June 22, 2009

It's Almost as if There's Only a Real Interest in the Problems of One Community…

Carroll Andrew Morse

Over at RI Future, Pat Crowley doesn't seem quite up to speed on the public budgeting process occurring in most Rhode Island cities and towns. Mr. Crowley assumes that last week's announcement that there will be no general revenue sharing in FY2009-2010 means that city and town governments will have to "re-raise" taxes.…

If the State does not repeal the flat tax and continues the elimination of general revenue sharing, this is how much towns would have to re-raise their property taxes to make up the difference.

For example...take a look at North Providence....

But if "re-raising" taxes means municipal governments asking for more than they've already asked for, he's wrong. North Providence, for example, built an assumption of zero state aid into its budget for FY2010 (see page 5). In fact, according to Philip Marcelo's report in Sunday's Projo, most Rhode Island cities and towns have already accounted for the cut in general revenue sharing...
Mayor David N. Cicilline says his administration will need to resubmit his plan for the fiscal year beginning July 1 if the General Assembly votes to end the $55-million general revenue-sharing program that Providence and other Rhode Island communities have enjoyed for two decades….Providence appears to have taken a gamble that few other communities were willing to make in assuming it would get anything at all from the state from the program.
I know Cranston has zeroed out its general revenue sharing figure for FY2010 (see page 4). Warwick too (see page 105). So did the town of Lincoln (see the bright yellow column, hidden on page 1). Mr. Crowley is active in party politics in Lincoln, so you might of thought he'd have a sense of what's going on there, but I guess not, as he claims that Lincoln will either have a 1.65% or a 3.46% "re-raising" of property taxes, depending on which of his RI Future posts you believe.

Actually, the 3.46% for Lincoln is obviously the result of a second layer of faulty analysis, where Mr. Crowley tries to calculate the percentage tax-increase that replacing general revenue sharing would require, but presents inflated figures as the result of considering only the municipal side of the local spending, neglecting the fact that property taxes also are used to pay for schools. (Is this error maybe corrected between the two posts?) That error notwithstanding, however, any "re-raising" of taxes in most municipalities, as a result of the official announcement on general revenue sharing, will amount to 0%, because most city and town governments budgeted responsibly and assumed that no aid was coming.

The major exception, of course, is Providence, where the administration of Mayor David Cicilline assumed that the city would receive 6 million dollars in state aid, and now has to re-budget assuming the loss. The total lesson from all of this, as always, is that progressives and public finance don't mix.

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"towns would have to re-raise their property taxes"

Is this a problem?

"property taxes also are used to pay for schools"

... wait, what? They are?

"Mayor David Cicilline assumed that the city would receive 6 million dollars in state aid"

You know, if those firefighters (6.5% of the budget) had just caved - and then some - this would not be a problem.

Posted by: Monique at June 22, 2009 7:50 AM

Andrew, don't attribute to errors what is probably an attempt at simply misleading.

In his post at RIF he says that less that "less than 15 people take advantage of the flat tax in North Providenc" then provides a link to another post with the breakdown by town which shows that the 15 people are spread amongst 26 unidentified RI towns. So while it's true that "less than 15 people" in Nprov take advantage of the flat tax the number might well be ZERO.

His claim also assumes that the amount of tax revenue gained by repealing the flat tax - assuming there is atleast 1 flat tax user in NProv -is the same amount that has been received by the state in the past.

Now, I have no real position on the flat tax, but when advocates or opponents of any side of a debate deliberately mislead with such frequency as Crowley it makes it difficult to trust them.

Posted by: JP at June 22, 2009 11:13 AM

poor Andrew. suffering from the same delusions as Justin know. Too bad. You used to have some interesting things to say. Now....not so much.

Try reading the different posts and you will figure out the differences. Most of my readers did.

Posted by: Pat Crowley at June 22, 2009 2:41 PM

On second look I think I totally missed his point. If the larger point is whether to restore state aid to all 39 towns or continue the flat tax - again assuming in a vaccuum they net the same revenue - then thats a debate worth having. Assuming these towns dont have the capability to balance their budget by cuts, the difference has to come from something...maybe not property tax, but fee increases and the like.

Posted by: JP at June 22, 2009 8:13 PM

Most of my readers did.
That's because your readers must know not to take anything you write involving a number seriously.

Posted by: Andrew at June 22, 2009 8:50 PM

Andrew, Justin, It's really quite simple, first you drink the kool-aid, then Crowley's comments makes sense. Oh, by the way the comment...You used to have some interesting things to say. Now....not so much.
This was plagiarized from the many comments folks have made on another publication in reference to Comrade Crowley.

Posted by: bobc at June 23, 2009 7:01 AM
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