2014 Campaign: Six BIG Issues No One is Talking About

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6 Big Questions Not Being Asked of the Gubernatorial Candidates

With the 2014 Rhode Island gubernatorial campaign now shifting into high gear, the Rhode Island Center for Freedom and Prosperity encourages the media, advocacy groups, and citizens to ensure that certain major policy issues are publicly addressed by the full slate of gubernatorial and other statewide and General Assembly candidates.

big-questionsEach of the issues below has the potential to significantly alter the future of our state, and to date, little, if any debate has taken place, with most candidates talking vaguely about their own plans for broadly related issues. The specific positions of each candidate on these issues and questions would provide clearer insight into each of their individual governing philosophies.

The Center believes that candidates should be forced out of their comfort zones and inform voters of their specific positions on each of these important statewide issues:

1. Constitutional Convention: on the ballot this year will be a referendum for voters to decide if the State should convene a constitutional convention. Advocates believe that a convention is necessary due to the lack of action by the General Assembly in addressing Rhode Island’s most pressing issues and its continued favoritism to special-interest groups.

  • Are you in support of a Constitutional Convention for Rhode Island?
  • What specific issues would you like to see addressed if a convention were to be approved by voters?
  • As governor, if the convention is approved, how would you help ensure that the Convention is conducted a non “politics as usual” manner?
    • Would you encourage the election of delegates in a nonpartisan manner?
    • How do you feel about sitting lawmakers’ being eligible to run as delegates?

2. HealthSource RI: once federal funding runs out in FY2016, what position will the candidates take regarding use of state funds or assessments to Ocean State taxpayers or policyholders?

  • Do you support paying $23 million per year for ongoing operations? Or should we transfer the exchange to the federal government?
  • Major insurance premium increases were again approved for 2015, despite HealthSourceRI claims that it would decrease costs. Is this a concern to you?
  • Do you support consolidating all public and private healthcare in the state under HealthSource RI? (Per H7819, which was heard in House Finance in June 2014)
  • Are you aware of and do you support paying $10-15 million per year for the related Unified Health Infrastructure Project (UHIP)?
    • Do you support using financial information collected from individuals applying for health insurance via HealthSource RI to automatically enroll them in other statewide public assistance programs?
      • Given the projected $50 million per year increase in the state share of Medicaid costs, can the state afford similar additional increases in other public assistance programs?

3. Educational Choice: While each candidate has put forth some general thoughts on education, no significant reforms have been suggested. A movement is underway in Rhode Island to empower parents with expanded choices for their children’s education, choices that may include some form of scholarship voucher so that no child is condemned to remain in a failed government school.

  • Do you support providing expanded educational choice for families? Why or why not?
  • Do you specifically support some form of educational voucher?
  • Do you support expansion of charter schools? Or expansion of the state’s existing Corporate Tax Credit Scholarship program?

4. Sales Tax Reform: Speaker Mattiello has publicly stated that he will take a look at sales tax reform in 2015. The RI Center for Freedom & Prosperity claims that major reforms in this area would produce a game-changing, massive jobs boost for the state’s economy, much more than any other tax reform idea. Given the chronic unemployment problems we face in Rhode Island …

  • As Governor, will you support significant sales tax reform?
  • Do you believe any major jobs creation policy idea would be worth pursuing if it was not revenue-neutral?

5. RhodeMapRI: is a major economic development plan for the state, quietly advanced by the Chafee administration and signed-on to by multiple municipalities and other organizations, that has largely flown under public and media scrutiny. This self-described “sustainable living” plan is funded by the federal department of Housing and Urban Development (HUD) and is largely based on an environmentalist and economic justice agenda, that may even include future racial quotas for communities.

  • Are you aware of and do you generally support the RhodeMapRI plan?
  • Do you believe that unelected federal bureaucrats should be dictating the future economic development of our state?
  • Or should any plan for Rhode Island be developed by our own elected officials?

In other cities and counties across the nation where similar plans have been implemented, such as Westchester County, NY, residents have complained about a loss of individual property rights, loss of sovereignty of locally elected government, and unequal property taxes levies.

  • Do you share these concerns or do you believe they justify the larger goals of the plan?

6. Unionization of Independent Business Owners: in June of this year, the U.S. Supreme Court’s ruling on the Harris v Quinn case led most legal experts to believe that the ruling has a direct impact on last year’s successful effort to unionize home childcare workers in Rhode Island. The 2013 law and subsequent election that would force the payment of union dues or fair-share fees is now likely unconstitutional for such non full-time state employees.

  • As governor, what will you do regarding ongoing negotiations with the SEIU?
  • What will you do to return workplace freedom to this group of childcare workers?
  • What is your position on the unions’ stated intention to unionize other private workers — as quasi public employees — in other industries?

List of Lasts RI

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LastPlace

July 22, 2014

Providence, RI – Calling it “a shameful failure of public policy and political leadership”, the RI Center for Freedom & Prosperity today published a List of Lasts RI, based on its revealing 2014 Report Card on RI Competitiveness, which was released last week. The List of Lasts documents (19) distinct categories where the Ocean State ranks last, either nationally or regionally, in various national performance indices, as of the spring of 2014.

“Our elected officials keep telling us how they’re moving our state forward, yet we’ve fallen to the bottom of the class in an shockingly high number of subjects,” commented CEO Mike Stenhouse. “Rhode Island has all the characteristics to be an A+ state, yet our political class keeps failing us.”

Rhode Island’s Lists of Lasts (19)

National Lasts:

  • CNBC saddles the Ocean State with the WORST CLIMATE FOR BUSINESS
  • The Federal Government ranks RI as suffering from the HIGHEST UNEMPLOYMENT RATE
  • 247 Wall Street ranks our state as having the HIGHEST LEVEL OF SPREADING THE WEALTH; or taxpayer funded income redistribution.
  • A Reason Foundation report rates RI as being hampered with the MOST DEFICIENT BRIDGE SYSTEM
  • CNBC also handicaps RI as enduring the WORST TRANSPORTATION INFRASTRUCTURE state in the nation
  • RI is burdened with the HIGHEST NUMBER OF HEALTH INSURANCE MANDATES, per the Council for Affordable Health Insurance

New England Lasts: In addition to the above (6) categories, Rhode Island also ranks last in New England in (13) more categories:

  • Business Tax Climate
  • Sales Tax Rate
  • Estate Tax Exemption
  • Economic Freedom Index
  • State Lawsuit Climate
  • Unemployment Tax Rate
  • High School Graduation Rate
  • 4th Grade Reading Scores (NAEP)
  • 4th Grade Math Scores (NAEP)
  • Municipal Worker Compensation (vs private sector)
  • State & Local Pension Liabilities
  • Medicaid Payments (per enrollee)
  • Overall Freedom

NOTE: All citations and sourcing can be found on the 2014 Report Card on RI Competitiveness.

Stenhouse continued, “This November, voters should hold accountable those legislators they feel contributed to these dismal rankings. Hopefully, in 2015, we will see a new public policy culture on Smith Hill.”

Rhode Island Employment Snapshot, June 2014: Really Pushing Credulity

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You’ll never guess what Rhode Island’s unemployment rate did in June.  It went down again!  To 7.9%.

That’s still worst in the country (tied with Mississippi), but Rhode Island has now had its best six months of employment growth in recorded history.  For the past three months, the Ocean State has had the most employment growth (as a percentage) in the entire country.  It’s boom-time in the Ocean State, even if we’re still at the wrong side of just about every ranking, and even if it doesn’t feel like things have turned around.

In fact, there were actually 400 fewer jobs based in Rhode Island in June than May, yet, somehow an additional 3,246 Rhode Islanders found work… according to the U.S. Bureau of Labor Statistics, in cooperation with the state Dept. of Labor and Training.

The first chart below illustrates just how bizarre the numbers look, given the state’s recent history. Since December, more than 16,000 Rhode Islanders have found employment.  The total number hasn’t been so high since November 2008.

The second chart provides a longer-term sense of the results. Rhode Island is still below its employment level just before the jobs-crash of the recession and still lags both of its neighbors dramatically when it comes to reclaiming jobs.  Indeed, Massachusetts has now surpassed its pre-recession peak, and Connecticut is just about there.

The third chart compares Rhode Island’s unemployment rate with what it would have been if the state’s labor force had held steady. It shows that unemployment never got as low as Rhode Island officials had claimed, and the growth in the gap between the two lines is steadier and more dramatic, with the exception of the peculiar results these past three months.  Even if the results since December reflect real growth, Rhode Island’s unemployment rate would still be over 10% if people had not stopped looking for work.

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Stenhouse OpEd & Testimony Video re. Bill to Socialize Healthcare in RI (H7819)

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See related OpEd in the Providence Journal, July 3, 2014 

 

Rhode Island Employment Snapshot, May 2014: The Silent Boom

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Rhode Island’s unemployment rate moved down by a notch, rather than a leap, in May, to 8.2%.  However, the 2,659 newly employed Rhode Islanders, according to official Bureau of Labor Statistics (BLS) figures, lead the nation in terms of growth. The downsides of these numbers are that they’re simply difficult to believe and that, even if they’re accurate, the state’s employment situation is still abysmal.

The first chart below illustrates the first downside. If we believe the lines that the government is drawing for us, over 13,000 Rhode Islanders have found employment since December, and we’re back to the employment level of January 2009, after more than five years of wallowing.  Are there any non-statistical signs of this recovery?

The second chart provides a longer-term sense of the results. Rhode Island is still below its employment level just before the jobs-crash of the recession and still lags both of its neighbors dramatically when it comes to reclaiming jobs.  Indeed, Massachusetts has now surpassed its pre-recession peak.

The third chart compares Rhode Island’s unemployment rate with what it would have been if the state’s labor force had held steady. It shows that unemployment never got as low as Rhode Island officials had claimed, and the growth in the gap between the two lines is steadier and more dramatic, with the exception of the peculiar results these past three months.  Even if the results since December reflect real growth, Rhode Island’s unemployment rate would still be over 11% if people had not stopped looking for work.

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House Budget Adopts 25% of Spotlight on $pending Recommendations

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But Leaves $168 Million of RI Taxpayer Dollars on the Table

 

The budget unveiled in the Rhode Island House Finance Committee, last week, showed a $13.3 million decrease in state spending, compared with the governor’s proposed budget.  Approximately $3.1 million of the reductions overlap with the Spotlight on $pending report that the RI Center for Freedom & Prosperity released in March, after a review of the governor’s proposal.

Another $52.9 million in Spotlight on $pending suggestions were in the budget, but were either not counted as a line item or amounted to transfers to federal funds.

“The legislature clearly has different priorities than the Center, but the fact that some of our suggestions found their way into the budget shows how important it is to have alternative voices,” says Justin Katz, who is the research director for the free-market think tank and a coauthor of the Spotlight on $pending report.  At a State House press conference promoting Spotlight on $pending on April 2, Katz had told reporters that the Center hoped legislators would look to their analysis for ideas no matter what fiscal goals they were trying to reach.

Specific areas of agreement between the Center and the House were as follows (note that reductions are from the governor’s proposal, not from current spending):

  • A $1 million reduction in local funding for the State Council on the Arts.
  • Savings of $834,512 in “inmate population-related operating expenditures.”
  • Eliminating a $500,000 increase in workforce training programs.
  • Over $323,973 in savings by not adding new employees to a consolidated Diversity, Equity and Opportunity office.
  • Ending $159,585 in Public Utilities Commission personnel previously funded by the federal American Recovery and Reinvestment Act (ARRA), rather than absorbing them into state spending.
  • Saving $145,303 by running a new certificate of good conduct program for parolees with existing personnel.
  • A $100,000 reduction in payroll within the governor’s office.
  • Not adding a $75,000 per year Creative and Cultural Economy Coordinator to the state’s payroll.

The House also agreed with the $50 million in savings the Center recommended by not expanding the historic tax credit program as the governor wanted.  However, neither the governor nor the House included those costs or savings anywhere in the budget.

Another area of partial overlap came with the Unified Health Infrastructure Program (UHIP), which will make it easier to enroll people in multiple government programs when they apply for any one of them.  The Center expects this program, operated using the state’s health benefits exchange (HealthSource RI), to amplify the cost of social service programs and called for it to be ended.  Instead, the House budget managed to transfer $2.9 million in near-term spending on the project from general revenue to federal sources.

“It’s going to take more feedback from Rhode Islanders to change way the state government operates,” says Katz, who would prefer the savings to be used to reduce the state sales tax rate to 3%, creating over 13,000 private-sector jobs.  “Still, counting the tax credits and UHIP, the House budget includes 25% of the savings that we identified in Spotlight on $pending.”

The Spotlight on $pending report was produced in cooperation with the Taxpayers Protection Alliance and coauthored by Drew Johnson and Justin Katz.

STATEMENT on FY15 BUDGET: Middle Class to Pay for Corporate & Estate Tax Reforms

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June 6, 2013
Sales Tax Cut Would Have Larger & More Immediate Impact
Pointing to new broad-based taxes and fees that will especially harm the middle-class, that will also help pay for planned cuts for corporations and high-income individuals, the RI Center for Freedom and Prosperity sees little in the budget that cleared the House Finance Committee yesterday that will aid struggling families and small businesses, in a statement released today.
The Center further urges lawmakers to modify the budget so as to make a more immediate and larger impact on job creation. While noting a that a few items in the proposed budget are a small step in the right direction, the Center notes that the budget also takes backwards steps, and argues that much more needs to be done to boost the state’s struggling economy.

“While the modest corporate and estate tax reforms will be helpful over the long term for those constituencies, we then simultaneously turn-around and add to the plight of the average guy, asking them to pay for those reforms by imposing new vehicle fees and gas and use taxes,” said Mike Stenhouse, CEO for the Center. “Nor does this budget have any bold jobs creation plan. If we also cut the sales tax, we can put money back in the pocket of every Rhode Island family and business, and create thousands of new jobs right away.”

The proposed new gas taxes and fees on vehicle inspections and on good-drivers seeking to clear their traffic records, along with the $2+ million in new sales taxes, will be a direct hit on middle and low income families. The deceptively named “Safe Harbor” for the use tax would impose a new default of 0.08% of adjusted gross income tax on residents’ assumed purchases outside of the state.

The Center does note it as a positive step that the proposed budget did make some cuts that were recommended in its April Spotlight on $pending report, namely: suspension of the historic tax credit program and holding the line on state personnel costs.

The $48 million to pay for a reduction in the sales tax to 3%, that would produce about 13,000 jobs, can be made by eliminating the $12 million payment of the 38 Studio bond, by eliminating the $15 million to the HealthSourceRI UHIP project, by eliminating $11 million in General Assembly legislative and community service grants, and by cutting $19 million in excessive overtime payments, all were recommended cuts in the Center’s spending report.

OTHER NEW TAXES & FEES:

* Article 12 of the budget increases the real estate conveyance tax that a seller of a home or other real estate must pay at the time of transfer.    The current tax is $4.00 per $1000 of the sale price;  the FY2015 budget would increase this tax by 15% and would become $4.60 per $1000 in Rhode Island, higher than Massachusetts tax of $4.56 per $1,000.

Center’s Testimony Shoots Down HealthSourceRI’s Major Claims to Justify Continued State Operations

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CEO Mike Stenhouse’s full written testimony can be viewed here.

 

 

Following a House Finance Committee hearing Wednesday on H7817 that would send the state’s health insurance exchange to the federal government, Mike Stenhouse, CEO for the RI Center for Freedom and Prosperity, commented that “virtually every major claim made by HealthSourceRI in defense of its own costly existence was shot down by well-researched testimony.”

State Funds on the Hook? HealthSourceRI officials claimed that no local funds would be required for FY2015: the Center countered that $15 million is indeed allocated in the Governor’s proposed budget for the closely related UHIP project, an expense that would be eliminated by passage of the bill.

Federal Fee Exaggeration. They previously claimed that a transfer to the federal government would cost Ocean State policyholders $17.3 million in federal fees: testimony by both the Center and by the House Fiscal Advisory Staff put the actual figure under $5 million. The Center further noted that the costs of maintaining operation of the exchange in Rhode Island would be significantly higher, and that it is disingenuous to talk about only one side of the coin.

A True Success Story? They also claimed that theirs is one of the most successful state-based exchanges in the nation: the Center questioned whether it truly should be considered a success when HealthSourceRI has met less than one-third of its original enrollment projections; has see abysmal business sector participation; has no sustainability funding plan; and will cost the state an additional $50 million per year in higher Medicaid costs.

Health Insurance Premiums kept rising, even after Massachusetts passed its exchange law in 2006. Why would anyone think that RI's exchange could do better?

Health Insurance Premiums kept rising, even after Massachusetts passed its exchange law in 2006. Why would anyone think that RI’s exchange could do better?

Local Control to Reduce Costs? They further claimed that loss of local control would inhibit the likelihood of reducing healthcare costs in the state: however testimony from Josh Archambault of the Foundation for Government Accountability, a national healthcare think tank, noted that after seven years of operating its own exchange, the cost curve has not been bent-down in Massachusetts, which had similar cost-reduction hopes, and that HealthsourceRI’s claims to be able to accomplish this may be over-played. (See “They Knew in 2009” analysis)

Illegal Use of Funds? HealthSourceRI official also proclaimed that the federal government, in reaction to recent news coverage, expressed a willingness to work with HealthSourceRI to help fund its ongoing operations: the Center testified that such use of federal funds may be illegal, being specifically prohibited both by the ACA law and Governor Chafee’s executive order that established the exchange in 2011.

“HealthSourceRI officials all but admitted that they have no idea how to pay for the high expense of the exchange in future years. The fact that the federal government called local officials to try to save the exchange, shows that even its own advocates here and in DC understand the challenge of justifying its continued costly existence, and that they are willing to violate their own law,” concluded Stenhouse. “It is an obvious choice to let the federal government pay for its own federal mandate; a choice that other states are making, and a choice that will not adversely affect any current or future policyholder in Rhode Island.”

Stenhouse’s full written testimony can be viewed here.

In the past week the Center has published two reports supporting the transfer of the state’s costly health insurance exchange to the federal government; $38 million or Zero? and Moving HealthSourceRI Forward to the Feds. Each of these reports, as well as links to other related information about this issue,can be found on the Center’s home page for the health exchange issue at RIFreedom.org/Exchange.

Related News Stories:

Associated Press – http://apnews.com/ap/db_268748/contentdetail.htm?contentguid=x4SpOIdE

Rhode Island Employment Snapshot, April 2014: Increasingly Hard to Believe

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Rhode Island’s unemployment rate took another large leap downward, to 8.3%.  The bad news is that the same is true across most of the country, so the Ocean State is still last.  The worse news is that there still doesn’t seem to be much by way of alternative evidence of this boom.

The first chart below illustrates why some healthy skepticism continues to be in order. After many years of general stagnation, February through April 2014 arrive as a sudden ramp, both in employment and in labor force.

The second chart provides a longer-term sense of the results. Rhode Island is still below its employment level just before the jobs-crash of the recession and still lags both of its neighbors dramatically when it comes to reclaiming jobs.  Indeed, Massachusetts is now beyond where it was in January 2007, and almost at its pre-recession peak, which it hit a few months later.

The third chart compares Rhode Island’s unemployment rate with what it would have been if the state’s labor force had held steady. It shows that unemployment never got as low as Rhode Island officials had claimed, and the growth in the gap between the two lines is steadier and more dramatic, with the exception of the peculiar results these past three months.

The chart makes clear that the Ocean State’s unemployment rate would have been much higher, over the past few years, had people not given up looking for work… almost reaching 14% in 2011. It also emphasizes the disturbing trend that the only reason the unemployment rate seems to have been stagnant, rather than increasing, throughout 2013 is that fewer Rhode Islanders are counted at all.

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OPINION. The RI “left” refuses to debate: What are they afraid of?

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Opinion by Mike Stenhouse as appeared in the Providence Journal (May 9, 2014)

Mike Stenhouse: Left won’t defend failed R.I. policies

‘The price of freedom is eternal vigilance,” is a sentiment many have shared. Engaging in a spirited public debate is one form of such vigilance — a debate such as the Rhode Island Center for Freedom and Prosperity conducted in late April. The core question was: Would we be better off with more government in our lives, or less?

Based on the reaction we received from audience participants, our debate offered a fresh, new discussion about public policy; conversations that are not normally held by politicians or in the media. “When is the next debate? We can’t wait!” we were told, as well as, “If only our lawmakers could have heard this.”

However, the experience of organizing and running the debate ended up being as educational for me as it was for audience attendees. The audience learned about core philosophical policy differences. I learned about a revealing tactic of the left.

Ocean State “progressives” appear to have little interest in an open and honest debate about public policy. Either they don’t want to consider questions about whether their liberal agenda has been serving the well-being of our state’s residents, or they don’t want to admit that it is their big-government ideas that have, indeed, failed our families and businesses.

In seeking participants for the debate, I quickly became aware that the Rhode Island left hopes to avoid talk about connecting their policies to the wreckage we have seen across our state — either by refusing to debate in the first place, or by claiming that Rhode Island’s overall public policy culture is not liberal.

In reaching out to local groups to try to assemble a balanced slate of debaters, no fewer than four local left-leaning organizations, plus one other, refused our invitation to participate in the event: the Economic Progress Institute, the Latino Policy Institute, the Rhode Island Council of Churches, RIFuture.org and the Rhode Island Urban Debate League.

Stated reasons ranged from not wanting to be identified with or seen as supporting our center, to disingenuous questions about the debate’s funding sources, to a general sentiment that nothing would be gained from being involved in such an event. In one case, one of these groups was actually warned by another that we might be calling, and was armed with a ready excuse to turn us down.

What were they afraid of?

We are thankful that two local individuals — Tom Sgouros and Samuel Bell — agreed to participate and represent views from the left. However, their debate tactic was to run away from their own policies, by claiming that Rhode Island is much more conservative than most might think, that conservative tax cuts for the rich are partially to blame, and that there must be factors other than public policy behind our state’s failings. These assertions drew repeated chuckles from the audience.

Could these men be serious? With our heavy tax burden and poor economic rankings, how many Rhode Islanders honestly believe the state is struggling as a result of too-conservative policies?

It’s actually a very clever tactic to blame the other guy, or to avoid debate altogether. There is no doubt in my mind that a liberal-progressive agenda dominates Rhode Island — and, if I were them, I wouldn’t want to be held accountable for that agenda’s failures either. But it is a blatantly transparent tactic, with zero credibility.

Over the decades, a big-government, liberal and special-interest-oriented agenda has been systematically implemented in the Ocean State. As a result, we have seen dismal state performance in far too many important national indexes. Ranking last, or nearly last, in business climate, unemployment rate and population growth, Rhode Island simultaneously ranks near the top when it comes to redistribution of wealth, or income transfer, policies.

Yet the left refuses to even discuss whether or not there is a correlation. I believe there is a direct causation. This was the premise of our debate.

Nor do our elected officials or local media seem to want to encourage such discussion. I noted only one lawmaker, Sen. Lou Raptakis (D-Coventry), in attendance. Further, even with national headliners such as Stephen Moore from the Heritage Foundation and Fox News, and Rich Benjamin from Demos and MSNBC, not one local news organization covered this important debate, except GoLocalProv.com, our media partner. Why not?

If people on the left truly believe that their ideas are best for our society, their advocates should proudly stand up and fight for them — not run away and blame others. Sticking our heads in the sand and refusing to engage in rigorous public debate does not serve any democracy’s best interests. What are they afraid of?

Mike Stenhouse is CEO of the Rhode Island Center for Freedom and Prosperity, a nonpartisan public policy research and advocacy organization.