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

LastPlace

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. 

HOUSE FINANCE COMMITTEE:

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)

HOUSE JUDICIARY COMMITTEE:

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

Protecting Citizens from Unjust Prosecution

Why Rhode Island needs a Default Mens Rea Provision

Download a PDF of the 2013 policy brief here ; related Senate Bill No. 414; related 2012 policy brief

2014 GoLocalProv Article – on “Dumb” Providence ordinances

2013 GoLocalProv article – on “50 Dumbest” RI Laws

Background

The rapid expansion of criminal laws in modern day jurisprudence requires a default mens rea (criminal intent) provision to ensure innocent citizens are not given serious criminal penalties for conduct outside the realm of traditional criminal laws.

Every state should be careful when seeking to convict its citizens of crimes without the government proving that he or she intended to violate a law or knew that his or her conduct was unlawful. Many states are moving to protect its citizens from unjust punishment because of ambiguous and poorly-drafted criminal offense statutes.

Nationally, there are fourteen states that have a default mens rea provision similar or identical to that found in §2.02(3) of the Model Penal Code: Alaska, Arkansas, Delaware, Hawaii, Illinois, Kansas, Missouri, North Dakota, Ohio, Oregon, Pennsylvania, Tennessee, Texas, and Utah. Four other states facially require a mental state without a default mens rea.

Close to Home: Examples in Rhode Island Statutes

1) It is a fineable offense, with no requisite mental state, to use the terms “fresh eggs,” “strictly fresh eggs,” “new-laid eggs,” or similar words or descriptions when selling eggs, unless the eggs are consumer grade A or better. R.I. GEN. LAWS §21-17-10, §21-17-6.

What about a farm stand owner who sells “fresh eggs” but doesn’t know to check if they are consumer grade A or better?

2) It is an offense to own a billiard table without a license, and no intent requirement is included. The fine is either $20 or three months of imprisonment. R.I. GEN. LAWS §5-2-12.

What if a bar owner puts a pool table in his facility without knowing of this requirement?

3) It is an offense to sell footwear which has been imported from a foreign country without notifying each person purchasing or intending to purchase that footwear that it has been imported, by displaying in a conspicuous place, in letters at least as large as the figures indicating the price of the goods sold, a sign marked “Imported goods.” If the goods have an individual price marking, they shall also be marked with the words “Imported goods” or the country of origin. This offense carries penalties up to $500 or three months imprisonment, or both. R.I. GEN. LAWS §5.41.1, §5.41.2, §5.41.3.

What about garage or yard sales?

4) It is an offense to own a snowmobile or ATV without “a muffler in good working order which blends the exhaust noise into the overall snowmobile or recreational vehicle noise and is in constant operation to prevent excessive or unusual noise. The exhaust system shall not emit or produce a sharp popping or crackling sound.” The penalty is $100 or 90 days imprisonment, or both, for a first offense. R.I. GEN. LAWS §31-3.2-8, §31-3.2.10.

Does one single pop or crack create criminal liability? What if someone isn’t aware the muffler is required to “blend the exhaust noise” adequately?

Nationally: A Real Life Example of Over-Criminalization

George Norris, a resident of Houston, Texas, imported orchids as a part-time business. In 2003, federal agents raided his home and seized his belongings. Norris was prosecuted and imprisoned because he imported a few legal orchids into the United States with improper paperwork. Because Norris unknowingly committed this “crime,” he not only spent 17 months in prison, but he lost his business, retirement savings, and trust in the legal system.

Recommendations

Enact a Default Mental State in Rhode Island

Criminal laws in Rhode Island today cover a wide range of otherwise innocent behavior, from trading workout tips to transporting poultry, in statutes and administrative regulations.

Such criminal sanctions to regulate behavior sometimes do not include a requisite culpable mental state, opening up innocent actors to serious criminal sanctions for behavior that is not inherently wrong.

Enacting a default mental state provision would ensure that criminal sanctions are levied against the guilty while protecting citizens from unduly burdensome regulations and criminal laws. It would not alter any Legislative pronouncement of a requisite mental state, but merely supply the answer when the Legislature has not already specifically addressed it in codification in a particular criminal law.

This policy recommendation is not about letting violent, career criminals off the hook – this model is about reining in government’s zealous regulation and protecting innocent, hardworking Americans from the destruction of their businesses and livelihoods.

The Criminal Intent Protection will:

  •  Protect citizens from unjust charges or conviction
  •  Protect freedom and liberty for individuals and small business
  •  Strengthen our criminal justice system
How will a default mental state achieve these goals?

1) By protecting citizens from unjust charges or conviction:

  •  It will ensure that criminal offense statutes and rules include a criminal intent requirement.
  •  It will focus the criminal law on putting dangerous offenders in prison (murder, arson, rape, theft, and robbery)–-not putting hardworking Americans in prison who are unaware of vague and ambiguous law.
  •  Many non-violent criminal offenses, such as failing to comply with specific regulatory or reporting requirements, criminalize conduct that is not inherently wrongful.
  •  It will protect citizens from being criminally charged for an accidental mistake.
  •  Many of the offenses that do not include criminal intent requirements are paperwork violations and are created by un-elected, regulatory bureaucrats.

 2) Protect freedom and liberty for individuals and small business:

  •  The average American, worker, and business have no hope of knowing the thousands of criminal-law statutes. They can find themselves facing expensive prosecutions and lengthy prison sentences for making honest mistakes.
  •  Will reserve criminal law for those who intended to commit a wrongful act – those who deserve the consequences.
  •  Will help to protect citizens’ businesses, livelihoods and reputations so they may contribute to, and strengthen, our economy.
  •  Any time lawmakers pass a criminal law that does not take into account criminal intent, honest hardworking citizens can find themselves facing prison time.

3) Strengthen our criminal justice system:

  •  When conduct that is not inherently wrongful is criminalized, it threatens and endangers the integrity of our criminal justice system.
  •  Criminal law should safeguard both liberty and security.
  •  Prosecuting and imprisoning one individual is costly to taxpayers and should be reserved for offenders who knowingly and willfully violated the law.

Conclusion

A default mental state would prevent unjust criminal sanctions for innocent behavior. It would protect citizens from oversights in legislative drafting and provide peace of mind for those taking part in wholly innocent and blameless behavior. It would not restrict the Legislature, but instead encourage it to speak clearly as to the guilty mind it thinks must be proven to obtain a guilty verdict.

Rhode Island citizens are currently without recourse if charged with a crime that should have a mental state included in its language but does not. A default criminal intent provision would restore the protection afforded to Americans for centuries.

Minimum Wage’s Cost in Jobs: 432 at $8.25 and 3,466 at $10.10

Profile of minimum wage worker is NOT of a low-income, family bread-winner.

Related Links: WJAR-10 TV Story; GoLocalProv Story; Pew Research Center: national data backs up our findings; CBO – nonpartisan federal agency echos job loss projections (2014)

2014 Wall Street Journal story confirms Center’s position

Video by FEE: The Truth about the minimum wage …

As an update to prior studies of the effect of increasing the minimum wage on Rhode Island’s employment situation, the RI Center for Freedom & Prosperity estimates that proposed increases could cost the state hundreds or even thousands of jobs.

Legislation passed the General Assembly in 2014 that will increase the minimum wage in 2015 to $9.00 per hour, from its current $8.00, which was itself a new increase from $7.40 2 years ago. When all is said and done, this jump from $7.40 to $9.00 will wind up costing the state hundreds or thousands of jobs, the lion’s share affecting teenagers.

Additionally, legislators in the U.S. Congress are advocating for an increase to $10.10 per hour or higher.  That change, we estimate, would destroy 3,466 Rhode Islanders’ jobs.

Minimum Wage Changes in Rhode Island

The very next session after the Rhode Island General Assembly voted to increase the minimum wage from $7.40 to $7.75, the legislature will consider bills moving it up again, to $8.25.  The elected officials who made H5079 and S0256 among the earliest legislation to hit the State House, this year, surely see the move as a campaign to help struggling families. But the RI Center for Freedom & Prosperity sees it as a continuing assault on the state’s economy and especially those most in need of upward mobility.

Last July, the Center found that Rhode Island’s move from $6.75 to $7.40, from 2005 to 2011, likely cost teenagers in the state 397 jobs.  The increase to $7.75 destroyed an estimated 200 more.

Based on the work of the economists who performed that study, David Macpherson (Trinity University) and William Even (Miami University), with a review of the Census Bureau’s Current Population Survey for 2011 and 2012, the Center estimates that, overall, the move from $7.40 to $8.25 will eliminate 432 jobs, 204 of them among teenagers.*

Who Is Affected?

According to the study, 24,846 Rhode Islanders currently have jobs that pay them at a rate of $8.25 per hour or less.  The “typical” profile — using the highest percentage by each demographic quality — is of a white non-Hispanic high-school graduate, 21-years-old or younger and with no college experience, who lives with his or her parents and works 20-34 hours per week. The following chart shows how dominant each of these qualities is in the under-$8.25 population.

Rhode Islanders Earning $8.25 or Less per Hour by Demographic Category

Simply put, the image of low-income families struggling along at minimum wage is mostly false. The average family income of Rhode Islanders who make $8.25 per hour or less is $61,299.  For these families, the minimum-wage job provides only supplemental income. As the following table shows, even two full-time minimum-wage incomes would barely amount to half of this average.

Annual Income Earned for Different Minimum Wages by Hours Worked per Week ($)

$7.40

$7.75

$8.25

20 hours

7,696

8,060

8,580

34 hours

13,083

13,702

14,586

40 hours

15,392

16,120

17,160

Notes: The percentages of minimum-wage-earning Rhode Islanders in each hours category is as follows:

  • Fewer than 20 hours: 30.2%
  • 20 to 34 hours: 41.6%
  • 35 or more hours: 28.2%

Results assume 52 weeks of work per year.

Source: U.S. Census, Current Population Survey, 2011 and 2012

The following chart illustrates that only a small minority of families rely entirely on a minimum wage income for support, even among households with some minimum-wage income.

Living Situations of Rhode Island Households with a Member Earning $8.25 or Less per Hour

What’s the Effect?

We estimate that the increase of the minimum wage from $7.40 to $8.25 per hour will result in a loss of 432 minimum wage jobs in Rhode Island. This total assumes a lower effect on better educated and older workers.  That’s a 1.74% reduction of employment available to people currently earning less than $8.25. Of those losing jobs, 204 will be teenagers.

The focus of advocates for higher minimum wages is very often on the plight of people striving to live on such low salaries, but most workers at that pay rate do not fit the profile.  Most of them are bringing in relatively small amounts of supplemental income — many as discretionary spending cash for teens and young adults who are still largely supported by their parents.

In the view of the RI Center for Freedom & Prosperity, the loss of employment opportunities for Rhode Islanders in this group outweighs the relatively small increases in take-home pay.  At young adults’ formative age, the connections, habits, and general experience that come from working at any pay scale are vastly more valuable than the small increases that legislators are able to mandate through minimum wage laws.

At the National Level, a Bigger Hammer

This morning, Rhode Island’s two representatives in the U.S. Congress, Jim Langevin (D) and David Cicilline (D), jointly announced their support for the “Fair Minimum Wage Act.” The act would increase the federal minimum wage — and, therefore, Rhode Island’s minimum wage — to $10.10 per hour.

The RI Center for Freedom & Prosperity estimates that this move would result in a loss of 3,466 jobs for Rhode Islanders, or 4.1% of the total number who currently work at or below that rate of pay.  Moreover, even with this broader net, the number of affected families that are subsisting on minimum wage income alone would still be just 17% of all households with at least one member earning that amount.

 

* Going back to the prior minimum wage rate of $7.40 was necessary because measuring the change from the current rate of $7.75 to $8.25 produced insufficient sample sizes.