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.

Initial Reaction to Governor’s Proposed Budget

FOR IMMEDIATE RELEASE:

January 19, 2017

Lack of Vision and Bold Action – Stunning

Providence, RI — The Center’s CEO, Mike Stenhouse, provides initial reaction to the Governor’s proposed 2018 budget:

“When our state ranks 48th in family prosperity and dead last in business climate, a ‘no broad-based tax increase’ strategy simply is not good enough. We just lost 1000 jobs! The new mandates, increased minimum wage, and new penalties on businesses only rub salt in the wound. More taxes and more special handout spending policies are exactly the wrong approach; especially corporate tax credits, which do nothing to help the average family and business. Where is the bold action? The lack of leadership and vision and the acceptance of our dismal status quo is stunning.”

A more detailed statement from the Center will be issued tomorrow.

NEW: Ballot Voter Guide. REJECT QUESTIONS #4-7 over Debt Concerns; APPROVE #2

FOR IMMEDIATE RELEASE: October 18, 2016
REJECT QUESTIONS #4-7
RI Families, our Children Cannot Afford Increased Debt Burden

Only Question #2 Ethics Reform Recommended for Approval

Providence, RI — In heaping over $321,000,000 of additional debt burden on Rhode Island families, as well as on future generations, the RI Center for Freedom & Prosperity recommends that voters “reject” bond Questions #4-7. Just like families who must tighten their credit card debt and avoid luxuries they cannot afford, voters should reject the exorbitant spending proposed by the state, much of which is earmarked to benefit special interest insiders.

The 2016 Ballot Question Voter Guide, released today by the Center, documents how the state’s ‘interest on debt’ burden has already increased by 90% since 2005, almost four-times as much as the national average and double any other known state.

“The bond questions this year are just more corporate welfare to special interests, while also advancing the RhodeMap RI agenda,” commented Mike Stenhouse, CEO for the Center. “This is not a popularity contest. Quite simply, Rhode Island families and businesses cannot afford the higher tax burden that approval of these irresponsible spending measures would inevitably lead to.”

Only Question #2 – to amend the state constitution restore Ethics Commission authority – received an “Approve” recommendation from the Center. The Center did not take a firm position on Question #1 or #3.

The voter guide PDF provides a brief discussion of each of the seven statewide ballot questions, with the Center’s final recommendations summarized as:

  • Q1 NO POSITION on the “Tiverton Casino”
  • Q2 APPROVE Ethics Commission “Constitutional Amendment”
  • Q3 NO POSITION on “Veterans Home” Bonds
  • Q4 REJECT Wasteful “Innovation Campus & Higher Ed” bonds
  • Q5 REJECT Corporate Cronyism “Infrastructure” bonds
  • Q6 REJECT RhodeMapRI & Property Takeover “Green Economy” bonds
  • Q7 REJECT RhodeMapRI “Affordable Housing” bonds

2016 Ballot Question “Voter Guide”

 

REJECT QUESTIONS #4–7 AND $321,000,000 IN WASTE

Time for Rhode Island to Exercise Fiscal Restraint… Like Families Do

Rhode Island cannot afford to sink any deeper into debt by passing unnecessary, wasteful, and costly new bond measures. Voters should keep in mind that ballot bonds are not a popularity contest, but rather, by approving any of the five state bond offerings in 2016 (questions # 3–7), voters will be putting the State of Rhode Island into even greater debt.

Ocean State taxpayers already are suffering from the largest “interest on debt” burden of any state in New England, with interest around $550 per year for every man, woman, and child in the state, compared with a $300 average for all states. Since 2005, related interest payments have increased by 90% in Rhode Island, with Connecticut at 25%, and New Hampshire at 10%. The three other New England states actually saw decreases.

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Nationally, the average increase is just 25%, while Illinois, considered by many to be the most fiscally troubled state in the nation, saw a 45% increase.

By these measures, Rhode Island’s 90% increase in debt-interest payments dwarfs other states. This level of fiscal irresponsibility by our state’s political class should not be worsened by voters in 2016.

Rhode Island families, who rank just 48th on the national Family Prosperity Index, have long had to tighten their belts when it comes to spending and debt. Approving any of these bond measures would place a future debt burden on our own children!

It is time for the State of Rhode Island to show similar restraint. On November 8, it is up to voters actually to do the tightening by voting to reject state questions #4–7. These bonds, totaling $200,500,000 in new debt — over $321,000,000 including interest payments — will also advance the controversial RhodeMap RI agenda as well as more 38 Studios–style corporate-welfare programs as recommended by the discredited Brookings Institution report.

It is a myth that advancing smart growth and sustainable development boondoggles such as campus innovation centers, subsidized affordable housing, green infrastructure, and government land acquisition programs can produce a positive return on investment. The reality is these programs merely increase the level of government intervention in our lives, while costing millions to taxpayers.

Summary: Voters should decide their own priorities, of course, but for the reasons described below, the Center can clearly recommend to approve only one ballot measure: #2, asking for “ethics reform” approval. Of the five spending bonds, as discussed below, only #3, $27 million for veterans homes, should be given any serious consideration by voters.

FIRST THE REJECTIONS (QUESTIONS #4–7)

#4: Higher Education Bonds

Principal: $45,500,000
Total estimated cost: $72,937,126
Discussion: Not only does this bond increase Rhode Islanders’ debt burden, but it also puts taxpayers, the state government, and college students in bed with private, for-profit companies. The money wouldn’t just invest in new buildings, but it would also fund a new program that helps private corporations use public resources to develop “products, services, and businesses.”

#5: Port Infrastructure Bonds

Principal: $70,000,000
Total estimated cost: $112,210,962
Discussion: This new debt would not only move business costs off of the private businesses that use the ports in Quonset and Providence, but it would also hand 25 acres of Providence real estate over to the government and a non-profit company acting in its behalf.

#6: Property Takeover and Development Bonds

Principal: $35,000,000
Total estimated cost: $56,105,481
Discussion: Of all the bonds on the ballot, this one teaches most clearly the lesson that bonds are not just borrowing for infrastructure, but are policy decisions. Of the total, $8,000,000 will go toward the direct government purchase of land or property rights, some of it for resale or lease at heavy discounts to preferred individuals and businesses. When the Center began investigating the new practice of the state’s purchasing farmland, officials pointed to a bond on the 2014 ballot that had authorized such action. These bonds allow the state government to buy up even more open space, recreation land, and farmland while also creating a windfall for private construction companies and non-profits.

#7: Affordable Housing Bonds

Principal: $50,000,000
Total estimated cost: $80,150,687
Discussion: These bonds would feed what has become an affordable housing industry in Rhode Island, with overlapping interests of construction companies, non-profits, politicians, and government agents. Burdening Rhode Islanders with yet more unaffordable debt is not the way to help us pay our housing bills.

MAYBE, APPROVE, MAYBE (QUESTIONS #1–3)

#1: Tiverton Casino

Maybe
Discussion: The first question on the ballot will essentially allow the state government, acting through the private Twin River Management Group, to construct and operate a casino in Tiverton, on the border of Fall River, Massachusetts. (Tiverton residents will also have to pass their own local ballot question.)

The Center’s emphasis on freedom would generally lead us to support the right of individuals to engage in activities such as gambling if that is what they want to do. On the other hand, our preference for a very limited scope for government leaves us wary of creating a monopoly market for government to enter as if it were some sort of organized crime syndicate. The case for gambling on principles of freedom weakens to the extent that Americans are only able to gamble under the watchful eye — and for the direct profit — of the government.

However, this ballot question does not create that dynamic. Indeed, one could characterize the Tiverton casino not so much as a new operation, but as a new location for Newport Grand, which would be closed if Tiverton opens. Granted, a Tiverton casino will be an expanded casino, but voters may reasonably see the difference as minimal and balance it against an expected relief of pressure to increase Rhode Island’s already-high taxes.

#2: Ethics Commission Authority over the General Assembly

Approve
Discussion: A member of our staff recently received the intriguing question of whether giving the unelected Ethics Commission authority over the elected General Assembly contradicts the Center’s preference for smaller, less-intrusive government. To the contrary, our state and our nation are constructed so as to ensure a balance of powers, and in the case of legislators’ immunity to Ethics Commission investigation, the legislature is dramatically unbalanced.

In offering this assessment, we would stress our skepticism of the Ethics Commission’s execution of its role. With members’ terms extending into decades, even though state law is supposed to limit them to five years, and with the commission’s decisions sometimes seeming to float between arbitrary and abstruse, we aren’t confident that this renewed oversight power will make a great deal of practical difference.

But these are pragmatic considerations, whereas the ballot question would be procedural. A future governor and legislature appointing a different sort of commissioner, with greater turnover, will do the state government more good if those commissioners can address corruption among legislators.

#3: Veterans Home Bonds

Maybe
Principal: $27,000,000
Total estimated cost: $43,281,371
Discussion: As a baseline judgment, we oppose any and all new debt for the state government of Rhode Island at this time. Too often, it seems, voters see bonds as a way to access free money for projects that the profligate spending of the government precludes.

Nonetheless, we cannot ignore the sacrifice and dedication of America’s veterans or the unacceptable treatment that they have received so visibly from our government in recent years. Voters should therefore weigh the practice of borrowing and the implicit boon to labor unions that it represents with the value of developing infrastructure for the benefit of those to whom we owe our freedom.

Center Supports Town of Narragansett Single-tier Property Tax Plan

FOR IMMEDIATE RELEASE: October 14, 2016

Narragansett’s Proposed Single-tier Tax Rate a Good First Step

Providence, RI — The RI Center for Freedom and Prosperity supports the proposed single-tier tax rate plan that will be decided at the Narragansett Town Council meeting on Monday, October 17.

The Center applauds the Town’s goal to create one of the best local business climates … in a state that has the worst overall business climate in the nation. The bi-partisan plan would significantly lower the commercial tax rate and slightly raise the residential rate to equal levels.

“If town families are to achieve a better quality of life, it is essential that more and better businesses, that create more and better jobs, have a better business climate in which they can thrive,” said Mike Stenhouse, CEO for the Center. “The positive benefits of this plan clearly outweigh the arguments against it.”

Currently, commercial properties pay up to 150 percent higher than the residential, leaving Narragansett as the only Washington County locality with a split rate.

Not only would a lower commercial rate spur local economic activity, but the single-tiered rate would eliminate the practice of pitting businesses against residential property owners when future tax policy is considered. The concept of tax policy that treats everyone the same, is a fundamental precept of American governance.

The slight increase in residential rates could be directly offset by taking advantage of a discussed “homestead exemption” for year-round, owner-occupied properties; this exemption has already received enabling approval from the General Assembly, and is in the works to be reviewed and decided upon in future Town Council sessions. Further, if the town does realize growth in the commercial business community, this could lead to reduced overall tax rates for everyone.

The plan would be even stronger, according to the Center, if the commercial rate would be lowered to the existing residential rate. This could be accomplished without raising the residential rate by cutting town spending by a few percentage points.
Additional commentary on Narragansett’s single-tier tax plan can be found on The Ocean State Current, the journalism and blog website for the Center.

RHODEMAP-RI DEM FORUM TONIGHT: ‘Make Believe’ Economics Behind State’s Farmland Acquisition Scheme

FOR IMMEDIATE RELEASE: September 7, 2016
State Farmland-Grab Program Lacks Economic Basis

Could lead to reduced farmland values across the state

Providence, RI — The RI Center for Freedom & Prosperity will officially object the RI DEM proposed rules – that will allow the government’s environmental agency to acquire private farmland and resell it at a loss to others who will obey the state’s agenda – when its CEO speaks tonight at a public comment forum at the URI Graduate School of Oceanography.

With multiple concerns about property rights and local governmental sovereignty being infringed upon by this state program that was designed to advance a federal agenda, the Center’s comments, to be delivered by Mike Stenhouse, will focus on the economic non-sustainability of the proposed program, at the 5:30pm DEM meeting.

With government increasingly influencing and controlling the means of production through myriad tax-credit, loan, and direct subsidy schemes in a multitude of industries, this DEM farmland acquisition scheme, which will actually acquire and resell private property, is not based on any legitimate economic analysis – or any economic consideration at all – that the Center is aware of. Despite the fact that the state’s own Commerce Corporate demanded a ‘RhodeMapRI’ mandate be inserted into the DEM plan, no economic justification was provided.

“If the state of Rhode Island is truly concerned about preserving farmland and agricultural farming, it should develop policies that will make it easier and more profitable for every farmer by reducing excessive taxation and regulatory mandates,” suggested Stenhouse. “There are free-market alternatives that should be considered, as opposed to this obvious lurch towards centralized-planning and further government intervention in the private sector.”

Stenhouse, who earned an Economics degree from Harvard University, will make a number of economic observations as objections to a plan that he will say is based on ‘make believe economics’ and that could lead to adverse consequences for the state’s farmers and taxpayers.

The Center will release a more complete version of its economic analysis tomorrow, following the meeting.

Center supports Representatives’ call for DEM to reschedule ‘redistribution of land’ meeting

FOR IMMEDIATE RELEASE: August 17, 2016
Center supports Representatives’ call for DEM to reschedule “redistribution of land” workshop
Calls for rigorous public debate on proposed new regulations that could lead to potential ’eminent domain’ abuse.

Providence, RI — As it has forewarned for years about the potential for eminent-domain abuse in its multi-year battle against the RhodeMapRI agenda, the Rhode Island Center for Freedom & Prosperity (Center) applauds the call yesterday by Representative Sherry Roberts for the DEM or the Governor to cancel the DEM workshop planned for this evening to review new “Farmland Acquisition” rules.

“We commend Representative Roberts and her colleague in the House Minority Caucus who took heed of our Center’s alert earlier this week and are taking action to protect farmers,” said Mike Stenhouse, CEO for the Center. “It is an unethical ploy that the public meeting to review these new anti-farmer regulations was scheduled at the exact same time when most farmers would be busy participating in the Washington County Fair. This government-by-stealth approach is not an exercise in good government.”

On the heels of a lawsuit filed against the RI Office of the Attorney General to release documents related to its attempts to criminalize political dissent against the President’s radical climate change agenda, the Center supports the Representatives’ call for a halt to this DEM initiative that would also advance the same climate change or sustainable development agenda.

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Brookings Land Acquisition Recommendation

Part of the RhodeMapRI strategy and consistent with the 2016 Brookings Institution plan for Rhode Island, “the DEM agenda apparently seeks to set the regulations for how it can be authorized to seize farmland from its private owners and redistribute it to others who will develop the land the way the government wants,” continued Stenhouse. “This land grab plan is ripe for abuse, and serious questions must be addressed. This process has to be slowed down to allow for a legitimate public debate that includes all interested parties.”

The Center is alarmed that the “State Farmland Acquisition Advisory Council” appears to be transitioning to become a broker of private property. Further, the Center demands that the DEM clarify in detail how it will interpret and implement its vague standard for seizing private property; currently stated as – “a reasonable probability … (of) farmland in danger of converting out of agriculture”. Such statewide authority could be a back-door to eminent domain abuse and could infringe on what would traditionally be local zoning decisions.

Written Testimony submitted by CEO Stenhouse to Senate Committee on Finance and House Committee on Finance

Statement: SCOTUS Decision, Massive Rate Hike Should Doom HealthSource RI

STATEMENT
June 26, 2015
FY2016 Should be Last Year of Continued Taxpayer and Ratepayer Subsidies for Failed Boondoggle
Exchange Can be More Efficiently Operated by the Federal Government

Providence, RI — Based on yesterday’s U.S. Supreme Court decision upholding the Affordable Care Act (ACA), and with statewide health insurance premiums once again set to sky-rocket, the nonpartisan Rhode Island Center for Freedom & Prosperity suggests that FY2016 should be the last year that Rhode Island taxpayers and ratepayers should be burdened with subsidizing HealthSource RI.

The Supreme Court ruling, which preserved federal insurance subsidies across the nation, effectively removed one of the major arguments of proponents seeking to keep the state exchange funded by Rhode Islanders. Further, based on today’s Providence Journal story that insurance rates could rise by as much as 18% next year, HealthSource RI has obviously failed in its promise to control rate increases.

“There is no longer any legitimate reason for Rhode Islanders to continue to pay for this self-created boondoggle,” said Mike Stenhouse, CEO for the Center. “It’s time to renew the discussion about sending our exchange to the federal government, where efficiencies of scale can allow it to be operated at a significantly lower cost than we can run it on our own in Rhode Island. And now we can do so without any fear of anyone losing their subsidy.”

Rhode Island is one of just 15 states that fully-funds and operates its own insurance exchange. As the Center has documented over recent years, the Ocean State does not have a large enough tax base or insurance base to justify the related high costs.

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.