Governor’s 2019-20 Budget: The Rhode to Serfdom

Providence, RI — Instead of seeking to shape Rhode Island’s future with the proven ideals of a free-society, Governor Raimondo’s proposed 2019-2020 budget is a stunning departure from America’s core values and, instead, would put our state on a “Rhode to Serfdom,” according to the RI Center for Freedom & Prosperity.

With the Ocean State doomed to lose a US Congressional seat because of its hostile tax, educational, and business environment, which chases away wealth, families, and businesses, the policies presented in the Governor’s budget would make matters far worse.

“Just yesterday, I attended a thoughtful lecture by the chief economist for JP Morgan Chase at an event hosted by the RI Society of CPAs. His message was that economic growth is the best path to achieve prosperity and to manage deficits … not raising taxes and not necessarily cutting spending,” commented Mike Stenhouse, the Center’s CEO. “However, this Governor’s regressive budget points us 180 degrees in the opposite direction and would stifle any opportunity for growth. Ocean Staters are clearly being forced down a Rhode to serfdom.”

With new government-imposed health insurance mandates that will further burden already distressed families as well as employers who are already suffering from one of the worst business climates in the nation, and along with a bevy of new taxes and fees that will further restrain economic growth, the proposed budget takes a giant step backwards towards a centrally-planned society, where government controls more and more aspects of our lives. The entire country is thriving, economically, from reduced government intrusion into our lives, but these progressive-left policies would increase dependency on government.

The proposed Medicaid tax on businesses and the individual mandate are particularly egregious. Each would serve as yet another reason for large employers and families to stay away from Rhode Island. It is oppressive that the government would seek to punish employers for not compensating their workers how the government wants them to; or to punish individuals not being able to afford the high-cost insurance resulting from the government created Obamacare mandates.

“For the better part of a decade, the State has encouraged and bragged about the number of people enrolled in Medicaid with taxpayer funded ads, and now she wants to make businesses pay for it,” cynically question the Center’s research director, Justin Katz.

Equally disturbing, the budget contains no meaningful remedies to the many problems that plague our state, such as high taxes across the board, high energy and healthcare costs, and onerous regulatory burdens on job-producers.

“On top of her irresponsible new spending proposals, clearly designed to benefit special-interest unions, the reliance on SIN taxes to pay for these schemes will tear at the cultural fabric of our society,” continued Stenhouse. “The continued attacks against legal firearms owners and smokers, along with the unsustainable increase in overall government spending, with its immoral budget scoops, also points Rhode Island back towards a totalitarian form of government that I thought we were done with in America.”

For these reasons and more, Rhode Island suffers from an epidemic of people and businesses fleeing our state. “Maybe it’s time to build our own wall to keep people in,” joked Stenhouse earlier in the week.

The Center again calls on General Assembly leaders to reduce the state’s sales tax, citing existing law that requires such a rate-reduction if certain “internet” taxes are enacted. With the multitude of new sales taxes imposed in recent budgets, the Center maintains that we have essentially reached that legal threshold.

Center Co-signs Amicus Brief in Public Employee Union Supreme Court Case

CENTER JOINS LOCAL AND NATIONAL ORGS IN SUPPORT OF FURTHER WORKPLACE FREEDOM FOR PUBLIC EMPLOYEES

Government Unions Should Welcome a pro-Uradnik Decision

Providence, RI — The RI Center for Freedom & Prosperity is one of 18 organizations across the country listed as co-signers on an “amicus brief” filed last week in support of Kathleen Uradnik, a university professor in Minnesota, in her US Supreme Court lawsuit, Uradnik vs Inter Faculty Association
 
The amicus brief, submitted by the Center of the American Experiment, was also co-signed by another Rhode Island nonprofit, the Stephen Hopkins Center for Civil Rights, a libertarian strategic litigation organization (the brief’s Appendix lists all of the co-signing organizations).
 
This Uradnik case challenges state laws that appoint a union to represent and speak for all workers, even those who disagree with it – an arrangement known as “exclusive representation.”
 
Uradnik, who has had major disputes with her faculty’s labor union, which has discriminated against her, is nonetheless required by state law to associate with it and to allow it to speak for her. Rhode Island has similar laws imposing exclusive representation upon public employees, limiting their freedoms and opportunities for advancement. 
 
“Last summer’s Janus decision was monumental in restoring First Amendment rights for public servants against forced union fee payments. Now, the fight for freedom continues against forced union representation,” said Mike Stenhouse, CEO for the Center. “Public unions, which have complained about the ‘free-rider’ aspects of Janus, should join us in supporting Kathleen Uradnik, as it would alleviate them of their stated burden of representing employees who have chosen not to pay their high annual union dues.”
 
A win for Uradnik would strike down such laws nationwide, another major blow against union favoritism and in favor of First Amendment rights. The amicus brief encourages the Supreme Court to hear the case, hopefully in its 2019 session.
 
Any state or local government employees (teacher, fire, police, service, or admin) who wants more control over their families’ financial security and who may have questions about their rights in the aftermath of the historic Janus ruling by the US Supreme Court last summer can find out more about their restored freedoms and their unions’ activities at www.MyPayMySayRI.com . In short, the high cost of union dues means less money in employees’ paychecks and more money toward a system teachers don’t control. @MyPayMySayRI 
 
The Center is currently compiling detailed data on exactly how teachers union dues are being spent, including what political agendas and candidates are being unwittingly funded by the dues of teachers across the state of Rhode Island. An initial report is expected soon.

Jobs & Opportunity Index November 2018 update- employment down 190 from the first-reported number for October, labor force dropped 208. RI in 47th place.

Jobs & Opportunity Index (JOI), November 2018: Employment and Income Diverging

November’s data for the RI Center for Freedom & Prosperity’s Jobs & Opportunity Index (JOI) paints a bit of a mixed picture. The Ocean State is still 47th in the country, with seven of the 12 datapoints in the index updated. (Rhode Island remains the only state not updating its SNAP [food stamp] data, thanks to UHIP, although positive news suggest this may soon change.)

Employment was down 190 people from the first-reported number for October, and the labor force dropped 208. The number of jobs in the state also dropped, by 400. Turning to the financial results that make up JOI’s Prosperity Factor, total personal income in Rhode Island increased by an annualized $359 million from the prior number, while state and local tax collections increased $71 million. On the hopeful side, the number of Rhode Islanders relying on Medicaid decreased by 1,490 enrollees.

The first chart shows RI remaining last in New England. New Hampshire leads the region, in 3rd place, nationally. Vermont held 13th place, but Maine lost the step it had taken last month and fell back to 16th. Massachusetts and Connecticut both remained in place at 36th and 40th, respectively.

The second chart shows the gaps between RI and both New England and the United States on JOI, which both increased in November. The third chart shows the gaps in the official unemployment rate, which both decreased slightly.

Results for the three underlying JOI factors were:

  • Job Outlook Factor (optimism that adequate work is available): RI remained 26th.
  • Freedom Factor (the level of work against reliance on welfare programs): RI remained 41st.
  • Prosperity Factor (the financial motivation of income versus taxes): RI remained 47th.
Throwing more money at the severe failures highlighted in this week's RICAS student assessment scores is not the answer, as our state already ranks among the highest spending states per student in the nation. The solution must come from fundamental reforms to Rhode Island education failures.

Center Calls for Empowered Teachers and ESA’s as Part of the Solution to RI’s Education Failures

Teachers Should Leverage Their Newly Restored Rights

ESA Outlet for Concerned Families?

Providence, RI — The Rhode Island Center for Freedom & Prosperity for years has been warning about the poor value state and local taxpayers have been receiving for their high public investment in public education. Throwing more money at the severe education failures highlighted in this week’s RICAS student assessment scores is not the answer, as our state already ranks among the highest spending states per student in the nation. The solution must come from fundamental reforms.

First, the Center has previously suggested that public education can be the greatest beneficiary of the last summer’s landmark US Supreme Court Janus decision. By boldly taking advantage of their recently restored first-amendment Janus rights, and because unions can no longer force teachers who disagree with them to fund bargaining positions that tie the hands of educators, teachers have been empowered with a stronger voice to fight against ineffective policies. Teachers must be un-handcuffed by ending union-negotiated restrictions on how they are allowed to educate our children. Teachers must also demand a greater say about potential reforms that may improve educational outcomes. If teachers believe their unions are not helping to positively reform education, they now have the full-freedom and leverage to opt-out of paying any money to their union without fear of negative repercussions. Teachers, and all public employees can learn more at MyPayMySayRI.com.

Throwing more money at the severe failures highlighted in this week's RICAS student assessment scores is not the answer, as our state already ranks among the highest spending states per student in the nation. The solution must come from fundamental reforms to Rhode Island education failures.

Second, an outlet must be provided for families that want a brighter future for their children, which begins with a better education today. The Center’s “Bright Today” Educational Scholarship Account program (ESA), which was blocked by teachers unions in the General Assembly years ago, would empower parents to choose a better school for their children, by allowing limited dollars to follow the student to a private school of their choice. National studies have shown that such private school choice policies can improve educational results for participating students, without harming existing public educational outcomes. More information about the Bright Today ESA scholarship program can be found at BrightToday.org.

October 2018 Jobs & Opportunity Index: More Slipping as the Weather Cools

The Rhode Island Center for Freedom & Prosperity’s Jobs & Opportunity Index (JOI) reports have been noting for a while that the state’s economy hasn’t been living up to the hype. October didn’t change that story. The Ocean State is still 47th in the country, with nine of the 12 datapoints in the index updated, and the indicators suggest Rhode Islanders are growing skeptical of improvement. (Note that Rhode Island remains the only state not updating its SNAP [food stamp] data, thanks to UHIP.)

Employment was up a tiny 50 people from the first-reported number for September. Meanwhile, the labor force dropped 685, people unemployed for more than 15 weeks went up by 700, and those who are only able to find part-time work increased by 1,600. To balance that a little, the number of jobs in the state went up by 1,000, while 200 fewer Rhode Islanders said they were only marginally attached to the employment market. Of course, that may be because they completely gave up. The discouraging results for labor force and alternative employment measures were enough to cause a nine-place drop for the ocean state in the Job Outlook Factor.

At the same time, the number of Rhode Islanders relying on Medicaid went up 736 enrollees. The TANF (welfare) data was finally updated after more than a year and showed that the numbers had decreased by 920. We should emphasize, however, that this data still lags considerably, reflecting the results from June.

The first chart shows RI last in New England. New Hampshire leads the region, in 3rd place, nationally. Vermont held 13th place, but Maine advanced a step to 15th. Massachusetts slipped one, to 36th, while Connecticut stumbled two spots, to 40th.

October 2018 Jobs & Opportunity Index

The second chart shows the gap between RI and New England and the United States on October 2018 Jobs & Opportunity Index. The third chart shows the gaps in the official unemployment rate.

October 2018 Jobs & Opportunity Index October 2018 Jobs & Opportunity Index

Results for the three underlying October 2018 Jobs & Opportunity Index factors were:

  • Job Outlook Factor (optimism that adequate work is available): RI dropped to 26th.
  • Freedom Factor (the level of work against reliance on welfare programs): RI remained 41st.
  • Prosperity Factor (the financial motivation of income versus taxes): RI remained 47th.

Center Opposes All Three Ballot Questions

The RI Center for Freedom & Prosperity urges Rhode Island voters to reject all three 2018 ballot bond questions as too costly, near-sighted, and overly geared toward special interests.

Question 1, the largest bond question, would put Rhode Island significantly further into debt by spending a whopping $250 million to repair school buildings (and would ask for another $250 million in 2020), and is also flawed because it:

  • Bails out irresponsible city/town and school officials who have misappropriated existing local tax receipts by neglecting to address school building repairs over the years.
  • Lacks any long-term vision or strategy in planning for the anticipated educational environments of the future.

“Of course, no one wants unsafe schools,” said the Center’s CEO, Mike Stenhouse, “but when we are talking about this much of a new burden on taxpayers, it is imperative that we are strategic in how we deal with this problem.”

More details on Question 1 below.

Question 2 asks taxpayers to fund $70 million in non-vital new higher education facilities that would mostly benefit other states, as far too many of our college and university graduates end up leaving the state in search of meaningful work. Until we develop a growing economy that can absorb new young workers entering the jobs market, this bond spending would not provide a good return on investment.

Question 3, an extension of the RhodeMapRI scheme, advances a dubious green-economy strategy by spending $47.3 million on a multitude of politically correct sustainable-development projects.

Special-Interest Government Spending Does Not Replace Grassroots Development. All three ballot questions are designed to help special-interest cronies. Because of Rhode Island’s dismal business climate, including a burdensome tax and regulatory structure, our state’s economy is not attracting enough grassroots private money for major capital projects. Instead, seeking work and dues from their employees and members, construction company insiders and labor union officials continually pressure government to spend taxpayer money on unnecessary public-works projects. Taxpayers also suffer a “double hit” because, unlike privately-financed projects, these government-funded boondoggles require abnormally high “prevailing wages” and mandate other costly pro-labor mandates.

Already Too Much in Debt. All three ballot questions would worsen an already burdensome debt problem. Historically, Rhode Islanders pass almost all bond questions that make it to the ballot, and no indications have emerged that this election will be any different.  If anything, consensus that the Ocean State’s public schools are in deplorable condition is translating into even-greater-than-usual consensus that we ought to saddle taxpayers with another $250–500 million in debt.

Broadly, Rhode Island is relying too heavily on debt to cover its bills.  The Mercatus Center at George Mason University puts Rhode Island’s long-term liabilities at 90% of the state’s assets, which is higher than the average state.[1]  Truth in Accounting’s State Data Lab gives Rhode Island a D for finances, with $8,288,881,000 in bonds and other liabilities, plus another $4,316,527,000 in pension and other retirement liabilities.[2]  A recent Rhode Island Public Expenditures Council (RIPEC) report finds Rhode Island already among the worst states when it comes to debt per capita and debt per income.[3]

More debt is not the answer to the Ocean State’s problems; it is a major problem in itself.  Adding $589,462,045 in principal and interest by passing the three ballot questions will make it worse.

The State of Rhode Island and its municipalities must be more prudent with the tax dollars they already collect — for example, prioritizing school-building maintenance over more frivolous projects.

More on Question 1. The RI Center for Freedom & Prosperity agrees that our education infrastructure is in lamentable shape, but we encourage Rhode Islanders to vote to reject Question 1’s new borrowing on the ballot.

Wrong to “bail out” irresponsible local officials. Focusing on the biggest ballot question — the $250 million school construction bond — the incentives that it would create will be damaging, as well.  Making this money available to local school districts that have been negligent in maintaining their infrastructure will only reinforce their habit of letting basic maintenance slide in order to fund other priorities, like above-market-rate increases to government worker compensation.  The legislation allowing these bonds to go on the ballot provides insufficient incentive for our cities and towns to change their ways. Further, it is unfair to ask state taxpayers to bail out local communities.

What do the “education futurists” say? Taking an even broader view, we should also question the wisdom of making these massive investments when our society is changing so quickly.  What will education look like 20 years from now?  What sorts of spaces will students require?  The weight of debt will hinder Rhode Island’s ability to adapt and to innovate in the future.

The Center does not believe it is prudent to burden Rhode Islanders with decades of new debt in order to rebuild an arguably obsolete, century-old school model, especially when new educational-environment models are rapidly evolving.

Many “education futurists” no longer envision that large and cold school buildings with walled-off classrooms will be how our children will be taught in the coming years. Creating more-productive learning environments that take advantage of ever-evolving Internet and other technologies could mean that home-based or large online-lecture type instruction may increasingly become the norm. This educational vision would require a far different kind of school campus than what this half-a-billion taxpayer-funded bond might be wasted on.

The Center is not aware of, but is open to review, any kind of long-term strategic educational plan that would justify massive investment in a potentially soon-to-be defunct school model.

2018 Middendorf “Pillar of Freedom” Award Winner

View previous winners here …

Dr. Daniel Harrop

2018 J. William Middendorf “Pillar of Freedom” Award Honoree

With a lifelong record of helping people both professionally and philanthropically, Dr. Daniel Harrop personifies the three pillars that our Center’s annual award is based upon: 1) Entrepreneurial or free-market business leadership, 2) Civic engagement, and 3) Record of philanthropic giving or charitable organization volunteerism.

In the area of professional accomplishment, Dr. Harrop, for many decades, has been a leader in the Rhode Island medical community as a certified psychiatrist. With a B.A. and M.D. from Brown University, along with an MBA from the Edinburgh Business School, Dr. Harrop is a licensee or certified member of over a dozen psychiatric and medical associations in numerous states. In addition to his private practice Dr. Harrop has served as President of the RI Psychiatric Society and the RI Catholic Medical Society, was a faculty member at the Brown University and Harvard Schools of Medicine, a staff member at RI and Butler Hospitals, and was RI Medical Director for United Behavioral Systems at United Healthcare. Additionally, dozens of other professional associations, publications, presentations, staff work, and leadership are not listed here.

With regard to civic engagement, Dr. Harrop is one of Rhode Island’s most honored members of the Catholic Church, having been knighted into the church’s distinguished “Equestrian Order of the Holy Sepulchre” in 2008 by Pope Benedict. He is also a Grand Knight in the Providence Knights of Columbus.

Dan also served as President of the Brown Club of RI as well as the Brown Faculty Club, among other civic leadership posts; and he is the only active member of the original ‘medical advisory board’ appointed in the 1980’s in response to Rhode Island’s ‘workers compensation’ crisis. To top it all off, he’s also a Notary Public.

Harrop is President of the Sons of the American Revolution, and has held leadership roles with the Sons of the Union, Veterans of the Civil War, and the RI Historical Society. He currently leads an initiative to raise awareness about the Battle of Rhode Island during the American Revolution; not to mention a Board member of the Nathaniel Greene Homestead Assoc.

Dr. Harrop has further been a shaman of Ocean State politics since 1980, when he co-chaired RI Physicians for Reagan, and more recently as a major donor to the RI GOP and as chair of the Providence GOP. He was a two-time candidate for Mayor of Providence and for General Assembly – and self-funded his campaigns – just so the Republican brand would be on the ballot. Dr. Harrop was also a successful litigant against the RI Board of Elections when he challenged and defeated, as un-constitutional, a state law that capped annual political gifts from individuals.

Philanthropically, Dr. Harrop is one of the larger donors to the Catholic Diocese of Providence and is a patriarch in support of the Christian Holy Land. He funds a major scholarship in his name at the Brown Medical School and also funded “Harrop Theater” at his alma mater, Bishop Hendricken High School. Many more charitable gifts not listed here.

But “Doc” claims, other than donating his time and treasure to his faith, that his most fulfilling act of civic responsibility was serving as founding Chairman of the RI Center for Freedom of Prosperity, which has become the state’s leading voice advocating for the free-enterprise system and challenging the policies of the entrenched status quo. Quite simply put, without Dr. Daniel Harrop … our Center would not exist.

Polarized and passionate, yet civil, debate is healthy for our democracy.

Polarized And Passionate, Yet Civil, Debate Is Healthy For Our Democracy

CEO Mike Stenhouse argues that polarized and passionate, yet civil, debate is indeed healthy for our democracy in a recent OpEd in the Providence Journal. Click on the button below now to read the full version on their website. 

Following the recent Providence Journal-sponsored “Publick Occurrences” panel discussion at Rhode Island College, I’d like to share some thoughts I did not have the chance to put forth.

The premise – “Why Can’t We All Just Get Along?” and the polarization of public discourse – gives us two factors to consider: 1) disagreements over the role of government and 2) level of civility of debate. Most panelists agreed there have always been divisive political issues in America: the Federalist Papers, slavery, civil rights, the Vietnam War, etc.

Polarized and passionate, yet civil, debate is healthy for our democracy, no matter the topic or how deep the divisions. But sadly, our nation’s history is riddled with violent incidents – even war – over some of those debates.

Worse, there is an increasingly pernicious national culture that makes today’s debates even more divisive than yesteryear’s.

As the panel discussed, we have become a tribal nation, of sorts. Special-interest and identity-politics factions are constantly seeking special benefits. Activists-for-profit and well-funded organizations exploit divisions to stoke public rage. Social media allow hate-filled word-bombs to be safely lobbed from behind internet devices. Educational and judicial systems eschew historical and constitutional values to conform with political correctness fads. And biased media irresponsibly fan the flames.

September 2018 Jobs & Opportunity Index

September 2018 Jobs & Opportunity Index (JOI): And Back Down Again

As somewhat expected, an update to income numbers lost Rhode Island its improved rank on the September 2018 Jobs & Opportunity Index (JOI) from the Rhode Island Center for Freedom & Prosperity, bringing the Ocean State back to 47th in the country. Six of the 12 datapoints in the index were updated for September, although Rhode Island remains the only state not updating its SNAP (food stamp) data, due to the UHIP debacle.

Employment was up from the first-reported number for July by a small 170 people, while the labor force actually dropped 319. In keeping with these results, RI-based jobs came in exactly the same for September, after having dropped significantly the month before.

Unfortunately, the number of Rhode Islanders relying on Medicaid went in the opposite direction, following a drop last month with an increase of 439 enrollees. When it comes to SNAP, the inability to update the numbers may be hurting Rhode Island, inasmuch as 45 states saw a reduction in this benefit, which registers as a positive for the index. Meanwhile, annualized personal income was up 4%, which wasn’t enough to prevent the Ocean State from losing ground compared with other states.

The Ocean State saw no change in any of the subfactors that go into its overall JOI ranking. The drop in place to 47th resulted from New York’s 6% increase in income.

The first chart shows RI last in New England. New Hampshire leads the region, with 3rd place, nationally. Vermont was steady at 13th, while Maine held 16th. Massachusetts also did not move, from 35th, but Connecticut managed to gain a spot, to 38th.

The second chart shows the gap between RI and New England and the United States on JOI. The third chart shows the gaps in the official unemployment rate.

Unemployment Rate Rhode Island

September 2018 Jobs & Opportunity Index

Results for the three underlying September 2018 Jobs & Opportunity Index factors were:

  • Job Outlook Factor (optimism that adequate work is available): RI remained 17th.
  • Freedom Factor (the level of work against reliance on welfare programs): RI remained 41st.
  • Prosperity Factor (the financial motivation of income versus taxes): RI remained 47th.

Click here for the corresponding employment post on the Ocean State Current.

Jobs & Opportunity Index August 2018 brought an apparent improvement in Rhode Island’s ranking to 46th in the country, largely as a result of decreasing state and local tax revenue.

Jobs & Opportunity Index August 2018: Less for Rhode Island Is More (Unfortunately)

August brought an apparent improvement in Rhode Island’s Jobs & Opportunity Index (JOI) ranking from the RI Center for Freedom & Prosperity, to 46th in the country, largely as a result of decreasing state and local tax revenue. Of the five (of 12) datapoints that were updated for August, four were positive, from JOI’s perspective, with a negative for jobs based in the state.

Employment was up from the first-reported number for July by 1,001, while labor force was up 256. The larger growth of employment than labor force translated into a drop of the unemployment rate to 4.0%. The growth in labor force was much smaller, this month, which may be related to the fact that RI-based jobs decreased by 1,900. Back on the positive side, however, was the 1,419 drop in Medicaid enrollment and $191 million reduction in state and local taxes. This last point may be too early to celebrate. Before next month’s JOI report, numbers should be updated for Rhode Islanders’ income, and if less income was the cause of the lower taxation, the net effect would not be an indicator of health.

The Ocean State saw no change in any of the subfactors that go into its overall JOI ranking. The jump in place to 46th resulted from New York’s falling behind with a drop in jobs and an increase in state and local taxes.

The first chart shows RI last in New England. New Hampshire leads the region, with 3rd place, nationally. Vermont jumped past Maine, moving eight spots to 13th while Maine moved up only one spot, to 16th; note, though, that this results from Vermont’s nation-leading loss in state and local revenue, so income numbers may reverse its progress. Massachusetts held at 35th, and Connecticut fell two spots, to 39th.

Jobs & Opportunity Index August 2018 race to first

The second chart shows the gap between RI and New England and the United States on JOI. The third chart shows the gaps in the official unemployment rate.

Jobs & Opportunity Index August 2018 New England, And U.S.A. Scores

Jobs & Opportunity Index August 2018 Unemployment Rate

Results for the three underlying Jobs & Opportunity Index August 2018 factors were:

  • Job Outlook Factor (optimism that adequate work is available): RI remained 17th.
  • Freedom Factor (the level of work against reliance on welfare programs): RI remained 41st.
  • Prosperity Factor (the financial motivation of income versus taxes): RI remained 47th.

Click here for the corresponding employment post on the Ocean State Current.