April 30, 2011

Scaring Grandma II - The Cicilline Lie-Apalooza Returns (Briefly)

Monique Chartier

Further to Marc's post about Rhode Island's junior senator going around baselessly alarming seniors, in the other Congressional chamber, Rhode Island's First District congressman was almost exultant last week about Paul Ryan's proposals to modify Social Security and Medicare.

“It’s interesting,” Cicilline said Tuesday during a half-hour interview with WPRI.com in his Pawtucket district office. “During my campaign I was criticized for doing a ‘Scare the Seniors’ tour. This is exactly what I was talking about. This is real!”

Actually, no, it's not real at all, Congressman. Nothing has changed since your Lie-Apalooza last fall when you went around telling seniors that changes had been proposed for Social Security ... without bothering to tell them that they would be completely unaffected by such changes.

Lie-Apalooza 2011 kicked off last week.

Congressman Cicilline will begin his Congressional Seniors Series by discussing the effects of the Republican budget on Medicare and Medicaid. Under the Republican budget, tax breaks for millionaires would be increased while the Medicare guarantee for seniors would end and support for seniors in nursing homes, disabled individuals, and low-income children who depend on Medicaid would be cut.

But, interestingly, it was cut short. Now, whether this was because he has repented about this really sleazy and dishonest way to drum up support or, more likely, because the press was asking good questions about the newest revelations of his budget shenanigans is not clear.

The larger question remains: why are these two elected officials (the junior senator and the junior congressman) addressing and upsetting a constituency about an issue that does not affect them in the least?

Where Rhode Island's Tax Dollars Go

Justin Katz

Cranstonite John Sauro was a year and some older than I am when he retired from the Providence fire department with a disability pension in 2000. Now 48, collecting a tax-free disability pension of $45,600 per year (on top of $1,800 that the city pays for his health care each month), Sauro spends his time on light hobbies like lifting 205 pounds on the incline bench at the local gym:

Target 12: Feel the Burn: wpri.com

I'm not sure why their shouldn't be criminal charges for what appears to be blatant fraud. Instead, according to WPRI reporter Tim White, Sauro walked right through a 2008 ordinance that required him to recertify his injury. If the system is that easy to skirt, then it might as well be considered part of the scheme.

April 29, 2011

Providence School Closings: Consequence of Decisions Past

Marc Comtois

The Providence School Board elected to close 5 schools last night. Parents were angry. Kids were used as props. I've seen it before. Similar circumstances occurred in Warwick a couple years ago, where a total of 4 schools were closed in two years (and everyone survived, believe it or not). My thoughts from 2009 are just as applicable to Providence now as it was to Warwick back then.

The entire problem was forged in a crucible of [Providence]'s own creation. The consequences of apathy often hit when the iron is hot, indeed.

Too many people simply don't pay attention unless they believe they will be directly affected. So the parents who are upset now need to recognize that they need to be involved in their children's education--whether in the PTO, School Committee meetings or other programs--all of the time. There's a chance that the budget shortfall could have been reduced, mitigated or avoided if more parents had attended School Committee meetings and advocated for their kids and schools by pointing out that every dollar spent on personnel costs...was one less dollar available for students. Perhaps that would have given the district more time to study and prepare for the inevitable downsizing without the added pressure they were under during this process.

So now we have kids who are going to have to adjust to new schools. I understand the anger and anguish felt by students and their parents. Perhaps there was more justification for closing other schools, but, as hard as it is to do, it's time to move on. Change happens whether we like it or not, whether we deserve it or not, whether it's right or wrong. Time for the grown-ups to remember that the kids are watching us. Instead of framing it as a loss, try to turn it into a new adventure. It's a life lesson, after all. Show them that it's OK to roll with the changes and hopefully they'll discover that change makes us stronger and, just maybe, even a little better.

To that I'd only add a couple additional observations. First, that, while this phenomena is not particular to Rhode Island, it seems that the geographic insularity characteristic of this state and its residents make the thought of closing a "neighborhood school" all the more intense and explosive. Second, I wonder how much easier such change would be if the students leaving the old school were going to an honest-to-goodness new school. As in, newly constructed, updated, latest bells-and-whistles. But that doesn't happen around here, either. Where the heck would we get the money, right?

A Couple of Narrower Economic Debates

Justin Katz

The other day, I mentioned the International Monetary Fund report suggesting that, by a "purchasing power," China would surpass the United States economically in 2016. Stephen Green isn't buying the "purchasing power" thing:

Measured dollar-for-dollar, China's GDP is less than half that of the United States’ — it's only by measuring "Purchasing Power Parity" that the numbers are even close, even all the way out to 2016. Per capita, most Chinese are quite poor, making little more than $4,000 a year. Grade on the PPP curve, and your average Chinese still makes only around $7,500. Per capita GPD in the U.S. is a much-comfier $47,132.

Of course, there's also the major consideration, which ought to be read into every study, that projections could be wrong — whether the error manifests in a gradual shift from expectations or a sudden boom or collapse.

While I'm on the topic of debates about economics and the metrics thereof, Al Lewis offers this opinion in the battle between Treasury Secretary Tim Geithner and Standard & Poor's:

S&P last week announced there's a 1-in-3 chance it will lower America's Triple-A credit rating, a move that would force higher interest rates on a debt-bloated nation.

Reading between the lines, one comes to suspect that Geithner's premise is based on the possibility of ever-increasing debt. Less-commonly mentioned are the huge number of assets that the government could sell to avoid default. Of course, the list to be found via the link concerns itself with financial assets and doesn't even begin to list such things as publicly held land that could be sold.

More interesting than the flat denial, though, is the pro-government spin of a left-wing think tank and Lewis's response:

Then there's S&P. "S&P has a horrible track record for judging credit worthiness," wrote Dean Baker of the Center for Economic and Policy Research. "It rated hundreds of billions of dollars of subprime backed securities as investment grade. It also gave Lehman Brothers, Bear Stearns, and Enron top ratings right up until their collapse. Furthermore, no one was publicly fired for these extraordinary failures."

S&P's legacy of risk mismanagement, however, comes from overrating incompetent and even criminal enterprises where it had grotesque financial incentives to do so. Not for downgrading things amid clearly downward trends. Still, what kind of company believes in Enron, yet loses faith in the U.S.A.?

Several answers are available to that last question. First, if S&P's tendency is to err toward optimism, it could be the case that the United States is in dramatically worse shape than Enron, just propped up by its power to tax and wage war. Second, the government's financial dealings are much more in the open than Enron's, so it's possible to be more accurate. And third (to throw a bone to the pro-government folks), S&P could see organizational advantage to threatening a downgrade of the U.S.

A Winner by Fiat

Justin Katz

Oh, happy day. Keynes and Hayek are back for round 2 of their rap war:

Not surprisingly, the representatives of the public sector and media, as portrayed in the video, have a preference.

April 28, 2011

Bringing the Cost-Saving Power of Competition to the Salary Bracket of the Senate Majority Leader's Special Assistant: "Qualified Young Republicans Will Work for Half-Salary"

Monique Chartier

As you know, it has come to light that the salary of the Special Assistant to Senate Majority Leader Dominick Ruggerio, Stephen Iannazzi, is $88,000+ a year (presumably not including health care, pension, vacation time, sick days, personal days, May Day, etc). This is a respectable level of remuneration for a position which apparently does not have a job description and does not require a college degree of the occupant.

The public-spirited proposal below, dispatched late this afternoon by Y.R. Chairman Travis Rowley, is self-explanatory and well worth exploring, especially in light of the state's budget difficulties. Travis has assured us that, if hired, none of the applicants will "leave the building" and walk back in again so as to double their salary, as young Mr. Iannazzi did.

After hearing the news that Senate Majority Leader Dominick Ruggerio's new 25 year-old staffer, Stephen Iannazzi, who hasn't earned a college degree, is being paid $88,112 annually for a cushy State House job, dozens of Young Republicans want to apply for the post themselves, expressing that they are willing to work for half of Iannazzi's salary.

"I could really use the job right now," said one applicant. "Even at age 27, my college loans from four years at Duke are still pretty hefty." Another applicant said, "It seems like a good job. You know, one of those errand-boy jobs. I have a degree in political science, so I'm sure I can handle all the stress. Plus, I'll be saving the taxpayers some money." Another promising member of the Young Republicans said, "I feel like I have a decent shot at getting the job. I'm a hard worker, and I graduated with a 3.7 GPA from URI. I can make a pretty good cup of coffee, too."

Chairman of the RI Young Republicans Travis Rowley elaborated on the situation, "When word got out about Iannazzi's outrageous salary, I began receiving dozens of resumes from the Young Republican membership, asking me to forward them to Senate President Teresa Paiva Weed on their behalf."

Young Republican board member Patrick Sweeney spoke practically about the situation: "It seems that there are dozens of Young Republicans who are unemployed, well qualified, and more affordable to the taxpayers." Sweeney gathered information from www.salary.com regarding comparative salaries in Providence. He discovered that an Office Services Assistant on average makes $37,559, and an Executive Assistant makes on average $52,998. "If you average those two salaries together, that's $45,287. And that's basically what our members are willing to work for," Sweeney stated.

"Government jobs should always go to the lowest bidder among qualified applicants," Rowley explained. "So this is a no-brainer. Sen. Ruggerio and Sen. Paiva-Weed will have to reconsider Iannazzi's hiring."

When asked about the fact that Stephen Iannazzi is the son of Donald Iannazzi, the business manager for Local 1033 (an affiliate of the Laborers International Union), Rowley expressed only slight concern. "We realize that Senator Ruggerio's 30-year-old son, Charles, works as a lawyer for a union that sustains the Democrats' political power in Rhode Island. But all of our applicants have college degrees, and are willing to work for much less money." Rowley added, "There are also a lot of Young Republicans with law degrees, who will be applying for Charles Ruggerio's job as well. This is a good week for us."

Regarding political influence, Sweeney said, "It's true, very few of our members have fathers who are politically connected labor leaders. But if you look at some of their resumes, it's clear that plenty of our applicants have some pretty solid credentials in that respect as well."

Sifting through stacks of resumes it's evident that Sweeney is correct. Not only do all of the applicants have college degrees from various schools, but many of the resumes make assertions such as "My dad knows your dad" and "My dad voted for your brother's wife." Others boast of job qualifications such as "My dad hired your son, so you should hire me." And perhaps the most convincing qualification found among stacks of resumes was "My grand-pappy was a member of Local 1033."

"Our membership isn't naive," Rowley explained. "Most of them have lived in Rhode Island their entire lives. So they know what type of qualifications State House employers look for. The 'Family and Labor Connections' portion of their resumes may have been beefed up a bit before they were submitted."

Scaring Grandma - The Whitehouse Plan

Marc Comtois

So Senator Whitehouse staked out another senior citizens home for the purpose of discussing proposals that would reform Medicare (specifically Rep. Paul Ryan's plan) and social security. Predictably, the seniors don't like the idea.

Rita Carbon, 80, of Cumberland, a retired high school secretary, said, “We don’t want Social Security to go with Wall Street.” Her husband, Joseph Carbon, 83, a retired office manager, said after the hearing, “We want Social Security to stay as it is.” And Roland Vigeant, 68, of Tiverton, a retired contractor, said, “I think the way Medicare is right now is fine.”

...Judy Moschella, 68, of Greenville, a retired sales representative, to come to Wednesday’s hearing. “I’m concerned they’re making cuts in Social Security and Medicare,” she said.

Whitehouse characterized some of the proposed changes as “potentially devastating,” telling the crowd, “We must continue to demonstrate the critical nature of programs on which American seniors depend . … We will protect our promises to our seniors.”

We've seen this playbook before. Somehow I doubt it was made clear that the reforms wouldn't affect anyone 55 years old and up. A recent poll shows that a majority of seniors favor Ryan's plan, but there are some who say they want to protect future generations.
Audrey Brett, 85, of Middletown, formerly of Manchester, Conn., who said, “I have never had a complaint with Medicare — it is always available to me and always delivers what it is committed to do.” But she said she fears that future beneficiaries may be impoverished if even a portion of Medicare is privatized.

“For all those Americans who worked, paid their taxes, added to the betterment of this country, served in military and civil service — we cannot let them live and die in poverty,” she said.

I'm pretty sure that no one is going to live in poverty, especially anyone over 55, who will still benefit from the current system. I'm also sure that the mindset evinced by the above seniors isn't going to change. Regardless, the current system isn't going to magically keep going without the future generations--for whom some of these seniors claim to want to vouchsafe these programs--paying more. And even then there's no guarantee.

Birtherism Dies an Easy Death

Justin Katz

At the end of a long post describing the ease with which President Obama could have ended the birther controversy long ago, Andrew McCarthy concludes as follows:

So, assuming as we should the legitimacy of the long-form birth certificate produced yesterday, the only thing that makes sense is that Obama knows the mainstream media is in his hip pocket. That is, he knew that he would not be held to the same standard as other politicians, and that if he acted in an unreasonable manner by withholding basic, easily available information that any other person seeking the presidency would be expected — be compelled — to produce, the media would portray as weirdos those demanding the information, not Obama and his stonewalling accomplices. And he also knows that, having now finally produced the document only because the game was starting to hurt him politically, the media will not focus on how easy it would have been to produce the birth certificate three years ago, or on how much time and money has been wasted by his gamesmanship; they'll instead portray him as beleaguered and the people who have been seeking the basic information (i.e., doing the media's job) as discredited whackos.

It's hard to say what's more depressing, Obama's cynicism or the zeal with which the media does his bidding.

One can imagine the media presentation had any given Republican drawn out the saga for so long, let alone a media-loathed figure like Sarah Palin. But when entire segments of society (news media, academia, Hollywood, and so on) are so slanted, politics is a different game depending whether one aligns with them or not.

A Rhode Island Story

Justin Katz

Ed Achorn was intrigued enough by (as his title puts it) "The 25-year-old high school grad with the $88,112 job" to have asked around for the fuller story surrounding Stephen Iannazzi, newly appointed "special assistant" to RI Senate Majority Leader Dominick Ruggerio. His report is characterized, most significantly, by the closed doors and unreturned calls and emails with which he's been greeted, but Achorn's found enough to prove the Iannazzi family's facility working the RI system:

Ann Marie Iannazzi, Stephen's mother, earns an annual salary of $69,933 working for Providence as "employability chief" at Workforce Solutions of Providence/Cranston, according to Margaret Wingate, deputy director of human resources at City Hall. His sister, Andrea Iannazzi, is chairman of the Cranston School Committee and a lawyer in the state Family Court, earning an annual salary there of $71,812, according to Craig Berke, the judiciary's director of communications. His uncle, Joseph Baxter Jr., is state courts administrator (he did not hire Andrea). Andrea and Stephen are listed as members of the "host committee" for a fundraiser for Angel Taveras, now Providence mayor.

Stephen's Facebook page notes attendance at Rhode Island College for the five years ending in 2009, although he never completed his intended degree in Labor Studies. He did, however, receive a scholarship from the Institute for Labor Studies, on whose board his father sits. While trying to track down details of the scholarship (unsuccessfully), Achorn found himself conversing with Institute employee Caroline Bernal, newly minted member of Governor Chafee's Board of Regents for Elementary and Secondary Education.

And so it goes...

A Main Page Summary

Justin Katz

On last night's Matt Allen Show Monique gave Matt a rundown of some of the more interesting posts currently on the main page. Stream by clicking here, or download it.

April 27, 2011

Democrats in Massachusetts Take Health Care Out of Collective Bargaining

Marc Comtois

Reality has hit Massachusetts' Democratic politicians, from the Governor on down: they realize the state can no longer afford to negotiate fixed medical co-pays in government employee contracts that span multiple years while the actual costs quickly increase well past the negotiated level.

House lawmakers voted overwhelmingly last night to strip police officers, teachers, and other municipal employees of most of their rights to bargain over health care, saying the change would save millions of dollars for financially strapped cities and towns.

The 111-to-42 vote followed tougher measures to broadly eliminate collective bargaining rights for public employees in Ohio, Wisconsin, and other states. But unlike those efforts, the push in Massachusetts was led by Democrats who have traditionally stood with labor to oppose any reduction in workers’ rights.

Democratic leaders claim this allows them to put more money directly towards services and retaining or hiring personnel.
“What we've recognized is that unfortunately, because of the cost of health insurance, that a very large percentage of the monies we commit are unfortunately going to fund municipal health insurance,” said House Ways and Means Chair Brian Dempsey (D-Haverhill). “Now, that’s not anyone’s fault. We’re not blaming anyone for the rise in health insurance. But, it's a fact. It’s a fact. The cost of health insurance is going up, and the money we commit every year, it’s unfortunately not going to textbooks. It’s not going to classroom size. Unfortunately, it’s going to a large degree to fund municipal health insurance.”

“I applaud the members of the House for taking the vote that will save more than $100 million for cities and towns,” [Massachusetts House Speaker Robert] DeLeo said in a statement. “By spending less on the healthcare costs of municipal employees, our cities and towns will be able to retain jobs and allot [sic] more funding to necessary services like education and public safety.”

Notice that this was done at the state level. In Rhode Island, individual cities and towns have proposed--or may try--similar reforms. Doing it at the state level would save a lot of time. Everyone is in the same boat, after all.

Fox Proposes Civil Unions

Marc Comtois

Ian Donnis broke the story that House Speaker Gordon Fox is throwing his weight behind Civil Union legislation in lieu of a gay marriage bill:

Based on your input, along with the fact that it is now clear to me that there is no realistic chance for passage of the bill in the Senate, I will recommend that the House not move forward with a vote on the marriage equality bill during this legislative session. I will instead support full passage of a civil unions’ bill that grants important and long overdue legal rights to same-sex couples inRhode Island.

I have had conversations with Senate leadership and, unlike the marriage equality bill, I am optimistic that a civil unions’ bill can gain passage in both chambers during this legislative session.

The new civil union bill is currently being drafted and will soon be ready for introduction and public inspection. I will be one of the sponsors.

This has been the pragmatic approach all along and its obvious that Speaker Fox is taking what he can get. Besides the legal considerations granted to gay couples, let's hope that the bill also includes allowances for non-gay couples (siblings, parent/child, friends, etc.).

UPDATE: More from Ian - MERI isn't pleased.

Where One Percent Becomes Two in the Governor's Tax Increase Plan

Carroll Andrew Morse

On the WPRO Morning News this morning, Lisa Blais from the Rhode Island Tea Party pointed out an aspect of Governor Lincoln Chafee's sales-tax increase plan that so-far has been largely overlooked -- the Governor's budget raises the additional tax in Rhode Island on meals and on hotel rooms, above the regular sales tax, from 1% to 2%. Following the state legislature's conventon, the blue text in the exceprts below signifies proposed additions to existing law...

44-18-18.1. Local meals and beverage tax. -- (a) There is hereby levied and imposed, upon every purchaser of a meal and/or beverage, in addition to all other taxes and fees now imposed by law, a local meals and beverage tax upon each and every meal and/or beverage sold within the state of Rhode Island in or from an eating and/or drinking establishment, whether prepared in the eating and/or drinking establishment or not and whether consumed at the premises or not, at a rate of one percent of the gross receipts; provided, further, that for the period commencing July 1, 2011, the rate is two percent (2%) of gross receipts...

44-18-36.1. Hotel tax. -- (a) There is imposed a hotel tax of five percent (5%) upon the total consideration charged for occupancy of any space furnished by any hotel in this state. The hotel tax is in addition to any sales tax imposed...

(b) There is hereby levied and imposed, upon the total consideration charged foroccupancy of any space furnished by any hotel in this state, in addition to all other taxes and fees now imposed by law, a local hotel tax at a rate of one percent (1.0%), provided, however, for the period commencing July 1, 2011, the rate is two percent (2%)...

When combined with the Governor's plan to lower the state's top-tier sales tax rate from 7% to 6%, the effect would be to keep the meal and hotel tax in Rhode Island at the same rate, meaning that Governor Chafee's tax slogan of "lower and broaden" does not apply meals or hotels, where there is no proposed lowering.

Prudence with Politician's Personal Lives

Marc Comtois

So the muckrakers over at RIF were all upset--even calling us hypocrites! (oh no, I'm stung)--because we didn't jump on the Watson DUI story. They cited one example, which, as Justin noted, was a brief mention used as a comparison point for the truly egregious aspects of said pol: his political agenda. It was not a lone-standing open forum on a Democrat politician getting nabbed. And RI Future never mentioned it either (go ahead, search for yourself). But they were ready to jump on Rep. Watson, weren't they? Hm. Hint: think "(" then "R" then ")".

Nonetheless, several RIFuturites attempted a threadjack, which some justified because they thought it grounds for discussion based on how it affected the political future of the minority leader and his agenda. By then, Andrew had up his post on Rep. Watson's legislative history regarding medical marijuana. The "need" had been met.

The point is that we simply don't make it a regular practice to get into the private life shenanigans of our politicians just for the sake of it. Really. Now, I won't claim universal abstinence on our--or my--part (methinks references to Patrick Kennedy may include some allusions, for instance), but generally we try to focus on issues and wonkdom. When the "incidents" may affect policy then, yes (as commenter JParis suggested) perhaps it is time to talk about it. So we did.

Just not in a speedy, "progressive" fashion.

The Young and Unemployed

Justin Katz

As the old song goes, the children are the future, and in discussing the effects of our graying workforce, John Kostrzewa worries about Rhode Island's:

Eleven percent of the 107,108 people ages 22 to 29 who lived in Rhode Island in 2008 moved out in 2009. That's 11,200 young people.

The numbers are even scarier when you break out college educated Rhode Islanders.

One in five who were here in 2008 had left in 2009, largely because they couldn't find a job.

Kostrzewa's mainly addressing the effects of our long-running downturn, but since I arrived in the late '90s, it's been the common wisdom in Rhode Island that young adults had to leave to find opportunity. The Great Recession just exacerbated what was already a problem, and as factions fight over slices of the public pie and beneficiaries demand that the pie be expanded through taxation, necessary priorities come into stark relief.

After all, what's the point of Rhode Island's generous "investment" in education if the products of our efforts — highly educated young adults — simply leave? Increasing taxation and making it harder to do business in the state in order to prop up an inefficient educational system of questionable quality has the steps backwards. The state has to reorder its priorities, and the people who make public decisions (and those who pull their strings) are manifestly disinclined to do so.

Commenting to my morning post, yesterday, Dan offered a compelling simile:

Fixing Rhode Island's cyclic financial problems at this end-game point in time is like trying to remove a horned toad that has inflated itself in crack deep between two jagged desert rocks while it bites and hisses and squirts defensive blood at you out of its eyes. Any herpetologist knows that once it has retreated in there, it's too late and it's time to move on to another location. Lots of other states to choose from in the United States.

Or, as Mark Patinkin put it, while explaining that RI's elected leaders have to do what's necessary, even if it means the end of their political careers:

One can say many public employees — especially those doing risky jobs like cops and firemen — deserve such pensions. Even I think they do. But sadly, we are past the point of talking about "deserve." We're in the realm of "afford."

Pensions are only a heavily bleeding part of the wound. Rhode Island has to make subjective notions of fairness and desert secondary to functional possibility. Social services have to be curtailed; the education system has to stop being managed under the assumption that more money means better results; and regulatory manacles have to be removed from businesses, even if it means that the state no longer micromanages everybody's safety and, yes, even if it means that people get rich.

April 26, 2011

Robert Watson's Original Political Encounter With Medical Marijuana

Carroll Andrew Morse

Republican Minority Leader Robert Watson was one of the House sponsors of Rhode Island's medical marijuana law passed in 2005 (H6052). Rep. Watson's name is listed as second sponsor on both the original bill and the as-amended bill that passed the RI House with his vote on June 22 of the 2005 session.

However, he then voted against the veto override that eventually made the bill into law (it had been vetoed by Republican Governor Donald Carcieri). The switch is recognizable to Rhode Island political-watchers as part of the enduring mystery of the leadership of Bob Watson.

And now prepare watch progressives turn on a dime, away from the hypocrisy argument to "he was just sponsoring a law to benefit himself" argument...


A second medical marijuana bill, this one with a Senate number (S0710), also made its way through the RI legislature in 2005. Again, Rep. Watson voted for the original bill (June 24, 2005) but against making it into law over the Governor's veto.

H'mm, What's Steve Laffey Up To?

Monique Chartier

The following press release materialized in my in-box this afternoon.

With regard to the location - Fort Collins, CO - note that Colorado is the state to which the former Mayor of Cranston Steve Laffey and his family have relocated.

"Fixing America"

The Movie

Fort Collins, CO - April 26, 2011

Stephen P. Laffey and Stephen T. Skoly, in conjunction with The 989 Project, a film and video production company located in Rhode Island, announce a collaborative effort to produce a feature length documentary film entitled "Fixing America" (www.fixingamericamovie.com).

"Our goal is to travel the country with a film production crew and speak with regular Americans as well as politicians, policy experts, and prominent business people on a variety of topics such as trade, China, taxes, energy policy, defense, and balancing the budget, and to ultimately share real solutions for fixing America now, while there is still time," said Mr. Laffey, a former RI elected official, president of a major investment banking firm, and author of Primary Mistake.

Laffey stated, "The political elites from both parties have destroyed our country financially. Since 1971 and the closing of the 'Gold Window' by President Nixon, America has not settled its accounts. By using its status as both the world's reserve currency and the world's military superpower, America has put off the day of reckoning. The financial shenanigans in the USA have grown, along with the power of the financial and political elite, to a point that it threatens our freedom, our financial future, and just maybe the freedom of the free world. Our goal is to show solutions to these issues and how they should be addressed immediately."

Please direct media inquires to: Field Producer Colleen Conley at colleen@the989project.com

Time to Stop Being an Ostrich

Marc Comtois

When Ernst & Young, one of the Big 4 professional services firms, releases a study (PDF) that says Rhode Island is one of the worst in the nation for tax competitiveness when it comes to attracting new business, you'd better listen.

This study provides a state-by-state comparison of the tax liabilities that new investments in selected industries or types of economic activities would incur in each state, taking into consideration state and local statutory tax provisions and the financial and economic characteristics of the new investments. The analysis focuses on capital investments in industries that have location choices, such as factories or headquarters, rather than those that are tied to a specific geography, such as retailers or hotels. The estimated tax burdens on selected investments are combined to provide an overall measure of the business tax competitiveness of each state.
Rhode Island is #49, to be specific (only Washington, D.C. and New Mexico are worse. Maine--yes, Maine--is #1). What particularly seems to hurt Rhode Island are property taxes, especially the effective 5.36% tax on commercial equipment. (Massachusetts and Connecticut are at 2.71%).

The usual advocates can debate and reframe and reshape the debate all you want in an effort to raise taxes on the rich and "big business". No matter how persuasive you may be, businesses don't care. They aren't coming here: E & Y have provided a first filter for them. And the businesses that are here may take a second look. They'll leave. Because business people listen to someone like Ernst & Young. Will Rhode Island?

Coming up in Committee: Thirteen Sets of Bills Scheduled to be Heard by the RI General Assembly, April 26 - April 28

Carroll Andrew Morse

A little behind schedule due to Holy Week, here's the list of some of the interesting bills going before General Assembly committees this week...

13. S0699: Exempts members of the "International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers and its signatory contractors jointly participating in the IMPACT National Substance Abuse Program" from state job-site drug testing laws. One guess as to who the primary sponsor of this bill is. (Senate Labor, April 27)

12. S0182: Would allow the length of the public school year to be counted as 1080 hours instead of 180 days. (Senate Education, April 27)

11. H5254: A ban on under-21 nightclubs. (House Judiciary, April 27)

10. S0874: A bill from the Lieutenant Governor requiring that individuals who purchase medical insurance in Rhode Island specify a primary-care physician to their insurance company. (Senate Health and Human Services, April 27)

9. H5502: Bans food-service establishments from using "artificial trans-fats" in foods that they serve, with an exception for "food that is being served directly to patrons in a manufacturer's original sealed package". (House Health, Education and Welfare, April 27)

8. H5508: A resolution requesting that "the President and Congress of the United States to refrain from enacting or imposing any law or regulation that is beyond the scope of these constitutionally delegated powers or that would diminish the rights of the people of Rhode Island to govern themselves as a free, sovereign, and independent state". (House Judiciary, April 27)

7. S0876: Requires health insurance co-payments and deductibles to be paid to medical service providers directly by insurance companies, with the insurance company being responsible for collecting the funds from the patients. (Senate Health and Human Services, April 27)

6. S0046: Raises the age of required school attendance from age 16 to 18 (or until the completion of high-school or several alternatives). (Senate Education, April 27)

5. H5340/H5456: Requires roll-call votes from General Assembly committees to be posted online, and for committee and floor votes to be posted in a format organized by Senator/Representative. (House Judiciary, April 28)

4. S0400: Requires either a photo ID or a document such as a birth certificate, social security card, etc. to be used as a voter-ID at a polling place. In the event that a voter does not have a required form of ID, he or she would cast a "provisional ballot", where a comparison to the signature in the voting record would be used to determine if the ballot would be counted. (Senate Judiciary, April 26)

3. Senate Hearing on the Department of Human Services Budget. The proposed Human Services budget contains a 130 million dollar general-revenue increase from last year, going mostly to fund "grants and benefits assistance" under the "Medical Benefits" heading. (Senate Finance, April 28)

2. H5407: "No official or agency of this state, city, town or other political subdivision of this state may limit or restrict the enforcement of federal immigration laws to less than the full extent permitted by federal law", and the establishment of immigration enforcement procedures for state and local authorities to follow. (House Judiciary, April 27)

1. A group of bills on the subject of abortion, including a bill to provide public funding for abortions (H5180), a ban on abortions for sex-selection (H5530), a bill requiring that ultrasound images be provided prior to an abortion (H5691), a bill banning state or local governments from interfering in decisions related to pregnancy prior to "fetal viability" (H5752), a definition of the crime of murder of an unborn child (H5125) and a few others. (House Judiciary, April 26)

Move Out of the State? That Might Only Buy You Some Time

Marc Comtois

Former RI Auditor General Ernest Almonte says moving out of the state is, right now, about the only way that Rhode Islanders can avoid paying the $13,000 apiece we "owe" to fund public employee retirees (present and future). This is the big headline that came out of a conference held at URI last night.

Also discussed was the Pew Center for the States research (RI fact sheet in this PDF), which found that Rhode Island had only 59% of its $11.5 billion pension liability covered in 2009, ahead of only five states (Illinois, 51%; Kentucky, 58%; New Hampshire, 58%; Oklahoma, 57%,West Virginia, 56%). However, as General Treasurer Gina Raimondo pointed out, Rhode Island is now even worse off (probably because of the recent decision to re-set the pension rate of return) and now sits at 48%. Worst in the nation. Yay.

Raimondo was on with Dan Yorke earlier in the day and left little doubt that we are screwed and that there is no more road left to kick the can down. She sounds ready to dig in and fix things. She said it wasn't "a problem" but "THE problem" facing the state right now. Unfortunately, Raimondo still seems to be clinging to the idea that a defined benefit plan--rather than moving to 401(k) style defined contribution plans--is still a viable option. I don't think so.

As Michael Barone recently wrote, "the U.S., in general, just can't afford generous defined benefit systems" anymore. Meanwhile, European countries are coming to the conclusion that social welfare benefits and programs aren't untouchable, after all.

The paradigm is shifting whether we like it or not. Promises were broken and it sucks. But it's economic reality: there is no money. We have to deal with current pensions and benefits, not just "future" pensions and benefits for workers not yet hired. That was the easy, low-hanging fruit. It's time for politicians--the people who are supposed to lead--to step up and really deal with this. That's why they were elected. If they don't, we'll have to find someone who will.

An Illustration of RI's Advantaged Class in Cranston

Justin Katz

Like the swapping of high-paying public jobs for the sons of union leaders, the fact that Cranston is currently paying $67,107-86,778 annual pensions to six former police chiefs feels emblematic of the state's broader systemic corruption:

In the past 20 years, Cranston has hired — and retired — six police chiefs.

Most served three years or less at the helm of the Cranston Police Department and they ranged in age from 48 to 51 when they retired. Their pensions are based on their salaries on the day they retired — with no minimum tenure or averaging of final years of pay.

The retirements placed six top-salaried employees on Cranston's pension payroll with guaranteed minimum 3-percent cost-of-living raises each year for life.

There is clearly a class that lords it over Rhode Island. Get into the club, and you're set for life. Otherwise, you'll spend your years in the state with a target on your back... or rather, on your wallet. All but one of these ostensible community leaders retired in his 40s.

April 25, 2011

The Reign of Obama May Close Out the Age of America

Justin Katz

It's not the current president's fault (although many of us would be inclined to suggest that he hastened the end result), but if Barack Obama wins a second term, it may be that he'll turn out the lights on the Age of America... at least according to the International Monetary Fund:

According to the latest IMF official forecasts, China's economy will surpass that of America in real terms in 2016 — just five years from now.

Put that in your calendar.

It provides a painful context for the budget wrangling taking place in Washington, D.C., right now. It raises enormous questions about what the international security system is going to look like in just a handful of years. And it casts a deepening cloud over both the U.S. dollar and the giant Treasury market, which have been propped up for decades by their privileged status as the liabilities of the world’s hegemonic power. ...

The IMF in its analysis looks beyond exchange rates to the true, real terms picture of the economies using "purchasing power parities." That compares what people earn and spend in real terms in their domestic economies.

Brett Arends, who wrote the above, suggests that the Age of China won't be as benign a hegemony as has been the past few "ages" dominated by Western democracies. He also quotes NYU Stern business professor Ralph Gomory as suggesting that the United States has "traded jobs for profit," leading to "a small, very rich class and an eroding middle class."

On the latter count, I'd say that business leaders' transition of jobs to lower-cost foreign markets is only part of the story. As seems to be a repeating theme, in our society, the trouble arises by our failure to follow a particular governing philosophy. What I mean is that the pursuit of cheaper labor for reasons of profits has had to combine with government imposition of regulations, mandates, and other market controls in order to trip up the United States.

With ever-increasing barriers to entry, the middle and working classes have been unable to compete with established companies, decreasing the risk for the internationals in turning toward distant employees. Displaced workers, and those who would employ them, have also been restricted in their ability to explore new means of making a living.

The way through this is to trust in the American people by removing government manacles, despite the fears and selfish interests of our ruling class, and begin to rebuild the character of the nation.

That Old Welfare Draw Question Poorly Answered, Again

Justin Katz

A weekend PolitiFact giving Colleen Conley "half true" for a statement regarding the generosity of Rhode Island's welfare system illustrates the flaw in the media enterprise's entire methodology:

Do welfare recipients really have it that good in Rhode Island? We decided to check.

The simple answer: When it comes to how folks commonly define welfare -- cash assistance to poor people -- they don’t.

The RIPEC report, released in 2010 using data from 2008, doesn't have a state-by-state comparison of cash payments.

Instead, it examines them by two different measures. And both show we’re far from the most generous in New England.

The real lesson, I'd say, is that folks making such statement's as Conley's have to add a parenthetical note to include other welfare programs than just cash assistance. It has long been a tactic of social service advocates (and therefore the mainstream media) to focus on cash payments as (in the ubiquitous phrases) "how folks commonly define welfare."

Personally, I've yet to see any evidence that most "folks" do not intend to include every variation of payment and service rendered to needy people when they say "welfare." Ask a person on the street, that is, whether child care subsidies are part of "welfare," and I'd wager you'll get a "yes."

More to my point, it misses what's relevant to investigate aggregate state spending in order to compare social services, as PolitiFact does. Conley said that Rhode Island leads New England in being "known for its generosity toward its welfare recipients." That calls for measurement from the perspective of those who receive services, not the government that processes the redistribution of money.

The problem, as Andrew noted a few years ago (here and here), is that such information is difficult to come by. To answer the question of whether Rhode Island is a "welfare magnet," one must know whether the state is perceived to offer benefits that can't be garnered elsewhere.

That shift emphasizes, first of all, that cash payments are not all that should be considered, and second of all, that such conclusions as PolitiFact's should be based on an analysis of actual program offerings. For example, it's been a number of years since I've had the opportunity to look deeply into this question, but it used to be the case that Rhode Island didn't count other states' cash payments when considering eligibility. That has changed, but I believe it remains unlikely that dishonest applicants will be caught.

Moreover, Rhode Island was (and still is, as far as I know) generous in allowing other sources of income when calculating check amounts. It isn't enough, in other words, to note that a family of three would get $554 per month in RI, but more than that in every other New England state but Maine. One must see how quickly other states adjust their payments to address other household income. When last I looked into it, Rhode Island quickly exceeded Massachusetts for those who were able to find a couple hundred dollars a month from other sources.

Vlog #11: A Speechification Coach for the Governor

Justin Katz

A little fun with juxtaposition:

April 24, 2011

Happy Easter!

Carroll Andrew Morse


(Copyright Gospel Communications International, Inc - www.reverendfun.com)

April 23, 2011

Facebook Facilitates the Preamble to Fraud

Monique Chartier

For 20+ years, especially on the right, Dave Talan has been a bit of a celebrity in Rhode Island politics. I first encountered him in 2000 as a volunteer for the McCain campaign. One of our tasks was to collect signatures to get him on the Republican primary ballot. Dave did not support McCain (if I recall correctly). But he made a point of collecting signatures for John McCain and all of the Republican presidential candidates; his view was that they should all get on the ballot and then let the people choose their candidate.

I'd direct you to Dave's Facebook page to learn more about him but that's the problem. It's been hacked and hijacked, so who knows whether what it now contains is accurate? Someone is squatting on his FB page, sending e-mails to the contacts on Dave's list, pretending to be Dave as a wind-up, almost certainly, to fraudulently obtain money. ("I'm stuck in London ...") And Dave cannot reach Facebook to tell them.

See, you can only e-mail Facebook via Facebook. And Dave is locked out of his page.

Someone found a phone number for Facebook. Dave called it but it is not set up to put calls through to a human, only to a series of unhelpful auto responses. ["Press two for Tech Support." - presses two - "Facebook does not offer Tech Support."]

Between politics and his other hobby, coaching baseball, Dave knows a lot of people. His FB contact list is many hundreds long. Accordingly, given enough time to fish in this large pond, the odds are pretty good that the squatter will catch someone who believes his story about "Dave" being stuck abroad and sends along some money.

When I spoke to him yesterday, Dave pointed out that this cannot be the first time that someone's Facebook page been hijacked. But Facebook has made it so that it is impossible to advise them when this occurs.

Dave also clarified that his e-mail account was not hijacked; only his Facebook page. The squatter set up an e-mail address similar to Dave's in order to carry out this dubious activity. (Here's a hint for distinguishing the real e-mail address from the phony: Dave's address does not contain any numbers.)

Three days and counting of this fraud-baited fishing expedition. By being so difficult to reach, Facebook has set itself up as a co-conspirator to it - the courts, if/when it comes to that, can decide whether their role is deliberate or unwitting. FB would undoubtedly claim the latter but their decision to be unreachable was clearly a deliberate one.

Dave observed yesterday that the one good thing that has come of this - to be balanced against the many hours spent fretting and trying to rectify the situation! - has been the slew of calls that he has received from friends and acquaintances checking on him.

Anyone who received a chat or e-mail from "Dave" which specifically included a solicitation for money is asked to forward it to yours truly. Anyone who actually sent money is advised to call the RI A.G. at 274-4400 and keep us posted.

Can Obama Juggle all of the Middle East Balls?

Marc Comtois

He inherited Iraq and Afghanistan and basically kept on the same path outlined by his predecessor. Then came Egypt. Then Libya. Now it's getting bad in Syria:

At least 90 people were reportedly killed and dozens were injured when Syrian security forces fired live bullets and teargas to disperse “Good Friday” protests in several cities, witnesses reported. The death toll seemed to be rising late Friday.

The reported deaths have created a new crisis for the regime of President Bashar al-Assad, raising questions about whether he is fully in control of Syrian security forces. The deaths raise questions about how far Mr. Assad is prepared to go to stay in power, and if the international community will take steps to prevent a humanitarian disaster in this geopolitically strategic Arab country.

President Obama condemned the Assad regime.
The United States condemns in the strongest possible terms the use of force by the Syrian government against demonstrators. This outrageous use of violence to quell protests must come to an end now...[The Syrian government has] placed their personal interests ahead of the interests of the Syrian people, resorting to the use of force and outrageous human rights abuses to compound the already oppressive security measures in place before these demonstrations erupted....Instead of listening to their own people, President Assad is blaming outsiders while seeking Iranian assistance in repressing Syria's citizens through the same brutal tactics that have been used by his Iranian allies. We call on President Assad to change course now, and heed the calls of his own people.
But are words enough? They weren't enough in Libya, where the imposition of a no-fly zone and active support of a rebellion isn't even working. Not to mention the Israel/Palestinian question. With so many balls in the air, it won't be surprised if the President drops a few.

Remember the Good Ol' Days (Before 2006)

Marc Comtois
Hey, remember when gas was $2.20 a gallon and the unemployment rate was 4.4%? What happened with that? …Oh, right, the Democrats won the 2006 Congressional elections.
That observation was made by Moe Lane and picked up by Glenn Reynolds. It's worth promulgating because it's a simple way to point out that what we were told was so bad back in 2006--the Bush Economy (negativity implied)--sure looks a helluva lot better to average Americans now, doesn't it? Then it all changed. Too simplistic? Perhaps. But since when is simplicity out-of-bounds in politics.

The Price of Green

Marc Comtois

The Rhode Island supreme court decided that Toray Plastics and Polytop Corp. have standing (decision here) to challenge the Public Utility Commission's approval for Deepwater Wind to build a wind farm off of Block Island. Michael McElroy, lawyer for the companies, explains (in the dead-tree version of this morning's ProJo) why this is important:

We're pleased with the court's decision to review the merits of the PUC's majority approval of the purchase power agreement, especially in light of the fact that National GZrid has recently increased its estimate of the above-market costs of this project from $390 million to between $409 million and $415 million.
As Alex Kuffner of the Journal explains:
The estimates of the above-market costs increased because the cost of natural gas, which provides a third of New England's power, has gone down because of increased supplies. The starting price in the Deepwater contract is 24.4 cents per kilowatt hour, more than three times the price that National Grid charges Rhode Island consumer through its standard offer rate.
So, to clear it up, the lower energy prices go, the more subsidy (ie; rate-payer's money) will have to go towards keeping Deepwater Wind "viable." What a great deal. Wind power is promising and should be tried where it is economically feasible. Massive subsidization on the backs of economically troubled Rhode Islanders is hardly the way to go. At least there's still a chance (even if it's a small one) that, thanks to these companies, Rhode Islander's won't be stuck with the higher bills.

April 22, 2011

Dumb Legislation at the Speed of Text

Justin Katz

Now here's a wrong way to address the complexities of society in the Information Age:

Under the legislation students could still carry phones in school, but they couldn't use them during school hours, including study hall and lunch. A first offense results in a warning. A second violation would lead to administrators confiscating the phone for three days. The third time, the phone would be kept for five days. Exceptions would be made for emergencies.

Sen. John Tassoni Jr., D-Smithfield, introduced the bill after leading a legislative task force investigating cyberbullying. The work led Tassoni to conclude that cellular prohibition is the best way to ensure students are focusing on a textbook, not Facebook.

Why is this a legitimate activity for a state legislature that currently has government-shaking deficits and structural deficiencies to address? Of course, legislation that would prevent Tassoni from operating his voting button while the General Assembly is in session might be worth a look...

Fish on Fridays

Carroll Andrew Morse

Nothing symbolizes the supposed arbitrariness of religion to those predisposed towards skepticism towards religious belief more than does the Catholic practice of eating fish on Fridays during the season of Lent. I’ll admit to having asked myself, especially on Good Friday, what connection there is between fish and the crucifixion of Jesus Christ. And then there is the philosophical paradox. If my soul is lost after I’ve eaten meat on a Lenten Friday, does that mean I’m free to commit worse sins without making my situation worse? But if the rule doesn’t really matter, then why follow it? And on and on and on and on…

Here’s what I do know. With the choice of fish options available to a 21st century American, eating fish on Fridays is about as small a “sacrifice” in a material sense as can be asked for. But honoring the rule does require me to make some conscious choices that run contrary to what the surrounding culture tells me are cool and sensible. And if I am unable to make this small sacrifice, because I find it too inconvenient, or because I’m afraid to explain myself to others who don’t share my belief or who might think that I’m being just plain silly, then on what basis can I believe myself to be capable of taking a stand in more serious situations, when the choices might be a little harder and the stakes a bit higher?

Slightly edited re-post of an April 6, 2007 original.

They're Watching You

Justin Katz

Well, this really isn't a surprise:

Apple Inc.'s iPhones and Google Inc.'s Android smartphones regularly transmit their locations back to Apple and Google, respectively, according to data and documents analyzed by The Wall Street Journal—intensifying concerns over privacy and the widening trade in personal data.

Google and Apple are gathering location information as part of their race to build massive databases capable of pinpointing people's locations via their cellphones. These databases could help them tap the $2.9 billion market for location-based services—expected to rise to $8.3 billion in 2014, according to research firm Gartner Inc.

It's been a goal of such companies for years to move these devices to the point of eliminating the distance between impulse and purchase. Whether that represents convenience or manipulation is a matter of opinion. Personally, I think a little such distance is an important aspect of self-control, and if devices get to the point of continually placing unrequested items into your awareness, that could be very disruptive. One can only hope that consumers will recognize as much and push back... probably by creating demand for somebody else to create an application that blocks the intrusions.

This is just one of those aspects of technology that we're going to have to learn to deal with. What's disconcerting, as a number of action and conspiracy movies from the past decade prove, is the interconnectivity of everything and the impossibility of expecting the average person to have any idea what to look for to safeguard privacy. Hopefully a new market for consultants will open up, rather than a new opportunity for government to regulate and manipulate for itself.

April 21, 2011

Did you know "the rich" mean a cop married to a teacher?

Marc Comtois

Veronique de Rugy helps clarify income redistribution:

Here are some other data points that I find interesting:

Of the top 1 percent of income earners, only 23 percent are millionaires.

A household income above $380,000 puts you in the top 1 percent of income earners.

Of the top 10 percent of income earners, only 2 percent are millionaires.

A household income above $114,000 puts you in the top 10 percent of income earners. That means that a cop making $60K married to a teacher making $60K make it into the top 10 percent. (emphasis added)

If you have ideas for a better chart, De Rugy is taking suggestions.

Not (Hiring) Just Another Pretty Face

Marc Comtois

It's a travesty I tell ya!

Staff in personnel departments are overwhelmingly female, typically single and aged 29 on average, the researchers found....The research, published by The Royal Economic Society, involved sending more than 5,300 CVs for 2,650 job vacancies. For each job, two applications were sent. One contained a photograph of an attractive man or woman, or a plain-looking man or woman. The other CV was identical, but did not contain a photograph.

Nearly 20 per cent of attractive men got an interview.

But only 12.8 per cent of attractive women fared as well.

Of plain men, 9.2 per cent got an interview, compared with 13.6 per cent of plain women. Men who did not attach a picture were asked for interview 13.7 per cent of the time, compared with 16.6 per cent of women.

Bradley Ruffle, from the Department of Economics at Ben-Gurion University in Israel, which carried out the study along with the Ariel University Centre in the West Bank, said it was an example of ‘beauty discrimination’.

So don't send a picture, ladies. Or dress down. Or something.
For the best chance of getting an interview, a woman should send in a CV without a picture, he said.

He blamed ‘the high number of women in human resources staffing positions’. It is their job to look through a mountain of CVs and job applications to decide who should be asked for an interview, and who should not.

When they see an application from a pretty woman, researchers said, many of these staff feel extremely ‘jealous’ of their potential colleague and often reject her instantly.

To check this stereotype, researchers telephoned the companies who were recruiting to find out about the people who screened the candidates.

They found that 96 per cent were female, the majority were between the ages of 23 and 34 and nearly 70 per cent were single.


Chafee Wants to Bite Charities and the American Flag

Justin Katz

The common wisdom is that Governor Lincoln Chafee's sales-tax scheme is dead — or rather, that at least the 1% section is. Still, something in this op-ed by a couple of YMCA officials inspired me to skim that section of the budget:

Article 26 of the budget would also remove the tax exemption for all charitable organizations and impose a 1 percent sales tax on their purchases. Together, these proposals would seriously hinder the ability of our Ys to continue to employ 2,100 staffers, serve 140,000 Rhode Islanders and provide $7 million in free, subsidized and sponsored programs every year.

Sure enough, the relevant language attempts to sink the taxman's teeth into charitable activities:

(8) Charitable, educational, and religious organizations. (i) The sale to charitable, educational and religious organizations as defined in this section and the storage use and other consumption of tangible personal property, specified digital property, and/or services as defined in § 44-18-7.3. This shall also include hospitals not operated for profit, “educational institutions” as defined in § 44-18-30(17) not operated for a profit, churches, orphanages, and other institutions or organizations operated exclusively for religious or charitable purposes, interest free loan associations not operated for profit, nonprof it organized sporting leagues and associations and bands for boys and girls under the age of nineteen (19) years, the following vocational student organizations that are state chapters of national vocational students organizations: Distributive Education Clubs of America, (DECA); Future Business Leaders of America, phi beta lambda (FBLA/PBL); Future Farmers of America (FFA); Future Homemakers of America/Home Economics Related Occupations (FHA/HERD); and Vocational Industrial Clubs of America (VICA), organized nonprofit golden age and senior citizens clubs for men and women, and parent teacher associations. Sales made to the United States government, this state and its political subdivisions are exempt from this section.

If you haven't yet done so, it's worth your time to read through the tax-increasing portion of the budget; the effect is quite startling. For example, it's one thing to read the word "flags" on a list of newly taxed items; it's another to come across this:

(21) Flags. The sale, storage, consumption, or other use in this state of United States, Rhode Island or POW-MIA flags.

The governor wants to tax you on your American flag... which leads me back to my suspicion that this 1% section is mostly political. It links the budget to Chafee's campaign promises, but it's so egregious, so magnificently objectionable, that the outrage was sure to give the General Assembly cover not only to go against the governor's plan (in the eyes of his puppeteers), but also to move forward with the new 6% tax on other new items, including services, perhaps with some of the less objectionable 1% items (involving constituencies that have less political sway) added to the list.

Americans Get More Tax Revenue Then They Send

Marc Comtois

A milestone has been reached. One not seen since the Great Depression.

Households received $2.3 trillion in some kind of government support in 2010....that’s more than the $2.2 trillion households paid in taxes, an amount that has slumped largely due to the recession, according to an analysis by the Fiscal Times.

Also, an estimated 59% of the 308.7 million Americans in this country get at least one federal benefit, according to the Census Bureau, based on 2009 data. An estimated 46.5 million get Social Security; 42.6 million get Medicare; 42.4 million get Medicaid; 36.1 million get food stamps; 12.4 million get housing subsidies; and 3.2 million get Veterans' benefits.

And the handouts from the government have been growing. Government cash handouts account for a whopping 79% of household growth since 2007, even as household tax payments--for things like the income and payroll tax, among other taxes--have fallen by $312 billion.

That is a tough feeding trough to take away from voters....In short, Americans have the government, not private enterprise, to thank for their wealth growth....does that mean those households are more inclined to re-elect politicians who are pushing for more government handouts?

Does the workforce erode because it is easier to collect a check than answer to an alarm clock each morning?

President Obama and Democrats have relied upon keeping the trough full to keep political power. It has proven effective time and again (David Cicilline, anyone?). Republicans aren't blameless either (earmarks, pet projects and the like). The mindset isn't new, but that it may be taking hold of a majority of Americans could be a dangerous tipping point.

Talking with Tony

Justin Katz

With Tony Cornetta filling in for Matt, I called in to the Matt Allen Show to mention David Cicilline's continuing dishonesty, Pennsylvania union overreach, and the effects of standardized testing. Stream by clicking here, or download it.

April 20, 2011

Is It Really Profit if There's Future Retirement Debt?

Justin Katz

Fredric Rolando, president of the National Association of Letter Carriers, might just get to the heart of the pension/retirement issue when he explains the following, by way of arguing that the U.S. Post Office is a profitable enterprise:

Congress requires the postal service to put $5.5 billion of its earnings each year into a separate account to "pre-fund" future retirees' health care insurance far into the future.

No other business or government agency has such a requirement. The postal service won't actually spend the money it puts away for "pre-funding" until many years from now.

Yet it counts as a loss on its balance sheet today.

Whether it's accurate to say that no other organization faces such a requirement (which is also different from saying that none utilize the methods anyway), I don't know. The question that comes to mind is: why shouldn't government agencies and businesses put aside money for benefits to be paid to current employees when they retire? Inasmuch as the payment is obligatory, the expense is being incurred in the present through the continued employment of the worker.

Do-Nothing or Hide-it Cicilline

Marc Comtois

The report on the Cicilline Adminstration's fiscal inadequacies has dropped. The major findings, according to the ProJo:

-- "The Administration transferred funds from the Undesignated Surplus (Rainy-Day Fund) without approval of a majority vote of the City Council as required."

-- "The Administration did not provide financial information on a timely basis to the independent auditor, the City Council or the Internal Auditor."

-- "The Administration did not provide the City Council with monthly financial statements or with projections of year-end surpluses or deficits."

-- "The Administration prepared budgets based on unrealistic assumptions."

-- "The Administration was not transparent in its use of the City's Capital Assets Account."

-- "Financial reports submitted to the State were inaccurate."

-- "The City Council's checks-and-balances on the Administration were ineffective."

Councilman Miguel Luna is loaded for bear, calling Cicilline a "pathological liar" (as reported by WPRO's Carolyn Cronin):
The City Council will consider a resolution at its meeting Thursday to investigate whether former Mayor David N. Cicilline and his administrators broke laws with financial decisions they made over the years.

Councilman Miguel C. Luna is sponsoring the resolution. It asks the council to hire a lawyer, with a background in prosecution, to "review the facts surrounding all transfers, withdrawals and expenditures of funds from reserve and real estate proceeds accounts" from 2003 to 2010," a draft of the resolution reads...."We can't just focus on the future," Luna said Wednesday. "He [Cicilline] knows what he did. He brought the city down to the knees. He wasn't doing the job of the city."

For his part, Cicilline is boiling mad and full of indignation that Gary Sasse is involved and has apparently decided that the tried-and-true "shoot the messenger" tack is the best one to take. I don't think it'll work.

Study: In Testing Era, Curriculum's Aren't Narrowing

Marc Comtois

There are (legitimate) concerns that student testing requirements will result in a "narrowing" of school curriculum. All math and ELA (and now a Science) and not much room for the humanities or arts. As Mark Schneider explains, the National Center for Education Statistics has released their High School Transcript Study and found that isn't happening. As Schneider summarizes:

The transcript study shows a long-term trend in which high school students are taking more courses and more academic ones than ever before—a trend that shows no sign of abating. In short, the high school curriculum, far from narrowing, is getting deeper and broader.

For example, the number of high school credits graduates took has increased by 15 percent since 1990 (up from 23.6 in 1990 to 27.2 in 2009). This increase was driven by an emphasis on academics. Between 1990 and 2009, high school graduates increased their enrollment in “core academic” courses (English, math, science, and social studies) by 17 percent and in “other academic” courses (fine arts, foreign languages, and computer-related studies) by almost 50 percent. In contrast, students took fewer “other” courses (such as vocational education and personal hygiene)....Since 2000, students took one additional credit in “core academic” courses, an additional 0.5 credits in “other academic” courses, and continued to take fewer “other” courses.

I'm not sure if it's a good thing that fewer students are taking vocational courses, given their practical, "real job" focus (and the growing belief that we're sending too many kids to college to effectively pay tuition, party and figure out that what they really want to do is work with their hands after all). But, be that as it may:
A second important finding in the study is that a more rigorous curriculum pays off with higher NAEP science and math scores. Students who took a rigorous curricula outscored students who took a below-standard curriculum by more than 40 scale points in math and science. Clearly, this is correlational and not causal. The study shows that the relationship between curriculum and performance has persistent race and ethnicity patterns. At any level of curriculum, black and Hispanic students lag, often considerably, behind whites and Asian/Pacific Islanders (chart, page 42).
The last is obviously a cause of concern (though I suspect the problems are less race-based and more economic, as usually seems to be the case). Despite the positive findings, Schneider points to areas of improvement.
While there has been progress in getting more students to take a more rigorous course of study, far too few students are taking the most rigorous curriculum. Only about 13 percent of students take the “rigorous” curriculum, up from 10 percent in 2000 and 5 percent in 1990, but still a low number. More encouraging: 46 percent take the midlevel curriculum and the percentage of students with that curriculum continues to expand.

But perhaps most disturbing is that high schools are failing to exploit emerging opportunities for students to increase their course-taking. Many critics argue that our school year and school day are too short—and clearly the evidence from the transcript study shows that exposure to more courses is associated with higher NAEP scores. The transcript study explores two ways in which students could take more courses: summer school and online education. In both cases, our high schools are dropping the ball.

The problem is that these two opportunities are utilized for remediation more than for adding value to education. Using on-line resources to supplement existing course work is a hot topic in education reform circles (just Google "personlized" or "digital" learning and have at it).

The Priorities of the Bargaining Unit

Justin Katz

Maybe it's just an overzealous union leader, but it's hard to believe that this isn't a parody:

The Scranton police union has filed an unfair labor practice complaint against the city for an off-duty drug arrest made by Police Chief Dan Duffy in March.

The complaint, which was filed with the state Labor Relations Board on April 14, takes issue with the chief arresting a man who was allegedly in possession of marijuana because the chief is not a member of the collective bargaining unit and was "off duty" when the March 20 arrest was made. ...

... the union president said the chief, as member of management, should not actively root out crime or randomly patrol neighborhoods while off duty because it violates union agreements that protect rank-and-file officers' employment. The union is concerned city administrators will have more leverage to lay off police officers because "Chief Duffy will step in" and do the work, Sgt. Martin said.

Somehow, the principle that labor agreements should come before public safety, and anything that increases the latter, doesn't seem quite right. One might even call it immoral and wonder whether collective bargaining in the public sector doesn't tend toward that sort of view.

A Matter of Protest Perspective

Justin Katz

Did you hear that this year's middle-of-the-workday Tea Party rally last Friday attracted fewer people than in past years? According to the Providence Journal's historically low estimate, about 400 people made it, and the article on the rally concentrated on that point:

The tea party rally at the State House Friday brought out a lower turnout than previous years, and for some attendees that brought frustration.

Stephen Struck, of Cumberland, remembered the marble plaza being "mobbed" with people during the first tea party rally in 2009. He says last year's crowd was about half that amount, and this year's crowd is about half of last year's.

Another rally, which arguably represents the opposing view, got quite a different treatment:

Tax Day rallies around Kennedy Plaza, one during lunch and the other at rush hour, drew some of the same participants and aired similar themes: that hard-working Americans pay more than their fair share of taxes.

Protesters who started gathering at 12:15 p.m. at the statue of Ambrose Burnside warmed up by chanting "Hey, hey, ho, ho, Wall Street greed has got to go," and "I pay, you pay, why doesn't Bank of America pay?"

This rally attracted a whopping 40 people, and since comparing that turnout with the rally just a few days earlier apparently wasn't relevant, reporter Donita Naylor spent most of the article conveying the talking points of the speakers. By comparison, based on the Projo's report, readers wouldn't be able to name a single one of the folks who spoke at the Tea Party event, much less what they said.

By the way, look who turns up in the second article:

Tax researcher Tom Sgouros said "problems are not going to be solved if we cut services" and stop doing preventative maintenance.

Tom's becoming like David Bowie. One week, he's an economist, the next he's a "tax researcher." He used to be a "consultant."

April 19, 2011

Reducing Obligations

Marc Comtois

No one likes to be though of as hard-hearted. But in an effort to find places to cut--to reduce our "obligations"--we simply need to take a closer look at our Human Services budget, which has $2.1 Billion (federal and state) in "assistance, grants and benefits" alone. Within that budget is the spending requested for the acute Department of Human Services, which has increased about 22% since 2009.

A review of the line items (PDF) shows that $864 million of Governor Chafee's 2012 DHS budget is comprised of money from Rhode Island taxpayers, an increase of $127.5 million over last year. (That's also with the $30.7 million in Veteran's Affairs money going off the DHS' books because the VA was made a new Department).

I suspect that advocates will explain that the increase in state funds is required to make up for the gap in Federal funding (nearly $111 million). This reduction in Federal funding correlates almost directly with a reduction in the Federal money spent on the Medical Benefits line item, where the loss of $111 million in Federal dollars is more than made up for with an increase of nearly $154 million in General Revenue expenditures.

This just points to the problem with becoming addicted and reliant upon the Federal government--or other "one time fixes"--to help smooth over budget gaps. The last Federal stimulus package just served as the latest drug of choice for the government addicts. Now it's going away. No matter what the "heart" wants, the wallet has to be able to afford it. And we can't (sorry, even the "Patriot Tax" doesn't get us there, folks).

Yet, to really get to the nut of the problem, we can't focus on the year-to-year gains or losses: it's time to revisit the basic formulation we use to qualify people for benefits. For instance, with regards to medical benefits, families who make 250% of the Federal Poverty Level can tap into RIte Share, Rhode Island's health care subsidization plan, for $1100 per year. That means taxpayers are subsidizing health care for a family of 4 with an income of $55,000 or a family of 5 with an income of $64,500.

I don't know if the figures are available to determine how many at the top-end are taking advantage of these programs. It can even be argued that this is a good use of our tax dollars: a helping hand for people who will work their way up and out of needing this assistance. I can buy that, but maybe we need to put a time limit on it. Regardless, can we afford to be so generous? I don't think so. But the problem may not be with offering a helping hand to people so close to not needing it.

I, like most Rhode Islanders, have empathy for those going through hard times. They're our family, our neighbors, our friends. We support a safety net. We can't afford to support a safety net "lifestyle." The poor economy brought many "newbies" into the safety net who have learned first-hand how it is abused by the lifers. For too long, Rhode Island, with it's generous benefit qualification "requirements", has taken a "no questions asked" approach (ie; "666" for a SS#) and served as a magnet and safe haven for the safety net careerists. Reform in the cash assistance program helped a little. But any savings have been eclipsed by expenditures in other, non-cash programs like, for instance, the aforementioned medical assistance. Ask doctors and nurses (or EMTs) how many people use 911 and the Emergency Room as a primary care physician, even now with all of the health care reform.

For the system seems to be meant to be gamed. We reward people for having more children (giving them child-care subsidies, for instance, that often go to family members operating a "daycare"), particularly out of wedlock, while working under the table to minimize their reportable income. We need to identify the abusers and other areas of fraud, waste and abuse (a la Ken Block). We need to tighten the qualification requirements and stop being taken advantage of by the safety net industry careerists. We need to help those who actually try to help themselves out of the safety net instead of those who see it as a hammock.

Godin on the "Economies of small"

Marc Comtois

Seth Godin has advice for the little guy. Like small business or even a small state.

Economies of scale are well understood. Bigger factories are more efficient, bigger distribution networks are more efficient, bigger ad campaigns can be more efficient. It's often hard to defeat a major competitor, particularly if the market is looking for security and the status quo.

But what about the economies of small? Is being bigger an intrinsic benefit in and of itself?

If your goal is to make a profit, it's entirely possible that less overhead and a more focused product line will increase it.

If your goal is to make more art, it's entirely possible the ridding yourself of obligations and scale will help you do that.

If your goal is to have more fun, it's certainly likely that avoiding the high stakes of more debt, more financing and more stuff will help with that.

The marketplace has changed: the ability to produce, market and sell to smaller groups of consumers has been made easier with technology. Consumers minds have changed along with it--we expect flexibility and the ability to get just what we want when we want it at a decent price. It doesn't have to be the cheapest price, so long as we see value in the quality of the product. Economies of scale still do work, but maybe not always.
I think we embraced scale as a goal when the economies of that scale were so obvious that we didn't even need to mention them. Now that it's so much easier to produce a product in the small and market a product in the small, and now that it's so beneficial to offer a service to just a few, with focus and attention, perhaps we need to rethink the very goal of scale.

Don't be small because you can't figure out how to get big. Consider being small because it might be better.

In many ways, Rhode Island really doesn't have any other choice but to embrace its "smallness." We're not going to get geographically bigger and our population has stayed the same seemingly forever. The argument around here has been focused on the efficiency that can be gained by embracing the concept of economies of scale by consolidating government services, say, at the county level. But we're not holding our breath, are we?

We have to get leaner in government--"less overhead"--and consolidation still makes sense (despite my pessimism that it will ever happen). Less waste can free up money to deliver those government services that the majority of Rhode Island citizens desire--"more focused product line"--like an efficient DMV, good roads/infrastructure, etc.

So how do we do it? By "ridding [ourselves] of obligations and scale." More on that later.

The Logic of Taking Your Money

Justin Katz

I don't want to let this one go without highlighting:

Just two people testified in favor of the governor's plan, out of more than 96 who signed up to speak.

The other was Kate Brock, of the pro-union advocacy group Ocean State Action, who questioned why the state taxes a lawnmower but not landscapers, or why it taxes nail polish but not a nail salon. "It is illogical to tax a good but not a service that results in the same outcome."

One suspects that Ms. Brock might find it further illogical to tax the landscapers but not the air that they breathe. After all, taxation is the singular purpose of government, right?

Do you think it'd do any good to point out to Brock the landscapers are taxed via their income? You know, as workers and individuals rather than as purchasable goods.

Meet the New Toady, Same as the Old

Justin Katz

Charles Wales, of Cranston, makes the argument that they were, indeed, the bad old days back before public-sector unionization:

Yes, they were indeed bad times: Elected and many non-elected persons held sway over municipal departments. Favors, assignments and promotions were granted, often without the smallest indication that merit was considered. Lackeys, sycophants and toadies were the winners from the lowest worker up to department heads. City departments had become the playthings of those ranging from the very prominent to shadowy figures patrolling in the political background.

My fellow non-union Rhode Islanders may wonder, upon reading that passage, what has really changed. Well, obviously, what's changed is that unions are now integrated with that corrupt spoils system. Remember Mayor Laffey's battles over the crossing guard union? His run-in with the fire fighters? And let's not limit ourselves to Cranston, especially when we've got the Iannazzi-Ruggerio connection so fresh in our minds.

If the situation was as Wales describes it, one could argue that having employees who weren't part of the spoils system helped to permeate government with whistle blowers on the taxpayers and voters' side. Now it's possible to collectively buy them off... "possible" being used, here, in exclusion of the question of whether the local society can afford to support the system in perpetuity.

April 18, 2011

Re: Local Governments Founded in Deception

Justin Katz

Rhode Island Association of School Committees Executive Director Tim Duffy commented as follows to the post in which I suggested that pension problems are a self-inflicted wound among governments, especially local governments:

The wound is not a locally self-inflicted one. School committees are not responsible for pension debt. We do not negotiate these benefits with unions. The rates we pay are determined actuarially and that is driven by factors set in state law. How long it takes an employee to become vested, when they can retire, when they can begin to draw down a pension, what % of pay the pension is set at, how much their pension increases annually, COLAs, are all embedded in state statute. During the 1990's recession the state changed the employer contribution ratio, from 60% state – 40% local to 40% state – 60% local. So when the retirement board changes the actuarial assumption, as they should, and it results in an increased unfunded liability, locals get to bill the pay.

A lot of communities are doing less with more, but our hands are tied by collective bargaining statutes that create an unleveled playing field in favor of the unions. Teacher unions can employ work to rule as a protest against management and hurt students in the process. Illegal teacher strikes, while infrequent, don't result in any financial penalty for teachers. Binding arbitration awards for police and fire have largely ignored a community’s ability to pay and in many instances have set conditions for retirement, selected costlier health care providers, and set manning and staffing levels.

When the legislature passed 3050 lowering the property tax cap, a bill we supported, it also required the state to fund mandates passed by the General Assembly or initiated by regulations of a state agency. The FY 2012 budget, like budgets before it, does not appropriate money for mandate reimbursement. In many instances local government is failing, but not necessarily due to any fault of locally elected officials. Rather much of the failure can be laid at the feet of state leaders who have passed the accountability buck down to the locals while denying them the authority to act in the interests of their citizens, taxpayers and students.

That's a reasonable response, but it requires a certain amount of acceptance of Rhode Island's paradigm for governance. Having watched school committees play at bringing negotiations to a close while continuing to promise that any raises would be retroactive, no matter how many times the union scuttled an agreement, I'm not willing to buy into the game.

More importantly, local government has played its role in the system of unions dominating the Statehouse and the Town Hall, as well, cycling taxpayer dollars into public-sector coffers.
As the elected officials closest to the voters, school committees (and town councils) should have pushed back harder. So, "self-inflicted" may be too strong, but only if one excludes passivity.

As the General Assembly has changed the pension system detrimentally to municipalities, those local governments should have taken steps to decline participation in the system altogether. If that didn't prove feasible, they should have insisted that new costs be worked into existing personnel costs, pushing salaries and other benefits down, as well. Let the unions decide whether they'd rather take their winnings in cash, benefits, or retirements.

There are surely dozens of actions, practical and political, that school committees could have taken to fight back. To my experience, they've been content to play along, complaining about labor and the legislature, to be sure, but also observably happy to have places to which to pass blame.

And if the system had pushed back more, then at the very least, those with an investment in the pension system wouldn't have been so complacent about its being sacrosanct.

April 17, 2011

UPDATED: John Derbyshire: "Dissidents and Doom"

Justin Katz

John Derbyshire, writer for National Review and author of We Are Doomed spoke last night to the Providence College Republicans, displaying his erudition and low-key humor on the topic of the dissident personality.

The upshot of Mr. Derbyshire's lecture had a relevance that I didn't expect to Rhode Island's current predicament. He spoke of "a dissident scene full of petty squabbles," which has certainly applied to Rhode Island's center-right reform movement at times over the past few years.

One question that would be worth further exploration arises from his very conservative suggestion that dissidents should have a due respect for the gods and pieties of the tribe, so to speak. That strikes me as applying a bit askew to Rhode Island and to the United States generally. Broadly speaking, our society is pretty sharply divided between two tribes, which has the effect of giving both a reasonable claim to dissidence (although conservatives have the better). The pieties of one are the blasphemes of the other.

Readers won't be surprised that my opinion is that dissidents of the Left are mainly conforming to a carefully woven groupthink that presumes itself to be the default truth for the culture. Still, resolving the conflict of opposing factions that each believes itself to be the righteous revolution founded in the original principles of our society will be quite a project... assuming the United States can survive it.

The title of Mr. Derbyshire's book gives some indication of what his opinion might be on that last count.


Mr. Derbyshire has provided the text of his speech on his personal Web site.

"By-Passing" the Qualifications for RI Social Service Benefits?

Monique Chartier

First of all, kudos to Terry Gorman of RIILE for obtaining the information contained in this post under Rhode Island's Access to Public Records law ("RI Gen Law 38-2-1 et seq" for other curious folks).

When someone goes to the State of Rhode Island and applies for social services, one of the first pieces of information for which they are asked is a social security number. However, there are instances when the applicant/recipient may not have one (more on that in a sec). When that happens, the staff at the Dept of Human Services is permitted to enter a "666" by-pass number - a nine digit number that starts with 666.

Know how many people are receiving benefits under a 666 by-pass number?


Now, per the attorney for the Department of Human Services, here's who might need a by-pass number:

newborns, citizens or legal permanent residents in the process of obtaining a copy of their Social Security cards and foster care children

However, all four of these instances would be very temporary situations; the social security number/card is obtained and the correct number is then plugged in, replacing the 666 by-pass number.

Are we to believe that there is a steady new batch of 3,300 applicants continuously coming into the system who need to use the by-pass number while waiting for a social security number or a copy of their card to arrive? What is the follow-up procedure prescribed by the Dept of Human Services? More specifically, how long have the cases represented by each of those 3,388 numbers actively been receiving benefits? Weeks, while the SS card is obtained? Or years, because no one from the state asked them for their card after a reasonable amount of time had lapsed?

Or is it possible that the by-pass number, purportedly for babies and foster care children (and how could you argue with that purpose, you hard-hearted person???), is being used to distribute social service benefits to adults who do not qualify because they simply do not have a social security number and do not dare to apply for one because they migrated here illegally?

There is a pretty straightforward solution to this: everyone gets re-qualified and, in the process, goes through e-verify. We are told repeatedly by advocates of illegal immigration that "undocumented immigrants" do not qualify for social service benefits. So there could be no objection to re-certification. In fact, better oversight (of Medicaid, at least) was exactly the recommendation of the Acting Auditor General Dennis E. Hoyle Friday.

The auditors said the state needs to improve oversight for processing Medicaid claims, determining eligibility, and disbursement of other program benefits, among other recommendations.

Could the re-certification process cost more in increased staffing? Maybe. Here's a suggestion: modernize (at least to the 20th century; ya don't want to move too fast on these matters) the state's completely assinine boiler laws and move the FTE's from the boiler inspection division over to human services. The increased taxes needed to fund unqualified social service benefits are a far greater threat to the well-being of the state than the danger posed by modern, forty four gallon hot water boilers.


Michael Morse checks in to say that the hot water heater which he and his wife harbor at their small business, and which was subjected to a state inspection, is all of four gallons. In fact, the pertinent Rhode Island General Law, 28-25, "Boiler Inspection and Pressure Vessels", does not specify a minimum size or vintage that shall fall under the scope of the inspectors. Accordingly, in the eyes of the state, no boiler is too small or too new to escape inspection.

April 16, 2011

David Cicilline Explains that He is Not Delusional, Because Spending Was Reined-In In the Years that Providence's Budget Grew by 71 Million Dollars

Carroll Andrew Morse

In an op-ed in today's Projo, First District Congressman David Cicilline defends his defense of his record as Mayor of Providence, as well as defending the record itself...

Five days before my election to Congress, last November, I said that Providence was in “excellent financial condition.” Today, Mayor Angel Taveras faces a critical deficit, and people want to know whether I was delusional, not paying attention, or not telling the truth.

It was none of the above...

Finding a way to close the nearly $60 million budget shortfall that I faced on my first day was urgent, as was establishing a plan to restore the city’s fiscal health.

Within two years, we reined in spending, cut hundreds of positions from city government, negotiated concessions from unions and enacted serious financial reforms, such as requiring employees for the first time in the city’s history to contribute to their health-care insurance and initiating long-overdue pension reform.

I don't think that the case for "not delusional" is proven through this op-ed.

According to the annual figures that are compiled by the RI Division of Municipal Finance, municipal-side spending by the City of Providence in the first budget of the Cicilline administration (FY2004) increased by 19.5% over the previous year. In the fiscal year after that, municipal-side spending grew by a further 3%. On the education side of the budget, spending grew by 7% over the previous year in Cicilline's first budget, then remained level in his second...

% Change From
Previous Year
% Change From
Previous Year

Source: Division of Municipal Affairs of the Rhode Island Department of Revenue.

In terms of absolute numbers, spending by the City Providence increased from $490.8 million in the fiscal year that preceded Mayor Cicilline's first budget to $562.3 in the fiscal year covered by his second budget. Apparently, increasing a budget by $71.5 million over a two-year period is what Congressman Cicilline refers to as "reining in spending".

And while Providence's official financial report shows that the Ciciline administration did cut almost 200 positions from the city payroll in his first two years in office, it also shows that there were 31 more municipal-side positions in Providence in Mayor Cicilline's final fiscal year than there had been at the start of his first fiscal-year...

Year# Municipal
# School
# Total

Source: City of Providence, Rhode Island, Comprehensive Annual Financial Report, Fiscal Year Ended June 30, 2010. Page 85.

(The major gain in municipal-side personnel in the latter-half of the Cicilline administration was in the area classified as "public works, miscellaneous". Also, there are now 40+ more building inspectors in Providence than in the pre-Cicilline days, though in terms of head-count, this is cancelled out by the fact there are 40+ fewer people in the "Firefighting department").

Finally, it should be noted that Congressman Cicilline does not claim in today's op-ed that 445 positions were eliminated during his tenure of mayor of Providence, a claim which he had repeated several times after the story Providence's "surprising" financial troubles broke after Mayor Tavares' innauguration. The claim is not supported by the numbers in the city's most recent financial report -- but if the Congressman follows his existing pattern, maybe he will tell us what he really meant by this statement in a year or two.

April 15, 2011

The Rhode Island Tax Day Tea Party 2011, The View of the Crowd

Carroll Andrew Morse

And, of course, no Tea Party Rally photoentry is complete without some shots showing the size of the crowd...

The Rhode Island Tax Day Tea Party 2011 -- Though Governor Lincoln Chafee Did Not Show Up, the Spirit of Zechariah Chafee Did

Carroll Andrew Morse

Supreme Court Justice Louis Brandeis, whose views on freedom of speech are generally considered to have been significantly influenced by Professor Zechariah Chafee, wrote in a 1927 opinion that...

If there be time to expose through discussion the falsehood and fallacies, to avert the evil by the processes of education, the remedy to be applied is more speech, not enforced silence.
A number of Tea Partiers lived up to the free-speech tradition of Justice Brandeis and Professor Chafee this afternoon, responding to some dissembling speech that appeared in the crowd with direct and honest speech of their own...

And there was also ample room for discussion between people with differing views...

The Rhode Island Tax Day Tea Party 2011, Signs of the Times

Carroll Andrew Morse

The Rhode Island Tax Day Tea Party 2011

Carroll Andrew Morse

Do You Trust Me?

Marc Comtois

Speaker Fox and the various members of the Democratic leadership say the Chafee plan is dead.....Right?

“I’m not going to swear on any Bible about revenue enhancements at this point,” Fox said. “Before we go to the taxpayers and say we need to increase your taxes, we need to build some credibility with them to say that we have turned over every stone, every nickel and dime.”

“We’re still looking at a lot of things,” said House Finance Committee Chairman Helio Melo, D-East Providence. “The speaker did mention that he had major concerns with some of those 1-percent items. But I did not get the impression that he’s taken all of the sales tax off the table.”

Is it over?
It feels over
Don't you trust me?
No I don't

Not Working: A Society in Decline

Justin Katz

A USA Today study finds that the percentage of Americans not working hasn't been higher since women began entering the workforce, and the percentage of men who are working has never been lower. Moreover:

In 2000, the nation had roughly the same number of children and non-working adults. Since then, the population of non-working adults has grown 27 million while the nation added just 3 million children under 18. ...

The aging of 77 million Baby Boomers born from 1946 through 1964 from children to workers to retirees is changing the relationship between workers and dependents.

Retirees generally are more costly to support than children.

Fewer children. More non-employed. A wave of pending retirements. Now stir this in:

A quarter of teenagers were jobless in March, representing a surprising increase from February, even as the unemployment rate for the rest of the population decreased.

So, not only are there fewer children, but fewer of them are forming the habits and skills of working.

The article about teen unemployment notes economists' expectation that increasing the minimum wage will only exacerbate things, as employers eliminate low-end positions that they can no longer afford and look for higher-skilled employees to fill the more-expensive positions that they keep. Meanwhile, the first article linked above ends with this:

Economist Eileen Applebaum of the liberal Center for Economics and Policy Research says the real problem is a lack of jobs. Another 25 million people would work in a healthy economy, and incentives such as child care assistance could help, she says: "We're getting richer. We can afford things. We just need to fix what needs to be fixed."

Those of us who are suspicious of the Left's ability to do such fixing might wonder how its solutions address the actual problem by continuing to expand and deepen dependency — of parents on government and of the young on parents and government. That strikes me as the opposite of the wise direction.

Indeed, progressives' proposed policies always represent a further step in the progression of covering up and papering over the adverse consequences of previous changes. Even with male exodus from the workforce and decreasing numbers of children, and decreasing proportions of them working, we're still hearing calls to somehow force the system to shift in favor of women to compensate for a debatable wage gap. Moreover, we're hearing calls to continue the dilution of marriage by severing the inherent link between it and childbirth.

Western civilization spent much of the past half-century undermining the family structure that secured its advancement toward prosperity. Papa Government isn't going to fill the gap, because the nuclear Western family ultimately encourages independence, while government encourages dependence. Parents will inevitably die; Big Government is eternal, unless killed.

Local Governments Founded in Deception

Justin Katz

One can't call the vote "party line" because Rhode Island's Pension Review Board is technically non-partisan, but as Marc observed on Wednesday, the vote to bring investment estimates closer to what the pension fund has actually been earning nearly fell along what might be called a "union picket line" vote. Basically, the question was about whether to give Rhode Islanders a better sense of just what their elected officials have promised, and that's not a reality that the unions want the public to face.

The perspective of one public figure who often falls on the other side from the unions is very interesting:

With school districts now facing a $55.5-million hike in pension costs in 2012-13, beyond the increases they were already expecting, Tim Duffy, executive director of the Rhode Island Association of School Committees, said: "I don't know how local government is going to continue to exist, given all the financial stresses."

If it's true that the pension promises of government amount to a self-inflicted and fatal wound, maybe local officials should lead the way in accepting reality, especially school committees. That's going to mean completely rethinking the way in which they structure compensation. Like countless private-sector organizations, families, and individuals, they're going to have to begin doing much more with much less. If that's an impossibility, as Duffy seems to imply, then local government is a failed experiment, anyway.

April 14, 2011

The Consistent(ly bad) Governor

Justin Katz

Before the news cycle moves on, I'd like to highlight the following, from Philip Marcelo's story on the tax-increase dispute:

One floor up from where business leaders gathered, in a room adjacent to his office, the governor repeated his challenge to detractors: provide an alternative solution, and be specific. ...

Chafee rejected business leaders’ arguments that the tax plan would hurt job creation. "Show me the evidence," he said.

The Chafee administration's attitude is entirely in keeping with the theme that inspired Anchor Rising's very first "Chafeedom" post. You'll recall that, soon after his election, Chafee evinced a pattern of declining to meet with advocates who disagreed with him on their particular issues. Supposedly, he'd already conducted all the meetings he needed and didn't think any more would be constructive. The ban on participation in and denunciation of talk radio soon followed.

Now, those who oppose his tax-increasing ways are called upon to show him evidence and propose solutions that he'll find acceptable. Only, one would be entirely rational to suppose that acceptability is a false hurdle, impossible to clear.

Mixing in the fact that "his administration could not produce an analysis on the potential impact to businesses," it's clear that this guy really doesn't care for discussion and open discourse, as he claims. That's just an illusion (fooling, most of all, the governor himself) accomplished by always insisting that the other side has to do more while one's own view is correct by assumption.

The City that Outsourced Everything

Marc Comtois

Really, watch the whole thing (7+ minutes). Yes, it's much easier to do with a "new" city (4 others have followed the Shady Springs model). But older cities can do the same thing. The difficulty is with selling the change. Especially to the workers.

Budget "Deal" Skullduggery - Shouldn't Have Expected Any Different

Marc Comtois

So that $38.5 billion budget deficit reduction deal? Not really much of anything.

[T]he cuts ...includ[e] cuts to earmarks, unspent census money, leftover federal construction funding, and $2.5 billion from the most recent renewal of highway programs that can't be spent because of restrictions set by other legislation. Another $3.5 billion comes from unused spending authority from a program providing health care to children of lower-income families....the spending measure reaps $350 million by cutting a one-year program enacted in 2009 for dairy farmers then suffering from low milk prices. Another $650 million comes by not repeating a one-time infusion into highway programs passed that same year. And just last Friday, Congress approved Obama's $1 billion request for high-speed rail grants — crediting themselves with $1.5 billion in savings relative to last year.

About $10 billion of the cuts comes from targeting appropriations accounts previously used by lawmakers for so-called earmarks...Republicans also claimed $5 billion in savings by capping payments from a fund awarding compensation to crime victims. Under an arcane bookkeeping rule — used for years by appropriators — placing a cap on spending from the Justice Department crime victims fund allows lawmakers to claim the entire contents of the fund as budget savings. The savings are awarded year after year.

Conservative Republicans and Tea Party faves weren't too jazzed about all of this:
Even before details of the bill came out, some conservative Republicans were assailing it. Rep. Mike Pence, R-Ind., said he probably won't vote for the measure, and tea party favorite Michele Bachmann, R-Minn., is a "nay" as well.

The $38 billion in cuts, Rep. Tim Huelskamp, R-Kan., wrote on his Facebook page, "barely make a dent" in the country's budget woes.

In all, only about $352 million in real spending was actually cut. Regardless of the reality of the actual cuts, Mark Steyn observes:
The joke re the original $38.5 billion deal was that, in the time it took to negotiate it, we added as much again in new debt (we’re borrowing about $4 billion a day). We didn’t know the half of it: Never mind negotiating, in the time it takes to type up the bill, we’ve borrowed as much as it “saves”. By the time this thing’s through, the cost of the Secret Service detail lugging the Obamaprompter to whichever grade school he announces the final definitive historic budget “cuts” at will be three times as much as any actual savings.
Just nibbling for show.

RE: Fox's Statement on Chafee Tax Plan - Room to Wiggle?

Marc Comtois

As Monique noted last night, Speaker of the House Gordon Fox came out against Governor Chafee's sales tax plan. This morning I heard Helen Glover wondering if there was room for Fox to wiggle by keeping the 6% "flatten and broaden". After all, Fox only specifically cited the 1% tax on new items, not the other part of Chafee's plan. Ted Nesi also wonders if the whole plan is dead?

Fox’s statement doesn’t say anything about whether he could support broadening the number of goods and services taxed at 7% (or at 6%, if Chafee’s proposal to lower the rate passes). And the revenue that would be brought in by taxing more items at 6% far outweighs the amount generated by the 1% tax.

“The House will not pass the budget in its current form,” Fox said. “We will instead develop alternatives to this proposal and will continue to work with the governor to amend his budget submission.”

I don’t know what’s going to happen next – all I know is, somehow or other, the General Assembly is all but certain to find a way to eliminate the $331 million deficit and pass a balanced budget for 2011-12.

Tune in at 11:30 PM on June 30th to find out.

The Two Languages of Rhode Island

Justin Katz

Monique's appearance on last night's Matt Allen Show focused on the distance between the people and businesses of Rhode Island and the governor and political class that presumes to lead the state... and are leading it into a ditch. Stream by clicking here, or download it.

Spending reductions in the tax code

Marc Comtois

I'm not the first or only one to note it, but it's worth mentioning around here that President Obama attempted to redefine a tax increase in his speech yesterday as a "spending reduction in the tax code".

The president also called for undoing the Bush tax cuts for upper-income taxpayers, and for canceling other tax cuts many of them receive such as the mortgage interest deduction — items that instead of labeling “tax increases” he called “spending reductions in the tax code.”
Actually, it's not too surprising given that PLDs* have been portraying tax cuts as "spending" for a while now. May as well be consistent.

*Progressives, Liberals, Democrats - take your pick, I don't know what the preferred appellation is anymore.

April 13, 2011

Sales Tax "Modernization" Gaffed: Gordon Speaks; Gov Backs Away; All Eyes Turn Keenly to the G.A.

Monique Chartier

The Pawtucket Times' Jim Baron reports.

Gov. Lincoln Chafee’s plan to radically overhaul the state’s sales tax structure is effectively dead.

After more than six hours of nearly unanimous testimony denouncing Chafee’s proposal to lower the state sales tax from 7 to 6 percent and broaden it to a vast array of goods and services that are now exempt, House Speaker Gordon Fox had heard enough.

Fox issued a written statement shortly after the finance committee adjourned saying “Governor Chafee's proposed multi-tiered sales tax approach is unacceptable … After speaking with a majority of House members, we will not support the current proposal.”

“The House will not pass the budget in its current form,” the Speaker announced. “We will instead develop alternatives to this proposal and will continue to work with the Governor to amend his budget submission.”

And, down the hall,

Hours later, Chafee apparently ran up the white flag. Rather than mounting a fight to save his proposal, the governor’s office issued a terse statement that said, “I look forward to working with Chairman Melo and Speaker Fox to advance an honest, responsible budget that fixes our chronic structural deficits and puts Rhode Island on a path to prosperity."

The Insidiousness and Destruction of Decades of Incremental Tax Increases

Monique Chartier

In response to the protest rally held by the business community yesterday at the State House, the governor asked for proof that his proposed massive broadening of the sales tax will damage Rhode Island businesses.

Rhode Island currently has the fifth highest state and local tax burden. It also has one of the worst business climates in the country - the latter due in part to the high cost of doing business here in which a myriad of government regulations, taxes and fees features prominently. (Boiler fee, anyone?)

However, these conditions did not evolve overnight. One by one, such regulations, taxes and fees were added. And then, one by one, many of them were expanded or increased, sometimes repeatedly; in the case of the fire code, to a ridiculous degree. As this happened, Rhode Island slowly evolved into its current status of business and property-owner unfriendliness. In response, one by one, businesses moved out of the state; naturally, taking jobs with them in the process.

This, then, is the fulfillment of the governor's assignment: the proposed massive broadening of the sales tax is a continuation of a decades-long practice that has slowly but inexorably driven business out of the state.

If we're ever going to pull out of this downward spiral, we need to head in the opposite direction. Regulations need to be addressed. And let's come to grips with the budget's structural problems so that we can begin decreasing taxes and fees rather than once again doubling down on failure and increasing them.

RE: Paying the Pension Piper - Board Approves ROI Assumption Reduction

Marc Comtois

Earlier today, the pension review board was presented with an actuarial study concerning the RI Pension system. After the presentation, the board voted 9-6 to reduce the assumed rate of return on pension investments from 8.25% to 7.5%, which was the figure recommended by the study. The ProJo has the roll call:

• General Treasurer Gina Raimondo, serves as chairwoman YES

• Richard A. Licht, state director of administration YES

• Thomas A. Mullaney, associate director of the state budget office, designated by the state budget officer YES

• Daniel L. Beardsley, president of the R.I. League of Cities and Towns YES

• Four public appointees -- two by the governor and two by the state treasurer, all subject to Senate approval (years in parentheses represent when terms expire)

Gary R. Alger (2011) YES

Frank R. Benell Jr. (2013) YES

M. Carl Heintzelman (2011) YES

Jean Rondeau (2012): YES

• Two active teacher representatives; Finelli serves as vice chairman

William B. Finelli YES

John P. Maguire NO

• Two active state employee representatives elected by working teachers union members

John J. Meehan NO

Linda C. Riendeau NO

• Louis M. Prata: active municipal employee representative elected by working union members NO

• Two retiree representatives elected by the plan retirees

Roger P. Boudreau NO

Michael R. Boyce: NO

Sorry union delegates, covering your eyes and ears isn't going to make the problem go away.

Guilt Industry Meme of the Day: Women Earn Less Than Men

Marc Comtois

"Rhode Island women earn $10,200 less than men" says the Providence Business News headline.

Full-time employed women in Rhode Island are paid an average of $10,191 less than their male counterparts, according to research conducted by the National Partnership for Women & Families.

The research is meant to shed light on the persisting gender-based wage gap on Equal Pay Day on Tuesday, April 12.

In Rhode Island, a woman working full time is paid $39,248 per year, while a man working full time is paid $49,439 per year.

Nationally, women working full-time are paid an average of 77 cents for every dollar that men earn.

Well, not quite, says Carrie Lukas:
Feminist hand-wringing about the wage gap relies on the assumption that the differences in average earnings stem from discrimination. Thus the mantra that women make only 77% of what men earn for equal work. But even a cursory review of the data proves this assumption false.

The Department of Labor's Time Use survey shows that full-time working women spend an average of 8.01 hours per day on the job, compared to 8.75 hours for full-time working men. One would expect that someone who works 9% more would also earn more. This one fact alone accounts for more than a third of the wage gap.

Choice of occupation also plays an important role in earnings. While feminists suggest that women are coerced into lower-paying job sectors, most women know that something else is often at work. Women gravitate toward jobs with fewer risks, more comfortable conditions, regular hours, more personal fulfillment and greater flexibility. Simply put, many women—not all, but enough to have a big impact on the statistics—are willing to trade higher pay for other desirable job characteristics.

Men, by contrast, often take on jobs that involve physical labor, outdoor work, overnight shifts and dangerous conditions (which is also why men suffer the overwhelming majority of injuries and deaths at the workplace). They put up with these unpleasant factors so that they can earn more.

Recent studies have shown that the wage gap shrinks—or even reverses—when relevant factors are taken into account and comparisons are made between men and women in similar circumstances. In a 2010 study of single, childless urban workers between the ages of 22 and 30, the research firm Reach Advisors found that women earned an average of 8% more than their male counterparts. Given that women are outpacing men in educational attainment, and that our economy is increasingly geared toward knowledge-based jobs, it makes sense that women's earnings are going up compared to men's.

I hope it's obvious that equal pay for equal work regardless of gender, creed, etc. is desirable. Stories like this relying on a simplistic statistical reading are meant to generate controversy, continue to foment a "battle of the sexes" mindset and, gee whiz, just maybe make it appear that feminist culture warriors are still relevant.

Bewildered Leaders and a Bewitched Population

Justin Katz

Calling Lincoln Chafee our "bewildered governor" and joking about the national search no doubt conducted before Senate Majority Leader Dominick Ruggerio hired the 25-year-old son of his union pal for a $90k job, Ed Achorn puts his finger on the chilling reality:

Until voters hold accountable these leaders — and the legislators who put them in power — they simply will not care if the masses suffer while those with connections gorge at the trough. If you vote those representatives and senators out of office for going along with these raises — or, at least, offer a credible threat that you will do so — you might find these leaders rethinking the question of whom they actually serve.

A few people still hold out hope that such a thing could happen, in Rhode Island, but I can't say I'm among them. The system is simply locked up by people invested in the corruption, which is a polite way of saying that they're bought off. I'd argue that the great majority of them would actually be better off under a fairer, less corrupt government, but few would listen.

In a state where people say that everybody knows everybody, too many folks think knowing somebody should actually be of legitimate value.

Minimal Pension Reform in Warwick

Marc Comtois

Warwick Mayor Avedisian's pension reform proposals are currently in the process of being reviewed by the Warwick City Council. In a nutshell, Avedisian proposes the following:

1) Minimum retirement age of 50 years old for Fire and Police and 59 for municipal workers. Right now, they can retire at any age as long as they've served enough years. Which leads to....

2) Increase the minimum years of service required to retire to 25 for police and fire (up from 20) and 25 years for municipal employees.

3) Unfortunately, any cost savings projections are immediately obsolete because the proposal also assumes the same 8% or so rate of return that is fast becoming obsolete as the new actuarial reports being presented today show. Former City Councilor Bob Cushman broke down the minimal--delayed--savings at the meeting:


Basically, right now, cost-savings are "on paper" and way in the future.

Anyway, taking it for what it is...upping the retirement age to 50 is defensible for police and fire, but 59 for municipal workers? Why not 65 like the rest of us? Average lifespan is what, 75 now? That means 16 years retired, getting full health care to boot. (As far as I know, Mayor Avedisian isn't proposing the removal of lifetime health care benefits for city employees). I've said it before, this is all nice, but it should have been done a while ago. The flexibility of bureaucracy in action once again.

Unions are fighting this reform because they don't want pensions to be removed form collective bargaining. So far, the first phase (police pension reform) has been approved 7-2 by the City Council. Apparently, Councilwoman Camille Vella-Wilkinson and Councilman Charles "C.J." Donovan Jr. couldn't even approve of this tepid reform. Vella-Wilkinson is the new City Councilor who said of the proposal:

I personally feel that it's heavy-handed for the city to decide (through ordinance) what pensions should be....We are not giving the unions a chance. They are stakeholders too.... They are not Al-Qaeda. They are not holding us hostage.
Brilliant. I'd urge Vella-Wilkinson to look at the new reports coming out of the General Treasurer's office. How is she going to hyperbolize when current pensions need to change?

Look, something is better than nothing and the wheels of government turn slowly. But forgive me if, again, I'm less than enthused that some fairly common sense modifications have taken so long to come forth. Congratulations aren't in order. This should have been a long time ago.

Governments Redirect Disaster Money

Justin Katz

Prepare to have your worldview shattered:

Tasers. Brand-new SUVs. A top-of-the-line iPad. A fully loaded laptop. In the year since the Gulf oil spill, officials along the coast have gone on a spending spree with BP money, dropping tens of millions of dollars on gadgets and other gear — much of which had little to do with the cleanup, an Associated Press investigation shows....

Florida's tourism agency sent chunks of a $32 million BP grant as far away as Miami-Dade and Broward counties on the state's east coast, which never saw oil from the disaster. BP announced Monday it would give another $30 million to help several northwest Florida counties promote tourism.

Some officials also lavished lucrative contracts on campaign donors and others. A Florida county commissioner's girlfriend, for instance, opened up a public relations firm a few weeks after the spill and soon landed more than $14,000 of the tiny county's $236,000 cut of BP cash for a month's work.

Government officials finding unrelated and ethically dubious uses for money meant for disaster relief? No way! Government is all about service and honestly helping people. That's why we can rely on it to regulate our lives in minute detail and dabble directly in the economy.

Paying the Pension Piper

Marc Comtois

Consultant's hired by General Treasurer Gina Raimondo will present their findings to the state retirement board today (report here - PDF). Their findings are grim if unsurprising, as reported by the ProJo. There are some basic structural problems:

The state pension system is based on three basic sources of funding: employee contributions, employer contributions and the volatile stock market. Because the employee contributions have been locked in place at 8.75 percent of pay for state employees, and 9.5 percent for teachers since 1995, taxpayers have been required to pay more and more each year....

The state adopted the 8.25-percent assumed rate of return on its investments in 1998, over the strenuous objections of then-Treasurer Nancy Mayer, who denounced the move as “amazingly irresponsible” in a volatile economy.

The actual market return averaged 2.47 percent over the 10 years that ended on June 30, 2010.

Assuming 8.5% annual return: mistake. The result:
[T]he gap between promises made and money available to pay for them is at least $1.4 billion bigger than previously believed.

• The required taxpayer contribution toward state employee pensions would shoot from 26.55 percent of payroll to 36.34 percent which, in dollars, would mean the difference between $182.5 million, with no change in assumptions, and $246 million.

• State and local contributions to teacher pensions would increase, at the same time, from 26.21 percent of payroll ($282.8 million) to 35.25 percent ($375.3 million).

At those levels, the required taxpayer contributions would be more than $100 million higher, within a year, than the $358.7 million that Governor Chafee anticipated...

Here are their recommendations (from the report):
1. Decrease the price inflation assumption from 3.00% to 2.75% per year.
2. Decrease the assumed net real return on investments from 5.25% to 4.75% per year. Combined with #1 decreases the nominal assumed investment rate of return from 8.25% to 7.50%.
3. Based on #1, change the COLA assumption from 2.50% to 2.35% for Schedule B retirees.
4. Modify the service-related components of the salary increase rates for both state employees and teachers; also change the wage inflation assumption from 4.50% to 4.00%.
5. Decrease the payroll growth rate from 4.25% to 3.75% for both state employees and teachers.
6. Improve the mortality assumption for active, and retired members, including the addition of
an assumption for ongoing future improvements in life expectancy. Also improve the
mortality assumption for disabled retirees, and lower pre-retirement mortality.
7. Make slight changes to the rates of disability for active male state employees and all teachers.
8. Make no change to the retirement rates for state employees or teachers.
9. Make no change to the termination assumption for state employees. Slightly increase the termination rates for teachers.
10. No change to the percentage of members that are assumed to be married.
11. No change to the actuarial cost method or the method for calculating the actuarial value of assets.
12. No other changes are recommended for any of the other actuarial assumptions or any of the actuarial methods.
Based on past results (which don't guarantee future returns!), even dropping to 7.5% seems too optimistic.

ADDENDUM: Ted Nesi has some thoughts from Governor Chafee on pensions.

Bringing Conservative Pessimism to Campus

Justin Katz

Readers of National Review will be interested to know that the Providence College Republicans are bringing the magazine's resident pessimist, John Derbyshire, to campus tonight at 7:30 (112 Slavin Center). It should make for an interesting talk.

April 12, 2011

First Fallout of the Chafee (Not Even Anywhere Near Implemented) Sales Tax: Taco Suspends Expansion Project

Monique Chartier

The Providence Business News broke this a little earlier.

Groundbreaking for a $15 million to $18 million addition at Taco Inc., originally scheduled for the end of April, has been delayed while company officials assess the impact of proposed state tax changes on the manufacturing business.

According to Kyle Adamonis, senior vice president of human resources and legal affairs, the company that manufactures HVAC equipment and employs about 400 workers at the Cranston facility has put on hold plans for expansion of its learning center. All local approvals are in place, she said.

The tax changes proposed by Gov. Lincoln D. Chafee include expansion of the sales tax. Depending on what tax changes are put into place, “it could cost us more to do business in this state,” Adamonis said. “We are reviewing the potential costs.” The General Assembly is expected to act on tax changes as part of its work preparing the state fiscal year 2012 operating budget.

The Governor and his admin appears to be laboring under the misapprehension that revenue generated by an expanded sales tax is just money lying around waiting to be grabbed without consequences. As Governor Chafee's Director of Administration, Richard Licht, averred earlier on the Dan Yorke Show, the Chafee administration, remarkably, views this as a tax on consumers, not on businesses.

The administration seems gormless of the reality that the effects of the proposed expansion of the sales tax would not be limited to consumers but would, in fact, become yet another burden to be born by businesses struggling to survive in a state that already has one of the worst business climates in the country.

The Chafee admin may be unaware but, clearly, this fact has not escaped the notice of Rhode Island businesses, as evidenced by Taco's announcement today. One business is already constricting at even the suggestion of a broadening of the sales tax. What would the consequences be if the proposal actually goes into effect?


As Patrick points out, the audio of Dan Yorke's interview with Richard Licht is now available at WPRO.

And tomorrow, John Hazen White, Jr., President and CEO of Taco, will appear on the Dan Yorke Show.

A Union Ratchet

Justin Katz

Yes, a bill is a long way from a law, and this one, which Andrew caught the other day, has only one sponsor, Spenser Dickinson (D, South Kingstown), but it really is quite a suggestion:

When a contractor employing members of a recognized union and providing services for more than twenty (20) hours a week to another person, firm, or corporation is replaced, and a new contractor engaged, the employees of the succeeding contractor will be admitted to membership in the union representing the employees of the prior contractor unless already unionized, as set forth herein.

The bill goes on and on, encompassing every conceivable scenario: not only spanning the completion of one contract to the beginning of another, but also requiring that the full-time employees that a company might hire after having contracted for unionized services immediately become part of the union.

One suspects that Mr. Dickinson's contracting company is a union shop, and although I'd wager we won't see this particular bill become law, it's helpful to have a glimpse, every now and then, of the sorts of goals that shrewder and more subtle political minds have targeted.

CORRECTED: The Minutia of Getting Your Way Locally

Justin Katz

Among the oddities of local politics is the stuff that you have to care about and pay attention to. A number of years ago, Tiverton opted to build three new elementary schools. I wasn't around for the debate, but at least a significant portion of the electorate believed that the old schools would be sold at the highest possible price to offset the cost.

At last year's financial town meeting, the voters gave the Town Council authority to transfer ownership by the following language:

RESOLVED, that pursuant to Section 204 of the Town Charter, the Town Council is hereby authorized to transfer ownership of any of the following of Tiverton’s municipally owned buildings: Nonquit School, Old Ranger School, Judson Street Community Center, Senior Center, Town Hall, and DPW facility; provided however that the Municipal Facilities Committee shall have completed its study of the current use and structural status of such buildings and submitted its recommendations to the Town Council; and further provided that any such transfer is at not less than Fair Market Value (FMV); and provided that any such transfer be subject to such conditions as required by the Town Council. This approval shall expire as of the second Saturday in May, 2011.

The resolution was explicitly amended to eliminate the clause: "or if less than FMV, to a non-profit or government entity acting for the public good." Well, wouldn't you know, with the deadline fast approaching, the Municipal Facilities Committee still has yet to submit its study and recommendation. But it has put together a request for proposals for one building that would, among other things, express preference for land uses that would allow public access to any building built on the property and give purchase price only 25% weighting in the decision process.

And the wheel goes 'round and 'round. Guaranteed: the reauthorization for the sale will attempt to allow the building to be given away to a nonprofit again. They'll keep on trying until their preferred result slips through.


Thanks to Councilor Brett Pelletier for correcting me with regard to the significance of the 25% figure. I had written that offers with 25% of value would be considered, but the proposal is actually that purchase price will only count for one-quarter of the decision when comparing offers.

Chafee Whines

Marc Comtois

WPRI's Ted Nesi reports that Governor Chafee just can't understand why people are so opposed to raising taxes. He blames the Providence Journal.

The Providence Journal is “hurting Rhode Island” with its barrage of negative editorials, advertisements and articles about the Chafee administration’s sales tax proposal, the governor told WPRI.com on Monday.
He blames former Governor Carcieri.
Chafee said the first suggestion – renegotiating contracts – is nearly impossible because of a two-year ban on state worker layoffs agreed to by Carcieri in late 2009. “Mayor Taveras is not saddled with a no-layoff contract,” Chafee said. “He can go to his union and say there will be layoffs – and they know that there will be layoffs. I can’t do that.”

Asked whether he had approached Council 94 and other unions about concessions anyway, Chafee said he didn’t see the point when he could not threaten layoffs and might just add to the existing unhappiness about previous furloughs and his proposed hike in employee pension contributions.

“I’ll look for savings, but I don’t want to go into a meeting with no cards in my hand,” he said.

B.S. "I can't do that." Ask N.J. Governor Chris Christie. Meanwhile, he continues to throw out the red herring of "show me the alternative" when it's obvious there is nothing anyone can propose that resembles actual cutting that he will consider as a "real" alternative. As Dan Yorke noted today, this is all so disingenuous given that it was the Chafee Administration that did little-to-no due diligence on the impact of this proposed "flatten and broaden" tax increases in the first place. So instead Chafee whines and obfuscates. Such a leader.

Dependence on Corruption

Justin Katz

Not to belabor the conversation about high-priced union executives, but certain aspects highlighted in our comment section point directly toward one of Rhode Island's major problems.

As Marc mentioned, yesterday, the head of Local 1033 of the Laborers' International Union, representing 900 municipal workers, Donald Iannazzi, makes $265,870. It's worth pointing out that the city's charter caps the salary of the mayor of Providence at $125,000. That is, the system by which Providence operates allocates more than twice as much money for the salary of an employee representative than for the person who has the responsibility of running the organization for which those employees work.

Moreover, the current mayor, Angel Tavares, gave himself a 10% pay cut. That's certainly relevant to attempts by commenter Russ to distract with comparisons of high-priced CEOs in private industry. Most private companies make their money by developing, manufacturing, or processing something. As obscene as some executives' compensation packages may be (and as representative of the need to increase other organizations' ability to compete as it is), the comparative pay of the CEO and the general workforce has to be considered relative to the value and profitability of the product.

In a labor union's case, the "product" is, in large part, the pay of the general workforce. So, it's a bit more egregious for the union leaders to coast along with their fortunes as workers give concessions. And to the extent that labor leaders are responsible for the broader well-being of their employees, they should have been the ones demanding full accounting of the pension system and, in Providence specifically, evidence that the city was in good health.

Now throw in Iannazzi's job swapping with fellow Laborers' International administrator and RI Senate Majority Leader Dominick Ruggerio. Ruggerio's son works for Iannazzi, and now Iannazzi's son pulls in $88,112 at the age of 25 as a "special assistant" to Ruggerio. For all of the talk about classes that union members foment, that's precisely what Iannazzi and Ruggerio represent: An insider class to whom economic reality does not apply.

They get away with it, though, because as Michael exemplifies with his tangential comment to Marc's post, too many people are reliant on the corrupt system. If they aren't enraptured with talk of unique rights and battle with corporate big-wigs, caught up in sweeping rhetoric that they must take an ever greater portion of taxpayer dollars in order to stand as the last bulwark of the middle class, they are dependent on union vein-tapping and persuaded that, but for the union, they'd be working for free.

April 11, 2011

Block Willing to Help

Marc Comtois

I heard a little bit of Ken Block this morning on the Helen Glover Show explaining how he was willing to help the state reduce the fraud, waste and abuse in its social services programs. For free. According to Ian Donnis, Governor Chafee is "receptive" to the offer.


Tell me, how often does someone with a track record of finding savings offer to help for free? OK, OK. In all fairness, Block hasn't formally offered his services yet and will do so at a public hearing later this week.

Management as the Science of Squeezing

Justin Katz

This interesting article by Matthew Stewart mainly questions the value of an education specifically in business administration, as opposed to, say, philosophy. Stewart notes two general management theories that alternate in emphasis in the popular mind, and this anecdote from the founding of one theory, indeed, from Frederick Winslow Taylor's invention of the field of management science, resonates with me, after my years in construction:

Taylor was forty-three years old and on contract with the Bethlehem Steel Company when the pig iron question hit him. Staring out over an industrial yard that covered several square miles of the Pennsylvania landscape, he watched as laborers loaded ninety-two-pound bars onto rail cars. There were 80,000 tons' worth of iron bars, which were to be carted off as fast as possible to meet new demand sparked by the Spanish-American War. Taylor narrowed his eyes: there was waste there, he was certain. After hastily reviewing the books at company headquarters, he estimated that the men were currently loading iron at the rate of twelve and a half tons per man per day.

Taylor stormed down to the yard with his assistants ("college men," he called them) and rounded up a group of top-notch lifters ("first-class men"), who in this case happened to be ten "large, powerful Hungarians." He offered to double the workers' wages in exchange for their participation in an experiment. The Hungarians, eager to impress their apparent benefactor, put on a spirited show. Huffing up and down the rail car ramps, they loaded sixteen and a half tons in something under fourteen minutes. Taylor did the math: over a ten-hour day, it worked out to seventy-five tons per day per man. Naturally, he had to allow time for bathroom breaks, lunch, and rest periods, so he adjusted the figure approximately 40 percent downward. Henceforth, each laborer in the yard was assigned to load forty-seven and a half pig tons per day, with bonus pay for reaching the target and penalties for failing.

When the Hungarians realized that they were being asked to quadruple their previous daily workload, they howled and refused to work. So Taylor found a "high-priced man," a lean Pennsylvania Dutchman whose intelligence he compared to that of an ox. Lured by the promise of a 60 percent increase in wages, from $1.15 to a whopping $1.85 a day, Taylor's high-priced man loaded forty-five and three-quarters tons over the course of a grueling day—close enough, in Taylor's mind, to count as the first victory for the methods of modern management.

Stewart goes on to note that the method apparently did not do much for Bethlehem Steel, and the experiment mainly benefited Mr. Taylor, who went on to teach at Harvard and become a sort of management guru. For my part, having long been very concerned with efficiency and proving my worth, I have to confess a shift, in recent months, toward the attitude of the Hungarians.

A carpenter I know who works for a custom woodworking company has the worst of two worlds: He is handled as a regular employee, meaning that corporate salesmen estimate the time that each project will take, but he is paid per project, not per hour. When the economy began to sour, the company simply reduced the amount of time that it estimated for each job. One day, installing a set of stairs was a two-day task; the next day, it was a one-day task.

I'm sure my employers aren't alone in having made a point of repeated reminders that their workers are fortunate to have jobs at all, in this economy, but I wonder whether the effect on employees mightn't be contrary to managers' intentions. Eventually, all workers will reach the point of suggesting that if such a pool of ready replacements exists (all certain to prove as competent and reliable as current employees), perhaps the boss should bring them in. With that attitude established, employers might be surprised to find that morale and personal dedication to the company weren't as high as they'd thought when things begin to turn around.

As the fatal flaw of Taylor's theorizing, Stewart points to the high degree of fudging that has to be done to make human activity estimable. Breaks, meals, health, motivation, and so on all affect outcomes. In other words, a stopwatch and limited-time experiment may tell the manager how quickly something can be done, but the relevant question is really how quickly it is reasonable to expect a particular person to accomplish a given task in specific conditions, and that's highly subjective.

The aforementioned building contractors believe it's reasonable to squeeze their employees in a recession, and it may, in fact, be. It depends on the justification for the squeeze. If competition has decreased the prices that he can charge, then pay decreases can be justified... and employees would understandably expect a resumption of their prior rates when prices go up again. If the employer's merely making a calculation on the amount of profit that he can claim for himself, then pay cuts are more apt to rankle.

Of course, the sort of management theory that Stewart describes above creates an ongoing battle entirely apart from wages. In construction it is especially noticeable, because the actual work is so distinct from the management and planning aspect of it, but a large portion of information technology's boon went to employers, who thereby gained access to workers around the clock, with weekend emails and lunchtime cell-phone calls.

One could argue, on the other hand, that technology has made it easier for workers to duplicate the activities of their employers, making it easier to go out and to compete. (The motivation is only stronger to the extent that employers don't respect the end-of-day bell as the true cessation of work.) In the long run, then, it may be the managers who find themselves obviated.

Workers know how long a task should take, in reasonable terms, as a matter of absorbed knowledge. If the rest comes down to timing and calculations, let a computer handle it.

Forthright Raimondo

Marc Comtois

As the ProJo profile showed on Sunday, General Treasurer Gina Raimondo is in an interesting spot. As a Democrat, she has the support of the various groups that stand underneath that party's umbrella, particularly the progressive wing. Yet, she is viewed with caution by the biggest portion of that group, labor. They are willing to give her the benefit of the doubt--to a point--but they are very wary of what she has in store for their pension future.

Raimondo says she wants to help craft a pension solution that labor can live with, even if it involves sacrifice –– a solution that would avert legal challenges. She is aware that the state’s largest public employee union, Council 94 of AFSCME, is suing the state over pension reductions in 2009 and 2010. And she has said that the issue of pensions as a guaranteed property right is “an unsettled area of the law.”

She didn’t win the endorsement of the NEA teachers union during the campaign because she would not promise she wouldn’t touch their pensions. And while the NEA’s Walsh says her comments about “haircuts” have been alarming, he says that her values and the union’s “overlap.”

“Her heart starts in the right place,” adds Walsh. “We’ll have to see where her head is at.”

That is where she has been successful so far: not coming across as the boogey man to the union. A Republican would have automatically fit that role. Raimondo--due to her roots, contacts and word-of-mouth--has disarmed those who would, in any other time, considered her a fellow-traveler (and probably still do run into her and her friends at the right sort of parties--though to be fair, it doesn't sound like Raimondo has spent a lot of time relaxing lately). It appears that the characteristic that makes up a great part of her appeal and popularity--her honesty--is problematic for them as they try to protect their bailiwick. Dammit, they like her but not what she's saying. How to "personalize" and demonize?!!
J. Michael Downey, president of Council 94, said his union endorsed Raimondo, despite not liking her answers on the possibility of cutting pension benefits, because “she was honest.” Downey doesn’t believe the retirement system is as bad off as Raimondo does, arguing that strong stock-market returns following the 2008-09 recession have boosted the fund.

Raimondo disagrees. Addressing a meeting of retired state workers in West Warwick on Wednesday, she was asked if the crisis would have been averted if pension investments had earned 8.25 percent over the past decade, as assumed. Raimondo answers no, not entirely.

“Well, that’s something that’s never mentioned,” the man replied. “All that gets mentioned is ‘the greedy public workers’ and politics.”

To a large degree, Raimondo's success thus far has been in her style and her forthright approach to the pension problem. Like most liberals/progressives, she is skeptical of 401(k) type retirement plans (like the Federal Government offers) and still thinks a more responsible defined-benefit plan can be worked out. I'm not so sure about that. Yet, so far, her willingness to be upfront about the problem, even proposing that current pensioners may have to see a reduction, has been refreshing. When it came to the General Treasure election in 2010, I was a single-issue voter. I voted for Raimondo (with some trepidation and fingers crossed), even though I knew I would disagree with her on some issues, because she struck me as the right person at the right time to deal with the current pension problem. So far, she hasn't disappointed me. But talk is easy. I'm still holding my breath to see what she actually does.

The Top-Down Model of Economic Development

Justin Katz

It's possible that all of the corporate executives on the Economic Development Corporation's board wouldn't dream of allowing their own companies' interests affect their prescriptions for the state's economy. It's even more possible that state government will treat the board's activities as a nice show to prove that everybody's really, really interested in turning Rhode Island around. Still, this makes me nervous:

EDC Executive Director Keith W. Stokes, who previously served on the board for 15 years, commended the board and gave Chafee credit for its new direction.

"This is unique," Stokes said. "This is the first time that the EDC will be driven by the board ... and that in itself is going to have an incredible value because these men and women — they're the eyes and ears of the business leadership."

Well, they're the eyes and ears of Collette Vacations Inc., Ximedica, CVS Caremark Corp., Betaspring, VIBCO, and Banneker Industries, anyway. Whether they'll recommend steps that would make it easier for start-ups or immigrating businesses to compete with their companies remains to be seen.

Cuts for the Little Guy, Not for the "CEO"

Marc Comtois

Sheesh. I just found out the CEO of a 900-employee operation, who just cut employee pay and increased their health care payments, pulls down $265,870 a year. And while his workers are all worried about pension problems and their retirement future, he's looking to retire next year at 55 and has few of their worries. Meanwhile, he got his kid a cushy $88,112 job working for a buddy and he employs his buddy's kid. Typical rich guy stuff, huh? Must be nice. I'll tell ya, there's nothing worse than those country clubbers.

RI Gets a National Chuckle

Justin Katz

I'm behind on all of my reading, so it was just last night that I made it to Mark Steyn's return column in the March 21 National Review and was humored to see that he devoted a large section thereof to characters from the Rhode Island scene. Noting Providence Teachers' Union President Steve Smith's hyperbole comparing Mayor Angel Tavares's teacher termination notices to Pearl Harbor, Steyn expands the topic:

But I'm getting ahead of myself. Reporting for the Providence Journal, Linda Borg, mindful of the fact that most of her readers have been educated by members of Mr. Smith's union, felt obliged to add a more basic clarification: "That was the day the Japanese government bombed Pearl Harbor."

December 7, 1941: a day that shall live in infamy, but not in Providence.

By the way, that's why America's monodailies are dying. Maybe they'd die anyway, but wouldn’t it be more fun and more dignified to go down in flames like a kamikaze pilot or Charlie Sheen than by self-anesthetizing your prose into utter unreadability? As Capt. Jean-Luc Picard of the starship Enterprise remarked apropos Ms. Borg's namesakes, resistance is futile. You can try to read on, but the vast J-school-credentialed army of lethal parenthetics will crush you 'neath their feet: December 7, 1941, is the day the Japanese government bombed Pearl Harbor. Pearl Harbor is a U.S. naval base in the Pacific. The Pacific is a large body of water. Water is what your eyes are beginning to do

April 10, 2011

Seventeen Sets of Bills Scheduled to be Heard by RI General Assembly Committees, April 12 - April 14, Numbers 1 through 5

Carroll Andrew Morse

5. S0760: "No person holding a position in state government which requires confirmation by or the advice and consent of the senate shall engage in lobbying or permitted to register as a lobbyist" aka "a Caruolo Act for the 21st-Century". (Senate Judiciary, April 12).

4B. S0823: Ethics Commission appointments would be subject to advice and consent of the Senate. (Senate Judiciary, April 12).

4A. H5410/S0634: Constitutional Amendment to bring state legislators under Ethics Commission jurisdiction. (House Judiciary, April 13; Senate Judiciary, April 12).

3. H6017: If I am reading this right, this bill says that if a business replaces a union contractor with a non-union contractor after the completion of a contract, the employees of the new contractor are forced to join the union that was there previously. (House Labor, April 13).

2B. H5873: Requires all cities and towns to participate in the "secure communities" program. (House Judiciary, April 13).

2A. H5312/H5225: H5312 requires participation in E-Verify by all Rhode Island employers with 3 or more employees. H5225 would prohibit use of an "electronic employment verification system" as a condition of receiving a government contract or maintaining a business license. They are not sponsored by the same group of Reps. (House Labor, April 12).

1. Bud Art 26: Governor Chafee's sales-tax expansion. (House Finance, April 13 @ 11:00 AM! -- an excellent time for professional activists and the unemployed to have unfettered access to the Finance Committee).

Seventeen Sets of Bills Scheduled to be Heard by RI General Assembly Committees, April 12 - April 14, Numbers 6 through 10

Carroll Andrew Morse

10. H5529: Directs the Department of Children, Youth and Families to disclose findings of abuse at a "family day care home, group family day care home or day care center", provided that no personal information is disclosed about anyone involved (House Judiciary, April 12).

9. H5498: Sets up the Obamacare "exchange" in Rhode Island (House Health, Education and Welfare, April 13).

8. S0438: Authorizes school districts to assess fees and accept donations for extracurricular activities (Senate Education, April 13).

7. S0547: Would restrict the applicability of the state fire code to structures that are "highly trafficked, populated or congested and present a clear public safety risk" (Senate Municipal Government, April 12).

6. H5712: Creates an "Interlocal Regional Services Commission" that can "operate and administer various municipal operations [that] may include, but shall not be limited to, tax collection or assessment activities, public works operations sewer and water treatment and distribution systems, police services, library services, and fire and rescue services" for combinations of 2 or more cities and towns whose city or town councils who authorize a "regional program or project" (House Municipal Government, April 14).

Seventeen Sets of Bills Scheduled to be Heard by RI General Assembly Committees, April 12 - April 14, Numbers 11 through 17

Carroll Andrew Morse

Lots of very interesting bills are being heard by General Assembly committees in the upcoming week. I'll put up the list in three separate posts; here's part 1 or part 3, depending on your personal preference for numbering conventions...

17. H5310: Prohibits rental agreements from containing clauses that prohibit tenants from inviting contractors onto a rental property to conduct repairs. A sentence that makes you wonder what the backstory is is included at the end: "This prohibition shall extend to rental agreements for docks, piers and marina slips" (House Corporations, April 12).

16. H6032: Creates a licensing board for orthotists or prosthetists, where the Rhode Island Society of Orthotists and Prosthetists gets to appoint 2 of the 3 members. A clear separation of powers violation (House Corporations, April 12).

15. H5664: Requires colleges and universities provide information about graduating students to the Secretary of State on an annual basis, to assist him in keeping voter rolls updated. No one is automatically removed from the voter registration list as the result of this bill (House Judicary, April 13).

14. H5458: From the official description: "This act would make any financial town meeting or referendum to set a city or town's budget or tax rate subject to state election laws" (House Judiciary, April 13).

13B. H5804/H5813: Would either increase (H5804) or entirely remove (H5813) the maximum number of voters that can be assigned to a single polling place, maintaining the restriction that no polling place can span more than a single ward (House Judiciary, April 13).

13A. H5511/H5661: Both bills would move the poll closing time in Rhode Island elections from 9pm to 8pm. H5661 would also make poll opening times uniform across RI communities, at 7 am (House Judiciary, April 13).

12. H5884: Various changes to the municipal pension system (House Municipal Government, April 14)

11. Bud Art 7,: The Senate's crack at the strange new tax on wireless equipment (Senate Finance, April 12).

On When a Raise is Not a Raise

Monique Chartier

When renegotiating our compensation packages, those of us in the D.P.S. (Dreaded Private Sector) will undoubtedly have far greater success if we are careful to invoke Speaker Fox's definition and ask for a "longevity increase" rather than a raise.

Fox disputes that the pay increases reported by the Journal were all due to raises. In some cases, he said salaries were increased because employees had assumed a new job or moved from part-time to full-time positions. About half of those listed actually received longevity increases rather than raises, according to Fox.

“We provided a complete list to the Journal of all the reasons for the increased pay of every individual, including those due longevity, but the newspaper decided not to include this information in its listings,” Fox said. “Allowing the public to see that so many increases were for longevity would have resulted in a much more accurate picture.”

In the unlikely event that Speaker Fox's approach doesn't work, there's always the sure-fire strategy of the Senate President: your boss will surely give you a raise if you make a point of first leaving the building.

Ruggerio, D-North Providence, confirmed that his aide is the 25-year-old son of Donald Iannazzi, business manager for Local 1033, the Laborers International Union affiliate that employs his own 30-year-old lawyer son, Charles Ruggerio.

You keep characterizing that one as an increase. It was not an increase. He left the building. He’s a new hire,” said Paiva Weed,

April 9, 2011

Earth Week: Hands-On Motorheads, Hearken to Iowahawk

Monique Chartier

A lovely way to celebrate.

Yes friends (in case you had not already marked your calendar), 2011 Earth Week is officially slated to take place April 17-23. And, for the 6th straight year, I will be opening this space for our annual Earth Week Virtual Cruise-In, where Iowahawk readers around our fragile planet gather, share, and celebrate nature's greatest miracle: the internal combustion vehicle. Over the years I have been proud to feature some amazing carbonating machinery, be it land-, water-, or airborne (see, for example, last year's entries).

And now's your chance to participate! But be forewarned - best bring your 'A' game, because there ain't no half-steppin' in CO2 City. If you've got an eye-popping car / truck / motorcycle / motorboat / airplane / intergalactic Vespa Death Star, send a pic and a pithy description via the email link on the left sidebar (please add 'Earth Week Cruise' in the subject line).

Let Them Buy Hybrid Vans

Justin Katz

In his NRO column, this week Mark Steyn mentions President Obama's response to an audience having to do with lowering the price of gasoline:

He was asked a question by a citizen of the United States. The cost of a gallon of gas has doubled on Obama's watch, and this gentleman asked, "Is there a chance of the price being lowered again?"

As the Associated Press reported it, the president responded "laughingly": "I know some of these big guys, they're all still driving their big SUVs. You know, they got their big monster trucks and everything. . . . If you're complaining about the price of gas and you're only getting eight miles a gallon — (laughter) . . . "

That's how the official White House transcript reported it: Laughter. Big yuks. "So, like I said, if you're getting eight miles a gallon you may want to think about a trade-in. You can get a great deal."

Glenn Reynolds has noted that the Associated Press has still scrubbed the exchange from the record. Luckily, one can find the video on YouTube, and even cue right up to the question, as I've done in the following embed:

What's interesting is that the president visibly forces himself to step back in his commentary when he goes on:

Obama: You may have a big family, but it's probably not that big, so... How many you have, ten kids, you say? Ten kids? [Pause for a stunned expression and probably a bit of lip biting.] Well, you definitely need a hybrid van, then.

No doubt, even folks who disagree with President Obama on just about everything would pull back from endorsing a ten-child family unless the parents can afford it. But that's pretty much the point: Doubling the fuel bill on the car by which the large family gets around reduces affordability. Moreover, it reduces affordability for a family already in particular circumstances, and it's not inconceivable that the family size resulted from adoptions meant to rescue the children from worse.

To declare that the father should spring for a large, expensive hybrid vehicle is to skirt the question, to put the blame for difficulties on the asker, and to impose government priorities on a highly diverse population — diverse not only in the liberal meaning of multiracial, but in the more significant (more conservative) meaning of varying circumstances and priorities.

Another Tale of Pensions

Carroll Andrew Morse

Once upon a time, a guy named Mike had money accumulated from various sources. He wanted to use some of that money to buy a car. The car was priced at $20,000.

As Mike was preparing to visit the car dealer, a young gentleman named Brian passed by. Brian had also accumulated some money of his own, though not as much as Mike had, mostly because Brian was much younger than Mike. Mike discreetly approached Brian, pointed to the $20,000 car in the showroom, and said "I have a plan that can get a car like that for the lowest cost possible. Do you want to learn how it works?". Brian, always looking for ways to stretch his money, said he did. Mike said, "Give me $5,000 of your dollars". Brian, being a trusting and innocent young fellow, complied.

Mike entered the dealership with his money and Brian's, bought the car for $20,000, and drove off, leaving Brian behind.

Brian patiently waited for the plan to make the purchase less expensive to continue to unfold, but heard nothing further from Mike. Being a resourceful young man, Brian found a way to contact Mike and messaged him to inquire when the next step in the plan to lower the cost of a car would occur. Mike answered "What do you mean by 'next step'? I just bought a $20,000 car by spending only $15,000 of the money I had saved for myself".

Brian, now growing concerned, replied "But I'm now $5,000 further away from a car of my own -- and I'll still have to pay the full $20,000 to get it".

Mike was honestly confused. "I got a $20,000 car for my $15,000. I got it at the lowest cost possible, like I said I would". Then, realizing what the problem was and its obvious remedy, Mike continued, "Don't worry, Brian. You're young enough; you'll eventually find someone even younger who will be willing to make the same deal with you that you made with me".

Understand this story, and you will understand the meaning of "lowest cost possible" used by advocates of reamortizing the pension system.

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April 8, 2011

Nesi: Tavares/1033 Deal "saves" 11%

Marc Comtois

WPRI's Ted Nesi has done some digging and found out more about the Tavares/1033 deal, particularly how much it has "saved":

The wages, benefits and other provisions outlined in Local 1033′s contract were projected to cost Providence’s city government about $60 million per year, adding up to $240 million over four years, according to calculations by Director of Administration Michael D’Amico sent along by spokesman David Ortiz. (For context, the entire city budget is somewhere around $638 million this year.)

So the $26 million in concessions approved by Local 1033 this week will decrease the contract’s estimated cost from $240 million to $214 million, a reduction of just under 11%.

At $60 million, the 1033 contract was about 9.4% of Providence's total budget this year. According to previous reports, this deal saves $2.2 million this year. Providence has a structural deficit of $69.6 million, with $28.6 million of that debt that needs to be paid for by July 1. The savings from this deal covered 7.7% of that cost. If we equate budget share with share of the deficit, then 1033's deal fell a little short of pulling "their fair share" (to use a familiar trope) when it comes to closing the budget gap this year. Incidentally, next year the 1033 "cuts" of $4.6 million will make up for about 4% of the total projected deficit for 2012. More work needs to be done.

Taxing the Rich won't get you there

Marc Comtois

One of Megan Mcardle's readers did the math on "taxing the rich" and how it would "help" with the budget:

[T]otal taxable income in 2008 was $5,488 billion. Taxable income over $100,000 was $1,582 billion, over $200,000 was $1,185 billion, over $500,000 was $820 billion, over $1 million was $616 billion, over $2 million was $460 billion, over $5 million was $302 billion, and over $10 million was $212 billion. Effective tax rates as a percentage of taxable income seem to top out around 27%.

You can estimate the effects of various proposals in the best case, which is that each percentage point increase in the marginal rate translates to an equal increase in the effective rate. Going back to 2000 ("Clinton era") marginal rates on income over $200,000, let's call it a 5 percentage point increase in the marginal rate, would therefore yield $59 billion on a static basis. Going from there to a 45% rate on incomes over $1 million (another 5 percentage point increase) yields an additional $31 billion. Or, instead, on top of 2000 rates over $200,000, 50%/60%/70% on $500,000/$5 million/$10 million? An extra $133 billion, or nearly 1% of GDP. That's not accounting for the further middle class tax cuts that are usually proposed along with these "millionaires' taxes."

Now, compare this to deficits of $1,413 billion in 2009 and $1,293 billion in 2010, and using optimistic White House estimates, $1,645 billion in 2011 $1,101 billion in 2012, $768 billion in 2013, and continuing at over $600 billion after.

Alternatively, you might also notice that while taxable income in 2008 was $5,488 billion, adjusted gross income on all returns was $7,583 billion on taxable returns only (with an additional $680 billion on untaxable returns), which means that $2,095 billion isn't even in the tax base. $592 billion of that difference is exemptions, which are not tax expenditures, and $1,512 billion is deductions, which are mostly tax expenditures.

Gee, now what? Maybe serious attempts at addressing ballooning entitlements should be listened to.

Buying Into the Pension System, 'Cause We Can Afford It!

Marc Comtois

"Bill would help Teachers Retire Early" says the ProJo headline to Randall Edgar's piece. Really? How about "Bill Would Increase State Pension Obligation", because that's what it really does.

Looking to expand on an option that is already available to most public school teachers who have worked in private schools, state Sen. Frank A. Ciccone III is sponsoring a bill that would allow teachers who have worked in “for-profit” schools to purchase retirement credit in the state Teachers Retirement System.

If adopted, Senate bill 0145 would allow those teachers to buy up to five years of retirement credit by paying the “full actuarial value of each year” they want to add, just as most teachers with private school experience can do now.

Ciccone, a Providence Democrat, said he sponsored the bill for a constituent, Jane Bernardino, who told the Senate Finance Committee Thursday that it would cost her about $70,000 to $75,000 to buy enough credit to retire, assuming the contributions were based on 20-percent of her current salary.

“I’ve been teaching for 31 years,” she said. “I only have 25 years invested in the retirement system.”

Good deal, pay $70-75k now, retire five years early and get your entire investment back within a couple, three years. Meanwhile, taxpayers get to subsidize your retirement for a couple extra years. It's great that our pension system is in such good shape.

Chafee Assumes New Tax Plan is a Go

Marc Comtois

Maybe the Governor knows it's a done deal?

Governor Chafee’s proposed sales-tax changes have yet to be approved by the General Assembly, but plans are already under way to roll out the program, according to state officials.

State Department of Revenue officials testifying before the House Finance Committee this week said that the department has already begun the work of drafting regulations and notices and assembling public outreach materials to explain the changes to taxpayers and businesses.

They say the estimated cost for implementing the tax would be $126,687 in the current fiscal year and about $1.5 million in fiscal year 2012, and would require the addition of 21 new state employees to administer the tax.

On the other hand, House Finance Committee Chairman Helio Melo didn't sound like this was being fast-tracked, much less a fait accompli
[Melio] would not commit to the Assembly hitting the administration’s hoped-for June 1 approval date. He also voiced concern that the administration was assuming about $165 million in new revenue from the sales tax, based on a July 1 implementation date.

“We are trying to be realistic here, and I hope they are, too. My concern is when a governor puts in 12 months of revenue. My question is, is that going to be reality?” he said. “Before any decision is made, we need to have an opportunity to hear from the general public and really vent this out. I don’t want to be rushed, or put under the gun.”

It's remarkable the sort of thing the Governor is optimistic about, isn't it? Sheesh.

A Tale of Pensions

Justin Katz

Ted Nesi has allowed far-left radical Tom Sgouros guest-posting privileges to his blog, which the latter used to offer an excellent example of his typical rhetorical style. Sgouros likes to explain complicated issues as if he's writing for children, so as (it appears) to leave the adult reader with a "well, gee" feeling and to breeze by the relevant points and objections.

First, a view from a high level: The essay is 1,055 words, and Sgouros spends the first 296 (28%) tallying an "unfunded liability" for education and roads. The next 125 words (12%) explain why he thinks the perspective that he's just described, and funding such expenses with investment income, would be "stupid."

With the next 125 words, Sgouros introduces his actual topic, pensions, and the principle that he's attempting to inject into thinking on the topic: "the goal is not full funding of the system; our goal should be simply making sure the checks don't bounce, at the lowest cost to the taxpayers, employees, students in the schools and drivers on our streets." He rephrases the question for another 138 words, and now two-thirds of the way into his essay, begins to let the reader in on what he's suggesting:

The people who say we can't re-amortize our pension obligations because it would make it more expensive would have you believe that we are going to pay off the liability by 2029, as called for under the current schedule. In truth, it's an absurd argument because neither option is going to happen. The cost of paying off the unfunded liability is what's breaking our backs, not the cost of servicing current obligations. Both options involve making escalating annual payments that are not within the bounds of either fiscal or political reality.

Translation: Treating current pension obligations as debt is completely unworkable. In fact, he goes on to compare the above choice to his own choice between two private jets that he couldn't afford to charter, anyway. Let's fund our pensions, he states, "at the lowest cost possible and not fret that because we can't afford the expensive way to do it, we can't do it at all."

Just in case the reader is wondering whether we can afford to pay retirements directly from current revenue, Sgouros preemptively offers the number of the upcoming year's pension expenses: $800 million. That's fully 10.4% of the total budget that Governor Chafee has proposed, but Sgouros has a ready explanation for its being so large. Governor Carcieri. Through "abrupt" changes to employee benefits, Sgouros argues, the state pushed a bunch of state workers into retirement. He doesn't bother to mention that we'd still be paying them as employees if they hadn't retired. He also doesn't elaborate that these folks would have retired in the relatively near future, anyway, and therefore merely joined the expense pool a little earlier, but that's not important, to him.

What is important is that he exit his argument rapidly, at this point, without offering a clear statement of his proposal and its costs. What's important, to Sgouros, is that we stop all this crazy talk about adjusting benefits to make the obligation more reasonable and just pay the obligation, year to year, without assessing just what it is our elected officials have promised. If we look at it as a debt that elected officials have incurred while failing to fund it year after year, we might begin to wonder why our children should be saddled with political hand-outs from old politicians. If we come up with a big scary total of what we owe in pensions, the public might demand that the benefits be reduced, but if we take it in annual billion-dollar bites, maybe apathy can continue to win out.

Sgouros closes as follows:

In other words, shortsighted and hasty changes enacted by people who did not really understand the situation have made the system’s problems much worse. Do we really want to do that again?

See, they didn't understand the problem. Not like Sgouros does. Can't you tell by the way he just explained it all in terms comprehensible to a twelve-year-old? Come now. It's nap time. Put your lunch money in the bag.

Look. I don't know the unabridged history of pensions in Western civilization, but it seems to me that we fund them the way we do so that the employing organization doesn't have every employee on its books for the rest of his or her life. The employer and employee put aside money as part of the employment arrangement while it is active so that the obligation (or liability) is covered by the time he or she departs the company.

The problems are, one, that a system that guesses what the investments will be able to fund and promises benefits at that level makes it too easy to offer big promises, and two, that a society with a shrinking population and whose progressive changes to the civic order are destroying those qualities that enabled its dynamism will just not create the investment returns that such a system requires. That's why defined benefit programs are almost unheard of, these days, except among government workers who can work to elect their bosses, who then make unworkable promises and force taxpayers to come up with a method of funding them at some point in the future.

We fund schools directly because students are a continuous stream. We fund roads directly (well, pretend that we do) because they are an annual expense. We fund pensions through savings and investments because they are an expense that begins when the employment relationship ends. Sgouros wants us to think as pensioners as wards of the state for the rest of their life.

Of course, anybody familiar with his work is apt to conclude that he'd be just as happy to make everybody a ward of the state. After all, then he and his really, really smart buddies — who really understand the problems that we face — can adjust the system so that it works right. And isn't that what we really all want? To put aside the disagreement and allow the smart folks to do what we all know, deep down, needs to be done?

That approach is working out so well with President Obama, isn't it?

April 7, 2011

Wisconsin Watch III

Carroll Andrew Morse

According to the Milwaukee Journal-Sentinel, Waukesha County's initial tally of its election returns didn't include over 15,000 votes that were cast in the Wisconsin election on Tuesday. With those votes added in, David Prosser now has a 7,000+ vote lead over Joanne Kloppenburg in the state supreme court election.

For the record, here's the observation I made at 12:51 on election night...

Well isn't that special. The number of precincts reporting from Waukesha just jumped to 100%, without the overall total jumping from the last time I checked. 96.5% of precincts in, about a 1,900 vote lead for Prosser.
I assumed at the time it had to do with the county totals and the total total being updated separately, and that someone had forgotten to punch in Waukesha's county level numbers earlier in the evening, but this may have been around the time that the error occurred.

Educational Choice

Marc Comtois

There is a white paper at AEI arguing that the it's time for a paradigm shift. Instead of school choice--which accepts the current whole school, institution (or "bricks and mortar") -based educational structure--reformers should look to educational choice as the true next-generation model:

By supporting reforms to increase choice only among schools, choice advocates are appealing only to a minority of parents who want to relocate their child to another institution and are thus missing the opportunity to boost choice among nearly all parents who would want some educational choice....

In an era when technology and cultural norms have made radical customization the rule in everything from cell phones to retirement plans to web browsers, it is notable that the vast majority of school reforms are "systemwide" measures that do little to bend schools into a shape more suitable for serving students with diverse needs. Indeed, most talk of accountability, merit pay, and school choice has emphasized "whole school" assumptions that simply take traditional schools and classrooms as givens. Such a mindset is ultimately crippling because the twenty-first-century schoolhouse is less likely to be the product of some big-brained reformer devising the one best model than the accretion of advances relating to diagnosing needs, researching interventions, employing online instruction, and permitting greater individuation....

The one-size-fits-all school system has passed its expiration date. There is nothing innately wrong with the "one best system" or the conventional schoolhouse. Indeed, they represented the best practices of an earlier, more bureaucratic era. Today, however, heightened aspirations, the press of student needs, and the opportunities presented by new tools and technologies mean that old arrangements are no longer a good fit. Likewise, school-choice advocates have missed an opportunity to appeal to the vast majority of parents who are not willing to relocate schools, but would be interested in greater choice among tutors, lesson plans, or instructional approaches. In these categories, the charge is for schooling to make the same shift from the centralized, industrial model to the more nimble, customized model seen recently in so many other areas of life--and to do so by leveraging greater educational, not school, choice.

Outlets like Khan Academy or concepts like "flip-thinking" (where students watch lectures at home on the computer but attend class sessions to do the "homework") are interesting ideas that are utilizing today's technology for new approaches to education. The educational choice is nested in the homes of the students and their parents instead of the "school system" while at the same time the "school system" still provides structure and guidance and can also facilitate some of the alternative options.

It's Been a Good Decade: Why Public Employees Make So Much of Freezes or Minor Cuts

Marc Comtois

To those of us not in the public sector, it seems outsized when public employees and politicians make so much of temporary pay freezes or a few minor cuts (or reductions in the expected increases!). Red Jahncke adds some context that will help us understand their perspective by explaining how, nationwide, local and municipal government employee compensation has outpaced the private sector. He backs it up with two tables (6.2D and 6.5D) from the National Product and Income Accounts of the U.S. Bureau of Economic Analysis.

Table 6.2D shows that, nationally, state and local government worker compensation grew 45 percent from 2000 to 2007 — plus another 8 percent in the next two recession years, while private-sector compensation grew only 33 percent from 2000 to 2007 and — surprise, surprise — fell 3 percent in the recession. [Incidentally, the chart also shows that Federal Gov't grew 52% 2000-07, 11.5% during the next two recession years~ed.].

Table 6.5D reveals that, during the 2007-2009 recession, private-sector employment fell by 8 million jobs to a level below its total in 2000, while state and local public-sector employment grew by 185,000 jobs, reaching 1.3 million, or 9 percent, above its total in 2000.

As Jahncke notes, public sector salaries were ahead of private before the Great Recession. He continues:
The 2007- 2009 data speak to the issue of fairness — massive job losses and pay cuts in the private sector, continued job gains and a smart compensation boost in the public sector. In 2010, relatively few jobs were regained in the private sector or lost in the public sector.

And the data for the full decade speak to the issue of sustainability: How can slower-growing private-sector income produce the taxes to fund a public-sector payroll growing at almost twice the pace?

The answer is that it can’t, and it isn’t.

So now we get even Democrats making cuts and both they and the unions think they're making significant sacrifices. Given their experience over the last decade, I can understand why they think that. But they have to understand that the sacrifices they are making now have already been wrung from private sector employees over the last decade. So forgive us if we don't hail them as martyrs for giving some of what they earned--even during the Great Recession--back.

The Way the Marriage Battle Should Be Resolved

Justin Katz

It appears already to be doomed, but this bill is precisely how state governments should go about addressing hardship experienced by couples that cannot marry:

Sponsored by Rep. Peter Petrarca, D-Lincoln, the bill would allow "any two ... unmarried persons who are excluded" from marrying under state law to establish "reciprocal beneficiary agreements" that allow their partners to oversee issues such as emergency medical care, medical decisions and decisions on "the disposition" of a person’s remains.

The relationship formed in homosexual couples is different in substantive ways from the relationship formed between heterosexual couples, most critically in the latter's ability to create children almost casually. It is not bigotry to insist that such an ability is not frivolous, and it is eminently reasonable to suggest that civic policies should maintain room for the encouragement of cultural acknowledgment of that difference. Doing so does not "create two classes," as Marriage Equality Rhode Island spokesman Bill Fischer asserts; it accurately recognizes two categories of behavior.

There are rights, however, to which people who've taken on the responsibility of caring for each other should have access, but they should be assessed on their individual merits. That appears to be what Petrarca's legislation would do.

It's interesting to note, by the way, which group is the de facto moderate in the local debate:

The Rhode Island chapter of the National Organization for Marriage, a traditional marriage-advocacy group, supports the bill, said its executive director, Christopher Plante.

"We don't oppose it. We think that it's a good way to try to address some of those issues that gays and lesbians, and not only gays and lesbians, have when they try to assign rights to significant others," said Plante, who also did not attend the hearing.

Perhaps on an emotional level it's true, but intellectually, the same-sex marriage cause is not about equal rights; it's about erasing a real distinction between two different human relationships. And it's about eliminating the right of Americans to recognize that distinction.

Full-Time Employee of a Part-Time Legislature: Good Gig If You Can Get It

Marc Comtois

After looking at the raises in the RI House, the ProJo turned it's eyes to the RI Senate and found more raises, which Senate President Paiva-Weed defended.

Senate President M. Teresa Paiva Weed says she sees no reason to reconsider any of the raises...As she explains it, the full picture includes: A delayed pay raise. An increase in employee health-care payments. The return to the State House, after a five-month hiatus, of the son of a prominent labor leader who is a “new hire,” not a staffer with a $50,126-a-year raise.

As a starting point, Paiva Weed, D-Newport, said all of the legislature’s employees received the same 3-percent pay increase that all state employees received in January and the same longevity bonuses that all state employees get every five years or so, so in her mind only five Senate staffers got what she considered a raise.

Here's how Paiva-Weed legitimized one such raise:
Fiscal analyst Matthew Harvey’s recent 13.2-percent raise, from $49,399 to $55,895, reflected his promotion to Fiscal Analyst II. “I can give you his résumé,” Paiva Weed said. “An incredible professional and, in order to keep someone like him in these difficult fiscal times, we certainly needed to raise him to the second level of the pay scale.”
Well, that makes no sense. Read it again: "in order to keep someone like him in these difficult fiscal times, we certainly needed to raise him to the second level of the pay scale.” Uh. Since these are difficult fiscal times, my guess is he wasn't going anywhere. Or are there a bunch of hidden fiscal analyst jobs that we don't know about? And if he did go, well, then you just saved some money!

The ProJo also published a couple helpful charts that show the payroll for the Part Time Legislature (which comprises about 85% of it's budget) has increased 21.5% since 2009. I wonder why?

Paiva Weed took particular umbrage as the characterization of Senate staffer Stephen Iannazzi’s 132-percent pay increase as a raise.

A one-time page, Iannazzi’s first full-time job at the State House was as a $35,110-a-year “secretary” in February 2009. He had worked his way up to a $37,986-a-year policy researcher by the time he left last July. He was hired back in December as an $85,546-a-year special assistant to Senate Majority Leader Dominick Ruggerio, and got a 3-percent raise the following month that boosted his salary to $88,112.

Ruggerio, D-North Providence, confirmed that his aide is the 25-year-old son of Donald Iannazzi, business manager for Local 1033, the Laborers International Union affiliate that employs his own 30-year-old lawyer son, Charles Ruggerio.

“You keep characterizing that one as an increase. It was not an increase. He left the building. He’s a new hire,” said Paiva Weed, on the day this week that Local 1033 agreed to wage concessions for about 900 city workers.

Gotta love lawyer-speak. "He left the building". Yeah, and walked right back in when a 132% raise was put in front of him. Nice little gig the Ruggerio and Iannazzi families have going there, no?

To Anchor Rising for Further Study

Justin Katz

Monique gave Tony Cornetta a rundown of Anchor Rising posts on last night's Matt Allen Show. Stream by clicking here, or download it.

April 6, 2011

UPDATED: The Providence Deal with Local 1033 (Cold Water Alert!)

Marc Comtois

UPDATED: Here are the actual deals (2011-12; 2012-15). The below was originally posted based on info released at Mayor Taveras' press conference as reported by the ProJo. (Thanks to commenter jparis for the heads-up).

According to the report from ProJo, here's the basic outline of the deal Providence Mayor Angel Taveras made with Local 1033:

* In exchange for "job security": 1% pay cut effective July 1; no raises until Jan 2012 June 30, 2013. Comment: That's one two year(s) without a raise. Another example of gov't speak trying to make the "cuts" look like more than they are - "The workers also forgo planned raises that were part of their previous agreement: 1-percent that should have came Jan. 1, 2011; 2-percent on July 1, 2011; and another 1-percent that was due Jan. 1, 2012." ADDENDUM: 3% raises resume July 1, 2013, with another 3% raise July 1, 2014. Glad to know we're going to be out of fiscal trouble by then.

* Increase in health care contributions from current 9.8%, depending on current salary. Those making more than $50,000 go to 16.5, 18 and 20 percent for 2012, 2014 and 2015 respectively. Less than $50,000 go to 15% in 2014. Comment: (Delayed) Reality setting in. I get the "give and take" of negotiations, but given the $70 million deficit facing the city NOW, why not impose the 20% (or 15%) NOW? ADDENDUM: Is the 20% really 20%? The calculation to determine the employee co-payment "shall not increase by more than 9.5% annually."

* 1% reduction in longevity payments, saves $1.5 million. Comment: I suppose the total removal of longevity is too much to ask for...

* Overall, $26 million saved over next 4 years, "including $2.2 million this year and $4.6 million next year." Comment: Quick math - so that means $19.2 million will be saved in years 3 and 4. Anyone else feel like that may be "on paper"?

Next year the projected deficit is $110 million. This deal is projected to save $4.6 million next year. Only $105.4 million to go.

Look, if this was 2006, this deal would be something to really cheer about. And I guess, given the past record, it still can be qualified as a positive step. But it does add to the sense that government just doesn't do a good job of expediently dealing with fiscal crisis. Again, given the past, I'm sure the union leaders and membership really feel like they've made big sacrifices here. The Mayor probably feels the same way. Like I said, welcome to 2006 guys. Too bad it's 2011.

Wisconsin Watch Cont'd

Carroll Andrew Morse

Continuation of this post.

[10:40] According to the AP results, 10 of the 12 remaining Milwaukee precincts have come in along with the 8 previously outstanding precincts from Ashland County. Prosser still leads, now by less than 400 votes. One outstanding precinct from Dane County (73-23 Kloppenburg), one from Jefferson County (58-42 Prosser), and six from Sauk County (55-45 Kloppenburg) are potential sources of big swings in a 400-vote margin.

[10:45] Kloppenburg now up, by 140 votes, mostly as the result of Sauk County's remaining precincts. Now the question is whether the remaining Jefferson precinct gives Prosser a margin over Kloppenburg that is 140 votes greater than the remaining Democratic leaning precincts, including 2 from Milwaukee and 1 from Dane (Madison).

[10:55] In one of those the county-level changes while the totals don't occurances that happen from time to time , Dane county now shows all in, with Kloppenburg's lead holding at 140.

[10:59] Kloppenburg now up by over 350. The Jefferson County precinct that is outstanding has to have a large population that breaks big for Prosser for him to retake the lead, plus 2 Milwaukee County precincts are still out. (Note: I don't know how absentee ballots factor into the results at this point)

[2:30] With one precinct left to report, Kloppenburg is up by 206 votes. The one precinct is in Jefferson County, so I'd expect that number to tighten, but something along the lines of a 70-30 Prosser majority from a large precinct would be needed to flip the result.

The Crapola of Simple Math

Justin Katz

Ken Block comments in response to my post suggesting that the state government that has him considering a move out of state is one that he helped bring about:

Enough of this unsubstantiated crapola about me costing Robitaille the election. He lost on his own accord by doing nothing to appeal to the centrist voter.

I have both anecdotal and polling data that show that my support came from across the political spectrum. Can you show me data that says otherwise?

If anything, Caprio really took the victory away from John by locking up a lot of the business vote early on in the cycle.

You run for election - you do not run away from election.

I ran to keep a fledgling party qualified in one of the toughest states to do so. Along the way, a lot of voters thought I was a pretty good choice.

You propose that Robitaille should have won as the 'lesser of two evils' candidate.

I propose that centrist voters desperately need a better choice than a bleeding heart liberal or a raging core conservative.

Your image of the ideal candidate does not translate to the vast majority of RI voters.

Sorry, Ken, we don't quite have the resources to conduct polls, but we can do some basic math related to the election results. Lincoln Chafee won the election by 8,660 votes. Block earned 22,146. That means that if Block's support "came from across the political spectrum" such that 40% of his vote would otherwise have gone to Robitaille, we might have a different governor. (That's a minimum, of course, which assumes that none of his other votes would have gone to Chafee, but it illustrates that Block's results were significant enough to make a difference.)

That doesn't mean Block didn't have a right to run. It's just the way politics and elections work, and as much fun as Ken might have had building his new party, such are the consequences that people must consider when making their political decisions.

Look, I don't think Block is wholly to blame. Frank Caprio's implosion toward the end of the race surely helped. I'd also argue that the Rhode Island Statewide Coalition's endorsement of the Democrat — while certainly proving the stubborn mantra about being nonpartisan and while providing evidence for Block's note about Caprio and the business vote — was also a factor, perhaps most significantly in giving liberal Democrats a reason to look for another candidate. That is, RISC needs to accept some of the blame, too.

But it isn't a relevant assessment to place a "lesser of two evils" position on one side of the ledger and a plea for "a better choice" on the other. For one thing, everything that I read during the campaign indicated to me that Block is, himself, a bleeding heart liberal, just one who thinks he can better manage the left-wing dream government. For another, the positions are different in kind; an activist can want a better choice and work toward that end in a way that doesn't ultimately lead to an outcome that would subsequently drive the very same activist out of the state in protection of his wallet.

It's cute of Ken to paint me as the purist, here. If his comment is to have any logical coherence, his conclusion must be that it is worth risking the collapse of the state (to the extent that he's seriously considering escaping it) in order for him to play the role of pure "centrist" candidate for an election cycle. That's just irresponsible. On election day, only one candidate can win. In a binary race, voters can pick one of two visions. In a broader race than that, their choice must include the degree to which a pure candidate who cannot win is worth a vote.

Moreover, as somebody who lacks the resources simply to up and leave, it illustrates to me the degree to which Rhode Island's problems are a consequence of the games of the rich. It is entirely reasonable to suggest that Ken Block and his Moderate pals chose a chance for same-sex marriage, an easing of immigration law, and other liberal social issue preferences over a fiscally conservative executive who would counterbalance the special interests who dominate the rest of state government.

That's a position that they're certainly empowered to take, but maturity requires that they admit it... or at least the possibility of it. I'd speculate that they cannot because at bottom there is very little room to be fiscally conservative, in a governmental sense, and still hold socially liberal positions in a coherent way. Either government must increase revenue to the extent that it suffocates the economy, or it must limit its activities, and if it limits activities, the culture must do the heavy lifting to create a proper order to society. Merely complaining that corruption and waste seem to go hand in hand with unitary power is like complaining that high expenditures require high revenue.

April 5, 2011

Wisconsin Watch

Carroll Andrew Morse

According to the Associated Press, Joanne Kloppenburg has opened up a slight 4,000 vote lead with 57% of the precincts reporting in the Wisconsin Supreme Court election that will likely decide if Governor Scott Walker's collective bargaining package of laws is allowed to stand.

Looking at the county-by-county results, I am willing to bet that Prosser wins.

[11:20] Prosser now up by almost 20,000 (62% of precincts in) with Waukesha County, a sizeable Republican stronghold, only about 1/4 in. Waukesha's outstanding votes will likely cancel out, at least, the outstanding votes from Milwaukee and Dane (Madison) Counties.

[11:30] Prosser's lead is now less than 1,000 (67% of precincts reporting) because a big chunk of Milwaukee precincts just came in. I stand by my prediction.

[11:35] Kloppenburg now up by 600 votes, 69% of precincts reporting.

[11:40] Kloppenburg is now up by more than 5,000 votes. Dane County (currently 73-23 for Kloppenburg) has 58 precincts yet to report. Milwaukee County (currently 55-45 for Kloppenburg) has 149 precincts yet to report. And Waukesha County (currently 73 - 27 for Prosser) has 146 precincts yet to report.

[11:45] Kloppenburg up by about 7,000. No change in the big 3 county remaining precincts.

[11:53] Kloppenburg still up by more than 7,000 with 77.5% of precincts reporting.

[11:55] On the AP Board, two medium size counties still are showing 0 precincts reporting, Fond du Lac and Grant. Fond du Lac went 54% for McCain in the 2008 Presidential election and Grant went 62% for Obama, if you believe Wikipedia.

[12:00] Kloppenburg now up by about 18,000 votes, presumably due to another influx from Milwaukee. 53 precints left from Milwaukee to report, 58 from Dane, and 79 from Waukesha. Plus 77 from Fond du Lac and 52 from Grant.

[12:05] Big lead now for Kloppenburg, about 35,000 votes. Dane has 41 precincts left to report, Milwaukee and Waukesha unchanged. All but one precinct from Grant is in, but the total number of votes from the county is very small.

[12:11] Hang on folks, this is going to be a nail-biter (as if anyone is actually reading this in real time). Kloppenburg's lead is now cut to about 4,000 with 88.8% of the vote in. Amongst other things, Fond du Lac came in with a 6,000 vote margin for Prosser and 14 Waukesha precincts came in.

[12:15] 89.6% of precincts in, Kloppenburg leads by less than 4,000. 41 precincts from Dane, 29 precincts from Milwaukee, and 73 precincts from Waukesha yet to report. If it's close, the 28 precincts yet to report from Washington County (Wisconsin, not Rhode Island) could have an impact.

[12:25] 90.5% of the vote in. Kloppenburg still with a 3,300 vote lead. But if the numbers from the counties still outstanding roughly parallel their results so far, it still looks good for Prosser.

[12:30] Kloppenburg's lead is now less than 2,000, almost 92% of the vote in. Still 41 precincts from Dane to report, just 13 from Milwaukee, and 73 from Waukesha (currently 73-27 for Prosser). Other counties that could still create noticable swings are Washington, Ozaukee, and Eau Claire.

[12:33] Prosser now on top by less than 1,000 votes. Not coincidentally, 5 precincts from Waukesha County have reported since the 12:30 update.

[12:36] 93.5% of the vote in, Prosser still on top by less than 1,000 votes. But Dane County is now almost tapped out for Kloppenburg, just 5 precincts left to report.

[12:40] As Washington County finishes reporting, Prosser opens up a 4,000+ vote lead with 94% of the vote in (and a big chunk of the remaining vote to come from Waukesha County).

[12:44] About 1/3 of Eau Claire's precincts reporting in have helped Kloppenburg narrow Prosser's lead to less than 2,000 votes.

[12:51] Well isn't that special. The number of precincts reporting from Waukesha just jumped to 100%, without the overall total jumping from the last time I checked. 96.5% of precincts in, about a 1,900 vote lead for Prosser.

[12:59] A few precincts reporting from Milwaukee have put Kloppenburg back on top, by about 1,700 votes, with 96.6% of the vote in. 2 precincts left to report from Dane, 12 from Milwaukee.

[1:02] Now it's Prosser by 5,000, with 97% of all precincts reporting. Not really sure where those votes came from.

[1:15] Prosser has about a 1,600 vote lead, with 2 Democratic leaning counties (Milwaukee and Eau Claire) and one Republican leaning county (Marathon) still with a number of precincts left to report.

[2:00] 98.5% of precincts reporting, according to the Associated Press. Prosser leads by under 1,900 votes. However, almost all of the remainging precincts are from counties that are currently leaning Democratic (Marathon is completely in; Milwaukee has 12 precincts still out; Eau Claire has 21 precincts still out; Ashland County, currently going 71-29 for Kloppenburg, has 6 precincts still out and Sauk County, currently going 55-45 for Kloppenburg, has 8 precincts still out.

[2:20] According to the AP, Eau Claire is now in and has closed Prosser's lead over Kloppenburg to less than 600 votes. The 12 remaining precincts from Milwaukee, plus 1 from Dane and a few others will close the remainder of the gap if they vote in the same proportion as the rest of their counties have so far. Based on this, I now have to give a slight edge to Kloppenburg.

Change of Trial Venue for 911 Plotters: Kudos, Mr. President

Monique Chartier

From the Wall Street Journal.

Attorney General Eric Holder on Monday announced that he had transferred to the Defense Department for military trial the cases against Khalid Sheikh Mohammed, Walid Bin Attash, Ramzi Binalshibh, Ali Abdul Aziz Ali, and Mustafa al Hawsawi, accused of key roles in planning the Sept. 11 attacks. The decision reversed Mr. Holder’s earlier plan to try the men in civilian court in New York City, a change the attorney general blamed on politics and congressional restrictions that banned moving prisoners to the U.S. for any purpose.

Rush Limbaugh was correct yesterday to point out that this announcement came on the same day that the President announced his re-election bid. Not altogether clear, though, is what conclusion should be drawn from this coincident timing: whether the former was intended to bolster the latter by garnering some votes or the latter to provide a little cover for a decision that would almost certainly disappoint some of the president's supporters.

In any case, thank you, Mr. President, for doing the right thing and changing the venue of these trials. The fact is that these are not common criminals but enemy combatants without uniforms who facilitated an attack on the United States and the values of Western Civilization. Michael Graham:

As foreign fighters waging illegitimate war against America, they aren’t entitled to the same protections as American citizens who commit crimes.

Sensible Deal in Providence?

Marc Comtois

Fiscal sanity coming to Providence? (I only question because the devil is in the details, which will be forthcoming tomorrow.)

Mayor Angel Taveras...said in a news release that [a new] agreement [with Local 1033] saves Providence "more than $26 million over four years, including almost $7 million in savings in the next 18 months." It includes a pay cut, a three-year freeze on raises, a reduction in longevity pay, a reduction in wage levels for new hires, and increases in insurance co-payments, as well as enhancements to city services with no additional overtime.

"Local 1033 was an honest and forthright partner in this negotiation," Taveras said in the news release. "Leadership came to the table in good faith and with a realistic understanding of the difficult steps we must take to restore Providence's fiscal health.

"These are not symbolic cuts: these are real changes that will help us address the fiscal crisis we face, both short and long term. It is never easy to take a pay cut. I truly appreciate 1033's willingness to be a partner in our effort to put Providence back on solid financial footing."

Doubling Expenses Through Fees

Justin Katz

For this week's Patch column, I took on Tiverton's new Pay as You Throw (PAYT) garbage-bag fee:

Granted, of all of the factors contributing to this increase, the proximate end of the landfill's usable life is among the most legitimate. Town leaders have spent decades inadequately preparing for the day that the dump was full - so much so that we'll be shy of the $6.8 to 8.2 million needed to cap the dump around 2015 by between $2.4 and 3.8 million. That's a real problem, and it still doesn't include the costs of implementing another solution for Tiverton's refuse. Moreover, the estimated $500,000 per year that the PAYT program is supposed to generate will still cover only half of the shortfall.

These are just the numbers, though. The point that has not been adequately considered is that the lack of preparation has not been caused by a refusal to raise taxes. This has been proven dramatically as the tax levy doubled over the last decade. In other words, the money that should have been saved in order to close the landfill was not given back to taxpayers; it was spent on other things, most significantly labor costs. Why, then, should the pain for this error be felt among those who've been forced to increase town revenue, these many years, rather than those who've benefited by the profligate spending?

Finding a Way to Build the Tax Wall

Justin Katz

Rhode Island's aristocracy chose to believe in their own power to impose taxes rather than the power of economic incentives, and some don't like the result:

State Rep. Raymond Gallison, D-Bristol, says local businesses are losing revenue that could help the state's financial situation, while the state itself has not generated any new revenue from the law, according to the Chafee administration.

Large online retailers such as Amazon.com and Overstock.com cut ties with local companies and individuals immediately in response to the state law. In effect, the companies absolved themselves of the responsibility of collecting the Rhode Island sales tax, but they also denied local affiliated businesses vital revenue, he says.

Of course, the preferred solution is to turn to state government's big brother to help with the bullying:

Governor Chafee, state Senate President M. Teresa Paiva Weed and House Speaker Gordon D. Fox are urging the state's congressional delegation to pursue national legislation that would require online retailers and other remote sellers to collect state sales taxes.

You'd think they'd learn that increasing taxes is increasing taxes, and consumers and the economy ultimately pay the price. eTailers aren't forcing their sales upon Rhode Islanders, and there are reasons Rhode Islanders turn to them and are willing to delay their gratification to buy goods online.

Elected officials should devote their energy to helping brick-and-mortar companies counteract those reasons rather than seeking to build economic barriers in everybody's way.

Typical Legislative Budget "Cuts" on Display

Marc Comtois

Governor Chafee is weighing in on the raises being paid to the Legislative staff.

“On the surface, in the toughest budget in decades, it’s hard to justify such big raises.”

That was Governor Chafee’s reaction on Monday to a series of recent Journal reports about the magnitude of the raises that have gone to legislative staffers in recent months.

Since March 2010, more than 100 General Assembly employees have gotten raises over and above the 3 percent that went to the vast majority of state employees in January. Several General Assembly employees got double-digit raises...

Yet, somehow, according to Speaker Gordon Fox, he saved money. How? Read closely:
In a statement issued by his office, Fox said his ongoing reorganization of the General Assembly’s day-to-day operation has already “resulted in savings of more than $500,000” in the legislature’s $39-million budget for this year. “I am proud of our efforts to make the legislature run more efficiently and transparently, and we will continue to try to save money going forward,” he said.

But the legislature’s overall salary costs are still going up, not down.

The lawmakers spent a total of $32.1 million, including $17.877 million on salaries alone in the year that ended June 30.

They budgeted $19.528 million for salaries this year, and then alerted the budget office they may not need that much, but will still need $19.067 million to meet this year’s payroll. For the new year that begins on July 1, they have requested $19.574 million for salaries, another $14.1 million for employee benefits, and an overall budget of $40.3 million budget, according to the state budget office.

Got that? They planned on spending $19.5 million in 2010. They only spent $19 million. They saved half a million! Well, except that's still at least $1 million more than they spent in 2009. Same old tricks. In government, a cut is a reduction in the amount of the expected increase.

Block Edges Toward the Border

Justin Katz

It seems as if Rhode Island's current government is pushing Moderate Party founder and gubernatorial candidate Ken Block toward an extreme:

Every year at this time, my accountant looks me in the eye and says I'm nuts to own a business in Rhode Island. ...

A 6 percent hit to my bottom line is more than enough to cause me to move my software business out of the state — as fast as humanly possible, taking more than $100,000 in state and local taxes with me when I move a few miles across the border.

I suspect that Mr. Block is far from alone, among those who've striven to improve Rhode Island's governance, in his growing sense of opposition's futility and willingness to turn from fight to flight. Certain groups may find that to be a positive development; most should not.

Still, one cannot touch on this topic without noting that, as Chafee was the far-left independent candidate, many voters treated Block as another choice on the center right. It's reasonable to suggest that, but for the 6.5% of the vote that Block drew to himself, Lincoln Chafee would not now be our governor. In that regard, Ken is fortunate that he has the resources to escape what he helped to bring about, should he so choose.

April 4, 2011

Chafee Tells Critics to "Show me the cuts"

Marc Comtois

WRNI's Ian Donnis has this from Governor Chafee:

I haven’t heard from anybody how to get out of the $295 million hole. There’s just been critic after critic without offering any constructive alternative — and I’m still waiting. I’m open-minded to anybody who has a better idea.
Now that's someone in a bubble. Or someone playing word games. Define "constructive" alternative. How about "better" idea? Enough wiggle room for you? The ideas that the governor doesn't WANT to hear have been out there: across the board cuts, salary freezes (no COLA, no raises), renegotiate Health care co-share, reform pensions, etc. See, the problem is that the aforementioned require HARD decisions or HARD work. Nothing is EASIER than raising taxes.

Pensions from the Top

Justin Katz

This paragraph from a weekend PolitFact points to the really disturbing part of news about $100,000-plus pension payments:

The Wisconsin report didn't compare starting retirement salaries. It simply catalogued the elements each state used to calculate the amount. To do the calculation, you take a worker's final average salary (usually the average of the last three, four or five years of employment), multiply that by the number of years of service, and multiply that by a percentage that varies widely.

In that light, the thing that ought to really bother taxpayers isn't so much the huge pensions (although they are rightly eye-catching), but the path that some people take to them. Take this guy, for instance:

Former House Speaker Matty Smith retired in 1993 with a $73,000 pension that reflected his 15 years as a legislator and his much higher-paying stint as state court administrator before he — and then-Supreme Court Chief Justice Thomas Fay — were forced to resign amid a scandal over a high-level cover-up of the theft of court money. ...

Smith's pension is based on his 15 years as a part-time legislator, his 5 1/2 years as Supreme Court administrator, his 4 1/2 years as a Providence schoolteacher in the 1960s, another 4 1/2 years of credit — he was allowed to buy at a one-time cost of $432 — for his years as an archivist and special lecturer in history at Providence College, and 6 months in the Army.

With 3-percent compounded annual increases, Smith's pension has grown to $100,078.56.

There's so much that's clearly wrong with this scenario that it feels redundant to list it all, but the largest part is basing a pension on a high-end political patronage job and many years as a part-time legislator. That alone creates incentive for corruption, because securing that golden retirement depends upon maintaining a political position for a long time and being in sufficient good graces with public administrators empowered to grant high-salary jobs to cash in those years of "public service."

Whose Voice Are We Hearing?

Justin Katz

Another interesting aspect of the article on Education Commissioner Deborah Gist's new regulations that Marc mentioned yesterday is the way in which one of the objections is answered in a separate article on the same page:

"If they gut collective bargaining, they are heading down a road to destroy public education," said Larry Purtill, executive director of the National Education Association of Rhode Island.

"Because in negotiating, you get the voice of the teacher who is in the classroom every day," he said. "And that's an important process. Without it, you take that voice away."

The other article is about negotiating difficulties between Central Falls Superintendent Frances Gallo and the union with which she negotiates. Gallo wishes to modify negotiations so that they follow a "streamlined compact," which would involve teachers, administrators, parents, and even students and vary from school to school:

"I think unions are an important check against the capricious actions of a supervisor," Gallo said. "But I also think unions come out more powerful [in a compact] because all 330 [teacher] voices are heard, not just the voice of the union leadership.... Dissent should be heard."

We could even bring in Julia Steiny, whose column on the facing page suggests that a rigid pension system that discourages changes in career path serve neither teachers nor students well:

When I write or speak about making pensions more portable and flexible, some teachers respond with effusive agreement. They say that they've had a great 12, 15, 20 years, but that now they're done. They want to do something else. But they can't afford to give up their investment in the teacher-retirement system, with its very attractive promises. They panic about becoming like the bitter burnout down the hall.

In general, I suspect most teachers would find much to like about life outside of the union pen, especially the best teachers.

April 3, 2011

Ivy ROTC Update

Marc Comtois

After much, sometimes heated, debate, Columbia University has elected to allow ROTC back on campus. Good. Now, Brown University finds itself increasingly out of the Ivy mainstream, though they're currently reviewing the policy:

[Dean of the College Katherine] Bergeron also discussed her attendance at the Ivy Plus conference — a consortium of universities, including members of the Ivy League as well as the Massachusetts Institute of Technology, the University of Chicago and Stanford — where deans from the universities discussed their respective plans to offer or not offer ROTC programs.

Of those universities, MIT, Cornell, Dartmouth, Princeton and Penn already offer ROTC programs. Harvard announced its intention to reinstate its ROTC program earlier this month, and Bergeron said it looks likely that Columbia, Yale and Stanford will do the same. If this were the case, Brown would be the only Ivy League university not to have a ROTC program on campus.

I suspect Brown will come around, if grudgingly.

Reshaping Education via the BEP

Marc Comtois

As reported by the ProJo this morning, the new Dep't of Education Basic Education Program attempts to implement a new way of doing business. It strengthens management rights, implements evaluations, defines a "code of responsibility" and removes seniority as the primary qualifier for job retention. All done to, as Commisioner Deborah Gist explains, to make the system "child-centered." To help explain these changes, Gist has written several advisories, including one on seniority.

Gist has sought to clarify the ramifications of these new rules by sending out “guidance memos” to districts. No longer will seniority –– the long-held practice of seasoned teachers being allowed to “bump” newer colleagues out of their jobs –– be the sole factor in determining teacher assignments, Gist says.

The new BEP aims to ensure “that highly effective educators work with classrooms of students who have significant achievement gaps,” Gist wrote in an October 2009 memo. “In my view, no system that bases teacher assignment solely on seniority can comply with this regulation.”

Obviously, teacher unions aren't happy and they're girding up for a fight. Yet, it's not just the teacher unions that are taking issue with Gist and her interpretation of the new BEP and Rhode Island law as it pertains to education. In Warwick, for example, Mayor Scott Avedisian is taking issue with school funding requirements that seek to reset the baseline back to 2009 dollars and not the prior baseline (2010/11) that had been legislatively reduced.
Gist’s memo is an answer to the hypothetical question if a community reduced its contribution for fiscal years 2010 and 2011 “is the maintenance of effort reference year FY2009 for purposes of calculating a community’s maintenance of effort obligation for FY 2012?”

In response, she says for 2010 and 2011, a 95 percent of the 2009 maintenance of effort is allowable but that for 2012 it reverts to the 2009 level. Further, she writes, if a community contributed more to schools than the 2009 amount that higher amount becomes the threshold.

I guess time will tell if this will fly.

April 2, 2011

Spring Cleaning

Marc Comtois

Gorgeous day today, no? The morning brought front yard raking to ensure that the weeds I cultivate on my front "lawn" have plenty of aerated soil and room to grow. I spent the afternoon cleaning the assorted flotsam and jetsam that accumulated along my stretch of the brook that makes the southern border of my property. Lots of bottles and cans and styrofoam and balls removed.

The biggest challenge, as it is every year, was removing the bamboo stalks that had broken and landed in the brook, thus blocking the free flow of water. To my mind, it is this invasive bamboo that we find throughout the state, even along the interstate and particularly near our waterways, that needs to be fought and vanquished! I do my part every year. I reclaimed a quarter acre in one battle a decade ago and now I allow some plants to grow along the brook bank to help stem erosion. One day, I'll plant more native species that will be up to that task and banish the bamboo to the far side of my mini-Rhine for all eternity!

Open Thread: What's the Best Way to Schedule a Fire Department?

Carroll Andrew Morse

Valley Breeze publisher Tom Ward has written an apology for a previous column where he described changes in the Woonsocket Fire department platoon structure and scheduling as being correctives to "overtime abuse"...

My column this week went over the line in its tone, and for that I apologize to our readers, especially the firefighters of Woonsocket and their loved ones. I regret using the term “overtime abuse” to comment on the $1 million in annual overtime pay that Mayor Leo Fontaine is now trying to remove from the 2012 budget.
At issue are changes that were unanimously approved by the Woonsocket City Council on March 20. According to Russ Olivio of the Woonsocket Call, the Woonsocket Fire Department currently uses a schedule where a firefighter works two 10 hour days -- where "day" actually means a substantial period of time when the sun is up -- followed by two 14 hour nights, followed by four days off.

Mayor Fontaine and the City Council are proposing changing that to a system of 24 contiguous hours on duty, followed by 48 hours off.

Also, I've come across discussions on the internet about a 48/96 system (two days on, four days off) in regular use or being tried by some departments. It seems to be more popular in the Western half of the US and is used in some places with populations as large or larger than Woonsocket (though their population densities may be very different, along with their density of triple-deckers).

Mayor Fontaine and the City Council have also approved changing the structure of the fire department from four platoons to three. I'm not sure if that is directly related to the scheduling change, or a separate issue altogether.

The two questions to kick off the open-thread are...

  1. How do the various scheduling structures impact a firefighting department's operations and effectiveness, and
  2. Given that, under all three systes, a firefighter is on duty for 48 hours and off duty for 96 hours in a six-day block, how exactly does this relate to overtime?

A Subject for Saturday Daydreaming

Justin Katz

So the public-sector labor unions in Wisconsin, on top of threatening businesses that decline to take a side in their fight for a continued monopoly on government jobs, have found a judge to interfere in the legislative process in an unprecedented way and are now pushing to change the makeup of the state's Supreme Court to preserve the stay. But this part sets me daydreaming from within must-collapse-before-reforms-are-possible Rhode Island:

... In 2001, Utah made the collection of payments to union political funds optional, and nearly 95% of public school teachers opted not to pay. In 2005, Indiana GOP Gov. Mitch Daniels limited collective-bargaining rights for public employees, and today only 5% of state employees pay union dues.

Some union supporters recognize the problems with coercive dues payments. Tom Geoghegan, a noted union lawyer, wrote in the Nation magazine last November that it should be "a civil right to join, or not to join, a labor union." He said it was time to "repackage labor law reform, even over the protest of organized labor itself." He noted that workers in countries "like Germany are free not to pay [their dues]—and many don't." Indeed, the U.S. is filled with powerful groups, such as the American Association of Retired Persons, that thrive on voluntary payments because they are seen as providing genuine services to members.

Ya Know, the Obama Admin's Word for W*r is Just as Silly as Sarah Palin's

Monique Chartier

Deputy National Security Adviser Ben Rhodes to reporters on Air Force One.

“I think what we are doing is enforcing a resolution that has a very clear set of goals, which is protecting the Libyan people, averting a humanitarian crisis, and setting up a no-fly zone,” Rhodes said. “Obviously that involves kinetic military action, particularly on the front end.

Palin during On the Record with Greta van Susteren.

I haven't heard the president say that we are at war. And that's why I, too, am not knowing, do we use the term "intervention," do we use "war," do we use "squirmish," what is it?

Even Jon Stewart was skeptical of the admin's term.

The difference as to intent should also not be ignored. Rhodes was attempting to avoid a word that would underscore the fact that the Obama admin had initiated a bellicose action against another country.

Palin just goofed up.

Semi-related item: Let the record show that it was Jay Severin, just before his suspension this week for unrelated remarks, who first plugged the admin's term into Edwin Starr's song.




What is it good for??

Absolutely nothing!

Uh Huh!




April 1, 2011

Ten Bills Scheduled to be Heard by RI General Assembly Committees, April 5 - April 7

Carroll Andrew Morse

10. H5830: Requires real estate commissions to be paid at the closing. (House Corporations, April 5)

9. H5575: From the official description: "This act would affirm the use in state legal proceedings of unsworn declarations made by declarations who are physically outside the boundaries of the United States when making the declaration". (House Corporations, April 5)

8. H5384:/H5471: Two of several bills related to auto-body shops. I know this isn't the most pressing issue facing Rhode Island, but if anyone has any insights into whether the long running public relations battle between auto insurance companies and auto body shops in this state for hearts, minds and dollars is something that happens everywhere, or is a uniquely Rhode Island thing, here's an excuse to tell people about it. (House Corporations, April 6)

7. Bud Art. 7: If I am reading this right, this would change the law so that in addition to each "telephone access line" into a residence or business being assessed a surcharge, as is currently the case, any wireless device would also be assessed a separate surcharge. It's another aspect of Governor Chafee's lower and broaden method for increasing taxes. (House Finance, April 7)

6. H5905: "No police department within this state, including the state police, shall use any checkpoint, random or otherwise, as an investigative measure in the detection and apprehension of motorists who may be under the influence". (House Judiciary, April 6)

5. H5366: "Custodial interrogations" in cases where a potential criminal sentence is life imprisonment must be recorded to be admissible as evidence. (House Judiciary, April 6)

4. H5887: Establishes state limits on "greenhouse gas" emissions that are "equivalent to twenty percent (20%) below the 1990 level, to be achieved by 2020, and...eighty percent (80%) below the 1990 level, to be achieved by 2050". (House Environment, April 7)

3. H5904: Establishes civil unions for "any two unmarried persons who are excluded from entering into a valid marriage under the marriage laws of this state". (House Judiciary, April 5)

2. Bud Art. 25: Changes to Rhode Island's business taxation system, e.g. combined reporting, minimum franchise tax, etc. (House Finance, April 6)

1. H5092: Incarcerated individuals who go before Rhode Island courts on criminal matters would be required to have their immigration status verified. (House Judiciary, April 6)

Darn (?), the Price of Electricity is Dropping

Monique Chartier

Let's go back a month.

Rising world energy prices, spurred by demand from India and China, will make wind energy off Rhode Island's shores a viable economic option, Governor Chafee told a group of Washington County town planners and officials Thursday night.

Fast forward to today's ProJo.

On Thursday, the state Public Utilities Commission unanimously approved an across-the-board rate decrease for National Grid’s 482,000 customers that will go into effect April 1.

For residential customers, the standard offer rate — or the price of power without any surcharges factored in — will plummet 26 percent, from 9.4 cents per kilowatt hour to 6.9 cents.

Oops. The Deepwater Wind project just got even more unviable.

Of course, Governor Chafee is not the only person misguidedly looking for such rate increases, whether for power or at the gas pump. Advocates acknowledge that green fuel sources only "work" if fossil fuel sources achieve a certain quite elevated price point.

In the real world, far from being quietly crestfallen at the announcement yesterday from National Grid, most people will be only too happy to funnel the savings, however modest, from lower power costs to savings, other household bills or frivolities; i.e., to more productive uses.

Funny how what's good for consumers is bad for green energy. Isn't that a major red flag about the wisdom and practicality of this (heavy quotes) "industry"?

Using Transparency to Know What Administrators Should Be Investigating

Justin Katz

My Patch column, this week, notes that school administrators in Tiverton appear to analyze differences between their approach and that of one of the most successful districts in Rhode Island (neighboring town, Portsmouth) only to the degree that they can formulate excuses why their own students and community in general are to blame for the disparity in results:

It's typical, among public officials, to focus on others' mystery resources and sunnier demographics and to insist on the impossibility of comparison and accountability. The fact remains, though, that Tiverton pays $1,290 more per pupil. Yes, Portsmouth's budget is 33% bigger, but its student body is 46% bigger. And even if it were accurate to suggest that Portsmouth has expenses that it doesn't report to the Department of Education, its unlisted expenses would have to amount to $3.6 million, not $300,000-400,000, for the per pupil spending to match Tiverton's.

Moreover, the UCOA shows that one needn't imagine phantom revenue, because the lines in the budget show that the "philosophical shift" is reflected in how the district spends the money that it does declare. The two districts spend about the same percentages of their budgets on regular education (73% Tiverton; 72% Portsmouth) and special education (both 24%), and Tiverton throws another 1% in for vocational and technical education. The strategies for allocating those budgets makes all the difference.

A lower median income surely has some effect on educational outcomes and the strategy used for achieving them, but it doesn't explain why Tiverton appears to focus on higher-cost employees and, say, health education over math education.

Koch Brothers and Unions

Marc Comtois

Oh, the shades of gray!

A number of organizations are advocating a boycott of the products that come from companies owned by the Koch family. This is problematic for a number of reasons, not the least of which is that it could potentially hurt the wrong people.

The Koch brothers own Georgia Pacific. It is an American consumer goods company that makes everyday products like facial tissue, napkins, paper towels, paper cups and the like. Their plants are great examples of American advanced manufacturing. Incidentally,

GP makes most of its products here in America. The company’s workforce is highly unionized. In fact, 80 percent of its mills are under contract with one or more labor union. It is not inaccurate to say that these are among the best-paid manufacturing jobs in America.

This presents a dilemma and a paradox. While the Koch brothers are credited with advocating an agenda and groups that are clearly hostile to labor and labor’s agenda, the brothers’ company in practice and in general has positive and productive collective bargaining relationships with its unions.

While some companies are running from investment in American jobs, The Koch brothers’ Georgia Pacific just reached agreements with its primary union in the paper industry to invest more than a half a billion dollars in capital to essentially create two state-of-the-art machines that conserve fiber and energy at two separate union mills.

While certainly there are disagreements from time to time on what the right pension program is, or right wage increases and incentives, or the right formula for health care cost sharing, ultimately we end up with negotiated solutions.

That from Jon Geenen, International Vice President of the United Steelworkers. The difference, of course, is that the unions that the Koch Brothers have a working relationship with operate in the private sector, where reasonable negotiations between equal stakeholders actually take place. Keeping the management/employee relationship balanced is beneficial to the company and its employees. The Koch Brothers anti-unionism, if one is to judge by their actions, is focused on the public sector. While Geenan believes this "a dilemma and paradox", the Koch Brothers, and many other people, are not so conflicted. Like it or not, there is a difference.

No New Taxes. Period.

Monique Chartier

As the General Assembly begins to consider the governor's budget, Riborn hits the nail precisely under Marc's post:

No increases. Nothing. No new taxes. No new fees. No fee increases. Cut spending. Cut muni employee salaries, benefits, increase their medical insurance %, increase pension contributions of every state and municipal employee.

It isn't just that even one new item covered by a sales tax would open Pandora's Box to ever more more more in future budgets, though that is true and important. It's that what would be viewed as a "compromise" by some at the General Assembly - just implementing some of Governor Chafee's tax increases - is not a compromise at all in light of Rhode Island's current level of taxation: fifth highest state and local tax burden. A real compromise would be a lowering (BUT NO BROADENING) of the sales tax by addressing the real budget problem: the spending side of the ledger.

To quote Donna Perry quoting the hair salon owners,

Governor, on your tax plan idea, please just cut it out.

Anatomy of a Controversy

Justin Katz

With over 250 comments, it'd take quite a bit of catching up, and the horrible policy of letting readers delete a comment when enough of them flag it as "inappropriate" makes the conversation difficult to follow, because comments (including Gordon's) suddenly disappear, but the response thread to this story on the Tiverton-LittleCompton Patch is a fascinating glimpse at the boiling of a controversy.

The story itself is about Tiverton High School student Cynda Martin's founding of a gay-straight alliance (GSA) group. There was no controversy in the group's founding, no push-back from the school, and the subject is a mildly more-topical variation of the local feel-good story. The controversy began when Budget Committee Member Joe Sousa and State Representative Dan Gordon expressed the opinion that schools should focus on academics, with the latter writing:

And this is why if I have anything to say about it, Tiverton will lose school funding to local charter schools. It doesn't matter if gay or straight, if sexual meet-up groups are being promoted in our schools rather than improving test scores, that school is failing. Is it really more important for our children to get 'sexed-up', than learning advanced math?

As I was quick to point out in the comments, what's reasonable in that paragraph is inartfully put and, in my view, errs in the approach to charters, which might very well emphasize such groups and the motivation for which ought to be to improve public schools, not defund them. What's not reasonable in the comment stems from a misunderstanding of the nature of such student groups and an apparent disconnect from the current state of acceptance of homosexuality in terms that aren't explicitly sexual, but amorous.

The indignant comments began to steamroll, with parents, students, and school faculty chiming in, especially when WRNI picked up the story as "Lawmaker wants to ban gay student group from Tiverton High School," RI Future tugged on the thread, and Gordon went on John DePetro's show. His fellow Tiverton rep. Jay Edwards eagerly condemned his comments, and the state Democrat Party got in on the action. Then Gordon made matters worse by returning to the comment section, where he wound up arguing about grammar with high school students.

Amidst a flurry of posts from students during the school day, yesterday, Tiverton tech teacher Edward Davis took the opportunity to decry a focus on test scores:

The popular trend is to say, "We are falling behind other countries, we need to get our scores up!" But research shows concentrating on test scores is not the solution. Harvard Graduate School of Education's recent study, "Pathways to Prosperity", looked into why our education system, that once led the world, has fallen behind. According to the report, most of the countries that have passed us up have developed career pathways that emphasize technical education and preperation for the workforce.

And not surprisingly, commenters — including Davis, but many anonymous — have dragged the local taxpayer group, Tiverton Citizens for Change (TCC), into it, because obviously one cannot limit taxation without having an anti-gay agenda... or something.

If you want a glimpse of the seams of personal politics, this controversy shows them. It really is fascinating, not to mention a case study for new politicians.


Although I thought it worth noting that teachers and students have been participating in online discussions during school hours, I don't think there's anything inherently objectionable about it. Given the state of technology, it's entirely feasible that everybody can post on the Internet during truly free time. (That kids might be better off socializing in person or doing something active is a different question.) And even were class time being used for that purpose, online discourse and politics are certainly legitimate areas of concern in some classes.