The opioid epidemic is a widespread, complicated problem, and only a collective effort will begin to solve it not a harmful opioid tax.

Testimony: Opioid tax bill would harm families and businesses across Rhode Island

To: RI Senate Committee on Finance
From: Rhode Island Center for Freedom & Prosperity, Mike Stenhouse
Subject: Written Testimony re. Opioid Stewardship Act (S0798)

Chairperson Conley, Jr. and Committee Members: As CEO for the RI Center for Freedom & Prosperity, a non- partisan research and advocacy organization, I would like to provide some background re. S0798, which is before your committee today. As a 501-C-3 organization, our Center is not advising you whether or not to support this legislation. However, we are allowed to discuss our research and perspectives with regard to pros and/or cons of the underlying issue.

For our written testimony, I am submitting, in its entirety, an opinion piece written by our Center’s Chairman, Dr. Stephen Skoly, who has ample medical experience in dealing with pain-killing drugs for his patients.

Thank you. Thank you. If I can answer any questions, please contact me.


Opioid tax bill would harm families and businesses across Rhode Island

By Dr. Stephen Skoly, a maxillofacial surgeon in Cranston, and Chairman of The Rhode Island Center for Freedom & Prosperity.

The opioid epidemic is a widespread, complicated problem, and only a collective effort will begin to solve it. The healthcare community and lawmakers need to work in tandem to find policies that effectively lessen opioid abuse while still keeping our state’s economic health as well the health and safety of the patient in mind. It’s unfortunate, however, that Senate Bill S0798, the Opioid Stewardship Act, fails on both accounts.

This bill seeks to levy $7.5 million in annual taxes on the healthcare system for the distribution of prescription opioid medications to healthcare facilities throughout our state, including pharmacies, hospitals, and urgent care clinics. The motivation behind the legislation is clear; legislators seeking to disincentivize use by taxing the products that they believe have contributed to growing rates of addiction and overdose. However well-intentioned, this is a costly approach that misses the mark.

Prescription opioids serve a clinical and legitimate medical purpose. Postoperative analgesia, cancer, trauma, and chronic disease are just a few examples of the many medical conditions and procedures that require opioid- containing medications.

Just like all taxes imposed by lawmakers, there will be reactions as these added costs will somehow be passed onto patients in the healthcare system. Employers that provide health coverage could see insurance premiums rise, while families could experience higher prescription costs; all for an epidemic being fueled by illegal behavior that S0798 would not address.

Those suffering and without adequate insurance would be most impacted, and would be incentivized to seek more dangerous drugs on the underground market.

As a medical professional, I find it morally reprehensible that our lawmakers might inflict economic pain on patients who are suffering acute physical pain; especially at a time when Rhode Island has one of the worst economies in the entire country.

Examples of the real and unintended consequences of taxes on prescription opioids are showcased in New York. In fact, Rhode Island’s Opioid Stewardship Act is nearly identical to a bill recently passed in the Empire State. This New York bill was loudly opposed by patients, healthcare providers, the business community, and other lawmakers, who expressed ire that the bill’s hefty and punitive tax would lead to increased costs or restricted access to care.

I find it confounding that Rhode Island lawmakers would draw inspiration from another state’s misguided legislation. Reacting to a crisis in haste, just to claim you did something, is itself misguided. This legislation represents another example of “not letting a crisis go to waste.”

There is no debate that a robust response to the opioid epidemic is necessary. But when developing policy, Rhode Island legislators need to acknowledge the importance of protecting the affordability and accessibility of necessary medications for our state’s patients and their families. The Opioid Stewardship Act fails to make these considerations. Rhode Island legislators need to understand that opioid prescribing protocol are evolving based on evidence based medicine and recommendation from The American College of Surgeons. Recommend best practices for prescribing opioids in Rhode Island includes accessing the Rhode Island Drug Prescription Monitoring Program (PDMP). Finally, it is important to recognize that addiction is neither a moral failing nor a character flaw. Rather, it is a chronic disease much like heart disease. Even our legislators should be morally offended by supporting a misguided tax on a chronic disease to balance their budget.

Rather than relying on added taxes, our lawmakers should promote more sensible solutions such as supporting efforts by our law enforcement agencies to purge our state of illegal drugs and by encouraging continued education of patients about the potential risks surrounding prescription opioid medications.

This tax would do nothing to address the core problems of inappropriate use and illegal distribution of opioids.

Greedy union bosses have corrupted state government, restricting municipal policymakers from governing their own affairs at the local level closer to the people.

Perpetual Contracts Will Keep Rhode Island in Perpetual Decline

Providence, RI— Statement from Mike Stenhouse, CEO for the RI Center for Freedom & Prosperity on the “perpetual (evergreen) contracts” legislation that was signed into law today by the governor:

“The number one driver of the Ocean State’s declining population and jobs numbers –  are high property taxes. Our Public Union Excesses report clearly connects high property taxes with the excessively high costs of collectively bargained government services. This new ever-green contracts law will keep property taxes ever-high.

We continue to give an unfair advantage to the wealthiest and most connected insiders of the population, and now these special-interest groups come before the Rhode Island people and saying we don’t have enough … and we want more? This is outrageous!

It is clear today, that after 10 years of the slowest economic recovery among all states, Rhode Island’s political leaders are not fulfilling their promise to help the average family. Instead, by heaping more and more favors upon those who help get them elected, politicians have lost the trust of the people.

Beyond the financial costs, there is a more corrosive impact from this kind of political cronyism. People are fed up with betrayals from lawmakers who have forgotten them, who cater to special interest groups, and who make it harder to live and take care of their families and business – and to continue to reside and work in Rhode Island.

Sadly, Rhode Islanders will now have even less hope for our state, with even less trust in their government! In this case, perpetual contracts will make it much more likely that the state of Rhode Island will remain in perpetual decline.”

Public Union Excesses, the largest research report ever produced by the Center, details how Ocean State taxpayers are dishing out an extra $888 million per year as compared with their private sector counterparts; findings that are consistent with previous national studies, including a report by the Center in 2012. Rhode Island property taxes would be 25% lower were it not for the ‘excessive’ costs imposed on families and businesses for collectively bargained government services, in providing up to a 27% total compensation premium for government workers.

The Center refutes the unsubstantiated & off-target NEA-RI claims made by two government union officials in publicly responding to our Union Excess Report.

CENTER Refutes NEA-RI Claims about its Cost of Collective Bargaining Report

Unions Respond with Mindless Attacks and Unsubstantiated Claims

Teachers Union Response Addresses the Wrong Points

Correction

Providence, RI— The Rhode Island Center for Freedom & Prosperity refutes the unsubstantiated and off-target claims made last week by two government union officials in publicly responding to the Center’s Public Union Excesses report. The eye-popping report details how Ocean State taxpayers are dishing out an extra $888 million per year in providing 26% total compensation premium for government workers as compared with their private sector counterparts, and that drive local property taxes 25% higher than they need be.

Typical of union tactics seeking to avoid discussion of the issue at hand, labor officials try to change the topic by responding with a barrage of subterfuge and attacks on the messenger. 

Robert Walsh, executive director of the National Education Association of Rhode Island made a series of apparently incorrect and misguided public comments when he claimed that Ocean State public school teachers make about $14,000 less in salary than their Massachusetts counterparts.

Mr. Walsh’s statement is off-target for a number of reasons:

  • The Center’s report focused on “total compensation”, while Walsh focused on just the “salary” component
  • The Center’s report compared all public sector workers to private sectorworkers in Rhode Island, while Walsh compared RI public teachers to MA public teachers
  • Most importantly, Walsh’s figures, in his attempt to downplay compensation for Rhode Island workers, do not match with public reports.

In his statement last week to the Providence Journal, Walsh claimed that RI teachers averaged $66,758 in salaries, compared to $80,357 in Massachusetts – a gap of $14,000.

However the salary figure reported in the official Employees’ Retirement System of Rhode Island (ERSRI) report show an average 2018 RI teacher salary of $77,581 – about $11,000 more than Walsh claimed. Further, the similar report in MA shows their average teacher salary (including Boston) was just $74,156 – about $6,000 lessthan he claimed. 

Walsh proceeded to dig himself into a deeper hole when he claimed on Twitter that the Rhode Island ERSRI figures were inflated because higher paid superintendents and other non-teaching positions were included: yet this reasoning ignores that the Massachusetts figures likely also include such positions, which only would minimally change the calculations by 1-2%. 

Per these two reports, Rhode Island teachers make about $3,000 more than do their Bay State counterparts, not the $14,000 less as claimed by Walsh.

Mr. Walsh’s initial statement about any gap could be off by as much as a whopping $17,000. When asked on Twitter to provide documentation for his figures, Mr. Walsh did not respond.

Additionally, the president of AFSCME, the largest government worker union in the state, J. Michael Downey, joined with Walsh in questioning the Center’s donor base and why it is not publicly disclosed. 

“Rather than professionally responding to the findings in our report, once again progressive-union-left leaders seek to shut down open and honest debate by mindlessly attacking the messenger,” responded Mike Stenhouse, the Center’s CEO. “Both Walsh and Downey know that the US Supreme Court has ruled that their is a major difference between government transparency and privacy for nonprofit organizations; and that donors to groups like our Center should be protected from recrimination by the  government or by over-zealous activists.” 

The Center is proud to have earned the support of about 500 in-state donors in support of its core mission to return government to the taxpayers. The Center accepts no public funding and receives no contributions from any out-of-state group that attempts to influence its agenda. The Center’s full donor privacy policy can be viewed here


The 48-page report was researched and co-authored by adjunct scholar to the Center, Dennis P. Sheehan, and by the Center’s research director, Justin Katz. The reports’ findings are consistent with previous national studies, including a report by the Center in 2012.

The full report also includes tables with town-by-town estimates of the excessive total compensation costs of government workers at the municipal level, in school districts, and in independent fire districts. 

CORRECTION: Stuart Peterson, actually the former School District Finance Committee Chair, in commenting on East Greenwich’s $9.5 million excess, was incorrectly listed as former Town Finance Director in the Center’s original media release last week: “The report’s findings are certainly in line with what we have seen in East Greenwich for the last 30 years. Our residents have seen (property) tax increases three times that of inflation, and up to four times that of median household income wage growth.”


Rhode Island property taxes would be 25% lower if not for the excessive costs imposed on families & businesses by collectively bargained public unions.

CENTER’S NEW REPORT: Public Unions Cost Rhode Islanders $888 Million Per Year

Property Taxes on Families & Businesses Driven Up By 25%

“Firefighter Overtime” and “Evergreen” Bills Would Give Unions a More Unfair Negotiating Advantage

Providence, RI– With two-thirds of the statewide burden heaped on local taxpayers, Rhode Island property taxes would be 25% lower were it not for the ‘excessive’ costs imposed on families and businesses for collectively bargained government services, according to a major report released today by the Rhode Island Center for Freedom & Prosperity.

Public Union Excesses, the largest research report ever produced by the Center, details how Ocean State taxpayers are dishing out an extra $888 million per year in providing up to a 27% total compensation premium for government workers as compared with their private sector counterparts; findings that are consistent with previous national studies, including a report by the Center in 2012.

Rhode Island residents could save 25% on their local property taxes, while state taxpayers could realize even further savings if public services in the Ocean State were provided at competitive market rates.

“Our state cannot survive morally or economically with this obvious imbalance. At $888 for each Rhode Islander, a family of four is paying over $3500 annually for these excessive compensation deals,” emphasized the Center’s CEO, Mike Stenhouse. “We must find a better balance between how much union members are paid and how much taxpayers can afford.”

The 48-page report, which utilized regression analysis calculations that controlled for experience and educational levels, was researched and co-authored by adjunct scholar to the Center, Dennis P. Sheehan, who is Professor Emeritus at the Penn State University Smeal College of Business, and who taught Finance at Penn State, Purdue University, the University of Chicago, and the University of Rochester. The report was co-authored by the Center’s research director, Justin Katz, who is one of the state’s leading analyst of the state’s jobs market and overall economy. 

Among the primary drivers of excessive public union employee total compensation, up to 27% higher than for comparable services in the private sector, are:

  • The 9th most favorable pro-union laws in the nation
  • A 4-6% base “wage premium”
  • Overly generous pension and healthcare benefits
  • Systematic overtime abuse
  • Numerous collectively-bargained cash-back schemes

The “firefighter overtime” mandate bill that passed the House in April and the “evergreen contract” legislation that passed the House in May would each create new state laws granting additional unfair leverage to local union negotiators.

The Public Union Excesses report discusses in some detail how its findings are supported by prior national studies and also includes a line-by-line budget analysis of the median Rhode Island town of Portsmouth. 

One chart in particular from Portsmouth demonstrates the lost opportunity cost, whereby excessive total compensation payments mean less money to spend on other important projects. For example, the $590 million aggregate annual municipal savings could easily pay for all necessary school building repairs and upgrades in just three to four years, estimated to be at over $2 billion, statewide.

Portsmouth Total Compensation Excess Estimates Portion of Budget, FY16

 The “remaining budget” is what the town currently has to spend a er compensation.  The low-end estimate is most likely to be excess and therefore available for other purposes, while the high-end estimate is least likely to be excess and therefore needed for compensation.

“Treating the 10% of unionized government employees more like the 90% of the rest of us are treated …  is not only more fair but also builds trust that government is looking-out after everyone the same,” concluded Stenhouse.

The full report also includes tables with town-by-town estimates of the excessive total compensation costs of government workers at the municipal level, in school districts, and in independent fire districts. 

Many state and municipal leaders also provided statements that say the reports’ statistically-determined findings match up well with their actual local budget analysis:

Mike Riley, municipal pension expert on Providence’s $110 million annual total compensation excess: “This massive over-payment in the budget directly hinders the City’s capacity to properly fund its critically under-funded pension plan.”

Ken Block, WatchdogRI.com, regarding the nation’s highest-cost for firefighter services in RI: “It is time to bring local municipal labor contracting into the light. A lack of transparency helps labor and elected officials hide the true cost of municipal labor contracts.”

Rob Cote, Warwick watchdog on his city’s estimated $54 million annual excessive overpyament: “… the actual numbers taken from official Warwick budget documents substantiate the analysis in the Center’s report …”

Stuart Peterson, former School District Finance Committee Chair, on East Greenwich’s $9.5 million excess: “The report’s findings are certainly in line with what we have seen in East Greenwich for the last 30 years. Our residents have seen (property) tax increases three times that of inflation, and up to four times that of median household income wage growth.”

Larry Fitzmorris, East Bay Taxpayers Association, on Portsmouth’s $10.2 millionexcess: “The millions of dollars of excessive costs identified in the report represents institutionalized spending borne by the taxpayers that is completely unnecessary.”

Rob Coulter, President Tiverton Town Council on its $7.4 million over-payment: “This high-quality study is incredibly insightful, and is sure to help us as we keep striving for the right balance of having a first-rate municipal workforce at a cost that is fair and affordable to our residents.”

Despite a booming national economy, Rhode Island's economic outlook dropped back into the bottom-10 among according to Rich States Poor States by ALEC.

Progressive Policies Sink Ocean State Back into the Bottom-10

Providence, RI– How much bad news can our state absorb before its political leaders change course, asks the Rhode Island Center for Freedom & Prosperity? Fittingly, it is on Tax Day that high taxes once again are cited for sinking the Ocean State.

Despite a booming national economy, many recently published metrics show Rhode Island is heading in the opposite direction, underscored by today’s announcement that the Ocean State’s “economic outlook” dropped three-slots and back into the bottom-10 among all states, according to the 12th edition of the Rich States Poor States publication, produced by ALEC (the American Legislative Exchange Council). 

“Our state is squandering its opportunity to remain competitive and to increase prosperity for its residents,” says Mike Stenhouse, CEO for the Center, who participated in a national conference call last week to preview today’s ALEC release. “This report reinforces all of the research and projections our Center has conducted in recent years. The upcoming a census will likely deliver the worst news for the Ocean State, which is losing the population battle. As this report again highlights, states with free economies and lower taxes are likely to see an increase in population, while the unfriendly economies with high tax and spend policies, like Rhode Island, are seeing a relative decrease.”

According to the Center, Rhode Island, is falling behind by standing still. While state politicians crow each year about not implementing broad new taxes, the unfortunate truth is that by nickle-and-diming residents and by not implementing aggressive reforms Rhode Island will continue to lose ground, nationally. As other states have moved to increase economic freedom for families and business, Rhode Island is losing ground by standing still: to reverse course, it must work quickly to reduce its onerous tax and regulatory burdens.

However, there is no indication that any political leader in Rhode Island has the courage to steer the state’s ship in the right direction. Encumbered by blind-dedication to a bloated budget, which itself is the state’s primary problem (with all of its taxes, fees, and mandates), lawmakers have put forth no vision and are stuck in the rut of continuing the policies of stagnation. 

According to ALEC’s Rich States Poor States, top-10 states such as #5 Indiana and #6 North Carolina are the most dramatic examples of states moving up the rankings by reforming their tax codes, as just a few years ago each state was in ALEC’s mid-20s. Conversely, Kansas, which has raised taxes in recent years has fallen from the mid-teens to 27th. 

Among the major factors cited by ALEC in Rich States Poor States leading to Rhode Island’s poor rankings are: 

  • High property tax burdens (47th)
  • High estate taxes (50th)
  • High Debt (46th)
  • High minimum wage (41st)
  • Workers Compensation costs (43rd)
  • Lack of workplace freedom (50th)
  • Unsustainable pension liabilities 

“Because of federal tax reforms, millions of good-paying new jobs are being created and trillions of dollars are being repatriated to US. But given RI’s hostile business climate, we are less likely to see major new capital investment or rapid job gains in our state,” concluded Stenhouse.

Jobs & Opportunity Index (JOI), February 2019: Employment and Jobs Turn Down

Given the short time between reports, only three of the 12 datapoints of the RI Center for Freedom & Prosperity’s Jobs & Opportunity Index (JOI) have changed for February, but the changes are important. After a disappointing downward revision of Rhode Island’s employment data from the Bureau of Labor Statistics (BLS) wiped away most of the employment progress Rhode Islanders had made in 2018, February showed an additional downturn. That downturn didn’t change the index ranking or the subrankings, so the Ocean State is still 47th in the country.

Employment was down another 570 people from the first-reported number for January, and the labor force dropped 951. An additional 1,400 jobs based within the state joined the 9,000 that disappeared the month before.

The first chart shows RI remaining last in New England on JOI. Although underlying scores moved, the three measures that changed did not cause any variation in rank from the month before across the country.

In New England, New Hampshire leads the region, in 3rd place, nationally. Vermont remained in 12th place, and Maine in 18th. Massachusetts is still 36th, and Connecticut stands at 42nd.

New England Jobs February 2019 Race To First Place

The second chart shows the gaps between RI and New England and the United States on JOI, both staying about the same. That was true of the third chart, also, which shows the gaps in the official unemployment rate.

United States Jobs February 2019 Scores
Unemployment Rate Rhode Island Jobs February 2019

Results for the three underlying JOI factors were:

  • Job Outlook Factor (optimism that adequate work is available): RI remained 24th.
  • Freedom Factor (the level of work against reliance on welfare programs): RI remained 42nd.
  • Prosperity Factor (the financial motivation of income versus taxes): RI remained 47th.

See here for the corresponding post focusing on employment from the Ocean State Current.

H5541 is the Bad Bill of the Week. The legisaltion would create a big brother Rhode Island health database to track information - without your consent.

Socialist “Big Brother” Database Bill Infringes on Our Privacy

The Rhode Island Center for Freedom & Prosperity today dubbed H5541 as its Bad Bill of the Week. The Rhode Island Department of Health wants to track sensitive information about you and your family – without your consent. In a state where government already has far too much control over our daily lives, big-brother should not be allowed to systematically track such information about our private lives.

Aimee Gardiner, founder of Rhode Islanders Against Mandated HPV Vaccines and a longtime advocate for medical informed consent, writes in her blog post about the many ways the proposed legislation (H5541) would infringe on our privacy. With the State of Rhode Island already collecting highly personal information about children and their families, the legislation would expand the government’s database to automatically include all adults … under the guise of tracking immunizations … without your knowledge or consent.

“Such an aggressive intrusion by government into our lives should not come as a surprise,” said the Center’s CEO, Mike Stenhouse. “Part of  the progressive-socialist agenda is for government to gather as much information as it can about its subjects, so it can someday decide who the winners and losers of its policy mandates should be.”

Further, a question raised by Gardiner asks whether or not this database-tracking is “dollar driven”, with the the Department of Health and/or doctors receiving a kick-back for every vaccination administered from big pharma vaccine manufacturers.

All in all, whether it’s a matter of government control or money, this legislation would violate our privacy without our permission! The medical community prides itself on the ethic of delivering services with “informed” patient-consent. This legislation would also violate that ethic.

If you do not want our state to take yet another step down the #RhodeToSerfdom, you are encouraged to send a note of opposition to your lawmaker, which can quickly and easily be done here: http://www.gaspeeproject.com/contact.

RI 2019 budget

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.