July 19, 2008

Which Way to Economic Health?

Justin Katz

Perhaps some wishful thinking is involved, but it has seemed as if the various help wanted sections have seen a slight up-tick in ads. Could be seasonal; could be my imagination. At any rate, viewed from a different direction, the economic news continues to be discouraging:

Rhode Island's recession continues to deepen, as payrolls shrink and the ranks of residents unable to find work grows.

The state unemployment rate last month climbed to 7.5 percent, two percentage points above the national average, and payroll jobs fell for the sixth straight month, according to a report to be released today by the state Department of Labor and Training.

So far this year, Rhode Island has shed 8,600 payroll jobs and the ranks of unemployed residents have swelled to 42,600 — the largest in 15 years, the state reported.

Yet, just over the border, in Massachusetts, payroll jobs last month rose by 2,800 following a 1,900-job gain in May, according to a report yesterday by Massachusetts' Office of Labor and Workforce Development.

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Let's be honest ...who amongst us, if we were getting ready to launch a business, would establish it in RI vs a few miles away in MA?

The RI General Assembly, a wholly owned subsidiary of the Unions, has created such an unsustainable gov't cost structure, requiring outrageous taxes and fees, that you'd be a fool to open up shop in RI.

Our bloated cost structure is, primariliy, the result of three insidious and incestuous factors:

1) It starts with Entitlement minded Unions that believe they are entitled to a level of pay and benefits that have no correlation to the customer’s ability to pay (i.e. unsustainable).

PFD Union Pwesident, Lazy-Ass Pauly “No Show” Doughty, high-lighted this Entitlement attitude when he wrote a letter to the editor telling us his Union members deserved to be paid what other big North-Eastern cities pay, as opposed to what Providence could afford.

2) Out of control and irresponsible Social Welfare. RI has become a magnet for people that can not afford to take care of themselves, thus attaching themselves to the public-tit. The poverty pimps (e.g. Henry Shelton) complain and demand that the rest of us subsidize people that can’t afford to heat their homes. Never does he tell his flock to be responsible and turn down their heat. Nor does he advise his flock NOT to move to a geographic location in which they can not afford heat. Instead, he wags his finger at the rest of us for not doing enough.

And as the ProJo pointed out, the Unions have created an unholy alliance with the Social Welfare leeches.

3) A General Assembly lacking the courage and intelligence to say NO to the above leeches. Instead, they join in the tit-sucking by taking free health-care.

Enabling all of this is an uninformed and tolerant public. Too often the public is compliant. For example, when faced with a Pension System that has a $5B deficit (second largest in nation and yet another example of Entitlement minded pay & benefits that are unsustainable and uncorrelated to what the customer can pay), the public, rather than screaming “no F'ing more, the party is over”, instead settles for “studies” by commissions made up of beneficiaries.

Worse, we have members of the public that try to find ways to justify what leeches like Bob Walsh peddles (e.g. buying into the nutty “Walshian Assumptions”) rather than looking at history and the current situation and slamming the door shut when the snake-oil salesman shows up peddling his latest wares (“Walshian Assumptions”; “Selling Equity in the Lottery”).

By the way, when can we look forward to the next “Pension Simulation”, reflecting the current market, demonstrating that the “Walshian Assumptions” allow for a sustainable pension?

Posted by: George Elbow at July 19, 2008 9:34 AM

Very true, but scapegoating the poor, the sick, and immigrants without papers, is not going to solve our underlying economic and infrastructure problems.

Posted by: citizen at July 19, 2008 1:23 PM


i have no problem helping the poor and sick... but ri is so good to them, its become a mecca. there is an imbalance of those contributing and those receiving. its not about trying to hurt people. there is just n money left.

and how many poor people have you invited into your home for dinner this week? ever?? i mean people off he street you dont even know... wel those are the same eopel that my tax dollars are helping... i dont see them or know them.

as for immigrants.. there is a worlswide problem of poor people. maybe you should focus on making conditions better where these people came from so they have a better sociiety where they were born and can take care of themselves.

maybe we should ust open the doors to everyone on the world and ri can just go broke..

as is the case with most progressive causes...union labor, etc, when does it all end? when is enough , enough???

the response to date is that there is never enough for them....

Posted by: johnpaycheck at July 19, 2008 2:13 PM

maybe we should just open the doors to everyone on the world and ri can just go broke..
Posted by johnpaycheck

Hmmmmm.....isn't that more or less what has alreasy happened?

Posted by: Mike at July 19, 2008 3:21 PM


Look on the brighter side. RI is just entering the recession and although it will be a long one (3 years or more), at least RI is not as bad off as Michigan.

Michigan unemployment in June 2008 was 8.5% and RI was 7.5%.

In Michigan, subprime mortgage-related foreclosures will cost $3,081,807,231 in lost property value and $39,643,339 in lost property taxes over the second half of 2007 through the end of 2009.

Currently Rhode Island subprime foreclosures are estimated to now only cost the state over $1.7 billion in lost property tax on state and city and town levels.

Inflation is up 1.1% and gross wages are down. Everything cost more but oil prices are dropping so gasoline should drop in price. Oil for heat and hot water, natural gas will stay high maybe hitting $5 a gallon by winter. Electric will cost more.

However as of 19 July, there is a tropical depression with greater than 50% chance of developing into a tropical storm and hurricane moving through the Caribbean towards the Gulf of Mexico on course for the oil rigs and Texas refineries. If they shut down that will only drive gasoline up to $5/gal a little sooner.

First Fed is bailing out Wall Street investors and the banks but indicate at least over 850 banks should fail. This is the 10th straight quarter nationally small business bankruptcies fillings have increased. Between 60,000 and 90,000 small business have gone out of business.

RI highest unemployment during a recession was a little over 9%. RI has a long way to go in beating Michigan. Feel happy about that!

Besides, you’re healthy, working, roof over your head, and food on the table for your family.

Posted by: Ken at July 19, 2008 7:31 PM

Hey Ken,

I wonder what MI has that is so helpful to its economy?

Hmmm ...oh that's right. MI is Union central!

Toyota, Honda, etc. are just dying to put mfg. plants (and jobs) in MI ..NOT!

Posted by: George Elbow at July 19, 2008 8:24 PM


It is not a matter of scapegoating the poor, the sick, and immigrants without papers.

Rather, it is about being responsible and being realistic about what we can afford.

I'm happy to help those in need that have fallen on hard times. But I've been to too many "low income" homes in the winter only to find these folks walking around barefoot in shorts, windows open to hang out and smoke from, with the heat on full blast, compliments of fools like me who run around with sweaters and blankets in order to conserve heat.

And I don't like having to subsidize people that move here from warm climates when they can't afford the heat.

In summary, I don't like having to subsidize people that come to our nanny-state due to bad choices / decisions on their part.

It's not scapegoating. It's calling a spade a spade.

We can NO longer afford the madness.

Posted by: George Elbow at July 19, 2008 8:34 PM

Interesting that a neighboring state with a much more liberal governor (and just as Dem-dominated a legislature) is faring much better economically and doing a much better job of keeping its young people in-state than Rhode Island (and has also built a state where even conservatives would rather be than here).

Posted by: rhody at July 19, 2008 11:59 PM

Interesting that a neighboring state with a much more liberal governor (and just as Dem-dominated a legislature) is faring much better economically and doing a much better job of keeping its young people in-state than Rhode Island (and has also built a state where even conservatives would rather be than here).

Posted by rhody at July 19, 2008 11:59 PM

the sheer fooilishness of this post....

deval patrick has been governow for 2 years and he is the reason why the mass economy does better than ri???

cant you say anything more intelligent than that.

Posted by: johnpaycheck at July 20, 2008 1:38 PM

Besides, you’re healthy, working, roof over your head, and food on the table for your family...

sounds like a communist country.

i want more than that and i dont apologize for it

Posted by: johnpaycheck at July 20, 2008 1:43 PM

Mass, knowing how destructive over-taxation can be, has Prop Two-and-a-half, which puts limits on property tax increases.

RI waited too long to implement property tax caps via S-3050.

Unfortunately, the Bob Walsh's of the world had already wrought their destruction by the time S-3050 was implemented.

With regard to Devil Patrick, relax. He's doing his best to unwind any progress that MA has made over the past decade.

Posted by: George Elbow at July 20, 2008 4:30 PM

From Economics 101:
"The curve is most understandable at both extremes of income taxation—zero percent and one-hundred percent—where the government collects no revenue. At one extreme, a 0% tax rate means the government's revenue is, of course, zero. At the other extreme, where there is a 100% tax rate, the government theoretically collects zero revenue because (in a "rational" economic model) taxpayers presumably change their behavior in response to the tax rate: either they have no incentive to work or they avoid paying taxes, so the government collects 100% of nothing. (In actual fact the government will collect some minimal amount in either case, because not all taxpayers are "economically rational".) Somewhere between 0% and 100%, therefore, lies a tax rate that will maximize revenue.

The point at which the curve achieves its maximum will vary from one economy to another and depends on elasticities of demand and supply and is subject to much theoretical speculation. Complexities arise when taking into account possible differences in incentive to work for different income groups and when introducing progressive taxation."

RI is over taxed. It is a socialist state and it is falling apart at the seams.

Posted by: Holden Kuhl at July 20, 2008 5:27 PM

Mr. Kuhl,

I can anticipate the response to your post from Comrade Crowley: "You're just greedy and don't want to pay your fair share!"


Posted by: Ragin' Rhode Islander at July 20, 2008 5:31 PM

Ragin RI,

If Comrade Pat "I don't understand basic math" Crowley says "You're just greedy and don't want to pay your fair share!", I would assume he is referring to Bob Walsh's flock of "Do it For the Children" Union-hack "teachers", along with the staff of his wholly owned subsidiary (i.e. the General Assembly and it's members), all of whom refuse to pay their fair share of the cost of their health care.

Or perhaps he would be referring to all those folks that relocate to RI from warm weather climates, but who expect the taxpayers to pay their heat.

Posted by: George Elbow at July 20, 2008 8:01 PM

I just love this article. I also like the one earlier this year which analyzed Tiverton municipal and school median salaries to show that in the East Bay, only Little Compton's were lower. I think we all know the likely owner of the $3 million plus home described in the article below- isn't it Republican former top corporate laywer, tax whiner and honest fighter for the little guy Cynthia Nebergall? Gosh I feel terrible she has come up with $35,000 in taxes this year for her $3 million+ Sakonnet mansion (6,600 sq feet, 6 bedrooms, river vue... You know, Robert's Rules Cynthia? Gee, she and Scott might have to postpone buying another luxury car until next year. That'll be a blow to the German or Swedish economy.

The people in Tiverton who DESERVE property tax relief are the retired people who live in CountryView Estates. Anyone in Tiverton whose house is under $225,000 in value, and whose total income is under $70,000 ought to get a real break.
The town's budget ought to come partly from the state, and from income & sales & use taxes, not from most people with houses below the $385K median. The folks with those big houses and big bank accounts ought to kick in. Too bad that's not in Robert's Rules. More later.

Tiverton tax bill trend is paid in full

By Marcia Pobzeznik
Daily News correspondent

The number of complaints about tax bills is about the same as always, with the main one being the bills are too high, although more people are opting to pay their entire tax bill in one lump sum this year compared to years past.

They’re worried about the fuel bills they could face this winter.

“A lot of people are making payments in full because they’re concerned about the price of oil and want to get that payment out of the way before their oil bills start coming in,” said Judy Harvey, a clerk in the tax collector’s office, of people not wanting to have to think about quarterly tax payments due July 10, Oct. 10, Jan. 10 and April 10.

Tax bills were mailed in early June, shortly after the annual financial town meeting, where taxpayers voted on the annual budget and set the tax rate of $11.25 for fiscal 2009.

Some 50 people have appealed their assessments this year; one couple complained that their tax assessment is too low and should be raised, Tax Assessor David Robert said.

“We might get one of those every two years,” he said. The last one, he said, was denied.

“You can appeal for any given reason,” said Robert, who noted that about half of the appeals this tax season are from people who say their house is not worth what it is assessed because of the downturn in the housing market. He said the town doesn’t change the assessments because of the housing market unless it’s a revaluation year.

The couple that contends their house is worth more than it’s assessed at want the assessment of $417,000 raised to $650,000. They want to sell their home, Robert said.

A handful of the appeals are from elderly on fixed incomes who say they can’t afford their tax bill and want to be considered for a hardship exemption. Those temporary exemptions range from 10 percent to 25 percent and are given in extreme cases.

And then there are what Robert calls the “habitual” appealers who appeal their assessment every year.

There are 4,938 single-family homes in town, 298 multifamily, 416 residential condos, 223 mobile homes and 296 residential on leased land. The number of businesses has decreased, from 607 in 2007 to 577 in 2008. Most of the losses probably are in-home businesses, Robert said.

The highest tax bill for a residential property this year is $35,190, he said. It’s a 6,600-square-foot, six-bedroom, five-bath waterfront home in the south end, off Seapowet Avenue. It’s assessed at $3.1 million. Quarterly tax payments are $8,800, or about twice the price of the yearly tax bill of the average home in town.

There are 10 residential properties in town that are valued at between $2 million and $3 million. Another 89 properties are valued at between $1 million and $2 million.

The average home is valued at $385,000 and has a tax bill of $4,331.

The lowest tax bill is $204 for a 480-square-foot trailer and shack on Pelletier Lane that’s valued at $18,100.

As for the “For Sale” signs that seem to be everywhere, Robert said there are 172 single-family homes, 26 condominiums and eight multifamily homes for sale in town.

“Some people have the perception that taxes are getting high so they’re selling,” he said, “but out of 14 like communities in Rhode Island, Tiverton is tenth as far as taxes are concerned. Compared to other Rhode Island communities, we’re on the low side.”

Send e-mailto Marcia Pobzeznik at Pobzeznik@NewportRI.com.

Posted by: Richard at July 22, 2008 2:39 AM

OK, brace yourself:

Wealthy Tiverton condo residents cheat town-- pay only 20% of property taxes to the town budget-- for 20 years! Why? because the incompetent Republican anti-tax, pro-mall-business Tiverton Town Council led by Claudia Linhares and Lori Doyle in 2004 voted 4-2 back then (before they were thrown out in a landslide) for something called a TIF Bond. A TIF Bond is just like a School Bond, or any Bond but unlike the School Bond, which was approved by Tiverton's voters, after years of thorough review, a TIF Bond can be voted on by the Town Council- AND NEEDS NO VOTER APPROVAL. So thanks to Tiverton's Republican voters, in 2004 we were saddled with a $20 million dollar bond.
The Bond was a gift to the $8.4 billion dollar Starwood Corporation from our oh-so eager Linharians. It was negotiated by former Tiverton Town Administrator Jim Towers (sadly, a pseudo-Democrat). Towers, Linhares & Doyle said to Starwood: Golly you guys must be unable to build a three mile sewer hook up to Fall River by yourself, so with this TIF Bond, your futue condo residents-- and mainly the residents and taxpayers of Tiverton will build your sewer line for you. Would you know it? Starwood said "great!" Now, this tax year, The Mount Hope Bay Condo sweethearts owe the town about $1,000,000 in property tax on their darling luxury digs. How much is the Tiverton town treasury getting? About $200,000. The other $800,000 that we should get, to offset and reduce propety taxes at CountryView Estate and Justin Katz's house, is going to pay the debt service on the TIF Bond.
And 80% of the property tax from Mount Hope Bay condos will continue to be siphoned off EVERY YEAR THROUGH 2024. That's $15-$20 million in lost tax revenue-- given so that every Tiverton tax payer can say "I gave those rich bastards a sewer hook up."
Next time a Mount Hope Bay resident bitches to you about their awful property taxes, tell them their bucks not going to the evil NEA union, but so they can FLUSH.
BTW, Don Bollin and Louise Durfee were the 2 councillors who opposed this boondoggle. That's one reason they get my vote.

But wait-- there's more!! No, not ginsu knives... more sordid dirt. It was advertised about town that any lucky stiff who lived NEAR the Starwood sewer line could hook up to it! Guess what, I think that's true, but I think few if any people have...why? Because each house to be hooked up would be assessed a charge - to the town, and another to the homeowner. Then since the sewage leaves the state and goes into Fall River for processing, the homeowner would be assessed a yearly tax for this service-- FROM FALL RIVER.

Now, the brilliant Republican duo of Linhares and Doyle were rudely dumped out of office in 2004, Ms. Linhares tried a 2006 comeback and came in dead last. [Note to Justin: this gives you a clue why Republicans have fared poorly here recently.] This ousting was NOT really because of the TIF Bond, because most people had no clue it happened. Even I, who am political and have lived in TIV for 12 years didn't know the details of this until last month. Tiverton voters bitch about taxes and government but few understand how it works. (This is why is is too dangerous to turn budget approval over to an ignorant 244 or 450-- or to the ignorant 800 who come next week for that matter. That few Tivertonians should never try to figure out budgets.. remember we have 11,500 voters here. No the Linhares Council got dumped because they favored the New England Development Corporation mall on Souza Road. I watched all that play out from 2000-2004 and NEDC was one of sleaziest, manipulating organizations I've ever seen try to weasel into a nice community. (With the economy now no one would trust their word about the great things they'd do- malls are dead dead dead in Tiverton, and elsewhere. Smaller reasonable growth on Main Rd and Stafford Rd. is best.) It would be nice to develop and sell lots in the Industrial Park but some doofus on May 21st got the mob to give money from sales of parcels in the park to pay School Bond debt, when what is needed is further infrastructure improvements in the park-- any sensible first year MBA would understand that. BTW, the industrial park WAS probably a mistake 20 years ago, because every town in New Ebgland built one at the same time: result- instant overcapacity. Parks near Rt 128 and 495 and 95 worked out, mostly. Ours is not near any city that can use it. It will work out- but it is not this town government's fault. And FORGET about the cry of "build the Douglas asphalt plant" that rang out on 5/21. You morons, that was considered 7 years ago-- no one in their right mind wants the air, water and noise pollution of an asphalt plant. It is not happening. Light industry yes, office space, whatever.

Ok, you are bored, but I saved the best for last! After negotiating the lovely $20 million dollar TIF Bond in 2004, Town Administrator Jim Towers, who was my near neighbor, quit (was invited to leave) as Town Administrator. By gum, guess what! Scant months later he took a job with the Starwood Corp! What great luck! And then he sold his lovely house ($415K) and he bought a condo at Mt Hope Bay. I guess those Starwood folks really appreciated his help in negotiating their new sewer system. I imagine his job was sewer system Inspector. Kind of like those sidewalk supervisor jobs Mayor Daley used to provide when I was growing up in Chicago. So Towers was allegedly a Democrat in Tiverton. The party here now cringes to think of it. He was even a rep in the General Assembly. I went to the extreme step of voting for the Republican to get him out (1996). Yes, even way before Starwood I sensed he was a rotten apple.

Anyway, you Tiverton anti-tax people and haters of public schools, and true believers in an intolerant religion: I hope and I think you need to look more closely at this town. There are tons of fine moderates here, liberals, pro-union lefties (or like me, cynical about RI unions), there are environmentalists and secular humanists and conservationists and libertarians and Unitarians and hedonists and very fine sweet Methodists like my Mom.

My past existence in Chicago, Boston, New Haven, Seattle and rural New Hampshire made me hanker for diversity.
For you guys, it must be sweet to live in a town with mostly white people. Hardly any coloreds, or Muslims. or Muslim coloreds like Barack! Or sneaky Chinamen. What a blessing to live in a town that's 70% Catholic, eh? But are they really Catholic? Maybe we need a test to see who is a True Believer.

Anyway, you have it made-- Private school kids, Catholic school kids, homeschoolers, special needs kids who go to school 15 miles away-- all get books from the public schools. And free rides on the buses- of the public schools. I just love those chuckleheads at meetings who talk about all those buses going by with 3 kids on them: PROOF of a corrupt school board. No, they are just trying to meet the demands and schedules of all the kids they haul.
Be thankful that we do a great job in caring for special needs kids here
- by keeping them in the school system we are saving you a fortune. If we could hire 1.5 more FTE as special needs teachers for about $70,000 we could handle for special needs kids in our system and save twice that in fees to have them go out of network. Did you know there's one family in TIV with three severely disabled kids who have to go out of town to school and by law we must pick up the tab-- which is about $300K a year. For one family. How about the wealthy husband & wife- both full time professionals with probably $200K income. They send two of their kids to private school in Massachusetts. The third kid is severely disabled but is cared for, as by regulation and law, in the Tiverton Public Schools. He needs one-on-one attention all day. We pay a lot for that- as we should. You pay for it too-- but we cannot ask the rich parents to pay extra for the care. If we tried, the schools could be sued. How does your religion feel about taking care of kids who are disabled? You have to understand that if you try to cut the budget for special needs the town will be awash in lawsuits. You pretty much can't cut the school budget itself here-- try it-- you can't. You can help make it a better budget. You need to understand that the current School Board- 4 in are 5 moderate-liberal Democrats- are the ones who are standing up to the NEA and trying not to bust the union (you can't, it is RI), but they are working hard to reduce the cost of the NEA members through benefit co-pay increases. Yes, you want that situation improved, you vote the current School Board back in.
Basically guys, RI is Democratic. Tiverton is mostly lineral, moderate Democrats and independents, and some pro-union older Democrats. You can't win here. Joe Amaral was a Rep here for 12 years NOT because he was Republican and conservative, he was a bit out of step that way. He was elected because he was a really nice guy, came to your house to ask for your vote, did excellent constituent service, knew everybody, sent every sick or bereaved person a card. I voted for him 4 times because of those things, though I thought he was ineffective on Smith Hill through no fault of his own, plus I really loathed his views on abortion, gun control and the like. I'm telling you, that's the way Republicans win in Tiverton. Having Portuguese ancestry helped Joe, too. John Loughlin has a similar style in Dist 71.
Justin, the main thing I can leave you with is that I worry about you. For a religious guy with a big family, I wish you were more upbeat. Mostly when I read your writing-- well, you sound dark, cynical, bitter, angry, frustrated. If you keep pushing your personal and political agenda so hard, and keep obsessing about Tiverton, taxes, and whether evolution is evil... well I just worry. Like I wrote to Monique C.-- lighten up, and try to WORK with other Tivertonians - work instead of mocking and deriding. It ain't pretty, the mocking and deriding. Join a volunteer committee. They still have a couple dozen openings. Check with Mrs. Mello at the clerk's office. Don't freak that she's a Democrat. Democrats are people too. Some committees only require 3 or 4 hours a month work. Don't ever join a Charter Review Committee-- it drove me bonkers for a whole year & nothing much good came of it.


Posted by: Richard at July 22, 2008 4:29 AM

Its good to know that a state unemployment rate as increased,due to this job opportunities have increased in Rhode Island.

Addiction Recovery Rhode Island

Posted by: meshil at July 22, 2008 7:48 AM
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