December 22, 2011

Re: Taking Over Municipalities: The Governor's New Toy

Carroll Andrew Morse

Rhode Island's Director of Revenue provided a simple explanation to Projo reporters John Hill and Bryan Rourke about why the state has suspended municipal democracy in East Providence: It was necessary to make a "statement to Wall Street" to help East Providence get loans...

The appointment of a state budget commission with complete financial control of the city’s budget was more a statement to Wall Street than a reaction to any new problems that the state has found in the city’s finances, a state official said Wednesday.

State Director of Revenue Rosemary Booth Gallogly said the move was needed after a week that saw one of the nation’s major bond-rating services drop the city’s credit rating to junk-bond status and then, two days later, Bank of America backing out of a plan to loan the city $20 million next month.

Apparently, the statement is that Rhode Island's governing class is willing to suspend democracy, if financiers think that that's better for their business.

However, a quote from later in the article suggests a more substantive reason for the suspension of a democratically elected government...

In November, Booth Gallogly said she was optimistic that the overseer stage was all that would be needed. There was a deficit, she said, but the city had a broad and diverse tax base.
Serious questions should be raised when an official involved with replacing an elected taxing authority with non-elected appointees starts talking about "a broad and diverse tax base"; a primary question in this particular situation is what will the officials insulated from the people who pay the aforementioned taxes be charged with doing -- that the accountable officials weren't expected to -- in order to make the state's "statement" to Wall Street?

Last year, Anchor Rising put a question addressing exactly this situation to the administration of Governor Lincoln Chafee...

One set of criteria in the new fiscal stabilization law that can trigger a municipal takeover by the state involves decisions made by bond-rating agencies....Do we now live in a society that believes that financial-industry needs take precedence over democratic voice?
The answer from the Chafee administration was...
We do not agree with the premise of these questions.
Events have demonstrated that this is not now and never was an adequate answer. The question of whether Governor Chafee believes that representative democracy is the central organizing principle of the government he is part of, or instead believes that representative democracy is a luxury that common people can be allowed to play at, once the real groups that government is accountable to have been satisfied (including being sent the right "statements", of course) remains both open and important, and needs to be addressed before Rhode Island slides irreparably away from democratic practice.

Comments, although monitored, are not necessarily representative of the views Anchor Rising's contributors or approved by them. We reserve the right to delete or modify comments for any reason.
whether Governor Chafee believes that representative democracy is the central organizing principle of the government he is part of, or instead believes that representative democracy is a luxury that common people can be allowed to play at, once the real groups that government is accountable to have been satisfied

Darn. Wish I'd thought to put it like that!

Of course, with Chafee we know which it is. The blueblood set in Rhode Island has little knowledge of nor respect for the aptitudes of the voting population.

Posted by: Justin Katz at December 22, 2011 4:43 PM

The phrase that comes to mind is, "taxation without representation." It's kind of scary, actually.

Posted by: Bucket Chick at December 22, 2011 7:05 PM

"taxation without representation."

Some of you people need to grow up. We live in a federal system. The federal government is sovereign and each state is sovereign. Cities and towns by contrast are dust- artificial creatures of the state and can be restricted and abolished at the whim of the state.
We have plenty of elected representation in the Governor and the GA. Lousy representation, but that is our fault for tolerating a one party state longer than the Soviet Union.

Posted by: Tommy Cranston at December 22, 2011 7:33 PM

Wait a minute. This is Rhode Island. We lost representative government a long time ago. Utterly uneducated, stupid, corrupt, and bought-off legislature members and municipal "leaders."

Better the state get involved, and even better the feds. Granted, neither the state nor the feds have good track records recently when it comes to their finances, but at least take these problems away from the hands of the locals.

Posted by: Bill at December 22, 2011 8:13 PM


In a democracy, there are no levels of government that are as all-powerful as you seem to think they are, with the ability to bend reality itself and meaningfully decree that representation is occurring because they have said it is so.

During the original "taxation without representation" era in America, loyalists to England argued that representation was not an issue, because parliament represented all of the subjects of the British empire (much like a "budget commission" or a "receiver" might be said to represent the interests of all the citizens in a community today). The American colonists took a skeptical view of the idea that absolute omniscience and wisdom was inherent in any branch of government, and stuck with principle that taxes could only be raised with the approval of a branch of government closest to the people, whose members were held accountable by frequent elections.

Rhode Island is working way too hard to try to undo this very basic cornerstone of modern democracy.

Posted by: Andrew at December 22, 2011 9:50 PM

" for tolerating a one party state longer than the Soviet Union."

Very good, Tommy C.

"The Governor's New Toy"

Indeed. No one better tell the governor that Oonsocket-way just had its onds-bay downgraded to unk-jay atus-stay.

My question about the receivership process is, why does the state have to be involved at all? Why couldn't the city/town council put itself into receivership and let a judge hack up the contracts and pensions (like countless times in the real world when there's no money and like Flanders did in C.F.) while the council retains its powers?

Posted by: Monique at December 22, 2011 10:02 PM

RI has become the laboratory for failed govt. The beautiful state is swirling down the drain desperately grasping for a solution. History repeats itself as the "leaders" lurch at socialism and dictatorship as a counter measure. Missing Linc is ill suited for a common sense solution. His priorities are gay marriage, medical mary-jane and benefits for illegals. Apathy from the voters breeds incompetence.

Posted by: ANTHONY at December 22, 2011 10:04 PM

"RI has become the laboratory for failed govt.

Did you mean lavatory? Laboratory connotes a place of exploration, learning and problem solving. The lavatory connotes Rhode Island.

Posted by: Max D at December 23, 2011 6:05 AM

Does anyone find it odd that the state would appoint a trooper to be a financial overseer in the first place. The guy Chafee sent is a top notch member of the command staff with a JD but what really qualified him to do that work? Wouldn't it have been nice to have sent someone with real public administration education and experience or is that asking too much?

Posted by: Max D at December 23, 2011 7:57 AM

"We do not agree with the premise of these questions."

What a great non-answer, by the way, when someone asks you something that they won't like the answer to; e.g.,

Q: Did you eat the last chocolate truffle?

A: I don't agree with the premise of your question.

Posted by: Monique at December 24, 2011 7:19 PM
Post a comment

Remember personal info?

Important note: The text "http:" cannot appear anywhere in your comment.