Delegation from Warren Ranks Last in Freedom Index

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Warren Last, East Greenwich First
In 2013-14 Freedom Index Rankings

Based on the Freedom Index scores of the General Assembly delegations from each of the 39 cities and towns in Rhode Island, Representatives and Senators from the town of Warren, as a group, scored the lowest; indicating that this group voted on legislation that most infringed the individual, economic, or educational freedoms of Rhode Islanders. Conversely, and despite scoring a negative number itself, the delegation from East Greenwich ranked at the top of the list, meaning votes from its legislators least infringed on our freedoms.

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Freedom Index: Description and Methodology

Go to main Freedom Index page.

The index examines legislators’ votes in terms of their likely effect on the free market, the size and scope of government, the balance of residents’ interests against those of public employees and beneficiaries, and the constitutional structure of a divided government with limited power over the people whom it represents. The Center reviewed every bill that received a roll-call vote by the full membership of either chamber and selected 96 that fit its understanding of these criteria. (Companion bills only count once.)

The resulting scores give a detailed sense of each legislator’s priorities beyond a few high-profile issues.

The Center further divided the bills into five categories:

  • Tax & budget:  bills that affect the tax structure in Rhode Island and/or that relate to government expenditures, just driving or relieving the pressure on taxation
  • Regulatory environment: bills that make it more or less difficult to live and do business in the state by imposing regulations
  • Constitutional government: bills that affect the structure of the government, as well as the scope of government in its authority over residents’ lives
  • Public sector labor: bills related to the relationship between its employees and itself and the electorate
  • Education reform: bills that advance or impede the reform of the state’s public education system, in terms of both cost and quality

Most legislation has implications for more than one of these categories.  For the purposes of this index, we applied our subjective sense of the area of core effect and sorted the bills accordingly.  If, for example, a bill having to do with education seemed to us intended to secure the role of public employees, we classified that bill as Public Sector Labor, not Education Reform.

The Center selected legislative bills for inclusion in the Freedom Index if they were deemed to have an effect on free-market, small-government, or constitutional principles, with each bill assigned a positive or negative weighting based on the criteria listed below. Weighted points for each bill were given to each legislator based on his or her roll-call vote on it.

Each legislator’s final Freedom Index was calculated as his or her score’s percentage of the total possible points. A positive score indicates a voting record that generally protected individual and economic freedoms, while a negative score reflects the opposite.

Disclaimer: It should be noted that the total Freedom Index score generated for each legislator is a direct reflection of the perspective of the RI Center for Freedom & Prosperity when it comes to the weighting of each bill. The Freedom Index is not an absolute measure of a legislator’s merit and does not constitute any endorsement or individual criticism. The Freedom Index is a tool designed for general research and for accountability, giving voters some quantitative metrics for their own assessments as to their elected legislators’ performance. 

Methodology

1) Determine weighting: Each selected bill received a weight ranging from +3 to -3, as determined by the RI Center for Freedom & Prosperity. Negative weights indicate legislation that creates or expands an agency, government program/function, or tax; creates new regulatory burdens; is hostile to constitutional principles; or otherwise conflicts with the principles that guide the Center. Positive factors were assigned to bills in line with those principles. Companion bills in the House and Senate were weighted identically. To determine the weightings, the Center requested reviews of all chosen legislation from a half dozen engaged Rhode Islanders with similar principles and combined the range of results for a final weighting.

2) Determine vote: Each legislator received a +1 or -1 vote factor, depending on whether he or she voted FOR or AGAINST a particular bill, respectively. If a legislator did not vote on a bill, he or she received a +0.25 if the bill passed or a -0.25 if the bill failed. Legislators who abstained from voting received a +0.75 or a -0.75 vote factor depending on if the bill passed or failed.

3) Calculate weighted vote: Multiplying the weighting factor and the vote factor produced a weighted vote score for each legislator for each bill.

4) Calculate the legislator score:  The cumulative score for all bills for each legislator determined that legislator’s overall score.

5) Calculate Freedom Index: Dividing each legislator’s total score by the maximum possible for the appropriate chamber provided his or her Freedom Index, or a percentage of the best possible score he or she could have achieved. In 2014, the “perfect” scores are 99 for the House and 117 for the Senate.

For example, consider a bill that would increase the regulatory burden significantly in Rhode Island and that the Center therefore weighted as a -2. Legislator A voted for the bill. His or her weighted vote would be calculated as follows: -2 x 1 = -2. Conversely, the weighted vote for Legislator B, who voted against the bill, would be: -2 x -1 = 2.

If Legislator A, in the House chamber, earned a total legislator score of -33, his or her Freedom Index would be calculated as: -33 ÷ 143 x 100 =  -23.1.  If Legislator B in the Senate had a total score of +23, his or her Freedom Index would be calculated as: 23 ÷ 133 x 100 = 17.3.

To rank the legislators, the Center sorted them by their Freedom Index scores and then, in the cases of ties, by their scores in each category, in the following order: Regulatory Environment, Tax & Budget, Constitutional Government, Public Sector Labor, and Education Reform. When legislators’ results were still identical, the Center adjusted them in order of their apparent stature and power within their chambers.

Criteria

In determining each bill’s weighting, the following questions were considered:

  • Does the bill create or eliminate an agency, program, or function of government?
  • Does it give the government new or expanded power to prohibit or restrict activities in the free market? Examples may include licensure and other restrictions on legal business practices.
  • Is it unconstitutional or does it do violence to our concepts of federalism or separation of powers? Does it restrict property, speech, gun, or other constitutionally recognized rights or freedoms? Conversely, does it restore balance between the state and federal government, resume state authority over an issue under the 10th Amendment, or remove restrictions on constitutionally protected rights?

Other considerations were also brought into question:

  • Does the bill redistribute wealth or use tax policy or other incentives to reward specific interest groups with special favors or perks? Conversely, does it eliminate special favors and perks in the tax code or public policy?
  • Does it perform a function that can and should be performed by the private sector or restore functions to the private sector?
  • Does it grow or shrink the regulatory scope of an agency?
  • Does it directly or indirectly create/reduce taxes, fees, or other assessments?
  • Does it increase or decrease control of the private sector through rules, regulation, or statute?
  • Does it increase or decrease long-term debt or override or restore statutory or constitutional protections against long-term debt?
  • Does it give or reduce special benefits for government employees or politicians?
  • Does it promote government transparency and openness or does it restrict access to information that should be in the public domain?

It should be noted that the complexity not only of the law but of political theory in general can make assessments of the sort described above subjective and very difficult. People reviewing the index should consider the results to be the best judgment of the Center, given our collected experience and expertise.

Each legislator received a +1 or -1 vote factor, depending on whether he or she voted FOR or AGAINST a particular bill, respectively. If a legislator did not vote on a bill, he or she received a +0.25 if the bill passed or a -0.25 if the bill failed. Legislators who abstained from voting received a +0.75 or a -0.75 vote factor depending on if the bill passed or failed.

Go to main Freedom Index page.

2014 Legislative Scorecard

See how your Representative or Senator ranked in our 2014 General Assembly Freedom Index, as the state’s public policy continues to drift away from the principles of the free enterprise system.

[button url=”http://www.rifreedom.org/freedomindex” target=”_self” size=”medium” style=”royalblue” ] See legislator scores here [/button]

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Center Launches Local Transparency Portal

Does your city or town have an open government website? Tiverton taxpayers are the very first!

Find out how you can shine light on your municipality’s operations. Contact the Center at info@rifreedom.org .

[button url=”http://tivertonfactcheck.org/tiverton-transparency-payroll/” target=”_blank” size=”medium” style=”royalblue” ] Tiverton Transparency Site [/button]

2014 Campaign: Six BIG Issues No One is Talking About

6 Big Questions Not Being Asked of the Gubernatorial Candidates

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.

big-questionsEach 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.

  • Are you in support of a Constitutional Convention for Rhode Island?
  • What specific issues would you like to see addressed if a convention were to be approved by voters?
  • As governor, if the convention is approved, how would you help ensure that the Convention is conducted a non “politics as usual” manner?
    • Would you encourage the election of delegates in a nonpartisan manner?
    • How do you feel about sitting lawmakers’ being eligible to run as delegates?

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?

  • Do you support paying $23 million per year for ongoing operations? Or should we transfer the exchange to the federal government?
  • Major insurance premium increases were again approved for 2015, despite HealthSourceRI claims that it would decrease costs. Is this a concern to you?
  • Do you support consolidating all public and private healthcare in the state under HealthSource RI? (Per H7819, which was heard in House Finance in June 2014)
  • Are you aware of and do you support paying $10-15 million per year for the related Unified Health Infrastructure Project (UHIP)?
    • Do you support using financial information collected from individuals applying for health insurance via HealthSource RI to automatically enroll them in other statewide public assistance programs?
      • Given the projected $50 million per year increase in the state share of Medicaid costs, can the state afford similar additional increases in other public assistance programs?

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.

  • Do you support providing expanded educational choice for families? Why or why not?
  • Do you specifically support some form of educational voucher?
  • Do you support expansion of charter schools? Or expansion of the state’s existing Corporate Tax Credit Scholarship program?

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 …

  • As Governor, will you support significant sales tax reform?
  • Do you believe any major jobs creation policy idea would be worth pursuing if it was not revenue-neutral?

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.

  • Are you aware of and do you generally support the RhodeMapRI plan?
  • Do you believe that unelected federal bureaucrats should be dictating the future economic development of our state?
  • Or should any plan for Rhode Island be developed by our own elected officials?

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.

  • Do you share these concerns or do you believe they justify the larger goals of the plan?

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.

  • As governor, what will you do regarding ongoing negotiations with the SEIU?
  • What will you do to return workplace freedom to this group of childcare workers?
  • What is your position on the unions’ stated intention to unionize other private workers — as quasi public employees — in other industries?

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.”

Center Signs Letter Urging Executive Office Restraint

Following the President’s 2014 State Of The Union Address, the Rhode Island Center for Freedom and Prosperity, announced that it has signed a national letter urging President Obama to respect the separation of powers, a cornerstone of America’s system of government, and forgo his stated plans to implement new laws via Presidential Executive Order. The letter also demands that Congress aggressively fight every encroachment of its constitutionally defined powers.

A copy of the letter, originated by The Liberty Foundation of America, and signed by CEO Mike Stenhouse, behalf of the Center, along with about 20 other state based think tanks, can be viewed here.

38 Questions on the Superman Building

Would Saving Superman be Kryptonite to RI’s Economy?

Opinion

Local developer Arnold “Buff” Chace of Cornish Associates and a Massachusetts real estate investment fund, High Rock Development, recently released a “redevelopment plan” for the property at 111 Westminster Street in Providence’s Financial District popularly referred to as “The Superman Building.”  As the Providence Journal reports, the plan requires state-taxpayer-funded public subsidies of $39 million, $21 million in federal-taxpayer-supported tax credits, and up to $15 million in city-taxpayer-supplanted tax forgiveness in order convert a 441,000 square foot building from office use to primarily residential use.

$75 million … sound familiar? Given the disastrous track record of Rhode Island’s “public-private partnerships” of late, the Rhode Island Center for Freedom & Prosperity thought it might be appropriate to pose certain questions relating to the request.  38 questions, in fact.

38 Questions

1.    Did we learn nothing from 38 Studios?  With many multi-million-dollar years ahead of us to cover a failed gamble on subsidized video games, one would think that the state’s ability to adequately analyze this sort of massive investment and its risks would be a matter of suspicion.

2.    Is this a priority for the state?  Have we solved enough of our education, social services, and infrastructure problems to justify applying our treasure and attention to a massive, risky, and speculative real estate investment?

3.    If we do have budget dollars to spare, why wouldn’t we invest them in infrastructure improvements that benefit all economic drivers?  We can think of at least one bridge that could lose its looming tolls faster than a speeding bullet.

4.    Do the voters responsible for this big check get a say as to whether they want to be in the apartment building investment business?  Does their Constitution require their approval of such expenditures, or at least a legislative supermajority? (Should it?)

5.    If you call it a tax credit, but you then let the developer sell it to other taxpayers, isn’t it just a really inefficient way of handing out a multi-million-dollar corporate welfare check?

6.    Why do we need to involve tax credit brokers, anyway?  It would be a lot easier to keep track of all the people who stand to profit if the money flowed out of the state check book? Or would transparency be like Kryptonite to the superpowers of the deal makers?

7.    How about a tax-credit lottery? Tens of thousands of small businesses would love not to pay their full tax liabilities for a year or two.

8.    According to the developer, 775 office buildings are in the City of Providence, representing over 15 million square feet of space.  Do subsidies to one disadvantage the other 774?

9.    For that matter, why not redirect the $75 million in subsidies to pay most of the first-year cost of the proposed elimination of the state sales tax?  The Center’s Zero.Zero plan, currently before the General Assembly, would put that money in the pockets of every individual Rhode Islander and every business.  That would spark new economic activity, not just moving dollars from one neighborhood or town to another.

10.    Why can’t the developer phase in the conversion over time, using profits for additional remodeling?  They project that “stabilization” of the downtown Providence office market will take 12 to 15 years, saying it would take 24 to 30 years if we don’t give them piles of taxpayer money (Advisors Inc. Economic and Fiscal Impact Study dated April 25, 2013 [HR&A], page 26).  Cautious, phased-in funding over 5 to 10 years would achieve the same goal without the up-front risk.

11.    For that matter, its own market study says that the Class A office market in Providence is seeing its lowest vacancy rate in 10 years and that midsize office suites could generate $25 per square foot in rent.  Is that really not viable, or is it just harder to hide previous losses in smaller projects?

12.    And while we’re at it, how can the HR&A report (page 30) claim that the “magnitude” of the project implies that the spending is “net new”?  They seem to be arguing that 95% of the spending is “new to the region” because a project of this size “would not have otherwise taken place” without the taxpayer subsides.  If Rhode Islanders have that much money lying around doing nothing, perhaps the developers should just take up a collection.  Or maybe there’s a reason the project can’t gather funding without involving politics and taxes.

13.    Why does the developer get to retain $15 million in declared value while arguing functional obsolescence at the same time?  If you need this bailout to keep the lights on (literally), isn’t the building really worth nothing?

14.    Is it somehow our problem that the owners paid too much for the building in the first place?  In the nation’s 46th worst (of 51) real estate market, there are probably a lot of bad bets still shaking out around the state. Should other property owners start putting the word “iconic” in all of their materials?

15.    The various “public-private” redevelopment successes touted by the developers in other states don’t seem to have required quite the same sort of taxpayer-funded cash in hand.  Can they cite a successful effort that invested a similar amount of taxpayer money on a per-square-foot basis that wasn’t an investment in public infrastructure or funding traded for equity?

16.    Did the building owners have an appraisal done when purchasing the building in 2008?  They say they’ve spent $39,200,000 to date on the property.  Since we’re being asked to make the same investment, shouldn’t we know their upfront purchase price, how much they’ve spent since then, what they were paid in rent over the years, and what they have taken out in management fees and profits?

17.    Would a private investor get in league with someone whose own numbers indicate a loss of almost $25 million in five years on this project?

18.    Who’s on the hook for the bad investment?  Who invested the equity to allow the company to purchase the property, and who loaned them the money?  Who are we really bailing out here?

19.    More bluntly, does our proposed multi-million-dollar subsidy go to the new development, or does the plan include paying off old debt or old investors?

20.    What is the tax value of the write-down to the developer and/or its investors or lenders?  Will the state see the claimed $120,000 in corporate income taxes (HR&A, page 33)?  Will the EDC exempt the sales tax on construction materials?  Will the millions in federal payroll tax dollars that leave Rhode Island during construction be counted as an offset and a negative economic impact?

21.    The report calls the proposed rate of return for investors “below market,” at 2–6%. So what exactly is motivating an investor to invest?  Love of DC Comics–style architecture? Will there actually be other new investors, or will RI taxpayers be left holding Superman’s cape?

22.    If we later find out that the money players who are already over their skis on the project are taking the reduced return instead of losing everything, would that be called “fraud”?

23.    What kind of development fees, management fees, or other payouts to the developer, its investors, or its lenders are going to be made during the life of the project?

24.    Specifically, what do we get for $3,105,678 in “legal & professional” fees and $3,342,050 in “administration & development” fees?  (Would it be too bold to ask who exactly gets that $6,447,728?)

25.    If it’s an investment, do we get equity?  If the developer puts in $10,000,000 and we put in $40,000,000, do we get 80% ownership?

26.    How can the developers claim that the $75 million will drive economic activity without subtracting the $75 million that taxpayers will no longer have? Simply taking it from us and spending it yourself does not yield new economic activity.  A better term than the repeatedly used “generate” (HR&A, page 2, for example) would be “relocate” (or perhaps “redistribute”).

27.    Who thinks it is a compelling argument that the project will save $740,000 in lost property tax revenue over the long term?  The subsidies amount to roughly 100 times that amount. If we took those tens of millions and simply lowered the commercial tax rate in the City of Providence and across Rhode Island by eliminating the two-tiered tax system that today punishes and drives out businesses, it might lead to new tenants downtown and push up property values and assessments.

28.    In the absence of such market forces, where will the anticipated tenants come from?  Won’t they just leave the suburbs or the neighborhoods and move to the subsidized building?  Which cities and towns will lose the professional residents the project intends to attract?

29.    Who’s going to get those Burnside Park views?  The developers’ “tenant profile” talks about “young professionals, older professionals, Boston commuters, empty nesters, and students.”  Not exactly those most in need.  This table of expected annual incomes for each unit type assumes that housing costs represent about one-third of take-home income. In that case, our average beneficiary is making around $75,000 per year.

38questions-table1

30.    Is welfarequeenus hipsterus a rare breed of urban parasite noted for its aversion to suits and Windows-based products and its keen sense that everybody else can afford to pay a bit more for their greater good?

31.    Man of Steel aside, if we’re subsidizing “stainless steel appliances” and “granite kitchen and bathroom counters,” can we leave our doggie bags there when we go out for a night on the town after dinner? How about using the “24 hour fitness center” and “24 hour concierge/security”?

32.    Given the roughly $75 million in total proposed handouts, the proposal amounts to a subsidy of about $200 per square foot for 265 new households (HR&A, page 34.)  That kind of money builds a nice house; how about we just build a bunch of those and give them away?  That certainly seems more equitable than subsidizing one tall building in a single bound.

33.    How can they characterize a projected 104 jobs as economic growth?  Aren’t the people who will live there economically active today?  Same goes for resident spending estimates (HR&A, page 36.)  Even if every resident moved here from out of state, the HR&A study (page 38) only projects $697,000 in annual revenue to the State of Rhode Island, for which it calculates a net present value of $8,600,000.  So we invest $39 million in cash, and another $36 million in incentives, and we know on day one that over $60 million of that subsidy is a write off? Wouldn’t it be a better investment to spend $105 million to eliminate the sales tax and clear a path for 25,000 jobs?

34.    How can they claim a “multiplier effect” from jobs that are presumably mostly here already?  The “IMPLAN” model (HR&A, pages 41–43) for estimating economic impacts and multiple effects is certainly respected and credible for its purposes, but the HR&A study utterly misuses it.  The IMPLAN model assumes new economic activity, not simply the shifting of resources within the state; that’s more like a TRANSPLAN.

35.    Are we crazy to think that myopic economic analyses, absurd corporate welfare handouts, and inept economic meddling contributed to the fact that “Rhode Island’s economy suffered more from 2008 to 2012 than the neighboring New England states,” as the developer’s market study puts it?

36.    Mightn’t a broad-based reform help replace the roughly 1.5% population loss the study anticipates for the state with population and economic growth?  As the developers’ own analysis notes, we have 35,900 fewer jobs in Rhode Island today than we had at the peak of 2006.  Take out the 112,000 largely government funded healthcare and education sector jobs, and the 49,700 or so public sector jobs (U.S. Census Bureau 2011 Data for Full Time Equivalent Employment, state and local), and our current private employment of 388,000 is around 10% below the peak.

37.    If this deal ends in disaster, and taxpayers lose again, do we at least get the consolation prize of watching some political player get banished to Krypton?

38.    In the spirit of Rhode Island’s economic development habit of ending up where it began, we’ll close with: Did we learn nothing from 38 Studios?

On a Serious Note

Many years ago, the EDC liked to talk about “traded services” as the types of activities that represent economic growth for a state.  They are not activities that occur simply because of their proximity to the local market.  For example, a restaurant is not a traded service, because people will not travel to South Carolina for dinner.  On the other hand, jewelry manufacturing is a traded service, because another state can provide incentives or an economic environment that would draw that business away.

It follows that economic development policy should be focused on activities that are portable, or traded.  To subsidize non-traded services is simply to shift resources from one pocket to the other, while dropping a few dollars on the ground in costs and expenses.

Moving a Rhode Islander from Pawtucket to Providence is economic activity, but it is not economic growth.  The same can be said for the new dry cleaner or coffee shop that the resident will now frequent.  The construction activity for a new Providence apartment may be simply offsetting the same type of construction activity back in Central Falls.

Except that Pawtucket, Central Falls, and the other cities and towns in the state will never know what might have been.

RI Medicaid Abuse Puts New Spin on “Laundering” Taxpayer Dollars

MEDIA: NBC- Channel 10, ABC Channel 6

The State of Rhode Island has developed a new spin on the idea of “laundering” money, as part of the cycle of taxpayer dollars that end up in the pockets of the special few, according to a follow-up post today on The Ocean State Current, the journalism wing of the RI Center for Freedom & Prosperity.

According to the post by Justin Katz, some unionized laundry workers at the Eleanor Slater Hospital, and throughout the Department of Behavioral Healthcare, Developmental Disabilities and Hospitals (BHDDH), routinely double or even triple their salaries to take home over $123,000 per year, due to suspiciously high overtime payments.

The post follows an investigative article published yesterday in The Ocean State Current about six-figure overtime payments to government employed nurses and psychiatrists.

These new laundry worker revelations depict the waste and abuse in the laundering scheme where local and national taxpayer dollars are recycled first through the government via collection of taxes, then, in the Eleanor Slater case, sent to state-run facilities in the form of excessive Medicaid payments, with the money then further cycled directly into the pockets of privileged union employees – in this case, to laundry workers via exorbitant overtime payments.

Result: our hard-earned taxpayer dollars legally recycled to lavishly benefit government workers.

The data for The Current’s article and post was collected by the Center, as part of its transparency effort.For more information about salary and overtime payments made to other state employees, please visit our popular transparency website, www.RIOpenGov.org.

High Overtime, Evasion Raise New Questions About Medicaid Fraud and Waste

Related Links: GoLocalProv, New Allegations Surface in RI Medicaid Fraud

In the wake of an investigative article published this morning in The Ocean State Current about suspiciously high overtime payments to government employed nurses and psychiatrists, the Rhode Island Center for Freedom and Prosperity plans to publish additional related information in the coming week.

Considering that public dollars are being paid to government workers who, for years, have collected six-figures in overtime from a facility that was cited in a recent Medicaid fraud and waste report, “one really has to wonder if the State of Rhode Island is defrauding itself: at taxpayer expense”, commented Mike Stenhouse, CEO for the Center.

The recent Block Report cited the Eleanor Slater Hospital in Cranston, a state-run facility that charges abnormally high fees, as a potential source for abusive Medicaid spending. In her article, Suzanne Bates, a freelance journalist, details how nine employees at that same facility received over $100,000 in overtime compensation alone, pushing gross annual pay for some to over a quarter-of-a-million dollars.

The article also describes the difficulties Bates and the Center faced in getting an explanation and in obtaining the data. The investigative article raises questions that go to the heart of our state government’s inability to manage its budgets in a way that serves all Rhode Islanders:

  • Why would the state-run Eleanor Slater Hospital, in Cranston, be so short-staffed that it must pay over one million dollars in overtime to just 9 employees year after year?
  • Is our state truly being served well if union contracts make it more cost-effective for the Dept. of Behavioral Healthcare, Developmental Disabilities and Hospitals (BHDDH) to pay exorbitant overtime to some, rather than to hire more people during these hard economic times?
  • If taxpayers are ultimately paying almost the entire bill for this expensive workforce through both state and federal Medicaid dollars, where is the oversight to keep these costs under control?

Later this week, the Center plans to publish a broader list of overtime payments made to other state employees. Next week, the Center plans to launch a new module – that lists regular and overtime compensation for all state employees – to its popular transparency website, www.RIOpenGov.org .

The Ocean State Current is the journalism wing of the RI Center for Freedom & Prosperity. The data for The Current’s article was collected by the Center.