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3.0% Sales Tax: Superior Reform than Car Tax Repeal or Free College Tuition?

Car Tax, Free Tuition Programs Could Mean Loss of Jobs and Lower Municipal Revenues

3.0% Sales Tax Adds Thousands of Jobs, Increases Local Revenues

OVERVIEW:

As taxpayers continue to be asked to fund generous corporate subsidy programs, lawmakers are now dueling over two new spending ideas – reimbursing localities to phase-out the car tax and public funding for free college tuition – each of which would likely further raise taxes and fees on Rhode Islanders.

But would these programs make Rhode Island a better state? Or would the more innovative and bold policy concept of cutting the state sales tax help families become more self-sufficient?

Neither the Speaker nor the Governor have offered research or economic projections on the impact of their respective ideas. The Center, conversely, offers well-researched projections from a credible economic modeling tool.

As will be clearly demonstrated, the Center’s previously proposed 3.0% sales tax reform would help working Rhode Islanders and businesses much more than would car tax repeal or free college tuition. A cut in the state sales tax rate to 3.0% from 7% would :

  • Keep significantly more money in the pockets of Rhode Island families and businesses
  • Produce thousands of new jobs, as opposed to potential job losses with car tax or tuition spending
  • Require lower budget cuts and/or corresponding tax increases than would car tax reform
  • Create a major revenue windfall for municipalities that could go a long way toward funding local “self” phase-out of the car tax, where car tax repeal could result in lower municipal revenues
  • Would allow every Rhode Island family to save for any college education

Funding? Elimination of corporate welfare subsidies and free college tuition funds could go a long way towards paying for the $82.3 million required to dynamically fund a 3.0% sales tax … vs the $229.7 required to dynamically fund car tax repeal.

Regressive? While many view the current car tax play as regressive, a revenue-neutral car tax repeal plan would be further so in that low-income individuals who do not own a car, or who own a car valued under existing exemption thresholds, would be indirectly funding property tax relief for wealthier people. A 3.0% sales tax would disproportionately help low-income families. Similarly the college tuition and corporate welfare plans require lower income families and businesses to pay for benefits that will go, in part, to the more wealthy.

Fairness? The car tax plan would inequitably distribute money to localities, and would reward those cities and towns that imposed excessively high car tax rates.

Business Climate Benefit? The sales tax is a tax on business. Collectively businesses pay almost half-of all sales taxes. A 3.0% sales tax would reduce such costs across the board and improve our state’s last place business climate ranking. Car tax repeal would only impact those businesses that have company owned vehicles.

Municipal Dependency? The car tax repeal plan would make municipalities even more dependent on state aid via its associated reimbursement mechanism. Depending how the policy is implemented, municipalities may simply increase regular property taxes to compensate for the car tax no longer collected, avoiding the state tax cap. A 3.0% sales tax would give new revenues to cities and towns to able to phase-out the car tax on their own, especially when in combination with other “tools”  that could free them from state mandates and regulations.

Ease of Implementation? The car tax plan would require negotiation with low car tax municipalities, given the varying rates and exemption limits set by each municipality. Sales tax reform could be easily and uniformly implemented across the board.

BACKGROUND: Why bold reform is required

Rhode Island is losing the competition to retain and attract families who want to make our state their home-of-choice, where they can work hard, earn a respectable living, and support their families. But many Rhode Islanders feel left out. They are fed up with the status quo of ever-increased spending on special interest causes … and the perpetually high taxes and red-tape that are driving others out of town.

Our state’s stagnant population growth will likely result in the loss of one of our two precious U.S. Congressional seats after the 2020 census. This net-migration problem can be attributed to concerns about present and future financial security. Factors that contribute to this problem are obvious: In 2016 Rhode Island ranked as the worst state business climate in America and ranked just 48th on the national Family Prosperity Index (FPI) and on the Jobs & Opportunity Index (JOI)

People want restored hope that government is working for them and to feel that they have not been forgotten. To accomplish this, a bold reform idea is clearly required.

The RI Center for Freedom & Prosperity agrees with the Speaker of the House and with the Governor that Rhode Island families should keep more of their hard-earned income via tax reductions and that a college education should be more affordable. Car and property taxes, as well as college tuitions, are indeed high; they are an irritating or unbearable cost for most families. However, directly confronting those issues, may not be the most prosperous path forward.

The Center also believes that the state needs to  relieve burdens on employers, increase  our state’s consumer and tax base, and create more opportunities for meaningful work for those who want to improve their quality of life.

As such, not all tax and spending programs are created equally, as adjustments to certain taxes and fees will have greater impact on job creation and can be more of an economic stimulus than others. Given our state’s dismal national status, it is vital that Rhode Island takes bold and well-researched reforms to maximize the impact of every budget dollar.

Years ago the Center researched and proposed major cuts to – even repeal of – the state’s nationally high,  job-killing sales tax. A complex economic modeling tool that has been used by dozens of states and major municipalities, STAMP (State Tax Analysis Modeling Program), showed that for the Ocean State, sales tax reform, among all taxes and fees considered, would produce the greatest and most beneficial dynamic* economic impact.

However, neither the House leadership at that time, nor the special commission that was created to study sales tax cuts, were interested in re-configuring the state’s budget to accommodate for the major economic growth projected by STAMP.

But now today, with House leadership and the Governor apparently appreciating that tax and fee cuts would keep more money in the pockets of Ocean Staters, the Center suggests, once again, that reform to the sales tax would produce more benefit to families and businesses than would the Speaker’s or the Governor’s plan.

Not only would sales tax reform keep more money in the pockets of every Rhode Island family, it would reduce costs for every Rhode Island business. It would also spur increased consumerism by both in-state and out-of-state shoppers, and; most importantly … it would create thousands of good, new job opportunities.

The Center further researched which level of cut to the sales tax would produce the most benefit. It was clearly demonstrated that a cut in the sales tax to 3.0% would produce the best value for taxpayers and for the budget by creating a high number of jobs at the lowest budget-cost per job created.

*Based on 2014 figures from STAMP (State Tax Analysis & Modeling Program) developed by the Beacon Hill Institute. Dynamic scoring impact takes into account the “ripple” impact of tax reforms by projecting increases or decreases to other tax revenues and fees.

BUDGET RECONCILIATION METHODS

There are two primary methods to accommodate the budget to account for the impact of any tax cut or new spending program:

  1. Revenue Neutral” approach by raising other taxes to make up for the anticipated lost revenues or higher spending
  2. Spending Cuts” to other budget items

Or, some combination of the two.

To date, neither the Speaker nor the Governor have identified how they will reconcile, or pay, for their respectively proposed programs.

Revenue Neutrality?

The Center maintains that Rhode Island spends too much taxpayer money for the state to quickly break-out of its economic stagnation. No matter how lawmakers slice and dice the many taxes and fees that are imposed on our citizenry, our high level of spending – and corresponding need for high taxation – creates a permanent negative drag on our state economy.

RI State Budget Versus Inflation and Population Growth and Personal Income Growth (2001 Baseline)

In the past two decades, Rhode Island’s spending trajectory has risen far faster than inflation, population growth, or personal income would otherwise dictate.

By comparison, New Hampshire, which consistently ranks near the top of most national rankings, spends almost 50% less per person than does Rhode Island.

In order for any public policy reform to achieve maximum economic impact, it is necessary that budget cuts – without offsetting tax increases – are used to pay for the reform. However, the reality and history of public policy in the Ocean State tells us that lawmakers will likely consider only “revenue-neutral” scenarios, where revenue losses due to cuts in one tax are offset by increased fees or taxes elsewhere. While this practice would minimize or – as we will show – potentially eliminate any economic benefits in some cases, a revenue-neutral policy is seen as the likely political solution … as economically-unsound as it may be.

To be clear, the Center contends, for a state struggling as much as is Rhode Island, that revenue neutrality should not be the goal of bold tax reform … and that both tax and budget cuts are required if we want to generate maximum stimulus to our state’s stagnant economy.

Found Revenues? It has also been suggested by both the Speaker and the Governor, that “newly found” revenues from debt restructuring, casinos, or other sources, might be used to fund their new proposed spending. It is the Center’s contention that such new revenues should be applied to help pay for sales tax cuts.

In order to set the outside parameters for economic impact, the Center created two tables? Each compares the long-term dynamic* scoring of the two tax reform concepts for Rhode Island: 1) phasing-out the car tax; and 2) phasing-down the sales tax to 3.0%:

  • TABLE-1 assumes “revenue neutrality,” with offsetting tax increases, to pay for each policy option
  • TABLE-2 assumes “spending cuts” to pay for each policy option

Any actual implementation of either of these programs would likely fall within these parameters.

Because the governor’s free college tuition plan and the state’s current corporate welfare strategy technically do not qualify as tax reforms, we are not able to effectively run them through the STAMP model. Their economic impact, based on the findings and theory of the model, is assumed and referred to separately.

FINDINGS

Taxpayer Savings and Increased Purchasing Power: The Speaker’s car tax plan would directly save taxpayers $215 million in property taxes, while a 3.0% sales tax would put $585 million back into the pockets of Rhode Island families and businesses, and eventually back into the economy. However, the net dynamic impact would be far less – or even entirely eliminated – if other taxes and fees are hiked under a revenue-neutral approach.

A 3.0% Sales Tax is is the most beneficial reform in terms of jobs, economic stimulus, business climate, and budget value … regardless of whether a revenue-neutral approach is adopted or not.

Car Tax Phase-Out Could Lead to LOSS of Jobs.  Car tax reform, on its own, is a minor economic stimulus at best, as it does little to improve the state’s dismal business climate.

A revenue-neutral car tax phase-out would necessarily increase statewide taxes and fees (relatively) – even while most car owners would pay lower local property taxes – and would lead to a net loss of jobs. This is because the negative economic impact of increased state-level taxes is significantly greater than the positive impact of lowered local taxes.

If a “spending cut” approach is taken, car tax repeal could spur the creation of a limited number of new statewide jobs, but at a significantly lower level, and with far more required budget cuts, than a 3.0% sales tax with spending cuts.

Free-College Tuition Could Also Lead to a LOSS of Jobs. Similarly, using the same STAMP theory, providing free-tuition  would also increase statewide taxes and fees (relatively) – even while some in-state families would have more disposable income due to lowered fees – and would lead to a net loss of jobs. Again, this is because the negative economic impact of broadly increased state-level taxes is greater than the positive impact of more disposable income for a more narrow base.

Under a ‘spending cut’ approach, free college tuition, as car tax repeal, might produce a limited number of new statewide jobs, but at a significantly higher cost per job, than a 3.0% sales tax with spending cuts.

Rhode Island’s Current Corporate Tax-Credit Economic Development Strategy is highly inefficient as it creates relatively few jobs at an extremely high cost per job to taxpayers. Using the same STAMP theory, the negative impact of requiring increased statewide taxes to pay for the credits is presumed to be greater than the positive impact of a few hundred more people working.

Further, this targeted ‘advanced industry’ approach does little if anything to improve the overall business climate, which is necessary if organic entrepreneurial growth is to occur on its own.

EXPLANATION OF S.T.A.M.P. PROJECTIONS (see Tables 1 & 2)

ECONOMIC EFFECTS

Private Employment (or Jobs). Both the Speaker and Governor claim that “jobs” is their top economic priority. Sales tax reform produces significantly more job-growth, regardless of revenue-neutrality, while car tax reform and, as explained above, free-college tuition could lead to a loss of jobs under a revenue-neutral approach.

Investment. The increase/decrease in capital invested in the state due to tax reforms. As with employment, sales tax reform always produces a positive investment, while revenue-neutral car tax and free-tuition programs could produce a negative impact and a reduced investment.

STATE REVENUES:

Sales Tax Revenue: Under a ‘revenue neutral car tax repeal scenario, to partially fund the state’s $215 million in “Transfer” (reimbursements) to municipalities, and in order set the worst-case economic impact parameter, we assume an increase in “Sales tax” revenues. However, because a sales tax hike will negatively impact commerce and the economy, it will dynamically result in less sales tax revenue than the straight-line (or static) calculation, therefore the “Policy target” for sales tax increases must be higher than the needed revenues.

Conversely, under either budget reconciliation method for a 3.0% sales tax phase-down plan, the straight-line (static) calculated sales tax “Policy target” revenue losses are greater than the actual (dynamic) “Sales tax” revenue loss, because the sales tax cuts will spur more sales tax transactions.

Under a ‘spending cut’ approach, car tax reform would produce a very limited increase in “Sales tax” revenues, because of greater disposable income across the state.

The difference between the static and dynamic sales tax revenue projections is portrayed as the “Dynamic difference”

Personal Income Tax Revenue: Similarly, increased “Personal income tax” revenues are also assumed to fund the rest of  revenue-neutral car tax plan. However, because negative dynamic impact will lessen such revenues, a higher income tax “Policy target” is required.

Under the 3.0% sales tax plan, because of the thousands of new jobs created, “Personal income tax” revenues are projected to dynamically rise by between $304 million to $468 million, regardless of which budget reconciliation process is utilized.

Corporate/Business Tax . As with sales and income taxes, the negative statewide impact of a  revenue-neutral car tax plan that includes other tax hikes, may produce lower “Corporate/business taxes”. Under all scenarios, a 3.0% sales tax will always produce positive and significantly higher “Corporate/business tax” revenues.

Cigarette Tax, Other Taxes & Other Sources.  As with the personal and income taxes, the negative statewide impact of a  revenue-neutral car tax plan, may reduce revenues from “Cigarette taxes”, “Other taxes” and “Other sources”. Under all scenarios, a 3.0% sales tax will produce positive and significantly more revenues in these areas.

MUNICIPAL REVENUES: Additional municipal benefits from sales tax cuts will result from the increased retail and overall economic activity .

Business Property Tax. The stimulus of sales tax cuts would see many existing businesses expand and many other new business established. Cities and towns will likely see an expansion of its local commercial property tax base and will result in increased “Business property tax” revenues. While municipalities must comply with a 4% annual tax-levy cap, this larger tax-base will allow localities to reduce property taxes in other areas, potentially including the car tax.

Conversely, under a revenue-neutral car tax repeal plan, municipalities could actually see reduced municipal “Business property tax” revenues, due to the more potent impact of statewide sales and income tax hikes as compared with local property tax cuts.

In fact, the potential new municipal revenues from a 3.0% sales tax – on their own – could fund over half of the cost of statewide car tax repeal.

Municipal Sales Tax, Other taxes and Other sources of revenues:  Similarly, under a car tax repeal plan, municipal revenues in other areas could increase or decrease in limited amounts. Conversely, under any 3.0% sales tax scenario, these revenue areas would increase, potentially in a significant way.

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The “Real” News About Healthcare Reform

The Providence Journal and Rhode Island progressives are doing a disservice to the people of our state by advancing a biased and non-realistic perspective on the federal healthcare reform debate.

There are few issues that are more personal or important than planning for the care that can preserve the health of ourselves and our families. But what governmental approach best helps us accomplish this?

Currently, our state is following the federal Obamacare approach of seeking to insure more people with government-run Medicaid or with a one-size-fits-all government-mandated private insurance plan. This approach is in a death-spiral. In Rhode Island and across the nation, premiums and deductibles have risen beyond affordability; costs to taxpayers have exploded; the supply of doctors, insurance plan choices, and the availability of actual care are all plummeting.This is an unsustainable trajectory.

The U.S. Congress proposed reforms take an opposite approach. The goal of the reforms is NOT to force more people to buy or enroll in expensive government-approved insurance. Rather, the goal is to offer citizens more and lower-priced private insurance options and to let them choose whether or not they want to have health insurance … and what type and level of insurance they believe is best for them.

Compassion should not be measured by how many people are covered by inefficient government insurance or by how much money we throw at the problem. This is the biased, government-centric lens through which the left and the ProJo view the proposed reforms.

As Congress recognizes, there are a number of patient-centric reforms that could significantly reduce premium and out-of-pocket costs, even while expanding consumer choice and improving the quality of care: reducing mandates for services that patients do not want or will never need; allowing inter-state health insurance competition; allowing group purchasing; or encouraging expanded Health Savings Account (HSA) and other payroll deduction programs.

Medicaid, is perhaps the most contentious and misunderstood issue. Medicaid insurance is not necessarily good insurance and it does not always lead to good health care. With many doctors leaving the program because of its stingy payouts, and with enrollment levels continually on the rise, many Medicaid patients cannot get an appointment with a doctor in a timely manner, and when they do, suffer from substandard care.

Again, the new Medicaid reforms seek to reverse these trends. What will not happen is that people will be thrown off the system. What will happen is that Medicaid will be returned towards its original mission of providing health insurance for the neediest Americans; poor children, pregnant women, and the disabled elderly. In recent decades, and especially under Obamacare, eligibility standards have been dramatically expanded to include single and working individuals and families far above the poverty line. Medicaid was not originally intended to be an entitlement for able-bodied, working Americans.

All the while, taxpayers have been asked to bear the burden of this increasingly expensive, expansive, and ineffective Medicaid system.

First, the new reforms would cut the rate of enrollment in Medicaid by tightening the eligibility requirements to serve only the neediest among us. Under these new guidelines, while no one will be thrown off, it is through attrition, as people’s financial circumstances improve, that many will naturally leave the system.

Second, Medicaid reform will protect taxpaying families and businesses from never-ending increases; in effect, putting the system on a much-need budget. This will save money for federal and state taxpayers.

Third, the reforms will give states unparalleled flexibility, via a capped, block-grant type arrangement. With limited funds, based on population, states will be free to innovate and to decide how federal funds can best serve its low-income and disabled populations. For example, not only could enrollment parameters be customized by state, but states may be able to opt for a work-requirement or a co-pay for those above poverty levels. There is even some discussion of a voucher, whereby recipients could have public Medicaid funds instead follow them to a private insurer of their choice. Rhode Island, the trail-blazer when it comes to Medicaid block-grants, should embrace this option.

In summary, the concept of a government-run health insurance market has failed. Rhode Islanders will be better served when they have expanded options to purchase or enroll in one of the many new plans that will best meet their needs at the lowest possible price, and at quality levels.

Levels of money and government-mandated insurance enrollment are not the only standards by which the media, the public, and lawmakers should judge the federal reforms about to be implemented. Freedom of choice, affordability, and quality of care should be the primary metrics.

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Jobs & Opportunity Index (JOI), January 2017: Rhode Islanders Less Free from Government Dependency

The RI Center for Freedom & Prosperity’s first Jobs & Opportunity Index (JOI) report for 2017 finds the Ocean State slipping on the Freedom Factor, measuring welfare dependency versus employment. The Bureau of Labor Statistics (BLS) revised employment down for Rhode Island, reducing the state’s employment health, and more Rhode Islanders slipped into dependence on Medicaid and SNAP (food stamps).

Eight of the 13 datapoints used for the index have been newly updated. Employment was down 653 from the previously recorded number, while labor force fell 2,358. On the positive side, RI-based jobs increased by 600. (Note that these are calculated with pre-revision data for the prior month.) Perhaps beginning to show the UHIP-enabled expansion of welfare programs, Medicaid enrollment numbers increased by 3,455, and SNAP enrollment increased by 5,187. Quarterly data for additional employment measures were also released, with 1,400 fewer people long-term unemployed and 300 fewer part-time against their will; marginally attached workers remained exactly the same.

The first chart shows Rhode Island still in the last position in New England, at 48th in the country. Once again, the only two New England states to move in the rankings were Maine (now 18th) and Connecticut, although the latter changed direction, lost two spaces, and, at 34th, is now just one space ahead of Masaschusetts, at 35th. New Hampshire remained 1st in the nation, and Vermont held at 21st.

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The second chart shows the gap between Rhode Island and New England and the United States on JOI. The Ocean State made up a little ground against both averages. Rhode Island also made up ground on the gaps for unemployment rate (third chart).

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Results for the three underlying JOI factors were:

  • Job Outlook Factor (measuring optimism that adequate work is available): RI moved up four spots to 35th.
  • Freedom Factor (measuring the level of work against reliance on welfare programs): RI fell two to 41st.
  • Prosperity Factor (measuring the financial motivation of income versus taxes): RI held at 46th.
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STATEMENT: Center Joins National Taxpayer Group to Oppose Carbon Tax Scheme

FOR IMMEDIATE RELEASE: March 1, 2017

15 Cents per Gallon & other Increased Energy Rates Will Further Harm RI Families, Businesses, and State’s Overall Competitiveness

Providence, RI — The Rhode Island Center for Freedom & Prosperity supports a letter to Ocean State lawmakers issued today by Americans for Tax Reform (ATR), the national pro-taxpayer group headed by Grover Norquist, in opposition to the concept of a new state carbon tax on energy; a tax that will kill jobs in Rhode Island.

Legislation sponsored by Senators Jeanine Calkin, Ana Quezada, James Seveney, Harold Metts, and Frank Lombardo (S0365) would place a new tax of $15 per ton of emissions; a tax that will then increase by an additional $5 per year. The bill will be heard today by the Senate Committee on the Environment and Agriculture. The House version of the bill (H5369) sponsored by Representatives Regunberg, Carson, Handy, Keable, and Donovan has not yet been scheduled for a hearing in the House Finance Committee.

“This progressive-government kind of interference in the market, which will drive up energy rates for every Rhode Island family and business, is one of the major reason’s why Ocean Staters suffer from the 50th ranked business climate and the 48th rank in family prosperity,” commented Mike Stenhouse, CEO for the Center. “Once again, some lawmakers are placing the advancement of a radical green agenda, ahead of the interests of the people of our state – the forgotten families.”

Already paying some of the highest energy and gasoline rates in the country, Rhode Island families and business could see an increase of up to 15 cents per gallon if this bill were to become law, according to ATR.

Job-Killing, Economy-Busting Proposal? Whether via carbon taxes, green energy mandates, or restrictions on cheaper fossil-fuel based energy production, higher energy costs are a major drag on economic growth. According to a 2016 report by the Center, an extreme green energy agenda, which this bill would advance, could result in dire economic consequences;

  • 4,000 – 6,000 fewer jobs
  • $141-$190 million in total costs
  • a 49-73% increase in the base cost of electricity, leading to
  • a 13-18% increase in electricity rates
  • $670-$893 million extracted from the economy

“Our state economy is simply too fragile to be able to handle this kind of negative hit,” concluded Stenhouse. “And at what offsetting gain?”

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STATEMENT: Center Joins with RI Families Coalition to support Freedom to Work for Hair Braiders

FOR IMMEDIATE RELEASE: March 1, 2017
Hair Braiders Should Enjoy Freedom to Pursue Work

Providence, RI — The Rhode Island Center for Freedom & Prosperity today joins with the RI Families Coalition in support of regulatory reforms that would free natural hair braiders from the occupational licensing mandates currently imposed on the harmless practice.

Legislation sponsored by Representative Anastasia Williams (H5436) would allow natural hair braiders to engage in legal work without the mandate to obtain the same permission from the government (an occupational license) that is required of cosmeticians and hairdressers.

“This licensing burden is especially harmful to many people who would prefer to start new careers and earn paychecks instead of receiving welfare checks,” commented Mike Stenhouse, CEO for the Center. In 2016 Rhode Island ranked a dismal 44th in ‘entrepreneurship’ according to the national Family Prosperity Index. “Unfair and unreasonable occupational licensing restrictions must be repealed if we want more Rhode Islanders to have a chance to improve their quality of life and engage in entrepreneurial commerce.”

Anti Free-Market, Protectionist Policies? It is a common scheme for advocates of certain industries to lobby government to impose strict licensing requirements in order to create barriers to competition. According to a 2012 report by the Center, many such occupational licensing mandates have a disproportionate and negative impact on low-income workers, who often can’t afford the time or money to meet the sometimes onerous and unnecessary requirements.

Further, the Institute for Justice, in 2016, reported that there were 16 states in the United States that required hair braiders to get a “cosmetology” license, which could involve spending hundreds or thousands of hours in training and hundred or thousands of dollars on tuition or fees. In these cosmetology classes, students have to learn how to use chemical treatments and how to cut hair – tasks that have nothing to do with braiding hair.

Additionally, 14 states, along with the District of Columbia, require hair braiders to acquire a specialized license. In Mississippi and Iowa, hair braiders have to register with the state. Specialty licenses require 600 hours of classes and can cost thousands of dollars.

However, in recent years, many states, understanding the anti-commerce nature of such “protectionist” policies, have moved to reverse similar anti-jobs mandates. With regard to providing hair braiders the freedom to work, the states of Indiana, South Dakota, Iowa among others have considered licensing repeals for this specific vocation.

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STATEMENT: Center Opposes Push to Deregulate Abortion Industry; Decries Attacks on Catholic Church

FOR IMMEDIATE RELEASE: February 21, 2017

Deregulation of Abortion Industry Debate Should Not Include Criticism of the Catholic Church

Providence, RI — The Rhode Island Center for Freedom & Prosperity opposes the efforts by some lawmakers to deregulate the abortion industry as a preemptive step against unsubstantiated concerns about the Trump presidency. The Center also calls for a retraction of attacks against the Catholic Church and for a respectful public debate. Consistent with its current family prosperity initiative, the Center opposes any policy that promotes radical individualism at the expense of societal values.

“It is a setback for democracy and it could risk the safety of women if any type of abortion procedure can be performed at any time, on almost anyone, under potentially unregulated and unsafe conditions, without honest and rigorous public debate,” commented Mike Stenhouse, CEO for the Center. “It is ironic and disturbing that many of the same lawmakers that have voted to systematically over-regulate legitimate businesses and industries out of existence in our state, are the same lawmakers who want this controversial industry to be given a free-pass to grow uncontrolled.”

In its current form, House bill H5343 could readily be interpreted to prohibit the State of Rhode Island from exercising reasonable oversight over abortion practices. The Center suggests this radical approach does not represent the mainstream thinking of Rhode Islanders. The Center maintains that the public generally opposes gruesome “partial birth” and other late-term abortions; opposes state taxpayer funding of abortions to Planned Parenthood and other abortion providers; and opposes women in vulnerable circumstances from submitting to an abortion without informed consent … all of which could become rampant in Rhode Island if the proposed legislation were to become law.

The Center also decries the attacks by Representatives McNamara, Bennett, and Shanley against the Catholic Church and RI Right To Life by implying that they are spreading misinformation. Open and honest debate about such an emotional topic, especially by organizations with long-standing and principled histories with the issue, should be encouraged by all parties,without the need to cast aspersions.

“Certainly Rhode Islanders would not want a butcher like Kermit Gosnell to be able to act with impunity in our state,” added Stenhouse. In 2013 Gosnell, a Pennsylvania abortionist, was convicted of murdering three infants who were born alive during attempted abortion procedures, and was also convicted of 21 felony counts of illegal late-term abortions and 211 counts of violating the 24-hour informed consent law. “If the bill is not intended to allow certain procedures under certain circumstances, then the bill should explicitly state those exceptions.”

A detailed discussion of the potential pitfalls of the proposed legislation by Justin Katz, the Center’s research director, can be found on the Center’s journalism and blog site, The Ocean State Current.

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Right on Crime: Increasing Family Prosperity via Criminal Justice Reform

by Justin Katz and Matthew Henry Young

A Pressing Need for Reform

Many families seeking upward mobility and prosperity must first break the cycle of incarceration — a cycle that makes it nearly impossible for those caught up in it, ex-offenders in particular, to achieve productive lives for themselves and their families.

New national research shows that Rhode Island ranked just 48th on the 2016 Family Prosperity Index (FPI) as well as just 48th on the Jobs & Opportunity Index (JOI). In December 2016, the RI Center for Freedom & Prosperity, in conjunction with its national partner, the American Conservative Union, issued a 52-page RI Family Prosperity report that highlighted contributing factors to our state’s poor rankings across 57 indexes.

Among other things, the report suggests that Rhode Island has room to modernize and improve its criminal justice system. Reforms put forth as part of the state’s Justice Reinvestment Initiative (JRI) and by other organizations can lessen the harmful consequences of over-incarceration for Ocean State families:

  • S0005: to request that the state government continue to seek ways to help Rhode Islanders return to productive activity after having been convicted of crimes
  • S0006 & H5065: to add dedicated funding to an intervention program for domestic abusers, to make supervision more effective and humane through increased training and assessment, with more emphasis on government-driven manipulation toward “pro-social behaviors”
  • S0007 & H5063: to increase and expand the reimbursements for which victims of crime are reimbursed by the state, for example reimbursing families for funeral expenses of deceased victims and expanding the time to report crimes.
  • S0008 & H5117: to modify the rules related to probation and violations thereof by, for example, allowing a punishment of only time served in cases of technical violations of probation and giving judges more flexibility when sentencing for guilty or nolo contender pleas
  • S0009 & H5128: to expand the ability of the parole board to take into account parolees’ circumstances and behavior before incarcerating them for violations (with flexibility in the duration) and to expand the impact statements required for corrections legislation
  • S0010 & H5064: to allow the state judiciary to create a diversion program, enabling defendants to make restitution in ways other than prison terms, to give judges flexibility in handling the sanctions for complaints, and to expand programs for pre-trial risk screening
  • S0011 & H5115: to remove fines over $1,000 as an automatic trigger for designation as a felony ease automatic designations of misdemeanors and petty misdemeanors, with specific exceptions/differences for assault and larceny

Rhode Island’s dismal overall circumstances will only be improved if policymakers and civil society leaders are willing to join together to pursue needed reforms, one issue at time, as highlighted in the state’s FPI report. The status quo has obviously not been working for Ocean State families.

Outdated and overly harsh policies have done little to help Rhode Islanders and their families when it comes to criminal justice. Our policies have long-term consequences that ripple throughout time and adversely affect children and families… generation after generation.

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Center’s Family Prosperity Forum Suggests Stark Contrast to Governor’s State of the State Message; Statement on Free Tuition

FOR IMMEDIATE RELEASE:

January 18, 2017

Pro-Family, Pro-Business Focus Recommended vs Governor’s Centrally-planned Mandate & Corporate Subsidy Approach
Left and Right Come Together to Support Justice Reinvestment Initiative

Center Proposes Alternative to Free Tuition Plan

Providence, RI — The overwhelming sentiment from the local and national policy experts, from both the left and right, who participated in Tuesday’s Family Prosperity Leadership Forum at Bryant University was that Rhode Island families should be the focus of public policy; in stark contrast to the corporate tax-credit policies that have been the center-piece of the Raimondo administration’s economic development agenda.

fpi_ri-logoThere was apparent unanimity in the belief that the state’s current corporate welfare strategy would not provide any relief to most distressed families and small businesses.

“When considering our Ocean State’s 48th ranking in overall family prosperity and 50th business climate ranking, it was clear to all attendees that a new policy direction is required,” said Mike Stenhouse, CEO for the Center. “Instead of greater tax burdens on families and increased mandates on small businesses, broad-based relief that opens the door for more and better businesses to create more and better jobs is what we need if we want a better quality of life for Rhode Island families.”

The forum, sponsored by the Rhode Island Center for Freedom & Prosperity and the American Conservative Union Foundation, and hosted by the Hassenfeld Institutue for Public Leadership, attracted almost 100 civic and political leaders from across the state and nation.

The forum featured a salient moment, when the Center, along with civil rights and political leaders from the left and right, stood together to support the Justice Reinvestment Initiative (JRI), which would would modernize the state’s over-burdened probation system. The proposed JRI legislation could help break the cycle of incarceration, which makes it difficult for ex-offenders to live a productive life for themselves and their families. Senate Judiciary Chairman Michael McCaffrey spoke words of praise for those on all sides of the philosophical spectrum who are supporting this vital initiative.

Free Tuition Alternative: Unrelated to the forum, and with regard to the Governor’s proposed “free tuition” plan, the Center suggests that instead of raising $30-40 million in new revenues to pay for expanded K-14 government funded education, that the state should focus on getting K-12 education right by re-purposing $30-$40 million in existing state education funds to empower families with expanded school choices via Educational Scholarship Accounts, as the Center has proposed for the past two years.


About the Family Prosperity Index: In December, along with its national partner, The American Conservative Union Foundation, the Center unveiled an in-depth analysis of factors contributing to the Ocean State’s unacceptable ranking on the Family Prosperity Index (FPI). The Rhode Island Family Prosperity report highlights Rhode Island’s poor scores on a number of factors, including family self-sufficiency, family structure, fertility, and illicit drug use, compounded by its significant out-migration rate, as the determinant factors in the state’s overall FPI rank of 48th in the nation.

The FPI provides the credible data that state policymakers, civic and religious leaders, think tanks and activists need in order to develop and advocate effectively for policies that improve the prosperity of families and the communities where they live.

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Center to Recognize MLK Day by Supporting Civil Rights “Justice Reinvestment” Legislation at Family Prosperity Leadership Forum

FOR IMMEDIATE RELEASE: January 16, 2017
The Justice Reinvestment Initiative (JRI) Seeks to Lessen the

Harmful Impact of Over-Incarceration on Families 
Democrat Senate Leadership to be Recognized for their Work at Tuesday’s “Family Prosperity Leadership Forum” at Bryant University

Providence, RI — As the nation celebrates Martin Luther King Day, the Rhode Island Center for Freedom & Prosperity will recognize the struggle for civil rights by announcing its backing of a state Senate package of bills, designed to lessen the harmful impact of over-incarceration on Rhode Island families and communities, particularly those of color.

At its Family Prosperity Leadership Forum, to be held Tuesday, January 17, in conjunction with the Hassenfeld Institute for Public Leadership at Bryant University, the Center will join with civil rights leaders to endorse six bills under the “Justice Reinvestment Initiative (JRI)” banner that passed the Senate in 2016 but were held back in the House.

“Whether it is criminal justice reform, taxation, or education, if we are to improve our state’s dismal 48th place ranking in overall family prosperity, we must make helping families the focus of our public policy and private advocacy,” said Mike Stenhouse, Chief Executive Officer of the  Center. “At our Tuesday forum, we will recognize the leadership of Senate President Paiva-Weed and Senate Judiciary Chairman McCaffrey on this issue and we fully endorse passage of these bills in 2017.”

The legislation would modernize the state’s over-burdened probation system, which disproportionately impacts black families. The JRI legislation could help break the cycle of incarceration which makes it difficult for ex-offenders to live a productive life for themselves and their families.

Civil society leaders in the business, religious, community, and nonprofit sectors are encouraged to attend the leadership forum. Pre-registration is required at www.RIFamilies.org

In December, along with its national partner, The American Conservative Union Foundation, the Center unveiled an in-depth analysis of factors contributing to the Ocean State’s unacceptable ranking on the Family Prosperity Index (FPI). The Rhode Island Family Prosperity report  highlights Rhode Island’s poor scores on a number of factors, including family self-sufficiency, family structure, fertility, and illicit drug use, compounded by its significant out-migration rate, as the determinant factors in the state’s overall FPI rank of 48th in the nation.

The FPI provides the credible data that state policymakers, civic and religious leaders, think tanks and activists need in order to develop and advocate effectively for policies that improve the prosperity of families and the communities where they live.