Media Alert: Final pre-Election JOBS & OPPORTUNITY INDEX – Personal Income Falls; RI Stuck at 48th

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FOR IMMEDIATE RELEASE: October 27, 2016

Final Pre-Election JOI Report: Personal Income Down, Personal Taxes Up

Providence, RI — Despite recent endorsements of status quo lawmakers and policies by high-profile political and media elite, voters should be concerned that that Rhode Island is moving in the wrong direction. This according to the RI Center for Freedom & Prosperity which today announced that personal income dropped, keep the Ocean State mired in 48th place nationally in the Center’s September Jobs & Opportunity Index (JOI).  

In the final JOI report prior to November’s elections, revised data shows that Rhode Islanders saw personal income drop by a whopping $589,000,000 as compared with what was previously reported for 2016; this in addition to an increase in all state and local taxes collected, as highlighted in the August JOI report.

“The ratio of income earned vs taxes paid is going in the wrong direction, and underscores that our state also has the worst business climate in the nation,” commented Justin Katz, research director for the Center. “Political leaders point to a lower unemployment rate as reason to continue their policies, but our JOI report shows that real families are suffering the burden from paying for the state’s targeted corporate welfare strategy. Voters are advised to reject the rigged status quo in November, including most spending bonds that favor special interests, and instead demand that lawmakers adopt broad-based tax, regulatory, and spending reductions that will make Rhode Island a better place to raise a family and build a career.”

The Center’s monthly JOI report is based on state and local tax collection data from the U.S. Census and on income data from the Bureau of Economic Analysis (BEA).

Rhode Island has not gained ground on the national JOI metric, remaining – as it has for years – in the bottom five among all states. JOI is a broader and more accurate measure of employment and well-being than the traditionally cited and highly narrow unemployment rate, which has fluctuated more dramatically in recent years for Rhode Island, but which is not an accurate barometer of economic growth or family prosperity.

Supporting the findings of the JOI metric, Rhode Island also ranks 48th in the Family Prosperity Index, the broadest national measure of family well-being.

For the JOI homepage, click here. 

For a description of JOI and its three sub-factors, click here.

Jobs & Opportunity Index (JOI), September 2016: Rhode Island Slips on Income

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Printable report and national ranking table.

Last month’s Jobs & Opportunity Index (JOI) report from the RI Center for Freedom & Prosperity noted that Rhode Island slipped back into 48th place in the nation because total taxes collected in the state increased. This month, Rhode Island remains 48th because Rhode Islanders’ personal income dropped, leaving us to pay more taxes with less income.

Of the 13 datapoints used for the index, six are updated for the September report. Employment was up 516 from the previously recorded number, labor force up 675, and RI-based jobs down 600. (Note that these are calculated with pre-revision data for the prior month.) Medicaid enrollment increased by 2,338, while SNAP decreased by 451. Personal income, including wages and various forms of investment income, dropped an annualized $589 million in the second quarter (resulting from a downward revision of first quarter data by the Bureau of Economic Analysis). All in all, the increases were smaller and the decreases larger than the month before.

As reflected in the first chart below, Rhode Island remains the last state in New England on JOI. Moreover, it was the only state in the region to experience a decrease in its JOI score. Although the other five states improved their scores, Vermont was the only one to change rankings from a national perspective (from 44th to 41st). New Hampshire remained 1st in the nation, and Maine stayed at 20th. Connecticut held 33rd in the country, with Massachusetts still close behind, at 35th.

ne-joirace-0916

The second chart at right shows the gap between Rhode Island and New England as well as the United States, which expanded once again, this month. By contrast, Rhode Island’s gap shrunk on the unemployment rate (third chart), although minimally.

rineus-joi-2005-0916

rineus-unemployment-2005-0916

Results for the three underlying JOI factors were:

  • Job Outlook Factor (measuring optimism that adequate work is available): RI remained stuck in 36th place.
  • Freedom Factor (measuring the level of work against reliance on welfare programs): RI remained at 39th.
  • Prosperity Factor (measuring the financial motivation of income versus taxes): RI dropped one place, behind Ohio, to 45th.
Printable report and national ranking table.

Democrat Boycott #2; Southern RI Chamber Candidate Forum to Proceed Tonight

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FOR IMMEDIATE RELEASE: October 20, 2016
Candidate Forum to Proceed Despite Democrat Boycott

Challengers Sven Soderberg and Bruce Waidler to Participate
Incumbents Susan Sosnowski and Kathleen Fogarty Refuse

Providence, RI — For the second time in a week, a General Assembly candidate forum will be held without Democrat candidates. The nonpartisan Southern Rhode Island Chamber of Commerce, a highly respected south county business group, will proceed tonight with its scheduled candidate forum for the Senate District 37 and House District 35 races. The forum, co-sponsored by the RI Center for Freedom & Prosperity, will be conducted at 7:00 pm this evening at the Chamber on 230 Old Tower Hill Road in Wakefield. The moderator for the forum will Elizabeth Berman, Director of the Chamber.

Senate District 37 challenger, Sven Soderberg, has accepted the invitation, while incumbent Senator Susan Sosnowski (Democrat) has declined.

Similarly, the challenger for the House District 35 seat, Bruce Waidler (Independent) will participate, while incumbent Representative Kathleen Fogarty (Democrat) has refused to participate.

“With the worst business climate in the nation and the 48th rank in family prosperity, it is disappointing that some candidates refuse to face voters and explain their plan to remedy these unacceptable rankings,” commented Mike Stenhouse, CEO for the Center. Links to post event videos and other information can be found on the Center’s debate homepage at www.RIFreedom.org/Debates.

The media and the public are welcome to attend.

NEW: Ballot Voter Guide. REJECT QUESTIONS #4-7 over Debt Concerns; APPROVE #2

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FOR IMMEDIATE RELEASE: October 18, 2016
REJECT QUESTIONS #4-7
RI Families, our Children Cannot Afford Increased Debt Burden

Only Question #2 Ethics Reform Recommended for Approval

Providence, RI — In heaping over $321,000,000 of additional debt burden on Rhode Island families, as well as on future generations, the RI Center for Freedom & Prosperity recommends that voters “reject” bond Questions #4-7. Just like families who must tighten their credit card debt and avoid luxuries they cannot afford, voters should reject the exorbitant spending proposed by the state, much of which is earmarked to benefit special interest insiders.

The 2016 Ballot Question Voter Guide, released today by the Center, documents how the state’s ‘interest on debt’ burden has already increased by 90% since 2005, almost four-times as much as the national average and double any other known state.

“The bond questions this year are just more corporate welfare to special interests, while also advancing the RhodeMap RI agenda,” commented Mike Stenhouse, CEO for the Center. “This is not a popularity contest. Quite simply, Rhode Island families and businesses cannot afford the higher tax burden that approval of these irresponsible spending measures would inevitably lead to.”

Only Question #2 – to amend the state constitution restore Ethics Commission authority – received an “Approve” recommendation from the Center. The Center did not take a firm position on Question #1 or #3.

The voter guide PDF provides a brief discussion of each of the seven statewide ballot questions, with the Center’s final recommendations summarized as:

  • Q1 NO POSITION on the “Tiverton Casino”
  • Q2 APPROVE Ethics Commission “Constitutional Amendment”
  • Q3 NO POSITION on “Veterans Home” Bonds
  • Q4 REJECT Wasteful “Innovation Campus & Higher Ed” bonds
  • Q5 REJECT Corporate Cronyism “Infrastructure” bonds
  • Q6 REJECT RhodeMapRI & Property Takeover “Green Economy” bonds
  • Q7 REJECT RhodeMapRI “Affordable Housing” bonds

2016 Ballot Question “Voter Guide”

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Printable PDF with Sample Ballot

 

REJECT QUESTIONS #4–7 AND $321,000,000 IN WASTE

Time for Rhode Island to Exercise Fiscal Restraint… Like Families Do

Rhode Island cannot afford to sink any deeper into debt by passing unnecessary, wasteful, and costly new bond measures. Voters should keep in mind that ballot bonds are not a popularity contest, but rather, by approving any of the five state bond offerings in 2016 (questions # 3–7), voters will be putting the State of Rhode Island into even greater debt.

Ocean State taxpayers already are suffering from the largest “interest on debt” burden of any state in New England, with interest around $550 per year for every man, woman, and child in the state, compared with a $300 average for all states. Since 2005, related interest payments have increased by 90% in Rhode Island, with Connecticut at 25%, and New Hampshire at 10%. The three other New England states actually saw decreases.

ne-interestchained2005-2014-web

Nationally, the average increase is just 25%, while Illinois, considered by many to be the most fiscally troubled state in the nation, saw a 45% increase.

By these measures, Rhode Island’s 90% increase in debt-interest payments dwarfs other states. This level of fiscal irresponsibility by our state’s political class should not be worsened by voters in 2016.

Rhode Island families, who rank just 48th on the national Family Prosperity Index, have long had to tighten their belts when it comes to spending and debt. Approving any of these bond measures would place a future debt burden on our own children!

It is time for the State of Rhode Island to show similar restraint. On November 8, it is up to voters actually to do the tightening by voting to reject state questions #4–7. These bonds, totaling $200,500,000 in new debt — over $321,000,000 including interest payments — will also advance the controversial RhodeMap RI agenda as well as more 38 Studios–style corporate-welfare programs as recommended by the discredited Brookings Institution report.

It is a myth that advancing smart growth and sustainable development boondoggles such as campus innovation centers, subsidized affordable housing, green infrastructure, and government land acquisition programs can produce a positive return on investment. The reality is these programs merely increase the level of government intervention in our lives, while costing millions to taxpayers.

Summary: Voters should decide their own priorities, of course, but for the reasons described below, the Center can clearly recommend to approve only one ballot measure: #2, asking for “ethics reform” approval. Of the five spending bonds, as discussed below, only #3, $27 million for veterans homes, should be given any serious consideration by voters.

FIRST THE REJECTIONS (QUESTIONS #4–7)

#4: Higher Education Bonds

Principal: $45,500,000
Total estimated cost: $72,937,126
Discussion: Not only does this bond increase Rhode Islanders’ debt burden, but it also puts taxpayers, the state government, and college students in bed with private, for-profit companies. The money wouldn’t just invest in new buildings, but it would also fund a new program that helps private corporations use public resources to develop “products, services, and businesses.”

#5: Port Infrastructure Bonds

Principal: $70,000,000
Total estimated cost: $112,210,962
Discussion: This new debt would not only move business costs off of the private businesses that use the ports in Quonset and Providence, but it would also hand 25 acres of Providence real estate over to the government and a non-profit company acting in its behalf.

#6: Property Takeover and Development Bonds

Principal: $35,000,000
Total estimated cost: $56,105,481
Discussion: Of all the bonds on the ballot, this one teaches most clearly the lesson that bonds are not just borrowing for infrastructure, but are policy decisions. Of the total, $8,000,000 will go toward the direct government purchase of land or property rights, some of it for resale or lease at heavy discounts to preferred individuals and businesses. When the Center began investigating the new practice of the state’s purchasing farmland, officials pointed to a bond on the 2014 ballot that had authorized such action. These bonds allow the state government to buy up even more open space, recreation land, and farmland while also creating a windfall for private construction companies and non-profits.

#7: Affordable Housing Bonds

Principal: $50,000,000
Total estimated cost: $80,150,687
Discussion: These bonds would feed what has become an affordable housing industry in Rhode Island, with overlapping interests of construction companies, non-profits, politicians, and government agents. Burdening Rhode Islanders with yet more unaffordable debt is not the way to help us pay our housing bills.

MAYBE, APPROVE, MAYBE (QUESTIONS #1–3)

#1: Tiverton Casino

Maybe
Discussion: The first question on the ballot will essentially allow the state government, acting through the private Twin River Management Group, to construct and operate a casino in Tiverton, on the border of Fall River, Massachusetts. (Tiverton residents will also have to pass their own local ballot question.)

The Center’s emphasis on freedom would generally lead us to support the right of individuals to engage in activities such as gambling if that is what they want to do. On the other hand, our preference for a very limited scope for government leaves us wary of creating a monopoly market for government to enter as if it were some sort of organized crime syndicate. The case for gambling on principles of freedom weakens to the extent that Americans are only able to gamble under the watchful eye — and for the direct profit — of the government.

However, this ballot question does not create that dynamic. Indeed, one could characterize the Tiverton casino not so much as a new operation, but as a new location for Newport Grand, which would be closed if Tiverton opens. Granted, a Tiverton casino will be an expanded casino, but voters may reasonably see the difference as minimal and balance it against an expected relief of pressure to increase Rhode Island’s already-high taxes.

#2: Ethics Commission Authority over the General Assembly

Approve
Discussion: A member of our staff recently received the intriguing question of whether giving the unelected Ethics Commission authority over the elected General Assembly contradicts the Center’s preference for smaller, less-intrusive government. To the contrary, our state and our nation are constructed so as to ensure a balance of powers, and in the case of legislators’ immunity to Ethics Commission investigation, the legislature is dramatically unbalanced.

In offering this assessment, we would stress our skepticism of the Ethics Commission’s execution of its role. With members’ terms extending into decades, even though state law is supposed to limit them to five years, and with the commission’s decisions sometimes seeming to float between arbitrary and abstruse, we aren’t confident that this renewed oversight power will make a great deal of practical difference.

But these are pragmatic considerations, whereas the ballot question would be procedural. A future governor and legislature appointing a different sort of commissioner, with greater turnover, will do the state government more good if those commissioners can address corruption among legislators.

#3: Veterans Home Bonds

Maybe
Principal: $27,000,000
Total estimated cost: $43,281,371
Discussion: As a baseline judgment, we oppose any and all new debt for the state government of Rhode Island at this time. Too often, it seems, voters see bonds as a way to access free money for projects that the profligate spending of the government precludes.

Nonetheless, we cannot ignore the sacrifice and dedication of America’s veterans or the unacceptable treatment that they have received so visibly from our government in recent years. Voters should therefore weigh the practice of borrowing and the implicit boon to labor unions that it represents with the value of developing infrastructure for the benefit of those to whom we owe our freedom.

Printable PDF with Sample Ballot

Center & Representative Nunes Call for Pension Fund Protection

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FOR IMMEDIATE RELEASE: October 17, 2016
Political Correctness Should be Banned as Investment Criteria 

Providence, RI — The RI Center for Freedom & Prosperity recommends legislative action to end to the cronyism and overt politics that has caused instability to the retirement-security of public employees and that has exposed taxpayers to further risk. The mismanagement of Rhode Island’s public employee pension fund reached new lows last month when the State announced it was changing its strategy yet again, this time to divest of its “hedge fund” investments.

“Enough of the political correctness and insider cronyism. We call on lawmakers to act now to ensure that sound fiscal guidelines are adhered to,” suggested Mike Stenhouse, CEO for the Center. “The mismanagement and dismal performance of the state pension fund, under General Treasurers Raimondo and Magaziner, could have been avoided if sound investment practices were followed.”

Representative Jared Nunes (D-Dist. 25, Coventry West Warwick) has already expressed interest in submitting related legislation: “In order to protect retirees and taxpayers, it is vital that sound investment strategies are undertaken. Some kind of pension-fund protection act is clearly in order.”

Initial research indicates that a number of states have implemented, or are currently considering, provisions that require specific fiduciary guidelines to making pension fund investment decisions. A Pew Charitable Trusts report to the Committee on Alabama Public Pensions indicates that National Association of State Retirement Administrators (NASRA), suggests that pension fund trustees should adhere to “a robust fiduciary standard” in the execution of their duties, and supports the action of setting strong fiduciary standards into law so that the paramount goal of investment strategies should be the financial security of pension assets.

In recent years, conversely, Rhode Island policy has put retirees and taxpayers at increased exposure, because political correctness appears to have been the primary motivation of making certain investment decisions:

  • Treasurer Raimondo announced a divestment strategy in 2013 from high performing “gun” related investments … for political reasons. (In a similar move the City of Providence divested from eight fossil fuel companies.)
  • Treasurer Raimondo divested in 2014 from the states highest performing hedge fund, Dan Loeb’s Third Point LLC … caving to political pressure from teachers unions
  • Instead Treasurer Raimondo invested in other high-fee hedge funds … some of which were associated with her former investment company
  • Treasurer Magaziner announced in early 2016 that state’s proxy votes would be used to influence investment vendors to diversify their boards … to meet an arbitrary politically-correct standard
  • Treasurer Magaziner announced last month a “back to basics” investment strategy to divest of most hedge fund investments … bowing to political pressure from third-party critics
“Each of these fiscally-irresponsible decisions has led to deteriorating performance of the pension fund. There’s little reason to trust that Treasurer Magaziner’s new back to basics strategy will not continue be overly-politicized,” added Mike Riley, Chairman of the Center, and an investment and pension expert. “It is obvious now that the General Assembly must act to ensure proper fiscal due-diligence is conducted, devoid of political correctness considerations.”

In order to protect the security and stability of state retirement funds, Riley suggests that legislation should include the following goals:

  1. Ensure that all investment decisions are made solely in the best interest of the beneficiaries.
  2. Limit considerations for investment vehicles to measurable economic or fiscal factors only
  3. Ban other non-fiscal considerations, except in the most extreme instances (ie, Iran based companies)
  4. Ensure that investment fees and costs are reasonable in relation to the assets of the retirement system
The Center encourages incumbents and candidates for the General Assembly, prior to the upcoming elections, to make a pledge to voters and retirees to support related legislation in 2017.

Center Supports Town of Narragansett Single-tier Property Tax Plan

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FOR IMMEDIATE RELEASE: October 14, 2016

Narragansett’s Proposed Single-tier Tax Rate a Good First Step

Providence, RI — The RI Center for Freedom and Prosperity supports the proposed single-tier tax rate plan that will be decided at the Narragansett Town Council meeting on Monday, October 17.

The Center applauds the Town’s goal to create one of the best local business climates … in a state that has the worst overall business climate in the nation. The bi-partisan plan would significantly lower the commercial tax rate and slightly raise the residential rate to equal levels.

“If town families are to achieve a better quality of life, it is essential that more and better businesses, that create more and better jobs, have a better business climate in which they can thrive,” said Mike Stenhouse, CEO for the Center. “The positive benefits of this plan clearly outweigh the arguments against it.”

Currently, commercial properties pay up to 150 percent higher than the residential, leaving Narragansett as the only Washington County locality with a split rate.

Not only would a lower commercial rate spur local economic activity, but the single-tiered rate would eliminate the practice of pitting businesses against residential property owners when future tax policy is considered. The concept of tax policy that treats everyone the same, is a fundamental precept of American governance.

The slight increase in residential rates could be directly offset by taking advantage of a discussed “homestead exemption” for year-round, owner-occupied properties; this exemption has already received enabling approval from the General Assembly, and is in the works to be reviewed and decided upon in future Town Council sessions. Further, if the town does realize growth in the commercial business community, this could lead to reduced overall tax rates for everyone.

The plan would be even stronger, according to the Center, if the commercial rate would be lowered to the existing residential rate. This could be accomplished without raising the residential rate by cutting town spending by a few percentage points.
Additional commentary on Narragansett’s single-tier tax plan can be found on The Ocean State Current, the journalism and blog website for the Center.

Democrats Boycott; East Bay General Assembly Candidate Forum Still on for Tonight

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FOR IMMEDIATE RELEASE: October 12, 2016
Candidate Forum to Proceed Despite Democrat Party Boycott

Ken Mendonca and John Pagliarini to Participate
Linda Finn and James Seveney Refuse Invitation

Providence, RI — Apparently 630-WPRO AM radio is not the only boycott instituted by the Rhode Island Democrat Party. Portsmouth Concerned Citizens (PCC), which for many years has successfully conducted fair and nonpartisan successful debates, will move forward tonight with its scheduled Candidate’s Night Forum for the Senate District 11 and House District 72 races. The forum, sponsored by the RI Center for Freedom & Prosperity, will be conducted at 7:00 pm at the Portsmouth Council Chamber on 2200 East Main Road. The moderator for the forum will be Kate Nagle, political reporter and editor for GoLocalProv.com.

Incumbent Senator John Pagliarini (Republican) from District 11 has accepted the invitation, while his challenger, James Seveney (Democrat) has declined.

Vying for the open House District 72 seat, are Ken Mendonca (Republican) who has also accepted, and former Representative Linda Finn (Democrat), who similarly followed the orders of the Portsmouth Democrat party and will not take part in the event.

“It is clear that Mr. Seveny and Ms. Finn are not willing to defend the status quo failures of their party, which have caused our state to suffer from the worst business climate in the nation and the 48th rank in family prosperity,” suggested Mike Stenhouse, CEO for the Center.

The likely reason for the refusal to debate from the two Democrat candidates is a September 18 open letter from Leonard Katzman, Chair of the Portsmouth Democratic Town Committee. In the letter, Mr. Katzman called into question the “legitimacy” of the candidate forums and the “fairness” of the PCC.

Video recordings of the forum events will be submitted to the Public Access Studio for play on Cable Channel 16. The videos will also be posted online on the Center’s debate homepage at www.RIFreedom.org/Debates

The media and the public are welcome to attend and are encouraged to submit questions for the candidates. This is also an opportunity to meet the candidates and express your concerns directly. Coffee and refreshments will be served following each session.