Analysis: RhodeMap RI would further weaken Ocean State’s struggling economy

Go to Property Rights / RhodeMapRI home page … 

Our Rhode Island Center for Freedom & Prosperity, URI Professor Len Lardaro, the RI Public Expenditure Council, Mayor Allan Fung, and many other organizations have been critical of the proposed RhodeMap RI economic development plan for its fundamental lack of basic economics; that despite some worthwhile goals, there is no specific road-map offered to attain those goals. With the credibility of RhodeMap RI already in question as a building-block plan for the Rhode Island economy, upon closer inspection, it appears that RhodeMap RI may actually contain recommendations that would be destructive to family budgets, economic growth, and job creation.


First, RhodeMap RI does not even attempt to address the core cost-benefit analysis that any credible economic development plan should ask: How much will it cost; what are the projected returns?  As the plan itself states on page 178, “With few exceptions, everything in this plan requires funding,” yet it goes on to say “…  this plan does not present solutions to the issue of funding …”  To whom will the funding plan be handed, then, to figure out? Obviously, with no investment levels specified, neither are there any return on investment projections.


Second, given our state’s persistently poor national rankings over the years in headline after headline, there can be no question that the government-centric public policy approach – that has dominated our state for decades – has been an abject failure. RhodeMap RI would accelerate this failed approach by inserting government into even more aspects of our personal and business lives, adding new burdens on our state’s already struggling economy.

Appendix A describes the social equity principles of the plan, which, if adhered to, would place new burdens on the business community. This sentiment was echoed by John Simmons of RIPEC at the November RhodeMapRI consortium meeting. Similarly, Mayor Allan Fung expressed similar concerns  in a letter he sent to the planning council. Forcing businesses to comply with new social-equity guidelines would further harm our state’s last-place business climate and would limit business relocation and growth in our state … at a time when we should be tearing down barriers to economic growth, not erecting new barriers.

Subsection B of the Appendix discusses “living wages”, which, if referring to further minimum wage hikes, would actually increase the cost of employment in our state and would further burden employers, leading to fewer jobs for people looking for work. Policies regarding wage rates must be reserved for General Assembly debate, not adopted as a principle in a bureaucratic document outside of the legislative process.


Third, RhodeMap RI’s open disdain for the free-market system should be of concern to every resident in our state hoping to participate in a booming private sector. Subsection C of the appendix is direct in its anti-business nature; “Use public funds for public good, especially for marginalized populations … not private profit … to finance projects that overwhelmingly benefit big business.” Mayor Fung points out the success that he and the City of Cranston have had in public-private partnerships and questions whether smart growth plans would be wise to preclude such partnerships, which could employ hundreds or thousands of Rhode Islanders.

Further, the actual Minutes from the October 16 Consortium Meeting offer more distrust of the free-enterprise system, stating: “The market will never take care of marginalized populations. Consequently the plan has to have sticks (laws/regulations) for things the market won’t otherwise do, as well as carrots (incentives).”


Fourth, the sticks and carrots that RhodeMap RI contemplates would manifest via manipulation of local property taxes so that they become a weapon against those who do not live in preferred communities and as a reward to those who obey the plan. Annual property tax caps in municipalities would be wiped away, leading to unchecked residential and commercial property tax hikes, as one means to fund the ‘growth centers’ the plan envisions.

Page 159 of the plan itself  discusses that local property taxes are already too high across most of Rhode Island, yet it is precisely an increase in these same local taxes that the RhodeMapRI plan relies upon. How can this make sense?

Subsection C also recommends creation of “Community Benefit Agreements” that would somehow ensure that “current housing costs” are maintained for people or businesses that may be displaced during development. This rent-control concept is a failed idea from the past and would artificially distort the normal housing and rental markets. Further, someone would have to pay to ensure these price-control guarantees … either landlords or taxpayers … and such unfunded-mandates would result in even greater economic decline for those communities and for our state.

Finally, with local and state taxpayers in mind, Page 141 of the plan discusses “resiliency” provisions that would require significant investment to “increase the state’s resiliency to climate change.” The cost of developing such climate change resiliency infrastructures would certainly be high. The return on investment of such projects is unspecified, and, with recent history as a guide, often produces negative economic impact. Such, costly, unproven, even un-necessary burdens on taxpayers, with high potential unintended costs to state and local economies, is not a risk our state should commit to at considering its present fragile status.


It is the position of the Center and most economists, that the free-market capitalist system has raised the standard of living of more people across the world than any other system ever devised by man. RhodeMap RI , with its big government and anti-enterprise approach, would turn this system on its head in the Ocean State.

If our state is to return prosperity to its residents, a new era of public policy, free from oppressive government regulations and taxations … not more of it, per the RhodeMap RI scheme … must be the “rhode” the Ocean State takes. The free-market should be freed to work its ‘invisible hand’, and government should get out of the way. If adopted, Professor Len Lardaro suggested the plan be renamed – TrainWreck RI; we regrettably concur.

Mike Stenhouse is CEO for the RI Center for Freedom & Prosperity and holds an Economics degree from Harvard University.

Heavy-handed HUD in Westchester NY

Requiring that it “acknowledge its legal duty ” to HUD’s housing requirements and “amend its zoning” for county municipalities, the County of Westchester New York is a harbinger for oppressive federal mandates that could be imposed on state and local lawmakers if the controversial RhodeMapRI plan is adopted as the state’s official economic development plan, even without any action from Rhode Island’s General Assembly, the state’s primary legislative body.

In a letter to Westchester County officials by the U.S. Department of Housing and Urban Development in April of 2014, the federal agency  resorted to heavy-handed tactics to impose its bureaucratic vision of fair-housing on the citizens of the county, superseding the local zoning ordinances developed by the duly elected representatives of the people, even taking the extreme position of referring to existing county policies as “exclusionary zoning practices”.

If adopted by the state’s Planning Council, RhodeMapRI would pave the way for Rhode Island’s cities and towns to receive HUD grants and, in doing so, become victim of similar arbitrary tactics.

Property Tax Increases Inherent in RhodeMapRI

The controversial RhodeMapRI scheme that “plans” where people must live includes “growth centers” that will be funded by property tax increases. How bureaucrats intend to manipulate property taxes to reward people who live where HUD wants, and to punish those of us who want to live where we choose.

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AN OCEAN STATE DISGRACE. RhodeMapRI opponents, who questioned the plan’s economic viability and potential to infringe on individual property rights and the sovereignty of local governments were branded as “racists” and “Ku Klux Klan” by consortium members who designed the plan itself!

This proves our Center’s contention that RhodeMapRI is not a serious economic development plan, but rather a radical social-equity agenda.

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Center Challenges Chafee Administration to a Debate

Following an OpEd battle in the Providence Journal, the Center calls for a rigorous debate on this highly controversial issue. Do Rhode Islanders want local housing and land-use decisions being made by un-elected bureaucrats in Washington, DC … or by locally-elected officials?

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Our land, our rights, our local government

Originally published in the Providence Journal, October 20, 2014

–   Read Governor Chafee’s OpEd Response

Center/Stenhouse Response   – Related Media Release

See public comment letter submitted by the Center 

The American Dream once meant ownership of land and a home, with a white picket fence around the yard, as a symbol of independence and a step toward prosperity. To others today, that dream is being reduced to living in a multi-use tenement building, with a rail around a small balcony, in a socially-engineered collectivist society.

It was the design of our nation that each state should be an independent laboratory, largely free of centralized control. It is widely held that local government is better government — most reflecting the will of the people it serves. Similarly, it is understood that land-use and zoning decisions are best made by locally elected officials. These core principles are the basis of our American society.

Urban planning can be an effective tool in providing for growth of population and services, in maintaining these core principles, and in advancing local values and traditions. Conscientious planners should attempt to balance public benefit against potential loss of property rights. To manage these issues, we understand that related decisions are best made by local officials, accountable to their community.

However, the federal government has recently been pushing and funding a centralized approach, often referred to as “sustainable development.” In creating regional planning entities funded by federal grants, and run by unelected ideologues accountable to no one, this approach turns the local planning process on its head.
In 2012, Rhode Island became the first state to formally cede a major portion of its economic development and planning rights to the federal government when it accepted grant funds from the Department of Housing and Urban Development to create a so-called economic development plan that advances a “social equity” agenda that considers private-property ownership to be unfair. This agenda incorporates radical elements from the environmentalist and “social justice” movements, even to the extent where racial quotas could be implemented to determine who will be allowed to live in certain cities and towns.

In the Ocean State, a little-known plan is being aggressively advanced behind the scenes: It is called RhodeMapRI. While its cozily worded claims of benefits may seem attractive, experience with similar plans has shown that serious unintended — perhaps intended — consequences have undermined core principles that Rhode Islanders hold dearly. Urban planning should never supersede the rights of private citizens or the authority of local governments.

The goals of this movement are to force development of high-density “walkable” communities that meet radical social equity standards and that, ostensibly, reduce carbon emissions. By positioning its suggested reforms in attractive “affordable housing,” “social equity” and “environmentally responsible” language, the true intentions of the movement, also called “smart growth,” may severely limit levels of private property ownership and related property rights.

By focusing only on professed benefits, and covering up high costs and many pitfalls, regional sustainable planning acolytes often slip their agendas through, before local officials and residents realize what is going on. It is then often too late to do anything about it. Just Google “Westchester County Agenda 21.”

Among the many unsustainable problems created by RhodeMapRI could be:
•States and counties ceding their sovereignty to federal government agencies.
•Municipalities giving up much local authority to newly created regional non-governmental entities.
•Wasted money spent on an overly-idealistic urban agenda that would further depress our economy.
•Blocking paths to property ownership and infringing on rights of property owners.
•Transportation restrictions discouraging the use of private vehicles.
•Social equity and radical environmentalism as the standards against which future land-use proposals will be measured.
•Over-aggressive affordable-housing mandates that result in reduced and inequitable local property tax levies (as is happening now in Woonsocket and Barrington).
•Oppressive zoning statutes and liberal eminent domain laws that decrease property values.

RhodeMapRI is not an economic development plan. It is a ruse. It is an extreme social-engineering scheme that will serve to throttle economic growth at a time when the Ocean State can least afford it. Property owners, beware.

There are more questions than there are answers about RhodeMapRI and all Rhode Islanders are encouraged to voice their concerns at one of the upcoming public hearings on Oct. 27 and 28.

Who are these people who have written this massive and intrusive plan? Certainly not elected officials from Rhode Island!

For such an elaborate plan that will impact future decades for our state, why just two public sessions in the final week of a major election campaign? What are they trying to hide?

Mike Stenhouse is CEO for the Rhode Island Center for Freedom and Prosperity, a nonpartisan public policy think tank.

Public forums for the RhodeMapRI plan will be held on Oct. 27 at 6 p.m. at the Powers Building, One Capitol Hill, Providence; and Oct. 28 at 6 p.m. at North Kingstown Senior Center.

List of Lasts RI


July 22, 2014

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

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

Rhode Island’s Lists of Lasts (19)

National Lasts:

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

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

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

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

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

Individual Property Rights in the Cross Hairs in the Ocean State

Homeowners, businesses, and other property owners should be aware that a series of bills under consideration in the Rhode Island General Assembly would undermine or erode their individual property rights — the foundation of the U.S. Constitution and the free-enterprise system.

In the name of vague environmental resource benefits, three bills in particular would systematically give the state, or new state and local agencies, authority to infringe upon the rights and freedoms of local property owners.

It appears that the state is seeking a larger role in centrally planning, mandating, or influencing how local land or property may or may not be utilized. The plans are so invasive that Rhode Islanders may be left wondering whether they own their land or merely lease it temporarily from the government.

1) House Bill 6099 would create a new, quasi-public statewide Ocean State Regional Water Authority, with a board consisting of a majority of members appointed by the mayors of Providence, Cranston, and North Providence, ostensibly with the goal of ensuring that enough water is available to communities throughout the state.

Perhaps most egregiously, the new Water Authority would have the power to enter without permission onto any property in Rhode Island to examine the land and drill and dig into the ground. It would also have powers of eminent domain, to take land that the board determines it needs for current or future use. It would also set rates for water and have authority to place liens on properties of delinquent customers, as well as to shut off their water.

The bill further allows the state to purchase or lease from the Providence water system or other local organizations that currently operate such systems and to bring in water from out of state. The purchase or lease price would not be not subject to Public Utilities Commission (PUC) or Division of Public Utilities and Carriers (DPUC) approval or proceedings, and the costs would be passed on to water customers via increased rates.

“(c) Notwithstanding anything in the general laws to the contrary, and without limiting the provisions of section 46-32-11 set forth above, neither the Rhode Island public utilities commission nor the Rhode Island division of public utilities and carriers shall have any jurisdiction, authority, or other power to approve, reject, review, or in any way affect any acquisition or the terms of any purchase and sale agreement or lease agreement.”

Going even farther, the legislation explicitly prohibits the PUC and DPUC from requiring that the water authority’s purchase or lease payments “benefit, directly or indirectly… the water ratepayers.” In this case, the question of ownership is broader: In publicly held water districts, the taxpayers and ratepayers are responsible for the liabilities of their systems, but under this legislation, they would not likewise be recipients of any of the benefits of ownership.

2) House Bill 5633 and Senate Bill 696 would use state grants and matching funds to pressure cities and towns to create “community preservation committees” (with a majority vote from residents), which would research and implement land purchase and development deals in keeping with ideals of sustainable development. The legislation would allow cities and towns to impose up to an additional 3% tax (renamed as a “surcharge”) on local property that would not be counted in any calculations or limits on the property tax levy.

The state would provide matching funds up to 100% of the additional surcharge, with the money coming from (among other places) an additional $20 fee on all real estate recording instruments (e.g., deeds).

In creating these new local committees, these bills would provide a new path for “affordable housing” or other “green” projects to be approved and funded locally. This presents two potential issues for existing property owners.

First, it is not unusual that the resulting subsidized developments are taxed at lower rates than most others — while existing property owners are subject to higher rights, even surpassing existing caps. This tax level disparity would make it significantly more expensive to live in unsubsidized areas.

Second, these committees, in furthering their preferred land purchase and development deals, may exempt projects from local zoning ordinances.  In contrast, the way the legislation is constructed, the state government could impose requirements that the towns would have to follow. (One example already in the bill is a ban on “artificial turf.”)

While existing local governments would technically have to pass related projects and mandates, it isn’t clear whether the legislation permits them not to do so.

Unelected officials, coordinated and trained via a statewide infrastructure with its own agenda, would have new powers to determine local land use that would create disparate and inequitable tax structures. That all Rhode Island property owners would be forced fund this questionable activity via fees on standard transactions and new, renamed property taxes is clearly a program that infringes on property rights.

3) House Bill 5801 would require any “greenhouse gas emissions source” (as defined by the state Dept. of Environmental Management) in or doing business in Rhode Island to increase its tracking and reporting to the state, as well as impose direct fees on them for use of the DEM. The legislation would also make greenhouse gas emissions a focus of state economic development activities.

By charging commercial property and business owners additional fees or causing them to incur unnecessary expenses for conducting or reporting normal business activities, the state would be infringing on the rights of those owners.

Further, the idea that restricting or charging for greenhouse gas emissions can somehow be considered a serious part of an economic development activity is preposterous. Such fees would only be a further detriment to an already weak state economy that has been hampered by similar dubious statutes in the first place.

Center Provides Testimony on Key 2013 Bills

The RI Center for Freedom and Prosperity submitted the following pieces of testimony to the appropriate House and Senate committees regarding proposed 2013 pieces of legislation.

As an IRS approved, 501-C-3 nonprofit organization, the Center is not allowed to openly advocate ‘for’ or ‘against’ a specific bill, however we can provide testimony with regard to research and perspective relative to the underlying issue contained within the bill. 


May 15 (H5365) – Stenhouse, Katz and expert panel present the entire case to bring the sales tax to Zero.Zero%

Capitol TV Video of the Hearing (Stenhouse @ 18:00 mark; Katz @ 56:00 mark) .

Stenhouse-Written Testimony-H5365

May 8 (H5751 & H5805) – Justin Katz on proposals to raise state income tax rates. Written testimony and live excerpts at the ehearing. katz-testimony-housefinance-taxtherich-050813; See video from the hearing (19:25 mark)


May 8 (H5321) – the Center on proposals to modify Rhode Island’s litigation laws to ensure that defendants are liable ONLY for their percentage of fault. Written testimony only LegalClimate-H5321