Know as the “father of school choice”, Milton Friedman was feted on July 31 in Providence on what would have been his 102nd birthday!
Because every child deserves a BRIGHT TODAY educational opportunity.
[button url=”http://www.rifreedom.org/ABC” target=”_self” size=”medium” style=”royalblue” ] More on the event [/button]With the 2014 Rhode Island gubernatorial campaign now shifting into high gear, the Rhode Island Center for Freedom and Prosperity encourages the media, advocacy groups, and citizens to ensure that certain major policy issues are publicly addressed by the full slate of gubernatorial and other statewide and General Assembly candidates.
Each of the issues below has the potential to significantly alter the future of our state, and to date, little, if any debate has taken place, with most candidates talking vaguely about their own plans for broadly related issues. The specific positions of each candidate on these issues and questions would provide clearer insight into each of their individual governing philosophies.
The Center believes that candidates should be forced out of their comfort zones and inform voters of their specific positions on each of these important statewide issues:
1. Constitutional Convention: on the ballot this year will be a referendum for voters to decide if the State should convene a constitutional convention. Advocates believe that a convention is necessary due to the lack of action by the General Assembly in addressing Rhode Island’s most pressing issues and its continued favoritism to special-interest groups.
2. HealthSource RI: once federal funding runs out in FY2016, what position will the candidates take regarding use of state funds or assessments to Ocean State taxpayers or policyholders?
3. Educational Choice: While each candidate has put forth some general thoughts on education, no significant reforms have been suggested. A movement is underway in Rhode Island to empower parents with expanded choices for their children’s education, choices that may include some form of scholarship voucher so that no child is condemned to remain in a failed government school.
4. Sales Tax Reform: Speaker Mattiello has publicly stated that he will take a look at sales tax reform in 2015. The RI Center for Freedom & Prosperity claims that major reforms in this area would produce a game-changing, massive jobs boost for the state’s economy, much more than any other tax reform idea. Given the chronic unemployment problems we face in Rhode Island …
5. RhodeMapRI: is a major economic development plan for the state, quietly advanced by the Chafee administration and signed-on to by multiple municipalities and other organizations, that has largely flown under public and media scrutiny. This self-described “sustainable living” plan is funded by the federal department of Housing and Urban Development (HUD) and is largely based on an environmentalist and economic justice agenda, that may even include future racial quotas for communities.
In other cities and counties across the nation where similar plans have been implemented, such as Westchester County, NY, residents have complained about a loss of individual property rights, loss of sovereignty of locally elected government, and unequal property taxes levies.
6. Unionization of Independent Business Owners: in June of this year, the U.S. Supreme Court’s ruling on the Harris v Quinn case led most legal experts to believe that the ruling has a direct impact on last year’s successful effort to unionize home childcare workers in Rhode Island. The 2013 law and subsequent election that would force the payment of union dues or fair-share fees is now likely unconstitutional for such non full-time state employees.
July 22, 2014
Providence, RI – Calling it “a shameful failure of public policy and political leadership”, the RI Center for Freedom & Prosperity today published a List of Lasts RI, based on its revealing 2014 Report Card on RI Competitiveness, which was released last week. The List of Lasts documents (19) distinct categories where the Ocean State ranks last, either nationally or regionally, in various national performance indices, as of the spring of 2014.
“Our elected officials keep telling us how they’re moving our state forward, yet we’ve fallen to the bottom of the class in an shockingly high number of subjects,” commented CEO Mike Stenhouse. “Rhode Island has all the characteristics to be an A+ state, yet our political class keeps failing us.”
National Lasts:
New England Lasts: In addition to the above (6) categories, Rhode Island also ranks last in New England in (13) more categories:
NOTE: All citations and sourcing can be found on the 2014 Report Card on RI Competitiveness.
Stenhouse continued, “This November, voters should hold accountable those legislators they feel contributed to these dismal rankings. Hopefully, in 2015, we will see a new public policy culture on Smith Hill.”
You’ll never guess what Rhode Island’s unemployment rate did in June. It went down again! To 7.9%.
That’s still worst in the country (tied with Mississippi), but Rhode Island has now had its best six months of employment growth in recorded history. For the past three months, the Ocean State has had the most employment growth (as a percentage) in the entire country. It’s boom-time in the Ocean State, even if we’re still at the wrong side of just about every ranking, and even if it doesn’t feel like things have turned around.
In fact, there were actually 400 fewer jobs based in Rhode Island in June than May, yet, somehow an additional 3,246 Rhode Islanders found work… according to the U.S. Bureau of Labor Statistics, in cooperation with the state Dept. of Labor and Training.
The first chart below illustrates just how bizarre the numbers look, given the state’s recent history. Since December, more than 16,000 Rhode Islanders have found employment. The total number hasn’t been so high since November 2008.
The second chart provides a longer-term sense of the results. Rhode Island is still below its employment level just before the jobs-crash of the recession and still lags both of its neighbors dramatically when it comes to reclaiming jobs. Indeed, Massachusetts has now surpassed its pre-recession peak, and Connecticut is just about there.
The third chart compares Rhode Island’s unemployment rate with what it would have been if the state’s labor force had held steady. It shows that unemployment never got as low as Rhode Island officials had claimed, and the growth in the gap between the two lines is steadier and more dramatic, with the exception of the peculiar results these past three months. Even if the results since December reflect real growth, Rhode Island’s unemployment rate would still be over 10% if people had not stopped looking for work.
UPDATE – June 30, 2014: Based on today’s U.S. Supreme Court ruling, the Center, as it warned last fall, calls on State and SLRB to undo unconstitutional law and resulting SEIU elections. (see media release below)
UPDATE – August 6, 2014: SEIU in Massachusetts and other states abandon forced fee scheme for home childcare providers – see media release here! Our Center challenges the SEIU in Rhode Island to follow suit.
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FOR IMMEDIATE RELEASE June 30, 2014
Center’s CEO discusses the recently passed FY-2015 budget, BIG QUESTIONS for gubernatorial candidates, and the state of the state on “State of the State” cable TV.
[button url=”http://vimeo.com/channels/365354/99366876″ target=”_blank” size=”medium” style=”royalblue” ] Cable TV Interview [/button]Rhode Island’s unemployment rate moved down by a notch, rather than a leap, in May, to 8.2%. However, the 2,659 newly employed Rhode Islanders, according to official Bureau of Labor Statistics (BLS) figures, lead the nation in terms of growth. The downsides of these numbers are that they’re simply difficult to believe and that, even if they’re accurate, the state’s employment situation is still abysmal.
The first chart below illustrates the first downside. If we believe the lines that the government is drawing for us, over 13,000 Rhode Islanders have found employment since December, and we’re back to the employment level of January 2009, after more than five years of wallowing. Are there any non-statistical signs of this recovery?
The second chart provides a longer-term sense of the results. Rhode Island is still below its employment level just before the jobs-crash of the recession and still lags both of its neighbors dramatically when it comes to reclaiming jobs. Indeed, Massachusetts has now surpassed its pre-recession peak.
The third chart compares Rhode Island’s unemployment rate with what it would have been if the state’s labor force had held steady. It shows that unemployment never got as low as Rhode Island officials had claimed, and the growth in the gap between the two lines is steadier and more dramatic, with the exception of the peculiar results these past three months. Even if the results since December reflect real growth, Rhode Island’s unemployment rate would still be over 11% if people had not stopped looking for work.
But Leaves $168 Million of RI Taxpayer Dollars on the Table
The budget unveiled in the Rhode Island House Finance Committee, last week, showed a $13.3 million decrease in state spending, compared with the governor’s proposed budget. Approximately $3.1 million of the reductions overlap with the Spotlight on $pending report that the RI Center for Freedom & Prosperity released in March, after a review of the governor’s proposal.
Another $52.9 million in Spotlight on $pending suggestions were in the budget, but were either not counted as a line item or amounted to transfers to federal funds.
“The legislature clearly has different priorities than the Center, but the fact that some of our suggestions found their way into the budget shows how important it is to have alternative voices,” says Justin Katz, who is the research director for the free-market think tank and a coauthor of the Spotlight on $pending report. At a State House press conference promoting Spotlight on $pending on April 2, Katz had told reporters that the Center hoped legislators would look to their analysis for ideas no matter what fiscal goals they were trying to reach.
Specific areas of agreement between the Center and the House were as follows (note that reductions are from the governor’s proposal, not from current spending):
The House also agreed with the $50 million in savings the Center recommended by not expanding the historic tax credit program as the governor wanted. However, neither the governor nor the House included those costs or savings anywhere in the budget.
Another area of partial overlap came with the Unified Health Infrastructure Program (UHIP), which will make it easier to enroll people in multiple government programs when they apply for any one of them. The Center expects this program, operated using the state’s health benefits exchange (HealthSource RI), to amplify the cost of social service programs and called for it to be ended. Instead, the House budget managed to transfer $2.9 million in near-term spending on the project from general revenue to federal sources.
“It’s going to take more feedback from Rhode Islanders to change way the state government operates,” says Katz, who would prefer the savings to be used to reduce the state sales tax rate to 3%, creating over 13,000 private-sector jobs. “Still, counting the tax credits and UHIP, the House budget includes 25% of the savings that we identified in Spotlight on $pending.”
The Spotlight on $pending report was produced in cooperation with the Taxpayers Protection Alliance and coauthored by Drew Johnson and Justin Katz.
By Mike Stenhouse, CEO
The 2015 state budget is now public. Corporate tax and estate tax cuts are in. Help for the middle class is out. In fact, the average worker is being asked to pay for reforms that benefit more well-off constituencies. Why? It’s not just a matter of fairness; it’s a question of economic stability.
Rhode Island’s poor economic performance and dismal jobs outlook can largely be attributed to high levels of taxation and regulation across all points of Rhode Island’s economic lifestyle.
An analogy can be made between a prosperous state economy and a three-legged stool, where each leg plays an equally important role in keeping balance and maintaining strength, as part of the normal economic cycle through which most individuals progress:
All three economic roles, or legs of the stool, are equally important and are inter-dependent on each other. The free-enterprise system allows individuals move from role one to another as they choose, as they acquire capacity, or as other circumstances dictate.
A balanced, growth economy must have strength in each of its three legs: a partnership of sorts. If any one leg is out of balance or weak, likewise, the other legs – and the overall economy – will also suffer. It is this tri-lateral partnership that creates a vibrant free-market economy and a stable tax “base”, strong enough to support public assistance programs and foundational services such as education and infrastructure.
However, in recent decades in Rhode Island, excessive government interference has systematically weakened all three legs of our economic stool, limiting the capacity of individuals to move from one role to another; and at all three roles, driving many out of our state.
With high sales and property taxes in a high cost of living state, and with limited opportunity for upward mobility because of a weak jobs market, Rhode Island is a barely affordable home for many workers in low and middle income families, who have little chance of saving money and accumulating initial wealth. Yet no relief is planned in 2015 for the average worker.
With the highest corporate tax in New England and one of the worst business environments among all states, along with a dwindling consumer base, it has become very difficult for businesses and entrepreneurs to prosper in the Ocean state. Limited corporate tax relief is designated in the 2015 budget for the business sector.
For wealth that is accumulated despite these roadblocks, our state has further imposed a dis-incentive for many families to keep that wealth in Rhode Island, by charging one of the nation’s most punitive estate, or death, taxes … tending to drive high-income individuals out of our state. Some relief is also planned for wealthy investors in 2015.
Yet, while it is a positive sign that some reform is planned to fortify the two roles that generally involve higher income individuals, why are we ignoring relief for the middle class? To make matters even worse, the new gas taxes and fees on real estate transactions, vehicle inspections, and traffic court appearances, along with the new the ‘use tax’ on income, will be a direct hit on middle and low income families.
This puts the proposed 2015 budget completely out of balance.
There is, however, a policy idea on the table that would restore that balance by aiding those with lower incomes. Our Center’s sales tax reform idea, that cuts the rate to 3%, can also fortify the worker leg, leading to more family savings and creating thousands of vital, new job opportunities. If we also implement a major sales tax cut, strengthening this leg as well, this would spur consumer demand, increasing corporate profits and wealth creation in the other two legs. This is a balanced, win-win solution. Instead, Rhode Islanders are yet again looking at an unbalanced, win-lose approach.
Rhode Islanders want a government that works for everyone, not just for the well-off. We can do this by cutting corporate, estate, AND sales taxes.
The former rock star, Meatloaf, may have crooned that “two-out-of-three ain’t bad”. But when it comes to fortifying all three economic roles that are equally essential in turning around a struggling state like Rhode Island … two-out-of-three ain’t good enough!
Mike Stenhouse holds an economics degree from Harvard University.