Mike Stenhouse: Medicaid cuts that left, right can support

As published in the Providence Journal:

 

Gov. Gina Raimondo’s “Reinventing Medicaid” is not a new concept. In 2008, Rhode Island became the nation’s first state to receive a Medicaid global waiver, and since then many other states have explored ways to control burgeoning costs.

However, in 2012, after a bruising debate about President’s Obama Affordable Care Act and associated state exchanges, the Chafee administration took the further step of accepting the federal government’s program to expand Medicaid. As our Center warned, Medicaid costs in our state have exploded. Governor Raimondo is correct in asserting that Medicaid’s rate of growth is unsustainable from a budget perspective.

The question now is: Can cuts be implemented without endangering the safety net for those who are most in need of Medicaid services? One approach that everyone should agree with is to eliminate fraud and abuse and to ensure that taxpayer-funded benefits are provided only to those who are eligible. This has always been a nice-sounding goal, but difficult to achieve in practice.

But there is at least one proven solution, which our center discovered when we reached out to a national partner, the Foundation for Government Accountability (FGA), which focuses on health-care issues. FGA is successfully promoting a program that has saved hundreds of millions of Medicaid dollars in states such as Illinois and Pennsylvania.

The idea revolves around Medicaid eligibility. Without proper database mining and detailed eligibility verification for prospective and current enrollees, an FGA report shows that many states regularly extend benefits to individuals who are not eligible to receive them. Examples include payments to dead people, to wealthy lottery winners, cases with incomplete documentation, and individuals lying about their incomes.

Yet, given our Center’s strong opposition over the years to HealthSource RI and to Medicaid expansion, we wondered if we were the proper messenger to introduce this idea to state officials. We were pleased when both Elizabeth Roberts, the secretary of the Executive Office of Health and Human Services, House Speaker Nicholas Mattiello’s policy director separately agreed to meet with me and an FGA executive in March. Acknowledging our philosophical and past differences, the secretary and her staff were very gracious and highly interested in the FGA solution, as was the speaker’s policy team.

The FGA approach includes three steps: better verification at the front door; ongoing verification checks; and public prosecution and oversight. There are certain third-party vendors FGA identifies that can conduct national database checks, above and beyond the technical capacity of many states. With $90 million targeted by the governor in Medicaid cuts, this solution alone, FGA estimates, could save tens of millions in Rhode Island, allowing other critical services to be maintained.

We have been informed that this idea will be one of the recommendations included in Governor Raimondo’s work-group report. It could manifest as a request for proposals from the executive branch or via legislation that requires aggressive Medicaid eligibility verification.

Will Rhode Island try to implement this win-win cost cutting solution? If it does, it will be a reform both the left and the right should readily agree to support.

 

Mike Stenhouse is CEO of the Rhode Island Center for Freedom and Prosperity.

 

Read it on PROJO.com Here. 

Rhode Island Employment Snapshot, March 2015: A Return to Seasonal Overstatement?

[Click here for the printable one-page PDF of this post.]

Rhode Island’s employment data has developed a seasonal pattern — and it isn’t captured in the “seasonal adjustments” that the federal Bureau of Labor Statistics (BLS) applies to the data. Throughout the spring and early summer, employment numbers in the Ocean State undergo inexplicable improvement with no relation to other empirical or anecdotal evidence in the state. In the latter half of the year, the increases stop, perhaps receding a bit. Then, the BLS revises the numbers the following January, dropping both employment and the labor force (employed plus looking for work) and smoothing out the curves.

We’re currently in the inexplicable-growth season.

According to the BLS, in March, a net 2,401 Rhode Islanders gained employment, while 2,074 joined the labor force. Those two variables are the basis for the unemployment rate. The first chart below shows that, with the melting of the snow, the labor force turned around its steady, eight-year decline, while employment has taken off like a rocket. We’ll see.

The second chart shows the degree to which it will take more than statistical blips for the Ocean State to catch up with its neighbors. Both Connecticut and Massachusetts are now well above their labor force and employment rates as of January 2007, while Rhode Island isn’t even close. With the annual downward revisions of the monthly estimates, it’s been a long, frustrating climb for Rhode Islanders.

The final chart illustrates the point from a different angle. The blue line shows the official unemployment rate; the red line shows what the state’s unemployment rate would be if residents weren’t giving up their quest for work. With the big jump in the labor force, the difference between the two lines dropped, this month. Still, unemployment would be 10% with the January 2007 size of the labor force. Conspicuously, though, the labor force only jumps when employment does. Otherwise, the unemployment rate would go up, which is something the public would notice.

RI-laborforceandemp-0107-0315

RIMACT-laborforceandemp-0315perc0107

RI-unemploymentrate-steadyLF-0107-0315

The Math of Educational Choice

Introducing the RI-DIMES Fiscal Modeling Tool

Empowering parents with greater choices when it comes to determining the best educational path for their children is not only supported by strong moral arguments, but can also lead to a net positive fiscal impact on the bottom line of public school districts, very different from the math of charter schools.

Read “The Math of Educational Choice” report

Click here for a school-district by school-district summary table of fiscal results

EXECUTIVE SUMMARY

WINWINWIN

The Center, in conjunction with a PhD economics professor, has developed a fiscal modeling tool, Rhode Island District Impact Model for Educational Scholarships (RI-DIMES), that can project the statewide and district-by-district fiscal impact of the educational scholarship program component of the 2015 bipartisan legislation submitted in both the Rhode Island House of Representatives and Senate. In March 2015, the Center published a report, The Way of the Future, describing the Bright Today Scholarship program outlined by the legislation.

The RI-DIMES projections demonstrate that conventional beliefs about the fiscal effects of voucher-type scholarship programs exaggerate
the risk and, if the policy is well designed, do not apply at all.

In the first year, with fewer than 3% of public school students expected to opt for scholarships, which are capped at $6,000, RI-DIMES projects, under the “core” policy providing scholarships to current public school students who migrate out of the system (including new students), that:

  • Public school districts will see large aggregate net fiscal savings. With statewide savings expected to reach $17 million, 33 of 36 local districts will realize net savings in the first year. This figure could rise to $32 million per year and include all districts but one, under more-optimistic assumptions.
  • Funding per public school student will actually rise in every school district, by an average statewide increase of $316.
  • Total public and private spending on education will increase by $17.2 million, because the scholarships will provide an incentive for families to invest more of their private dollars into their children’s education.

When considering a “universal” policy as described in current legislation, in which current private school students are also granted partial scholarships, the net fiscal impact for public school districts is diminished, providing a wider range of possible first-year outcomes:

  • Under the projected assumptions, statewide savings would drop to about $1.85 million, with 50% of the public school districts still realizing net savings.
  • Under more-optimistic assumptions, all but
    one school district would realize net savings, with the statewide total savings approaching
    $18 million per year.

With our public school buildings in dire need of repair and maintenance, and with property taxes already high across the state, the proposed educational savings account legislation in just five years could free up $85 million to $150 million in revenue that could be applied to relieve these two pressing issues.

School Choice Saves Money for School Districts!

Families can be empowered with choices and student achievement can increase … while public school districts can realize net fiscal savings.

Bright Today Education Scholarships are the way of the future!

[button url=”http://rifreedom.org/?p=13690″ target=”_self” size=”medium” style=”royalblue” ]Read “The Math of Educational Choice” report[/button]

STATEMENT: Serious Questions for House Oversight Committee Hearing on RhodeMap RI

FOR IMMEDIATE RELEASE
April 9, 2015


Critical Questions About Controversial RhodeMap RI
Plan Must Be Addressed

How did a legitimate economic development plan request get hijacked and transformed into a radical social equity agenda?

Providence, RI — Critical questions must be asked and answered when Kevin Flynn, Associate Director of the state Division of Planning, testifies in front of the House Committee on Oversight at 4:30 pm this afternoon in Room 101 at the State House, suggests the RI Center for Freedom & Prosperity, a leading critic of the controversial RhodeMap RI plan, which will be the topic of the hearing.

The so-called economic development plan, which the Center argues is a radical social equity experiment in disguise, was adopted into Rhode Island’s official “Guide Plan” in December of 2014 by un-elected bureaucrats, without any significant public debate. Last fall, the Center challenged the Chafee administration and the RI Foundation, major supporters of the plan, to conduct an open and public debate on the matter, however, the requests were rejected or unanswered.

“Finally, the public will hear from the architect of this scheme, who, to date, has not been publicly questioned or held accountable for his actions,” commented Mike Stenhouse, CEO for the Center. “We know that in other states, similar plans have resulted in the infringement of individual property rights and the sovereignty of municipal governments. Mr. Flynn must be questioned as to what specific assurances he can point to that would preclude these same violations from happening in Rhode Island.”

The Center recommends that committee members
focus questions on a few critical areas:

  • How did a low-level, unelected bureaucrat receive the authority to sign-off on a document committing the entire state of Rhode Island and its 39 municipalities to adopt the six “livability principles” defined by HUD, a federal agency (U.S. Department of Housing and Urban Development)?

  • Was the 2013 legislative process manipulated, in a bait-and-switch maneuver, to corrupt a legitimate economic planning process by transforming it into a radical social-engineering experiment?

  • Are land seizures or private property development restrictions likely to become more prevalent under aggressive eminent domain or transfer of development rights mandates?

  • Given the devastating effects on the tax base in the city of Woonsocket, a poster child for HUD programs, why should every Rhode Island municipality be mandated to adopt similar programs, which invariably result in inequitable levies of property taxes?

  • Should Rhode Island risk its future economic viability on the notion that racial and income quota mandates, when it comes to residential compositions in neighborhoods, are a driver of economic growth?

Concerned citizens who value the concept of individual property rights are encouraged to attend the hearing.

The Center also commends the bi-partisan legislative sponsors of multiple legislative bills that would weaken or repeal many provisions of the RhodeMap RI plan, especially those that would create new mandates on municipalities. The Center has listed descriptions of a number of pro and anti RhodeMap RI pieces of legislation on its website.

2015 RhodeMap RI Related Legislation

RhodeMap RI targets individual property rights

A number of recommendations made by the Center earlier this year in its Legislative Antidotes to RhodeMap RI post, are encapsulated in many of the bills below, which have already been introduced in the 2015 RI General Assembly session. Thank you to PRARI (the Property Rights Alliance of RI) for compiling this legislative list and descriptions.

Recently Introduced Legislation, RhodeMap RI Opt Out Provisions

1. H6040 http://webserver.rilin.state.ri.us/BillText/BillText15/HouseText15/H6040.pdf

Prohibits affordable housing program requirements, that exceed those set forth in the general laws of the state, from being included in the statewide planning program. Sponsors: Price, Roberts, Chippendale, Costa and Nardolillo

2. H6041 http://webserver.rilin.state.ri.us/BillText/BillText15/HouseText15/H6041.pdf

Allows cities and towns to opt out of provisions in the state guide plan that relate to affordable housing and the related land use provisions, by providing timely written notice of that decision to the chief of the RI Division of Planning.   Sponsors: Roberts, Price, Chippendale, Filippi and Nardolillo

3. H6042 http://webserver.rilin.state.ri.us/BillText/BillText15/HouseText15/H6042.pdf

Allows cities and towns to opt out of provisions in the state guide plan that relate to affordable housing and the related land use provisions –by providing timely written notice of that decision to the chief of the RI Division of Planning. Sponsors: Costa, Lancia, Giarrusso, Reilly and Corvese

4. H6043 http://webserver.rilin.state.ri.us/BillText/BillText15/HouseText15/H6043.pdf

Repeals the provisions and references to compliance with the state guide plan relative to local comprehensive planning for land use. Sponsors: Nardolillo, Chippendale, Price and Roberts

Other Bills

1. H5643 http://webserver.rilin.state.ri.us/BillText/BillText15/HouseText15/H5643.pdf 

Eliminates the state mandate requiring cities and towns to include an affordable housing program in the local comprehensive plan and actually prohibits its inclusion in the local comprehensive plan.  (section 45-22.2-6, “RI Comprehensive Planning and Land Use Act”) Sponsors: Price, Reilly, Roberts, Costa, and Filippi

2. S653 http://webserver.rilin.state.ri.us/BillText/BillText15/SenateText15/S0653.pdf (Companion to H 5643)

Eliminates the state mandate requiring cities and towns to include an affordable housing program in the local comprehensive plan and actually prohibits its inclusion in the local comprehensive plan.  (section 45-22.2-6, “RI Comprehensive Planning and Land Use Act”) Sponsors: BIPARTISAN – Cote, Raptakis, ONeill, Gee and Kettle

3. H5644 http://webserver.rilin.state.ri.us/BillText/BillText15/HouseText15/H5644.pdf

Eliminates the state mandate requiring cities and towns to include an affordable housing program in the local comprehensive plan and provides an opt-out provision for this. It also provides an opt out provision from the state guide plan relating to affordable housing programs.  (section 45-22.2-6, RI Comprehensive Planning and Land Use Act”) Sponsors: Roberts, Price, Filippi, Nardolillo, and Costa

4. S654 http://webserver.rilin.state.ri.us/BillText/BillText15/SenateText15/S0654.pdf (Companion to H 5644) 

Eliminates the state mandate requiring cities and towns to include an affordable housing program in the local comprehensive plan and actually prohibits its inclusion in the local comprehensive plan.  (section 45-22.2-6, “RI Comprehensive Planning and Land Use Act”) Sponsors: Cote, Raptakis, ONeill, Gee, Kettle

5. H5713 http://webserver.rilin.state.ri.us/BillText/BillText15/HouseText15/H5713.pdf

Requires General Assembly approval of the state guide plan and any amendments to the state guide plan. (section 42-11-10 “Department of Administration”) Sponsors:  Filippi, Costa, Price, Giarrusso, and Morgan

6. S26 http://webserver.rilin.state.ri.us/BillText/BillText15/SenateText15/S0026.pdf

Exempts Coventry, E. Greenwich and W. Greenwich from all the terms and provisions of 42-64.17-1 entitled “Long Term Economic Development Vision and Policy”. Sponsors: BIPARTISAN – Raptakis, Kettle, Morgan, Cote and ONeill. Heard March 10, held for further study.

Bills to Address New Definition of Low and Moderate Income Housing

1. S172 http://webserver.rilin.state.ri.us/BillText/BillText15/SenateText15/S0172.pdf

Allows mobile homes to be included in affordable housing stock in Coventry. (Section 42-128-8.1) Sponsors: BIPARTISAN – Raptakis, Kettle and Fogarty

2. H5714 http://webserver.rilin.state.ri.us/BillText/BillText15/HouseText15/H5714.pdf

Changes what is included in the calculation of affordable housing stock.  (Section 42-55-21.1 “RI Housing and Mortgage Finance Corporation”) Sponsors: BIPARTISAN – Filippi, Hearn, Marcello, Price, and Ackerman

3. S498 http://webserver.rilin.state.ri.us/BillText/BillText15/SenateText15/S0498.pdf

Allows mobile and manufactured homes to be counted as low and moderate income housing for purposes of compliance with Comprehensive land use plans. (Section 45-53-3 “Low and Moderate Income Housing”) Sponsors: BIPARTISAN – Fogarty, Ottiano, Kettle, and DiPalma

Bills to Address Eminent Domain

1. H5774 http://webserver.rilin.state.ri.us/BillText/BillText15/HouseText15/H5774.pdf

Public use is defined as it relates to eminent domain. (Chapter 37-6 “Acquisition of Land”) Sponsors: BIPARTISAN – Costa, Trillo, Newberry, Giarrusso, and Shekarchi

2. S622 http://webserver.rilin.state.ri.us/BillText/BillText15/SenateText15/S0622.pdf (Companion to H 5774)

Requires that condemning land cannot include taking for private entity for purpose of economic development. (Chapter 37-6 “Acquisition of Land”) Sponsors: Cote, Lombardo, Archambault, Lombardi, McCaffrey

Bills to Increase the Maximum Property Tax on Qualifying Low Income Property

1. H5328 http://webserver.rilin.state.ri.us/BillText/BillText15/HouseText15/H5328.pdf

Increases the maximum tax rate on qualifying low income property from 8% to 12% of previous years gross rent. (Section 44-5-13.11 “Levy and Assessment of Local Taxes”) Sponsors: Phillips, Morin, Casey, Bennett, Almeida

2. S32  http://webserver.rilin.state.ri.us/BillText/BillText15/SenateText15/S0032.pdf

Increases the maximum tax rate on qualifying low income property from 8% to 10% of prospective gross rent.  (Section 44-5-13.11 “Levy and Assessment of Local Taxes”) Sponsors: Picard, Cote and Goodwin

3. S33 http://webserver.rilin.state.ri.us/BillText/BillText15/SenateText15/S0033.pdf

Increases the maximum tax rate on qualifying low income property from 8% to 10% of previous years gross rent. (Section 44-5-13.11 “Levy and Assessment of Local Taxes”) Sponsors: Picard and Goodwin

4. S562 http://webserver.rilin.state.ri.us/BillText/BillText15/SenateText15/S0562.pdf

Allows an increase in the maximum tax rate on qualifying low income property from 8% to 10%  if  LMIH stock represents 12% or more. (section 44-5-13.11 “Levy and Assessment of Local Taxes”) Sponsor: Picard

5. S112 http://webserver.rilin.state.ri.us/BillText/BillText15/SenateText15/S0112.pdf

Allows an increase in the maximum tax rate on qualifying low income property from 8% to 15% when budget commission or court appointed individual involved with city/town. Sponsor: Picard

BAD BILLS

Bills to Allow State Intrusion on Municipal Property Taxation

1. H5518 http://webserver.rilin.state.ri.us/BillText/BillText15/HouseText15/H5518.pdf

Mandates that municipalities do not charge impact fees to developers for 36 months or until 1,500 permits statewide. (section 45-22.4 “RI Development Impact Fee Act”) Sponsors:  Shekarchi, Edwards, Solomon, Ucci, and McKiernan

2. H5545 http://webserver.rilin.state.ri.us/BillText/BillText15/HouseText15/H5545.pdf

Mandates that municipalities do not charge impact fees to developers for 36 months and mandates the reduction of municipal permit fees. (section 45-22.4 “RI Development Impact Fee Act” and section 23-27.3 “State Building Code”) Sponsor:  Jacquard

3. H5550 http://webserver.rilin.state.ri.us/BillText/BillText15/HouseText15/H5550.pdf

Mandates that permit fees and special fees for new construction will be determined by the state building code commission, not the local municipality.  (Chapter 23-27.3 “State Building Code”) Sponsors: BIPARTISAN – Shekarchi, McKiernan, Trillo, Lima, and Edwards

Bills to Divert Funds To Densely Populated Cities

1. H5552 http://webserver.rilin.state.ri.us/BillText/BillText15/HouseText15/H5552.pdf

Creates an Urban Infrastructure Commission (to include 4 members of a 2,000 per square mile municipality) along with an Urban Renaissance Fund and provide that the state plays a central role in developing and supporting a targeted urban infrastructure program. (Title 42 – “State Affairs and Government”) Sponsors: McKiernan, Shekarchi, Lombardi, Carnevale, and Almeida

To GOVERNOR’S MEDICAID WORKING GROUP: A Proven Policy Idea to Save Money

A proven and bi-partisan cost saving measure that has produced significant savings in other states has been recommended to state officials by the RI Center for Freedom & Prosperity and its national partner, the Foundation for Government Accountability (FGA).

It is well-known that fraud, abuse, and lack of enforcement plague many state and federal welfare programs, often resulting in wasteful spending and a potential lack of funds for the truly needy.

FGA’s recent “Stop the Scam” report discusses how many states are not conducting detailed enough Medicaid eligibility and verification procedures for new and existing enrollees.

From issuing Medicaid and welfare payments to dead people, to lottery winners, to enrollees who did not provide proper documentation, and to people under-reporting their incomes, a process that provides for more detailed screening and periodic check-ups can result in significant cost savings for states.

According to FGA, “Illinois and Pennsylvania instituted proactive audit reforms with bipartisan support, and together they have saved hundreds of millions of dollars. Pennsylvania discovered thousands of ineligible individuals receiving benefits, removing 160,000 individuals in just the first 10 months of the audit, saving $300 million. Illinois quickly followed suit and removed 300,000 individuals in the first year, 400,000 more in the second, with expected taxpayer saving of $350 million per year in Medicaid alone.”

As with many states, Rhode Island has its own screening and verification process. However, according to FGA, rarely do they have the capacity to conduct the deep-diving to search the federal and state databases necessary to root out more subtle cases of ineligibility. 

The Center recommends legislative action or an executive order requiring Rhode Island to utilize third-party vendors that specialize in determining if enrollees have retained eligibility in Medicaid.

A thorough examination of FGA’s recommended “best practices to stop welfare fraud” should be conducted by Rhode Island  health officials to determine if the vendors suggested by FGA may be able to help the state identify additional cases of ineligibility.

POLICY BRIEF: Welfare Reform in Rhode Island

POLICY RECOMMENDATIONS: In tandem with plans to realign the institutional incentives of Rhode Island’s welfare services, the RI Center for Freedom and Prosperity recommends the following specific reforms:

  • Implement a cash diversion program for new enrollees. Thirty-three other states have such measures to provide lump-sum cash assistance in lieu of full enrollment in the state’s welfare program.
  • Decrease the lifetime limit for assistance through the state’s Temporary Assistance for Needy Families (TANF) program from its current 48-month limit.
  • Enforcement. Increase accountability by implementing stricter sanctions for noncompliance with work requirements. In Rhode Island, only 11% of TANF recipients are actively engaged in work-related activities, the second-worst rate in the nation. Strengthening the sanctions for failure to participate in work activities would likely increase work participation substantially in Rhode Island.

Download the PDF here

RI’s Poor Welfare Reform Performance

For the Ocean State, perhaps the most shocking finding in the Heartland Institute’s 2015 update to its “Welfare Reform Report Card” is that only 11.0% of Rhode Islanders receiving welfare payments through the Temporary Assistance for Needy Families (TANF) program are “working.” In this case, “working” would even include such activities as attending classes, doing community service, and receiving therapy to improve “work readiness.”

Nationally, TANF work participation ranges from 7.3% in Massachusetts to 68.7% in Wyoming, with a national average of 29.5%, according to the study. In the original 2008 version of the report card, Rhode Island ranked 43rd, with a work participation rate of 24.9%.

In that one statistics, Rhode Islanders can see the results of their state’s welfare-to-work policies, which Heartland graded an F and ranked 45th in the country. That grade and rank are given based on the Ocean State’s overall weakness in five areas of reform that should serve to draw people facing hard times toward work and self-sufficiency.

The Center recommends that lawmakers seriously consider implementing stronger reforms in areas of weakness. Legislators should be careful, however, to craft policies that take account of their state’s actual and unique circumstances.

Work Requirements

The requirement to work is the only area in which RI grades above a C, according to Heartland. As the state’s abysmal 11% work participation rate shows, however, it would be wrong to see the A grade as an indication that nothing can be done.

One consideration is that Heartland only applies three grades to this section: A for immediate work requirement, C for up to a three-month delay, and F for more than that. In Rhode Island, the immediate requirement isn’t so much working as having an “employment plan.”

A second consideration is, as mentioned above, that a wide variety of activities that might be better termed “work preparedness” count for the plan, and the General Assembly is moving in the wrong direction. In their 2014 session, for example, legislators removed the six-month limit that work-readiness education programs could be used to fulfill the requirement (2014 H7242 and S2476).

The third consideration is that Rhode Island’s statutes allow for a wide variety of exemptions, especially for single-parent families (60% of families receiving payments). So, while welfare recipients may technically be required to follow through on an employment plan, the requirement is easily waived and easily answered with activities that aren’t actually work.

Cash Diversion

Cash diversion is one of the two areas in which Rhode Island receives an F, because it has no such policy in place, according to Heartland, although the General Assembly has authorized it. The program would allow social workers to give those in need one-time payments that are relatively large, typically with a stipulation that they cannot receive TANF payments for a period afterward. The idea is to help cover one-time costs, like car repairs, that help family members keep working, rather than ushering them onto welfare.

In this area, the Center would caution that an additional cash diversion program should only be implemented as part of a strong welfare-to-work reform initiative, preferably with bureaucratic reforms that better align agencies’ incentives with the goal of reduced welfare rolls. In an agency without such a culture, or in which cash diversion programs are simply added to other benefits, they could make existing problems worse.

Regardless of whether such a program is created, the General Assembly should remove or limit the blanket authority that currently exists in law.

Integration of Services

Another area in which the Center would advise caution is integration of services, for which Heartland gave Rhode Island its second F.

On paper, the idea is sound. People toward the bottom of Rhode Island’s economic ladder probably don’t only need some money and a soft push into a job search. They also need various forms of therapy (e.g., for substance abuse) and other government services, including childcare, healthcare, heating assistance, and so on.

It makes a sort of intuitive sense to secure services that will help them market themselves as employees. Specifically, Heartland recommends reforms like locating all offices in one building and increasing the ability of case workers to sign their clients up for the full array of services.

The Center’s concern, which it has been expressing for years, is that activists seem to have something more insidious in mind, which we’ve dubbed a “Dependency Portal.” With all welfare programs integrated, and even automated, the emphasis could become on ensuring not that people have access to the programs that they need, but that the government is able to provide as many benefits as people may be eligible for.

Rhode Island is currently engaged in a Unified Health Infrastructure Project (UHIP) that Governor Raimondo’s budget projects to cost $229 million. As the Center understands UHIPs intended design, it will increase the risk without necessarily capturing the efficiencies that Heartland suggests. If the General Assembly remains intent on funding the project, it should move quickly to develop and implement reforms to safeguard against the development of a Dependency Portal.

Lifetime Eligibility Limits

As a state that provides welfare benefits to individuals for up to four years, Rhode Island receives a C from Heartland in this category.

Arguably, the Ocean State actually should receive a little more credit, here, because welfare recipients can only receive benefits for two years within a five-year period. On the other hand, the law does allow for “hardship exceptions,” which would seem to be broadly applicable to families eligible for welfare in the first place.

Moreover, the relevant statute contains potentially contradictory sections that muddy the waters of Rhode Island policy. This leaves the door open for the annual attempts at legislation that wears away at the requirement.

Not only should the General Assembly lower the lifetime limit, but it should also clarify the language of the law to be clearer. Clarity would ensure that regulatory interpretation cannot change the policy and that future legislative changes would have to be unambiguous.

Sanctions

Rhode Island’s second C grade comes in the area of sanctions, or the penalties that the state imposes when recipients don’t comply with the requirements of the program. Heartland notes that Rhode Island’s penalty is full elimination of monthly payments, but marks the state down because the payments are reinstated immediately upon compliance. A longer term penalty would give the requirement more force.

Institutional Reforms

As the above analysis makes clear, the Center does not dispute the value of some degree of safety net for Rhode Islanders who fall on hard times. The overriding goal of such policies, however, should be to guide our neighbors toward self-sufficiency and productive participation in the state’s economy.

The Heartland Institute lays out policy suggestions that would improve Rhode Island’s abysmal performance, but they require institutional incentives about which the Center is skeptical. Ensuring that Rhode Islanders can have full trust in their government to work toward the goals that give welfare programs their moral justification is a prior necessity for full, effective reform of the system itself.

Toward that end, the Center recommends developing institutional reforms to realign incentives for state employees so that individual case workers and agencies overall are motivated to move people off of public assistance and toward work. Such reforms are beyond the scope of this brief and would require additional research, consideration, and discussion.

They might include renegotiated employment contracts that shift the weight of compensation packages to reward success offloading beneficiaries. On an agency scale, they could also include pilot programs involving longer-term block grants.

In undertaking to reform Rhode Island’s public safety net — or in deciding not to do so — legislators must give full consideration not only to the needs of beneficiaries, but also the capacity of a struggling, fading private sector to support them. Legislators must also be constantly aware of the unintended consequences that their program can have, whether in terms of increasing dependency, of fostering a special interest culture within the bureaucracy, or of distorting the state’s economy.

STATEMENT: Pension Settlement Leaves Critical Constitutionality Issue Unresolved

FOR IMMEDIATE RELEASE
April 3, 2015

Pension Settlement Avoids Most Critial Issue

Providence Journal Incorrectly Reports on Constitutionality
Legality of Pension Reform Still an Open Question
Providence, RI — Regardless of the details of the negotiated settlement of the state’s 2011 pension-cutting law, Rhode Island lawmakers and taxpayers will be left in limbo as to whether or not future pension reforms at the state and local level can be legally conducted.”We don’t need a backward looking pension deal, we need a forward looking pension ruling on its constitutionality,” commented Mike Stenhouse, CEO for the Center. “We all know that the 2011 law was just a band-aid and that massive reforms are still required at the state level, and especially in municipalities.”Can responsible lawmakers constitutionally undertake such vital reforms down the road? The Providence Journal incorrectly reported that the deal addresses this issue. The Center believes that the proposed settlement would leave this critical question unanswered.

“The only thing ‘awesome’ about this deal, is how easily unions have been able to manipulate the process to win yet another major victory,” continued Stenhouse. “They understand that clouding the legality of future pension reforms is in their best interests. Once again taxpayers lose.”

According to the Center, supporting this settlement is a near-sighted, path of least resistance approach. The unions understand the long-term implications of a settlement, which will be to largely perpetuate the status quo.