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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.

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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
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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.

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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.

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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.

Center Rates Fung Sales Tax Reduction Plan

October 14, 2014 – Providence, RI: The Rhode Island Center for Freedom & Prosperity released today a scoring-summary of the sales tax reduction plan offered by gubernatorial candidate, Allan Fung, who proposes to gradually reduce the state’s sales tax rate to 5.5% over the next four years from its current level of 7%.

According to the Center’s economic modeling program, RI-STAMP, the Fung plan would produce the following ‘dynamic’ results for the Ocean State job market and for state and municipal budgets. As compared with current baseline projections over the next four years …

A 6.25% sales tax rate in year-1 would produce 2043 new private sector jobs; would require $19.9 million in state budget savings; and would add almost $17 million statewide in new municipal revenues

A 6.00% sales tax rate in year-2 would produce  2663 new private sector jobs; would require $28.3 million in state budget savings; and would add almost $23 million statewide in new municipal revenues

A 5.75% sales tax rate in year-3 would produce 3250 new private sector jobs; would require $36.5 million in state budget savings; and would add over $29 million statewide in new municipal revenues

A 5.50% sales tax rate in year-4 would produce 3804 new private sector jobs; would require $46.3 million in state budget savings; and would add almost $36 million statewide in new municipal revenues

completesolutionFor years, the Center has been advocating for an immediate repeal of the sales tax, or a major reduction to 3%, as the most cost-effective way to produce tens of thousands of new jobs and to provide a major boost to Rhode Island’s stagnant economy. According to the Center’s RI-STAMP projections …

A 0.0% sales tax rate would produce 25,426 new private jobs; would require about $313 million in state budget savings; and would add about $150 million statewide in new municipal revenues.

A 3.0% sales tax rate would produce 13,424 new private jobs; would require about $47 million in state budget savings; and would add about $119 million statewide in new municipal revenues.

A detailed analysis of multiple sales tax reduction scenarios, with corresponding RI-STAMP projections, can be found here.