labor force. The blue line is the official unemployment rate; the red line is what the rate would be if residents weren’t giving up their quest for work. Unemployment would still be 9.5% in Rhode Island with the January 2007 size of the labor force.

RI-laborforceandemp-0107-0415

RIMACT-laborforceandemp-0415perc0107

RI-unemploymentrate-steadyLF-0107-0415

RI Center for Freedom & Prosperity Launches Ad Campaign for School Choice. House Hearing Today.

FOR IMMEDIATE RELEASE
May 27, 2015
Rhode Island Center for Freedom and Prosperity Launches School Choice Ad Campaign
Full-Page Ad in Providence Journal Coincides with House Finance Committee Hearing on School Choice
Unions cited for standing in the way of needed education reforms
Providence, RI – Today the Rhode Island Center for Freedom and Prosperity, the state’s premiere free-market think tank, announced a new ad campaign in support of school choice. The Center’s full-page ad is currently running in today’s Providence Journal. The ad, which asks “What’s the difference between a bright future and a bleak one?” is part of the Bright Today initiative to expand school choice and improve education quality in the Ocean State.

The ad comes on the same day the House Finance Committee is to hear bill H5790, legislation that would offer Bright Today educational scholarship accounts for all Rhode Island families. The bi-partisan bill is sponsored by Representative Raymond Hull (D, Providence) and will be heard at 4:30 pm today in Room 35 of the State House.

The full-page Providence Journal ad goes on to say: “The Rhode Island General Assembly is considering a bill that could expand school choice and improve education in Rhode Island. For too long, unions have stood in the way of a brighter future for our children. But with the lowest graduation rate in New England, Rhode Island can and must do better.”

To view the ad, click HERE.Based on reports previously published by the Center, sub-grade facts about public education in Rhode Island include:

  • The lowest graduation rate in in New England;
  • Low value. The RI public school system spends among the top 10 in the nation per pupil, yet K-12 performance and reform is rated among the bottom 10;
  • At-risk students especially suffer– low income, black, Hispanic, & students with disabilities; RI Hispanics score almost 8 points lower than the national average;
  • RI parents are the most pessimistic about public schools in the entire country, based on public polling.

In addition to today’s Providence Journal ad, the Center will also launch an aggressive social media push to inform taxpayers throughout the state of the benefits of the school choice legislation. The bills currently under consideration in the General Assembly would allow parents greater flexibility and choice in their children’s schooling, whether at a public or private school.

Mike Stenhouse, CEO of the nonpartisan group, said today, “After years of increased per-pupil spending and little improvement in educational performance, it’s time for Rhode Island lawmakers to do what’s best for our state’s families and students. Empowering parents with expanded school choice options would give our children greater opportunities to succeed and help create a brighter economic future for our entire state.”

Bright Today Scholarships are a form of Educational Savings Accounts (ESAs) where, just this month, Tennessee became the fourth state to officially adopt the innovative scholarship program. . A bi-partisan Senate version of the bill (S0607), also with a Democrat lead sponsor, was heard in committee last week.*****

Background: In January 2015, the nonprofit Center published The Case for Expanded Educational Choice, putting forth arguments why the time is now to empower parents with more educational options for their children.
  • In March 2015, the Center published a report, The Way of the Future, describing the Bright Today Scholarship program outlined by the legislation.
  • In April 2015, The Math of Educational Choice, showed how most public school districts would actually achieve net fiscal savings via the Bright Today Scholarship program.
  • The main tenets of the “Bright Today Educational Choice” campaign, are that no child should be condemned to attend a failing school; that every family should feel confident that their children can dream of a bright future; that no child should have to wait for tomorrow’s reform promises; and that every child deserves an education of their family’s choice – today. A dedicated campaign website can be viewed at BrightToday.org.
  • The Center is part of a growing coalition, currently comprised of the nationally renowned Friedman Foundation for Educational Choice, as well as number of in-state advocacy groups. For more information, concerned parents can also visit the Center’s ed choice home page at RIFreedom.com/EdChoiceRI.
  • BrightToday_Prov_Journal
Media Contact:
Mike Stenhouse, CEO
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.

STATEMENT: RhodeMapRI Proponents Show True Color; Again Slander Opponents at House Hearings

FOR IMMEDIATE RELEASE
May 22, 2015
Dozens of Citizens Support Bills to De-Fang Controversial Plan
Consortium Members Once Again Resort to”Racist” Tactics
Center Recognizes Testimony from The Gaspee Project
Providence, RI — Once again, grassroots members of the public expressed their clear opposition to the controversial RhodeMap RI agenda at hearings in the House Finance Committee yesterday that lasted until approximately 9:30 pm.

And once again, liberal activists, who were members of the consortium that designed RhodeMap RI, resorted to underhanded tactics by slandering opponents of the plan as “racists”, this time recorded for all to see on Capitol TV (the two witness after the 94:45 minute mark of part 2 of the 5-21-15 House Finance Committee hearings). This following almost identical smears being levied at a November 2014 consortium meeting.

Virtually all of witnesses, who testified to support the bills that would de-fang certain elements of the top-down RhodeMap RI plan, were individual citizens or leaders of taxpayers groups. Virtually all witnesses opposing the bills – and supporting RhodeMap RI – were state employees, consortium members, or planners themselves.

Overall, testimony from the hearings supported the Center’s original contention that the true agenda behind the RhodeMap RI centralized plan is not economic development for Rhode Island, but, rather, to advance a radical social equity agenda out of Washington, D.C.

“This is a clear case of the government machine imposing its will against the wishes of the people,” said Mike Stenhouse, CEO for the RI Center for Freedom & Prosperity. Also presented at the hearing were copies of various resolutions from over a dozen municipalities, either requesting a halt to the RhodeMap RI process or expressing their desire to opt-out of the burdensome mandates the plan would impose on them. “We will now see if legislative leaders will listen to voice of the people or choose to allow this government boondoggle to proceed unabated,” added Stenhouse.

The most compelling testimony presented, from The Gaspee Project, claimed that supporters of the plan engaged in “systematic deception” over recent years in seeing the plan adopted into the official state guide plan, including:

  • Manipulation of and bypassing the legislative process
  • False claims of the plan’s economic development agenda
  • Claiming RhodeMap RI is a plan for RI, when dozens of other cookie-cutter HUD designed plans exist throughout the nation
  • Bogus claims of public support
  • Utilizing dishonest technical language to hide the true intent of the plan and the involvement of the federal government

A number of bills were heard, dealing with: allowing municipalities to opt out of various mandates in the plan; providing the General Assembly with future oversight of plan revisions; and plugging loopholes to limit overly zealous eminent domain land seizures by the government. All bills were held for further study.

Media Contact:
Mike Stenhouse, CEO
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.

Open-Eyed Medicaid Reform: Review of Working Group Proposals

Click here for a printable PDF of this analysis.

Josh Archambault with Buddy on Medicaid

As part of her 2016 budget proposal, Rhode Island Governor Gina Raimondo convened a Working Group to Reinvent Medicaid. Although its theme is reform of the way the public healthcare program operates, the selling point has been budgetary savings — specifically in the next fiscal year, when the group expects its suggestions to save or raise $91.1 million, just shy of 10% of state spending.

While there can be no doubt that Rhode Island’s Medicaid system is in need of reform, analysis of the proposals suggests that policymakers should be reluctant to hinge their budget decisions on the savings’ actually being realized. They should also go into the reforms with eyes wide open. Substantial portions are likely to shift costs to their constituents as healthcare consumers and federal taxpayers.

The group divides its proposals into three categories:

  • Payment and delivery system reform
  • Targeting waste, fraud, and abuse
  • Administrative and operational efficiency

Although waste, fraud, and abuse is often a go-to source when government officials promise to pay for new spending without raising taxes, it makes up a very small portion of the working group’s list, at $4.0 million (4% of the expected savings). About two-thirds of the savings come via payment and delivery system reform, with the remainder in administrative and operational efficiency.

These categories are of limited use in understanding how the state is actually supposed to save money. Working with health policy expert Josh Archambault, of the Foundation for Government Accountability, the RI Center for Freedom & Prosperity sorted the proposals into five new categories that are more descriptive of the likely effects of the policies:

  • Shifting costs to private insurance and employers
  • Shifting costs to federal taxpayers
  • Potentially saving or costing money, depending how the market reacts
  • Cutting payments, with uncertain effects
  • Implementing good (if limited) ideas

workinggroupprojections-newcategories

More than half of the savings (53%) will likely shift costs to the private sector, with another 4% shifting to the federal government. Despite the working group’s projections, 27% of the reforms should be considered speculative and might even cost the state money. Another 8% are simply cuts that may have adverse outcomes or fiscal effects. That leaves just 7% of reforms that we would count as plainly good ideas.

The largest example of cost-shifting to the private sector ($15.7 million) is a 5% reduction in hospital payment rates, which hospitals will seek to transfer to others. The policy would give hospitals an opportunity to receive bonuses, but to the extent that they do so, the “savings” will be consumed. The largest proposal to transfer costs to federal taxpayers, at $1.5 million, would “streamlin[e] the application process” to ensure that beneficiaries are counted in the way that will bring the most federal dollars for their care.

With respect to unknowable outcomes, the largest projected savings ($3.3 million each) come from proposals to change the methods and locations of treatment for people who are seriously mentally ill or have complicated cases. Such proposals may or may not save money, and if the providers losing revenue find ways to bring their customer bases back up, the costs could actually increase. The largest outright cut is $6.1 million in increased risk and other agreements the state would force on providers. Meanwhile, the most significant good, if limited, idea is $2.6 million in projected savings from new methods of tracking waste, fraud, and abuse.

In short, the working group’s proposals are a mixed bag. In some cases, it may in fact be more appropriate for costs to be borne by insurance customers and the federal government, and some reforms might be worthwhile despite uncertain outcomes. Hopes for short-term savings, however, should not become an excuse for jumping into reforms, and costs shifted off of the state’s books should not be an excuse for increasing or maintaining other government spending.

At Least 11 Other Judicial Employees Already Drawing $100k+ Pensions

FOR IMMEDIATE RELEASE
May 6, 2015
At Least 11 Other Judicial Employees Already Drawing $100k+ Pensions
Some have contributed $ ZERO $ to their retirements

Providence, RI — As follow-up to an article in the Providence Journal today about three soon to be retired judges who will draw high six figure annual pensions, at least 11 other judicial employees are already drawing taxpayer funded pensions at this level, some of whom have not contributed even a single dime to their own retirements. This according to information posted on RIOpenGov.org, the government transparency website of the RI Center for Freedom & Prosperity.

According to information filtered from the interactive transparency website, eleven judicial employees are known to have collected $100k or more in pension payments in 2013. One such retiree, former Superior Court judge Judith Savage is not listed as having made any individual contributions to her plan. Further, Savage is estimated to receive a total lifetime benefit of about $3.4 million, the highest such liability among all state retirees, which would be 100% funded on the back of taxpayers.

Statewide, 13 current retirees are projected to receive lifetime benefits exceeding $3 million: 6 former workers from the State; 4 from the State Police; 2 from the Judicial system; and 1 from the Woonsocket School Department. Two retirees from this group made zero individual contributions to their retirement.

Also according to the data listed on RIOpenGov.org, another former judicial employee, Bruce Morin from the Workers Compensation Court, who retired in 2011, pulled in $172,330 in 2013 – the highest amount among all state retirees from all departments. Further, the next three top 2013 pension payments in the entire state were made to former judges; Howard Lipsey (2008, $167.3k), Walter Gorman (2008, $161k), and Albert Ciullo (2013, $160.9k). Morin is projected to receive the 2nd highest total lifetime retirement benefit.

“As yet another unfair result of overly generous collective bargaining and state employment provisions, the average family is being forced to support exorbitant benefits for the select few,” commented Mike Stenhouse, CEO for the Center. “Rhode Islanders need to start understanding that government is not the friend of the little guy, but rather is geared to benefit well-connected insiders and cronies.”
Media Contact:
Mike Stenhouse, CEO
401.429.6115 | 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.

Mike Stenhouse: Medicaid cuts that left, right can support

As published in the Providence Journal:

 

Gov. Gina Raimondo’s “Reinventing Medicaid” is not a new concept. In 2008, Rhode Island became the nation’s first state to receive a Medicaid global waiver, and since then many other states have explored ways to control burgeoning costs.

However, in 2012, after a bruising debate about President’s Obama Affordable Care Act and associated state exchanges, the Chafee administration took the further step of accepting the federal government’s program to expand Medicaid. As our Center warned, Medicaid costs in our state have exploded. Governor Raimondo is correct in asserting that Medicaid’s rate of growth is unsustainable from a budget perspective.

The question now is: Can cuts be implemented without endangering the safety net for those who are most in need of Medicaid services? One approach that everyone should agree with is to eliminate fraud and abuse and to ensure that taxpayer-funded benefits are provided only to those who are eligible. This has always been a nice-sounding goal, but difficult to achieve in practice.

But there is at least one proven solution, which our center discovered when we reached out to a national partner, the Foundation for Government Accountability (FGA), which focuses on health-care issues. FGA is successfully promoting a program that has saved hundreds of millions of Medicaid dollars in states such as Illinois and Pennsylvania.

The idea revolves around Medicaid eligibility. Without proper database mining and detailed eligibility verification for prospective and current enrollees, an FGA report shows that many states regularly extend benefits to individuals who are not eligible to receive them. Examples include payments to dead people, to wealthy lottery winners, cases with incomplete documentation, and individuals lying about their incomes.

Yet, given our Center’s strong opposition over the years to HealthSource RI and to Medicaid expansion, we wondered if we were the proper messenger to introduce this idea to state officials. We were pleased when both Elizabeth Roberts, the secretary of the Executive Office of Health and Human Services, House Speaker Nicholas Mattiello’s policy director separately agreed to meet with me and an FGA executive in March. Acknowledging our philosophical and past differences, the secretary and her staff were very gracious and highly interested in the FGA solution, as was the speaker’s policy team.

The FGA approach includes three steps: better verification at the front door; ongoing verification checks; and public prosecution and oversight. There are certain third-party vendors FGA identifies that can conduct national database checks, above and beyond the technical capacity of many states. With $90 million targeted by the governor in Medicaid cuts, this solution alone, FGA estimates, could save tens of millions in Rhode Island, allowing other critical services to be maintained.

We have been informed that this idea will be one of the recommendations included in Governor Raimondo’s work-group report. It could manifest as a request for proposals from the executive branch or via legislation that requires aggressive Medicaid eligibility verification.

Will Rhode Island try to implement this win-win cost cutting solution? If it does, it will be a reform both the left and the right should readily agree to support.

 

Mike Stenhouse is CEO of the Rhode Island Center for Freedom and Prosperity.

 

Read it on PROJO.com Here. 

Rhode Island Employment Snapshot, March 2015: A Return to Seasonal Overstatement?

[Click here for the printable one-page PDF of this post.]

Rhode Island’s employment data has developed a seasonal pattern — and it isn’t captured in the “seasonal adjustments” that the federal Bureau of Labor Statistics (BLS) applies to the data. Throughout the spring and early summer, employment numbers in the Ocean State undergo inexplicable improvement with no relation to other empirical or anecdotal evidence in the state. In the latter half of the year, the increases stop, perhaps receding a bit. Then, the BLS revises the numbers the following January, dropping both employment and the labor force (employed plus looking for work) and smoothing out the curves.

We’re currently in the inexplicable-growth season.

According to the BLS, in March, a net 2,401 Rhode Islanders gained employment, while 2,074 joined the labor force. Those two variables are the basis for the unemployment rate. The first chart below shows that, with the melting of the snow, the labor force turned around its steady, eight-year decline, while employment has taken off like a rocket. We’ll see.

The second chart shows the degree to which it will take more than statistical blips for the Ocean State to catch up with its neighbors. Both Connecticut and Massachusetts are now well above their labor force and employment rates as of January 2007, while Rhode Island isn’t even close. With the annual downward revisions of the monthly estimates, it’s been a long, frustrating climb for Rhode Islanders.

The final chart illustrates the point from a different angle. The blue line shows the official unemployment rate; the red line shows what the state’s unemployment rate would be if residents weren’t giving up their quest for work. With the big jump in the labor force, the difference between the two lines dropped, this month. Still, unemployment would be 10% with the January 2007 size of the labor force. Conspicuously, though, the labor force only jumps when employment does. Otherwise, the unemployment rate would go up, which is something the public would notice.

RI-laborforceandemp-0107-0315

RIMACT-laborforceandemp-0315perc0107

RI-unemploymentrate-steadyLF-0107-0315

The Math of Educational Choice

Introducing the RI-DIMES Fiscal Modeling Tool

Empowering parents with greater choices when it comes to determining the best educational path for their children is not only supported by strong moral arguments, but can also lead to a net positive fiscal impact on the bottom line of public school districts, very different from the math of charter schools.

Read “The Math of Educational Choice” report

Click here for a school-district by school-district summary table of fiscal results

EXECUTIVE SUMMARY

WINWINWIN

The Center, in conjunction with a PhD economics professor, has developed a fiscal modeling tool, Rhode Island District Impact Model for Educational Scholarships (RI-DIMES), that can project the statewide and district-by-district fiscal impact of the educational scholarship program component of the 2015 bipartisan legislation submitted in both the Rhode Island House of Representatives and Senate. In March 2015, the Center published a report, The Way of the Future, describing the Bright Today Scholarship program outlined by the legislation.

The RI-DIMES projections demonstrate that conventional beliefs about the fiscal effects of voucher-type scholarship programs exaggerate
the risk and, if the policy is well designed, do not apply at all.

In the first year, with fewer than 3% of public school students expected to opt for scholarships, which are capped at $6,000, RI-DIMES projects, under the “core” policy providing scholarships to current public school students who migrate out of the system (including new students), that:

  • Public school districts will see large aggregate net fiscal savings. With statewide savings expected to reach $17 million, 33 of 36 local districts will realize net savings in the first year. This figure could rise to $32 million per year and include all districts but one, under more-optimistic assumptions.
  • Funding per public school student will actually rise in every school district, by an average statewide increase of $316.
  • Total public and private spending on education will increase by $17.2 million, because the scholarships will provide an incentive for families to invest more of their private dollars into their children’s education.

When considering a “universal” policy as described in current legislation, in which current private school students are also granted partial scholarships, the net fiscal impact for public school districts is diminished, providing a wider range of possible first-year outcomes:

  • Under the projected assumptions, statewide savings would drop to about $1.85 million, with 50% of the public school districts still realizing net savings.
  • Under more-optimistic assumptions, all but
    one school district would realize net savings, with the statewide total savings approaching
    $18 million per year.

With our public school buildings in dire need of repair and maintenance, and with property taxes already high across the state, the proposed educational savings account legislation in just five years could free up $85 million to $150 million in revenue that could be applied to relieve these two pressing issues.

School Choice Saves Money for School Districts!

Families can be empowered with choices and student achievement can increase … while public school districts can realize net fiscal savings.

Bright Today Education Scholarships are the way of the future!

[button url=”https://rifreedom.org/?p=13690″ target=”_self” size=”medium” style=”royalblue” ]Read “The Math of Educational Choice” report[/button]

STATEMENT: Serious Questions for House Oversight Committee Hearing on RhodeMap RI

FOR IMMEDIATE RELEASE
April 9, 2015


Critical Questions About Controversial RhodeMap RI
Plan Must Be Addressed

How did a legitimate economic development plan request get hijacked and transformed into a radical social equity agenda?

Providence, RI — Critical questions must be asked and answered when Kevin Flynn, Associate Director of the state Division of Planning, testifies in front of the House Committee on Oversight at 4:30 pm this afternoon in Room 101 at the State House, suggests the RI Center for Freedom & Prosperity, a leading critic of the controversial RhodeMap RI plan, which will be the topic of the hearing.

The so-called economic development plan, which the Center argues is a radical social equity experiment in disguise, was adopted into Rhode Island’s official “Guide Plan” in December of 2014 by un-elected bureaucrats, without any significant public debate. Last fall, the Center challenged the Chafee administration and the RI Foundation, major supporters of the plan, to conduct an open and public debate on the matter, however, the requests were rejected or unanswered.

“Finally, the public will hear from the architect of this scheme, who, to date, has not been publicly questioned or held accountable for his actions,” commented Mike Stenhouse, CEO for the Center. “We know that in other states, similar plans have resulted in the infringement of individual property rights and the sovereignty of municipal governments. Mr. Flynn must be questioned as to what specific assurances he can point to that would preclude these same violations from happening in Rhode Island.”

The Center recommends that committee members
focus questions on a few critical areas:

  • How did a low-level, unelected bureaucrat receive the authority to sign-off on a document committing the entire state of Rhode Island and its 39 municipalities to adopt the six “livability principles” defined by HUD, a federal agency (U.S. Department of Housing and Urban Development)?

  • Was the 2013 legislative process manipulated, in a bait-and-switch maneuver, to corrupt a legitimate economic planning process by transforming it into a radical social-engineering experiment?

  • Are land seizures or private property development restrictions likely to become more prevalent under aggressive eminent domain or transfer of development rights mandates?

  • Given the devastating effects on the tax base in the city of Woonsocket, a poster child for HUD programs, why should every Rhode Island municipality be mandated to adopt similar programs, which invariably result in inequitable levies of property taxes?

  • Should Rhode Island risk its future economic viability on the notion that racial and income quota mandates, when it comes to residential compositions in neighborhoods, are a driver of economic growth?

Concerned citizens who value the concept of individual property rights are encouraged to attend the hearing.

The Center also commends the bi-partisan legislative sponsors of multiple legislative bills that would weaken or repeal many provisions of the RhodeMap RI plan, especially those that would create new mandates on municipalities. The Center has listed descriptions of a number of pro and anti RhodeMap RI pieces of legislation on its website.