May 31, 2012

Putting Work Into Perspective

Marc Comtois

In a recent story, the ProJo reported about the so-called "skills gap" in Rhode Island.

Only 41 percent of the adults in Rhode Island have college degrees. The Georgetown Center on Education and the Workforce predicts that by 2018, 63 percent of jobs will require at least some postsecondary education.
Setting aside that there is a difference between a college degree and "some" post-secondary education, the theme of the article is that employers can't get enough trained workers.
Advanced manufacturing jobs exist in Rhode Island, but prejudice about them being “blue collar” prevent some schools, parents and students from taking classes that would help students enter these fields, [, Greater Providence Chamber of Commerce Executive Director Laurie] White said.

“We need to figure out how to make these jobs more inviting for our young people,” she said. “We need to get the message out that it’s cool to make stuff.”

Justin already addressed one disconnect surrounding this lament:
White’s...We, one supposes, means the collected interests of business groups, government officials, and special-interest advocates.

An alternative path would be to give young adults reason to understand that “settling” on a career is not “cool,” but obligatory — a stark necessity of survival. And then, they and their families must be empowered to make educational choices based on their intimate knowledge of their own circumstances, aptitudes, and interests.

I fundamentally agree with Justin and would add we also have to recognize that some people will make bad choices, with or without the direction of their parents or supposedly enlightened bureaucrats.

We all heard roughly the same thing about choosing our path in the future (particularly at graduation time): do what you love and all the rest will follow. For me, that always calls to mind the late Joseph Campbell's call to "follow your bliss," but any number of successful people have told the same story. Through hard work, perseverance and even a little luck, they kept on doing what they loved and were rewarded (and usually financially).

Now, we shouldn't be in the business of crushing the dreams of wide-eyed 18 or 21 (or 24!) year-olds, but some measure of reality should be injected into all of the good-intentioned encouragement. Namely, you still have to pay your bills along the way. That usually means taking jobs, or even choosing careers, that may not be the most emotionally gratifying or aren't "cool" or "meaningful work", which is something that Thomas Sowell recently commented upon:

What is “meaningful work”?

The underlying notion seems to be that it is work whose performance is satisfying or enjoyable in itself. But if that is the only kind of work that people should have to do, how is garbage to be collected, bed pans emptied in hospitals or jobs with life-threatening dangers to be performed?

Does anyone imagine that firemen enjoy going into burning homes and buildings to rescue people trapped by the flames? That soldiers going into combat think it is fun?

In the real world, many things are done simply because they have to be done, not because doing them brings immediate pleasure to those who do them. Some people take justifiable pride in working to take care of their families, whether or not the work itself is great.

Sometimes this is referred to as working to live instead of living to work. But such jobs can also be a path to a dream. For instance, being a pizza delivery professional (ahem) wouldn't be considered "meaningful work" to a lot of people. Yet, according to it's CEO:
[O]ver 90 percent of our franchisees started as delivery drivers at our stores. They worked their way up to become store manager. Ultimately, they bought their first store. They moved on from that.
Imagine that: from delivering pies to owning a franchise all because they were willing to do supposedly un-meaningful work. There are long term gains that can be made from short term sucking-it-up and working hard.

But even those who cling to as-yet unrealized dreams aren't the first to do so. The bartending musician or waitressing actress aren't unknown to us, after all. Heck, look at Grandma Moses. Finally, as many of us have learned, what you thought was "your bliss" at 18 is often replaced by something else by the time we're 30. Age adds perspective. So do kids.

Providence Failing in ESL

Patrick Laverty

In an article posted yesterday by Linda Borg in the Providence Journal, the Providence school system is failing those students who are learning English as a second language. For the time being, let's put aside the "they shouldn't be here in the first place!" comments, as that's a separate issue.

The article talks about a study commissioned by former Providence Superintendent Tom Brady (is there anything Tom Brady can't do?) and it found many deficiencies in Providence's ESL curriculum.

These students do not have access to rigorous math and English courses that could boost their academic achievement, he said. Instead, they are often offered a “watered down” curriculum that does not help them catch up with their English-speaking peers.
...the district does not have high expectations for its English-language learners nor does it hold staff members accountable for their academic progress.
Staff said they didn’t see themselves as responsible for improving this population’s performance and said they didn’t know who was responsible for students’ progress. Moreover, educators said they didn’t know how many schools were failing to make adequate yearly progress because of their English-language learners.
I go back to the same questions I've always had. Why do we separate students by age instead of ability? If we have a seventeen year old that doesn't understand English, why are they in math and science and social studies classes with other seventeen year olds that do understand the language? That is just setting those kids up to fail, get frustrated and quit completely.

If a school system has students who don't understand the language, why not use language immersion? Why bother even trying to teach them math, science and social studies until they do understand English? Put them in ESL classes until they do understand it, even if that is the full six hours a day. Have them learn basic English and English in context of what they'll be doing in the other subjects. When they are then ready, let them move on, but keep checking back on them and their progress. Anything else just seems like a waste of everyone's time.

May 30, 2012

Providence Retirement Benefit Deal Under Consideration

Carroll Andrew Morse

Lots of detail about a proposed settlement negotiated between Providence Mayor Angel Tavares and the heads of the city's employees' unions is available from WPRI-TV's (CBS 12) Ted Nesi and Tim White, including provisions like this one...

Going forward, pensions will max out based on the same equation as the COLA freeze: either 150% of the state's median household income or the salary of an active police officer or fighter in the same rank at which they retired - whichever is lower.
According to the report, "the proposed agreement will now go to the City Council for approval. It will also be presented to members of Local 1033 and the police and fire unions for votes".

Warwick's Pension Numbers Serve as National Example

Marc Comtois

The local efforts by the Rhode Island Center for Freedom and Prosperity to shine a light on the pension mess have brought national attention:

A locally published interview with a member of the national pension task force, assembled by the RI Center for Freedom & Prosperity, has caused a stir in Warwick, puzzling the Mayor, confusing the local paper, and leading to an online rebuttal. Even the Providence Journal has covered the action.

On May 24, the Warwick Beacon published an article from an interview with Eileen Norcross, senior research fellow and lead researcher on the State and Local Policy Project with the Mercatus Center at George Mason University, attempting to refute her warnings that the City of Warwick is not accurately representing the true scope of the liabilities in its locally administered pension plans.

Norcross published a pie-chart, which she has now updated:

Norcross explains the logic behind her adjustments:
The chart shows Warwick, Rhode Island’s municipal budget (excluding the school budget) carved up according to current costs for funding the town’s pension benefits, Other Post Employment Benefits (OPEB), current employee healthcare costs and General Obligation bond payment. The figures come from official budget documents.

My value-added is that I estimate the additional amount needed to fully fund pensions based on the risk-free discount rate. It’s a ballpark estimate backed into based on the plans’ valuation reports. The actuaries, with access to all the plan data, can model the effect of applying the risk-free rate to plan costs more precisely.

Follow the link to read her entire explanation (and here is another national perspective supporting her analysis from National Review), but here is the root of it:
Public pensions represent a secure, government-guaranteed benefit and are not likely to be defaulted upon. Public pensions should be valued like a government bond. The rate to use is the return on Treasury bonds, currently 2.3 percent.

But what policymakers are worked up over is not the economic principles behind discount rate selection. It’s the practical effect that many politicians and plan sponsors protest, as The New York Times story of yesterday highlights. Lowering the discount rate increases the liability and the amount needed to fund the plan. That has a real impact on the budget, as the Warwick chart shows.

Even if you buy the argument that the 3% figure used by Norcross is too low, it's still fantasy-land to use 7.5% as a basis.

Interesting Times in Rhode Island, May 30

Carroll Andrew Morse

1. The formation of the budget commission requested by the Woonsocket City Council was announced last night by Rhode Island Governor Lincoln Chafee. As is required by the state's "municipal fiscal stabilization" statute, two of the members are the current Mayor (Leo Fontaine) and City Council President (John Ward). Sandy Phaneuf's Valley Breeze article on the appointment of the Budget Commission has some biographical detail on the other three members, Peder Schaffer (current Associate Director of the RI League of Cities and Towns), William Sequino (town manager of East Greenwich since 1988), and Dina Dutremble (former Woonsocket Education Dept. Business manager, who left that position about 10 years before the cost overruns that led to the current budget difficulties occurred); and also Woonsocket Finance Director Thomas Bruce's reaction to the appointments: "Personally, I am delighted...I'm looking forward to working very hard with these individuals". The initial steps taken by the budget commission are likely to be 1) dealing with the supplemental tax increase and 2) accelerating state-aid payments to Woonsocket, which is one of the things that the budget commission can do that the elected government can't -- and one reason why some members of the Woonsocket City Council were willing to support the request for the commission.

Addendum: More detail on other possible impacts of the budget commission is available from Justin's post this morning at the Ocean State Current.

2. The legislature's version of the state budget has been scheduled for a House Finance hearing on Thursday, with the annual marathon floor session expected to happen around June 7. though according to Randal Edgar and Philip Marcelo of the Projo, the final form of several key items is still to be determined...

Members also said key pieces of the governor’s municipal relief package, which would give cities and towns new powers to cut costs, change working conditions and curtail pension expenses, appear to be dead, though other pieces, such as more state oversight of school budgets, may survive.

And they said other budget proposals — such as expanding the sales tax to high-end clothing, raising the cigarette tax from $3.46 to $3.50 per pack and providing some $2 million to $2.6 million over five years to lessen the blow to retirees in Central Falls — still appeared to be in flux.

3. Over at the Ocean State Current, Justin reports that the table-gaming regulation bill was held for further study by the joint House/Senate finance committee that met last night. Despite the fact that this bill has obviously been fast-tracked in the legislature and is receiving a large share of lawmaker attention, Justin makes the case based on the same numbers that the legislature is seeing that the overall impact of adding table games in Rhode Island casinos will be very small compared to the impact of forces beyond the state's control, i.e. what Massachusetts does with casinos. Millions of gallons of water may have already passed underneath this bridge, but the wisdom of the state spending so much effort on trying to directly manage one not-very-productive sector of the economy is very much open to question. Expect this to be one of the major pieces of legislation considered in the flurry of activity the follows passage of the budget.

4. The overriding forward-looking question in the 38 Studios saga is what is the next move for a company with no employees.

May 29, 2012

Coming up in Committee: Thirteen Sets of Bills Scheduled to be Heard by the RI General Assembly, May 29 - May 31

Carroll Andrew Morse

Getting up to speed after the long weekend...

Local Impact: Barrington Bristol, Burrilliville, Cranston, Exeter, for all intents and purposes, Middletown 2, North Kingstown, Pawtucket, Portsmouth, Richmond, Smithfield, South Kingstown, Warren 2, Warwick 2, West Greenwich.

13. H8188: Prohibits RI Resource Recovery Corporation facilities from accepting "any construction and demolition debris" (H Environment and Natural Resources; Tue, May 29). This bill involves the oft-seen pattern of Johnston's State Reps acting like a board of directors for the Resource Recovery Corp.

12. H8207/H8208/H8209/H8210/H8211: $8.55M of bonds for the town of Coventry (H Finance; Tue, May 29). So far, no rumors that any Coventry reps will be offering tearful motions to recommit the bills, if they make it to the House floor.

11. S2792: "Beginning on or before January 1, 2013 each electric distribution company shall, to the extent eligible projects are available and conforming applications are submitted, fund investments in at least twenty megawatts of combined heat and power installations at commercial, institutional or industrial facilities" (S Environment and Agriculture; Wed, May 30).

10. S2962: Ceremonial resolution, asking the Federal government to lift the ban on legalizing sports betting and other forms of wagering in states where it is not currently allowed (like Rhode Island, for instance) (S Special Legislation and Veterans Affairs; Wed, May 30).

9. S2036: From the official description: "This act would allow for shared service administration of OPEB [other post-employment benefit] trusts between municipalities. It would also allow city and town councils and regional school districts to jointly establish a corporation to manage and operate OPEB trust" (S Finance; Tue, May 29).

8. H7950/S2659: Gives city and town solicitors the power to investigate false claims against the state and municipalities, and bring civil actions against the perpetrators (H Judiciary; Wed, May 30).

7. S2553: Government funded "family planning" through "eligibility pursuant to section 1902(a)(10)(A)(ii)(XXI) of the social security act" (Medicaid?) for individuals "whose income is no greater than two-hundred fifty percent (250%) of the federal poverty level" (S Finance; Tue, May 29).

6B. S2887: Various measures to establish "health insurance standards in addition to, but not inconsistent with" Obamacare, including a prohibition on limiting or excluding healthcare coverage based on pre-existing conditions (S Health and Human Services; Tue, May 29).

6A. S2287: Instructs the state health insurance commissioner to phase out the use of fee-for-service medicine in Rhode Island (S Health and Human Services; Tue, May 29).

5. S2361: Detailed procedures for dealing with and possibly altering a patient's "medical order for life sustaining treatment" (MOLST), defined as a "request regarding resuscitative measures that directs a health care provider regarding resuscitative and life sustaining measures" (H Health, Education and Welfare; Wed, May 30).

4. H7859: An attempt to bring independent electioneering expenditures under a campaign-finance regime. Anyone -- including individuals, not just corporations -- who wants to independently spend more than $250 in a calendar year supporting/opposing a candidate for office or a position in a referendum would have to register with the Board of Elections (H Judiciary; Tue, May 29). Also, S2336 extends parts of campaign finance regulation to local financial town meetings & referendums (S Judiciary; Tue, May 29).

3. S2870: Authorization of the East Bay Energy Consortium as a subsidiary of the RI Economic Development Corporation, basically putting the EDC into the wind-farm business (S Environment and Agriculture; Wed, May 30).

2. S3001/H8213: Regulation of casino tables games (assuming the passage of a constitutional amendment allowing them (Joint H & S Finance; Tue, May 29). You can follow Justin's liveblog of the fast-tracked hearing for this bill, at the Ocean State Current.

1. H7323: The budget bill (H Finance; Thu, May 31).

The Current Week 05/21/12 - 05/28/12

Justin Katz


Rhode Island Cities and Towns, Where They Are and Where They've Been, Part 1 - Analysis
The Current's long-running review of population and employment data can lead to better understanding of who is being affected by public policy in Rhode Island and how. Part 1 reviews how the cities and towns compare right now.

Rhode Island Cities and Towns, Where They Are and Where They've Been, Part 2 - Analysis
Part 2 of The Current's long-running review of population and employment data assesses population, employment, and income trends across the cities and towns to develop a sense of how communities are shifting.

Rhode Island Cities and Towns, Where They Are and Where They've Been, Part 3 - Analysis
The final part of this series groups communities by income and population change, finding clear distinctions suggestive of different strategies for moving the state forward.
05/24/12 - House Floor & Judiciary Committee - Liveblog
Justin writes live from the House Floor session and Committee on Judiciary. Woonsocket.  Campaign finance.

052412 - House Floor Debate, S2872 Woonsocket Tax Recommit - Video - Video
Video of Rep. Lisa Baldelli-Hunt moving to recommit S2872, an act authorizing a supplemental tax increase in Woonsocket.

Justin's Case

State in Decline, Employment in RI Cities and Towns: Westerly - Research
Westerly's unemployment rate is better than RI's, but the reason appears to be the willingness or ability of its residents to drop out of the labor force when they aren't working.
Policing for Profit, from Google to the Little Guy - Opinion
An example of civil asset forfeiture in Northern Massachusetts adds punctuation to Justin's concerns about the local forfeiture windfall taken from Google.

Putting the EDC in the Wind Farm Business - Analysis
A quasi-public wind farm proposal is still flying below most Rhode islanders' radar and changing shape from month to month, the latest idea being to make it a subsidiary of the EDC.

In (Partial) Defense of the RI Mainstream Media - Opinion
News media too often goes for the flash, but Justin suggests that the impulse begins with the audience.

Despite DE Status, RI Will at Least Receive $500 Minimum Tax from 38 Studios - Opinion
Despite legally residing in Delaware, 38 Studios will be subject to Rhode Island's $500 minimum corporate tax.
Table Games: A Big Change for a Sliver of Improvement - Analysis
The state government's negotiated take from proposed casino games at Twin River and Newport Grand would provide a sliver of relief from a swath of loss and may not be worth the shift to full-scale casinos.

Memorial Day, 2012: Until the Best of Us - Poem
A Memorial Day reflection in verse.

One Question: Who has benefited from 38 Studios Mess?

Marc Comtois

Curt Schilling's interview with the ProJo is a must read because it provides insight from another angle into the 38 Studios mess. Thus far, to paraphrase what seems to be the current Rhody Conventional Wisdom, Schilling (along with "Caaarcheeeri") made a backroom deal to fleece the state of millions and both have pocketed the dough (somehow, though we haven't found it yet...we will!). The truth is a little more complicated, and quite a few more people were involved.

According to the 38 Studios founder, the State made and then broke promises that would have helped the company get through a tough financial spot. You may or may not believe Schilling regarding "potential" investors who backed out or promises that were made to him by the EDC or others. But his side of the story brings up many worthwhile points to consider and is an important addition to the narrative so far.

Schilling explains that the company needed short-term cash to keep going, so they met with the state and asked for $8.7 million in 2011 film tax credits to tie them over and submitted paperwork to get the credits. Some of the EDC members knew of the plan. Things looked to be moving along, then things got weird:

38 Studios was dealing with Keith Stokes, then-EDC’s executive director, and David Gilden, the EDC’s lawyer. On April 30, Schilling says, the company talked to Stokes about deferring the $1.12-million payment that was due the next day, May 1, and using the money for the May 15 payroll. But the company also said that if the tax credits were issued in time, 38 Studios wouldn’t need the extension.

...The company missed the May 1 payment. As a result, on May 4, the EDC issued a notice that 38 Studios had defaulted on its state loan agreement, making the company ineligible for the film-tax credits that it needed to stay afloat.

Schilling says the company was blindsided by the notice. Under terms of 38 Studio’s original agreement with the state, he says, the company should have had 30 days to address the missed payment before being declared in default.

That touched off frantic negotiations among 38 Studios, the EDC and Chafee. By the end of the following week, the word had begun leaking to reporters. Then, on Monday, May 14, Chafee said publicly that the state was working with 38 Studios to keep the company “solvent.”

...Meanwhile, Schilling says, the EDC’s Stokes and Gilden had agreed to a deal in which 38 Studios would pay the $1.12-million fee and then EDC would facilitate the release of the tax credits, by certifying that 38 Studios was no longer in default.

The night before it was to go through, company director Thomas Zaccagnino says, he learned that the embattled Stokes, who was drawing heavy criticism for the 38 Studios deal, had resigned. Since Stokes had been a point person in talks with 38 Studios, a worried Zaccagnino texted Gilden, “Please tell me that this won’t affect our agreement.”

Responded Gilden: “it will not.”

But the next day, when 38 Studios tried to pay the $1.12 million with money from a tax-credit investor, executives say they found themselves in an embarrassing scene in which Chafee announced that 38 Studios had sent a bad check with insufficient funds.

Richard O. Wester, 38 Studio’s chief financial officer, says he went to the EDC’s offices at 5 p.m. that day with a check. Meanwhile, 38 Studios’ controller was back at the office, waiting for the funds to be wired from the buyer of the tax credits into 38 Studios’ account. When that happened, Wester would receive the green light to give the EDC the check.

But the tax-credit buyer, whom 38 Studios declined to identify, backed out –– because the EDC lawyer Gilden would not provide a state guarantee to the buyer. When Wester learned that, he says, he never handed over the check.

Fifteen minutes later, he says, he saw a news story on The Providence Journal’s website, quoting Chafee’s spokeswoman that the company had given the EDC a bad check.

The next day, Friday, May 18, another tax-credit investor wired the $1.12 million directly to the EDC. But the state did not release the tax credits to 38 Studios, and still hasn’t ––raising doubts about how that investor will ultimately be repaid.

The rest of the story is well known. Schilling is critical of the way Governor Chafee portrayed the situation publicly, especially with the Governor portraying the first game, Reckoning, as a failure as well as how the Governor gave out closely held secrets like the release date of Project Copernicus and the so-called “burn rate” of the money 38 Studios was spending monthly. According to Schilling:
“We made it clear in EDC meetings how damaging it was, what was happening to our company. [My workers] are sitting there, busting their [humps] without a paycheck, we’re grinding through this, and then he’s press-conferencing on a daily basis, saying this company is a failure, our games are a failure, this was a mistake –– over and over and over again.
Schilling believes these comments undermined a potential $35 million deal that would have seen a sequel to "Reckoning" published and another $55 million deal for further financing on Copernicus. Again, believe Schilling or not, but the way the Chafee Administration publicly handled that first missed payment to the EDC is worth examining. Why did they state 38 Studios had defaulted while negotiations were still going on? I keep going back to the question: who has benefited from all of the negatives surrounding this problem? It isn't Schilling or Carcieri, or members of the EDC or the General Assembly or RI taxpayers. No, the only person who benefits--politically--is Governor Chafee.

Chafee has been saying "I told you so" without actually saying "I told you so" since the story broke (instead, he's been saying things like "throwing good money after bad", or that "no criminal wrongdoing [has been found]...yet"). And while it's true that we often ascribe malice and conspiracy to people when ineptitude may be the best explanation, Governor Chafee has shown a sort of passively-aggressive malice in his frequent press availabilities over the last couple weeks. Is it possible he facilitated this crisis? I'm not ready to go that far. But he sure seems to be the sole beneficiary of it. At least, until now.

Woonsocket City Councilors in Their Own Words on the Budget Commission Resolution

Carroll Andrew Morse

Here are the statements made by Woonsocket City Councilors and Mayor Leo Fontaine, prior to the vote to request a budget commission to oversee the city. The summaries with audio clip are my characterization's of each councilor's remarks, from the liveblog written during the meeting...

[7:04] Mayor Leo Fontaine speaks 1st. Recounting the short-term cash-flow problems of the school dept. They should be able to get through one more pay period, with regularly scheduled state aid. After that, the well runs dry...
[7:08] Says Rep. Baldell-Hunt's assertion that a budget commission would be appointed under any circumstance is false...Assertion that false information was given to House and Senate leaders is also false. Mayor Fontaine was taken aback that such a comment was made.
Audio 5m 46 sec
[7:16] Councilman Roger Jalette wants to be made Council President, so he can have the seat on the budget commission, if a budget a commission is appointed.
Audio 2m 15 sec
[7:18] Councilman Daniel Gendron says we're here tonight because of inappropriate actions by our General Assembly. Seven people who live in a city, overseeing a Mayor living in the city should be making these decisions. Not one of them was doing anything different then what they thought was best for this city. That security isn't there, if a budget commission is appointed.
Audio 3m 10 sec
[7:22] Councilman Christopher Beauchamp cites lack of communication as a problem, thinks at least 2 members of the Woonsocket GA delegation didn't really know what was going on.
Audio 1m 19 sec
[7:23] Councilman Robert Moreau agrees with sentiments of Councilmen Gendron and Beauchamp. The City has an obligation to pay its debts to the people who are owed money.
Audio 2m 7 sec
[7:25] Councilman Albert Brien is in total opposition to "any state interference". Says Woonsocket has significant shortages in cash flow, because the school department has been underfunded by $7M..."We have repeatedly asked to negotiate with our unions" wrt the health plan. Nothing has happened. Cites fire overtime issue.
Audio 5m 11 sec
[7:30] He doesn't see a viable, ongoing plan. This supplemental is insufficient to fund current receivables. "There is no concrete plan other than a hope" other than Governor Chafee's municipal plan.
Audio 3m 40 sec
[7:43] Council President John Ward ...without the supplemental tax, Woonsocket's ability to meet its short term needs go away. Budget commission powers to accelerate state funding mimic those of having tax anticipation notes. After that, options are things like not making payroll. "I don't think we should be breaking faith with our employees".
Audio 5m 11 sec
[7:48] He will not step down a Council President to avoid the budget commission...He holds the state responsible for much of Woonsocket's fiscal City Council President, he will continue to look for ways to cut costs.
Audio 4m 54 sec
[7:54] Councilman Brien suggests that the state should ignore the request for a BC, and advance Woonsocket the money to handle its cash flow problem. "We are more qualified" than the state is, to deal with our own problems.
Audio 2m 25 sec
[7:57] Councilman Marc DuBois will support a budget commission.
Audio 55 sec
[7:59] Councilman Gendron says recent tax increases have been fueled by cuts from the state. Now putting the state in charge, after that, doesn't really make sense.
Audio 1m 9 sec
More to come...

May 28, 2012

New York Pension Fund Rate of Return Disappoints: Is It Still Cooking the Books When the ACTUAL Rate of Return Drops?

Monique Chartier

When General Treasurer Gina Raimondo led the way in edging down the projected rate of return for Rhode Island's state pension fund from 8.25% to 7.5% (and tweaking life expectancy assumptions for the system), the President of the Cranston Firefighters Union, Paul Valletta, accused her of cooking the books to create a problem where none existed.

The New York State and Local Retirement System just ended its fiscal year. Don't tell Mr. Valletta but its rate of return, while respectable, failed to meet expectations.

The New York State and Local Retirement System (NYSLRS) closed its most recent fiscal year with a return of just 5.96 percent — well below the 7.5 percent target rate used to discount its long-term liabilities.

So is the entire stock market now participating in the wilful cooking of pension books? Or, more likely, today's New York Times has hit on the explanation.

Few investors are more bullish these days than public pension funds.

While Americans are typically earning less than 1 percent interest on their savings accounts and watching their 401(k) balances yo-yo along with the stock market, most public pension funds are still betting they will earn annual returns of 7 to 8 percent over the long haul, a practice that Mayor Michael R. Bloomberg recently called “indefensible.”

Now public pension funds across the country are facing a painful reckoning. Their projections look increasingly out of touch in today’s low-interest environment, and pressure is mounting to be more realistic.

These words were printed in a newspaper that is not exactly a bastion of conservatism or champion of the taxpayer. Despite that, it is quite possible that "realistic" will remain defined, in some small circles, as "cooking the books".


Carroll Andrew Morse

Fox Point, Providence, Rhode Island, May 26, 2012.

May 27, 2012

Special Meeting of the Woonsocket City Council

Carroll Andrew Morse

Once you start covering one of these civic stories, you have to seem them through, so here am I at tonight's special Sunday night meeting of the Woonsocket City Council, to discuss the aftermath of the General Assembly's tabling of the supplemental tax bill...

[7:02] Meeting called to order.

[7:03] Budget commission resolution is up first.

[7:04] Mayor Fontaine speaks 1st. Recounting the short-term cash-flow problems of the school dept. They should be able to get through one more pay period, with regularly scheduled state aid. After that, the well runs dry.

[7:06] $4.6M debt service payment is due on the city-side of the budget, in early July. General Assembly inaction endangers meeting that.

[7:07] Budget commission powers would enable an acceleration of state aid, that would reduce the short term fiscal stress on the city.

[7:08] Says Rep. Baldell-Hunt's assertion that a budget commission would be appointed under any circumstance is false.

[7:09] Assertion that false information was given to House and Senate leaders is also false. Mayor Fontaine was taken aback that such a comment was made.

[7:10] No state reps in attendance, by the way, as far I can tell.

[7:10] If the council passes the resolution, his office will support it.

[7:11] Councilman Moreau asks the city solicitor if he and councilman DuBois, as former employees, can vote on this resolution.

[7:12] City solicitor says since no specific benefit is specified, there's no conflict of interest to worry about.

[7:16] Councilman Jalette wants to be made Council President, so he can have the seat on the budget commission, if a budget a commission is appointed.

[7:18] Councilman Gendron says we're here tonight because of inappropriate actions by our General Assembly. Seven people who live in a city, overseeing a Mayor living in the city should be making these decisions. Not one of them was doing anything different then what they thought was best for this city. That security isn't there, if a budget commission is appointed.

[7:22] Councilman Beauchamp cites lack of communication as a problem, thinks at least 2 members of the Woonsocket GA delegation didn't really know what was going on.

[7:23] Councilman Moreau agrees with sentiments of Councilmen Gendron and Beauchamp. The City has an obligation to pay its debts to the people who are owed money.

[7:25] Councilman Brien is in total opposition to "any state interference". Says Woonsocket has significant shortages in cash flow, because the school department has been underfunded by $7M.

[7:27] Woonsocket should have known it was facing a fiscal tsunami at least a year ago. The cancer that has been affecting the city's fiscal well being is the police and fire pension fund. Suggests making something a Federal tax issue, to make it potentially sustainable.

[7:29] "We have repeatedly asked to negotiate with our unions" wrt the health plan. Nothing has happened. Cites fire overtime issue.

[7:30] Doesn't see a viable, ongoing plan. This supplemental is insufficient to fund current receivables. "There is no concrete plan other than a hope" other than Governor Chafee's municipal plan.

[7:32] Councilman Brien motions to amend the request for a budget commission, to a request for a receiver

[7:37] Councilman Jalette, I believe, is arguing that this amendment will prevent any supplemental tax, or any tax increase at all.

[7:39] Councilman Gendron asks if the emergency receiver provision of the fiscal stabilization really applies here.

[7:40] Amendment defeated on a voice vote.

[7:43] Council President Ward, back on the original subject. Without the supplemental tax, Woonsocket's ability to meet its short term needs go away. Budget commission powers to accelerate state funding mimic those of having tax anticipation notes. After that, options are things like not making payroll. "I don't think we should be breaking faith with our employees".

[7:45] This resolution is here, so we can get a budget commission to move cash more quickly.

[7:46] Resolution asking for a receiver doesn't obligate the state to do anything. State can declare an emergency at any time, if the state doesn't think there's not an emergency now, passing a resolution doesn't change that.

[7:47] If Woonsocket's GA delegation thinks there's a fiscal emergency justifying a receiver, they think Woonsocket's situation is more dire than the state's Director of revenue does.

[7:48] He will not step down a Council President to avoid the budget commission.

[7:49] He holds the state responsible for much of Woonsocket's fiscal situation.

[7:50] As City Council President, he will continue to look for ways to cut costs.

[7:51] On a budget commission, he would consult with the sitting City Council on all decisions.

[7:52] Part of the duty of a budget commission is to evaluate if a receiver is necessary. BC can do that by a simple majority vote, implication is that the BC is the proper route to receivership.

[7:53] Councilman Brien thinks that neither a budget commission request nor a receiver request is binding on the state.

[7:54] Councilman Brien suggests that the state should ignore the request for a BC, and advance Woonsocket the money to handle its cash flow problem. "We are more qualified" than the state is, to deal with its own problems.

[7:57] Councilman DuBois will support a budget commission.

[7:58] Councilman Jalette thinks that a receiver has an ability to negotiate with unions, that a budget commission or the regular government doesn't.

[7:59] Councilman Gendron says recent tax increases have been fueled by cuts from the state. Now putting the state in charge, after that, doesn't really make sense.

[8:00] Mayor Fontaine rebuts Councilman that receiver has no more power to negotiate than anyone else, save for the power to file for bankruptcy.

[8:02] Addressing Councilman Brien about school dept. funding: The agreed upon school budget had appropriate funding to meet its need, according to a doucmented performance audit.

[8:06] Advances the argument that the loss of state aid necessitates replacement, and "it's a little ironic" that it's the state that controls Woonsocket's future.

[8:07] If the state delegation really wanted to help Woonsocket, they should have accelerated the funding formula.

[8:08] The new funding formula also touched on pension funding issues, that have worked to Woonsocket's detriment.

[8:09] Once Woonsocket was an engine for the economy. When manufacturing was driven out of state and out of the country, Woonsocket's affordable housing became a magnet for people with large human services needs. That's an imbalance that needs to be corrected.

[8:10] Vote on the resolution calling for a the appointment of a budget commission.

[8:11] Resolution approved 5-2, Brien and Jalette against.

[8:13] Motion to adjourn. Accepted.

May 26, 2012

(Lack of) Monitoring - What Happened to IBM's Monitoring Reports Once They Hit the EDC?

Monique Chartier

First of all, I agree with the leap-off point of Travis Rowley's column this week: vilification of Kurt Schilling is completely misdirected.

Responsibility for the 38 Studios mess - "mess" as in, who is to blame that taxpayers will probably end up paying $90-100 million hard earned dollars with nothing to show for it - does not rest with Kurt Schilling but with our then-elected officials (G.A. leadership and the Governor; not rank-and-file legislators). Kurt Schilling - and any other businessperson - was perfectly within his rights to come to Rhode Island for a loan guarantee. It was up to us to properly evaluate and then either approve or reject the request. It is not Kurt's fault that our elected officials apparently failed to carry out - or disregarded the results of - due diligence on our behalf.

So state officials failed miserably on advance due diligence. What about diligence and monitoring once the project was underway? From the AP.

The EDC and 38 Studios signed a monitoring agreement in November 2010 under which IBM would provide 38 Studios with an initial assessment of "Project Copernicus" — the development of the company's second game — and quarterly "milestone verification" reports, according to a copy of the agreement.

The initial assessment was to include a review of project plans, financials and financial management as well as an analysis of risks and recommendations on how to mitigate them. Subsequent reports would essentially be progress checks, which IBM suggested would include a review of the project's financial status and a list of results "relevant to Rhode Island's interests."

The agreement said 38 Studios would provide to the EDC copies of all materials prepared by IBM and invite EDC to attend all discussions between 38 Studios and IBM.

But in August, the EDC and 38 Studios signed a "modification and waiver" to the agreement saying that, instead of being provided with IBM's actual reports, the economic agency would agree to briefings from IBM on the findings. This came at the request of 38 Studios.

Observers have pointed out that Governor Chafee has been restrained in not crowing about the failure of a tax-payer backed arrangement which he so vigorously opposed. He has been wise to do so and not just for the sake of decorum but because two of the major questions that have emerged from this mess pertain to his administration:

1.) Who in Governor Chafee's EDC agreed to with 38 Studios' request that IBM switch from written to verbal reports and why did they do so?

2.) What happened to that information once it reached the EDC? Who at the EDC was receiving those reports, written and subsequently verbal? Did those reports contain information that foreshadowed the events of the last two weeks?

May 25, 2012

And Just When You Thought Things Couldn't Get Any Dumber

Carroll Andrew Morse

The Woonsocket Legislative Brain Trust (Jon Brien, Robert Phillips, Lisa-Susan Menard-Baldelli-Hunt) has submitted this wonderful piece of legislation to the Rhode Island General Assembly, apparently as an alternative to the supplemental tax proposed by the Woonsocket City Council...

45-21-67. Application of pension funds to reduce tax levy. – Any city or town, or any municipal agency which controls, or has control of, through a selected financial institution acting as custodian, any municipal pension fund may, in its discretion and notwithstanding the provisions of any general law or municipal charter to the contrary, apply the pension funds or a portion thereof, or direct the custodian to apply the pension funds or a portion thereof, to reduce the overall tax levy of the municipality.
That's the whole bill. It is not an authorization for emergency borrowing to cover a short-term cash flow problem, as was discussed by the City Council on Monday. It authorizes the "application" of money from a pension fund, to provide a one-time property tax fix, with future consequences (probably including lawsuits) not really well-specified.

What's doubly amazing about this bill is that it comes from a group of Representatives who have been demanding a state-appointed budget commission or receiver for Woonsocket. But does anyone think that state appointed officials, once in charge of a city, are going to say "I know, let's take money from the pension fund, and use it to lower taxes this year"?

There is a maxim of intelligence analysis that says you should never assume malice when incompetence provides an explanation. Watching the Rhode Island legislature makes one wonder "why choose?" -- and folks inclined to view the RI House's refusal to support a supplemental tax for Woonsocket as an act of fiscal conservatism (you're wrong) need to think long and hard about the kind of idiocy they're willing to enable, by supporting the General Assembly's imposition of its kick-the-can-down-the-road ineptness upon municipal governments willing to do something a little different and a little smarter.

May 24, 2012

Rep Baldelli-Hunt Has Not Saved Woonsocket From a Sharp Property Tax Increase

Monique Chartier

An alert Andrew noticed this.

[Woonsocket] Taxpayers won't be getting that supplemental tax bill after all.

At the urging of state Rep. Lisa Baldelli-Hunt on Thursday afternoon, the bill was recommitted to committee, essentially killing it.

Her reasoning?

An emotional Baldelli-Hunt, a Democrat who represents Woonsocket, told House members that Mayor Leo Fontaine had not given the House Committee on Finance all the facts about Woonsocket's financial future when he testified earlier this week. She had offered weak support for the bill at that hearing but says she changed her mind after meeting with members of the governor's staff.

"Imposing this tax would be disastrous for our struggling city, disastrous for our struggling citizens and a clear indication that this chamber has lost its way," she said.

Justin, who just finished live-blogging from the State House, reported on this particular vote starting at 5:29 pm.

Let me be clear that I don't support property tax increases, either generally or in this circumstance. That's not the issue. The problem is that Rep Lisa Baldelli-Hunt (D-Woonsocket) is under the impression that she has accomplished something by addressing only the revenue side of Woonsocket's financial convulsions. But what about the expense side? To cite just one item in that column, there's the $4.7 million in step increases built into the city's 2010-2013 teacher contract which Justin highlighted on Ocean State Current.

Again, the point here is not to criticize teachers. It is my understanding that teacher pay in Woonsocket ranks at the bottom 20% statewide.

The question is, as Rep Baldelli-Hunt has not suggested abating this or any other budgetary expense nor is she permitting the city to augment a revenue stream, how does she propose that the city honor this contract and meet all of its other obligations?

The response might be that it is not her job to do that. No, it's not. Now, with the vote by the House denying the supplemental tax and the almost simultaneous downgrade by Moodys, neither will it be the rightful job of the Council and Mayor. Almost certain, a Budget Commission - the second step towards a Receivership - will now take control of the city's finances.

Neither of those authorities will be shy about asking for a supplemental tax. And a Receiver won't even need to go to the General Assembly for authority.

Was that perhaps the point all along? In his live-blogging coverage just now, Justin reported the following eye-opening item, with "she" being Rep Baldelli-Hunt and the bill being the Woonsocket supplemental tax.

With tears in her voice and talk about her “political demise,” she made a motion to recommit.

Probably as early as tomorrow morning, it will be clear that Rep Baldelli-Hunt did not forfend a property tax increase for the people of Woonsocket, she only shifted the responsibility for it to another party. It appears that another unintended consequence of the state's new receivership law has been to convey to our elected officials the power to pass the buck.


In Friday's Woonsocket Call, Jim Baron supplies amplified coverage.

“Imposing a 13 percent tax at this time,” Baldelli-Hunt said, “would be disastrous for our struggling community, our struggling constituents and a clear indication that this chamber has lost its way.”

Starting to tear up, she continued: “If my actions today result in my eventual political demise, at least I know that, in the end, I had the best interests of my city, and my constituents at heart.”

Interviewed after the session, Baldelli-Hunt said, “We said we were going to vote for it (in the finance committee), but we wanted a hard copy plan in place and we wanted a resolution in support of House Bill 8040 answering the questions we have asked all along: how did this happen and who is responsible? To this day we still do not have the resolution in support of that and our constituents deserve the answers to those two questions.”

Asked if she is happy with the outcome, Baldelli-Hunt responded, “Who could be happy at this time about anything that is happening in our city. It is not a matter of winning or losing.”


Over at Ocean State Current, Justin has posted the video he took of the floor action on this bill.

Breaking - Moody's Downgrades Woonsocket Bonds

Monique Chartier

Andrew points to the Valley Breeze report that the House has killed the 13% property tax increase requested by the city. Now Woonsocket Council President John Ward has just shared the following. (It appears not to have yet hit any news outlet.) [Addendum: This report was provided by Moody's Investment Service to its subscribers.]

Moody's downgrades Woonsocket's (RI) general obligation rating to B2 from Ba2, remains under review for downgrade

Downgrade of rating applies to $225 million in long-term debt


NEW YORK, May 24, 2012 -- Moody's Investors Service has downgraded the City of Woonsocket's (RI) underlying general obligation rating to B2 from Ba2, affecting $225 million in long-term debt; the rating remains under review for downgrade. At this time, Moody's has also downgraded the underlying rating on the Rhode Island Health and Education Building Corporation Bond Issue, Series
2009E to B2 from Ba2, for which the city is the sole obligor; the rating remains under review for possible downgarde. All outstanding debt is secured by the city's general obligation, unlimited tax pledge.


The downgrade to B2 reflects the continued deterioration of the city's school operating financial position and severely liquidity position, despite the recent issuance of deficit bonds.

The rating remains under review for downgrade, reflecting the city's near-term credit stress due to a continued deficit in the School Fund, reliance on the implementation of a proposed supplemental tax levy necessary to the successful placement of a tax anticipation note, and ongoing underfunding of the locally administered pension plan.

Edit - The balance of this post has been deleted at the request of a representative of Moody's Investor Service who said, in part,

While we make our full reports available to the media on a per-request basis we ask that they do not post the entire report online as they are for subscribers only.


Carroll Andrew Morse

From Erika Niedowski of the Associated Press: "38 Studios lays off entire staff".

From a staff report from the Valley Breeze: "Woonsocket tax bill killed by full House".

East Greenwich Looks to Stay on Top

Marc Comtois

Yes, East Greenwich has economic advantages that Central Falls doesn't have. It also has parents, teachers and a community that is involved in the school. These are all reasons for why East Greenwich High School has been ranked as the best high school in the state and one of the top schools in the nation. But, over and above all that, it is a willingness to continue to push boundaries and have a dialogue about re-shaping what it means to have an education.

During the second “Excellence in Education” forum held on Monday, School Superintendent Dr. Victor Mercurio told a group of about 25 residents that the state’s minimum requirements for a 180-day school year and 330 minutes of instruction per school day may inhibit student performance and teaching efficiency.

Mercurio said the School Department is exploring several alternative plans for creating a year-round academic schedule including the use of a four-day school week.

According to Mercurio, other school districts that have shortened their school weeks in an effort to reduce spending witnessed beneficial results relating to student achievement....In addition to a year-round schedule, Mercurio said the department is also examining the use of longer school days and alternative methods of instruction, such as digital devices and social media.

“The bricks and mortar part of school is no longer the essential piece of the relationship between a teacher and a student,” he said.

The idea of "flipping the classroom" (mentioned here before) was also discussed:
...[Assistant School Superintendent Paula] Dillon said other districts have found success by “flipping the classroom,” which essentially means that students use digital devices to experience the lecturing part of their coursework while at home. They then go to school to work hands-on with teachers for problem solving and review work. The educational model is the opposite of how most districts operate with teachers lecturing during the school day, and students working on the subject matter at home, she said.
The overall goal is to make actual instructional hours more efficient and effective. It sounds like it was an interesting and worthwhile dialogue, but it's really just shooting the breeze until it is actually put into effect.

The [Sheldon] Whitehouse Standard

Marc Comtois

David Scharfenberg points to an interview that Senator Sheldon Whitehouse did with ThinkProgress in which he claims the five Supreme Court justices who ruled against Whitehouse's preference on Citizens United shouldn't have even been allowed to rule because they didn't have the right experience to judge:

Unfortunately you had the five right-wing judges, none of whom have ever run for any office ever and have zero political experience between the five of them, offering opinions about what money can do in elections...The President asked me who I thought, you know, what were the characteristics of somebody that should be appointed to the Court, and I said I think it should be somebody who has some actual political experience out there so that they are not operating in this political arena with absolutely no knowledge. Even if they wanted to come to the result that Citizens United came to, I think those judges would have had a hard time getting there if they’d had actual practical political experience because they would have known what a preposterous finding they were making.
What a facile viewpoint (and I'm pretty sure that none of the 4 liberal judges meet the Whitehouse standard, either). Well, if that is the new standard by which we're supposed to adjudicate, or legislate, then I can think of any number of things that Senator Whitehouse should stay away from. So I guess we should expect him to refrain from speaking or offering legislation on anything but silver spoons and tort reform from here on out.

May 23, 2012

The Blame Game and Sowing Seeds in Woonsocket

Patrick Laverty

There's lots going on up there in Woonsocket, lots of worrying and lots of shortages on paying the bills. But why? Clearly if a town is in financial trouble, it means the Mayor hasn't been doing his job, right? He's the chief executive in the city, so that's where the buck should stop.

When you dig a little deeper though, it's easy to see that Mayor Leo Fontaine had very little, if anything, to do with the issues in Woonsocket.

The first thing that people need to understand is that the financial shortfalls that Woonsocket is experiencing are not on the municipal side, they are completely in the school department. The next thing to know is that the School Committee is independently elected, they are the ones that hire the school superintendent and the business manager. None of these report to the mayor.

Next, let's take a quick look at the school department's finances. 75% of the school's funds come from the state. As part of budget cuts over the last few years, suggested by Gov. Carcieri and passed in the budget by the General Assembly, Woonsocket received less funding. Plus, in recent years, the school department was using American Reinvestment and Recovery Act (ARRA) funds to pay for positions. That too has dried up. Additionally, the previous superintendent and business manager approved spending that exceeded their budget, by millions of dollars. Making things worse, these expenditures were not even reported to the city's School Committee for approval.

So here we have an out of control school department with little to no oversight overspending their budget by millions of dollars. It can't get much worse. Actually, it can.

So why not just cut the extra spending and increase taxes to make up the difference. Simple right? No, not so much. The state's General Assembly has also enacted a cap on how much the property tax levy can be increased and for the city to make up the difference would exceed the cap. Additonally, the General Assembly has passed a law that states cities cannot spend less on their schools than they did in a previous year, so now they're locked into that extra spending each year, even though it wasn't budgeted and the city doesn't actually have the money to cover it. Additionally, the city's leaders have asked for help with the school funding from the General Assembly and haven't gotten the results they needed.

After meeting with municipal leaders, even Governor Chafee stated that a Budget Commission wouldn't help anything here because they're already doing all they can do to help themselves. Then to make things worse, we have General Assembly members from Woonsocket (Sen. Cote, Reps. Brien, Baldelli-Hunt and Phillips) stating that they'd prefer to put the city into receivership. Why? What have we seen that a receiver could fix? The problem isn't bad contracts, the problem isn't unsustainable pensions. The problem is the school department greatly overspent their budget and the Assembly and Board of Regents hasn't lifted any of the mandates on the city. They haven't been given the "tools" to help themselves.

Even the mere mention of bringing a receiver to the city is a severe black eye and likely a political death knell for the mayor. So should we ask why those four Democrats want a receiver? Especially when one of them, Rep. Lisa Baldelli-Hunt, has been rumored to be interested in the city mayor's job, replacing the Republican Leo Fontaine.

Although the mayor is not tasked with overseeing the school department, is the strategy to muddy the waters with talk of a receiver and then swoop in on election day? I guess in politics, anything is possible.

May 22, 2012

Warwick Police & Fire Pensions Only 22% Funded

Monique Chartier

... according to actuary results released a couple of hours ago by Councilman Joseph Solomon.

According to the city’s professional actuaries, Warwick’s largest pension plan is just 22.3 percent funded and, as of June 30, 2011, had a staggering liability of $242,127,650.

Police and Fire I is not the city’s only pension plan, but it is by far the largest pension plan in the city. The other three pension plans are relatively well-funded, but when liabilities and assets are combined with Police and Fire I, the city’s four pension plans are average funded at just 51.2 percent.

Not sure what the councilman means by this allusion to the governor.

“Like many of our neighbors, we in the city of Warwick face some serious liabilities. Time is running out. Warwick city leaders need to stop downplaying our significant financial challenges and start getting behind solutions,” said Solomon, an accountant and lawyer.

Solomon continued: “I would hate to think Governor Chafee was misled. I will continue to deliver the truth about Warwick’s financial condition as information becomes available to me from our actuaries and CPA auditors—even though it may not be pleasant.”

Cicilline Campaign Engaging in Video Intimidation?

Monique Chartier

Isn't this charming.

On May 12, I attended the grand opening of First District congressional candidate Bren-dan Doherty’s campaign office in East Providence. It was a well-attended event that inspired the crowd gathered to show support for Mr. Doherty and his positive message.

As the event ended, campaign supporters, volunteers and friends of the candidate filed out of the building and onto the street, where they were met by a young man with a video camera pointed toward the exit of the building. With the video camera mounted on a tripod approximately 15 to 20 feet from the doorway, and the cameraman leaning cross-armed against a telephone pole next to it, supporters of Mr. Doherty had little choice but to have their images captured as they left the event. After the last few attendees exited, the cameraman packed up his tripod and drove off in a car prominently displaying a “Cicilline for Congress” bumper sticker.

Since that day, I have been consumed with questions. For what purpose will those images be used? Who will be reviewing the videotape? Have I made someone’s “enemies list”? Will our respective businesses be blacklisted from participating in government contracts? Will U.S. Rep. David Cicilline (D.-R.I.) now expand his tracking to supporters and their families? ...

Tara Pinsky Providence
The writer is chairwoman of the Providence Republican Committee.

(Thanks to the Providence Journal for printing this letter.)

Ms. Pinsky raises some excellent questions, especially the one about blacklisting businesses from gov't contracts. Oh, perhaps not so much on the federal level. But certainly on the state level. All the congressman or his staff have to do is quietly pass the word back to Rhode Island. Funnelling business to the "right" (not necessarily the best or the most competent or the most competitive) companies is second nature for the RI Democrat party which, of course, also controls the General Assembly and its budget.

Video-taping his opponent's supporters borders on thug behavior. How desperately does David Cicilline want to win re-election?

Mayor Fontaine on Tabling the Request for a Budget Commission

Carroll Andrew Morse

After the Woonsocket City Council voted to approve a motion tabling a resolution requesting that the state to create a budget commission for the city, until after the House Finance Committee votes on the supplemental tax, I asked Mayor Leo Fontaine for his reaction...

Anchor Rising: Tonight, the City Council voted to table the resolution regarding a request for a budget commission, which is tied intimately to the vote on the supplemental tax that will be taken by the General Assembly on Tuesday. What is your reaction to the City Council's action?
Woonsocket Mayor Leo Fontaine: Clearly, I think it recognizes the importance of the circumstances that we find ourselves in and the importance of the vote at the General Assembly. Right now, we're dealing with the fact that the school department overdrew their accounts, just this past there's a real urgent need for us to move forward right now, and this passage at the General Assembly is critical. That's why the Council has kept this on the table for another vote in the near future, so that if the General Assembly either delays this yet again or denies it, then we would be in the position to move forward...
Audio 44 sec
AR: And in your opinion, what's the best path forward for Woonsocket?
LF: Well, I would have liked to have seen the legislation passed through the General Assembly before now. Our initial deadline had been the 15th...and if it had been passed by then, we would have been in the position where the school department would have had the money. They wouldn't have overdrawn the account or had to borrow from us. I'm hopeful that we'll be able to keep ourselves moving forward with the supplemental and continuing on with our plan.
Audio 34 sec

"The Governor Literally Walked out of the Meeting and Said We Don't Need a Budget Commission There, They Are Doing All the Things that a Budget Commission Would Do"

Carroll Andrew Morse

In a brief interview immediately following last night's Woonsocket City Council meeting where the Council had voted to table a resolution asking the state to appoint a "budget commission" to deal with the city's finances, Council President John Ward discussed how city officials have already been working with the state to do just about everything in the short term that a budget commission could do, and the direction that Woonsocket needs to move in the long term in order to deal with its fiscal situation ...

Woonsocket City Council President John Ward: Myself, [Finance Director Thomas Bruce] and the Mayor went to this meeting with Rosemary Booth Gallogly and Dennis Hoyle and the Governor's staff...we had a lengthy discussion, with the Governor in the room, talking about all of the things the city is doing...we charge $96 a year for trash collection...we've turned off 1/3 of the city's street lights, because we can't afford the $70,000...we have no parks and recreation programs, because they've all been cut...we have no capital spending, that's been going on for years and years...
Audio 1m 20 sec was at the tail end of the meeting, as the Governor had to leave, and he simply got up and he said to Rosemary, I understand why they don't need a budget commission in that city, because they're doing everything that a budget commission would do in terms of cutting costs and in terms of trying to rein in spending...
Audio 1m 56 sec
If we do the supplemental tax bill and the Governor's budget is approved for education aid, we are probably not anywhere near a position that somebody would come in and say we're unmanageable and we need a receivership and a bankruptcy...we have to develop strategies that will improve our tax base and bring our commercial rate down...
Audio 1m 36 sec
We've sort of been upset by this delaying of the process, as though we don't know what we're doing when, in fact, we have very limited ability to maneuver, but with what we have, we've done everything we can to work with the people in the state administration -- who would be the people that would be managing a budget commission anyway. And by working together with the school committee and the Mayor's office and the council and Rosemary, we are doing a budget commission's work... Audio 48 sec

May 21, 2012

"A Fast Infusion Of Jobs"

Patrick Laverty

One thing has stuck out to me recently in a couple articles I've read. One article is a couple years old and the other appeared just this past weekend and I think they both make logical mistakes. They both talk about getting Rhode Islanders back to work, yet both are also in fields that I wonder how many new hires are being plucked from the unemployment lines and how many are being taken either from other companies or moved from one project to another.

During the past week, in trying to figure out all this 38 Studios stuff, Ted Nesi sent me an article he wrote in 2010 when the deal was first being done. One part that stuck out to me was this:

Robert Stolzman, a lawyer for the EDC, said last week. "We wanted a fast infusion of jobs in Rhode Island." The number of unemployed Rhode Islanders was 67,500 in August and the jobless rate was 11.8 percent, the R.I. Department of Labor and Training said Friday.
However, these aren't the type that someone routinely can pick up after filling out a simple application:
Each of those jobs must pay at least $67,500 a year plus benefits under state law.
That's no small salary here in RI, even for a game developer. I have to believe that in order to really qualify for that kind of salary, we're dealing with some fairly well-qualified individuals. One thing that I'd like to see in 38 Studios' hiring data (but I'm 99.9% certain will never see the light of day) is how many of their hires were plucked from the Rhode Island unemployment lines. Isn't Mr. Stolzman at least implying the point of the EDC's deal with 38 Studios is to hire unemployed Rhode Islanders? When you have tens of thousands of people out of work, hiring up to about 300 people isn't going to put much of a dent in the unemployment numbers, but if you aren't pulling people off the unemployment lines, it sure isn't going to help those numbers either. How many of the new hires were pulled away from other local companies or even people who relocated from other parts of the country? Wouldn't that be good information to have to see that the intent of this deal with the state was being followed?

Then this weekend in another Op Ed to the Providence Journal, David Cicilline wrote:

In addition, the House Republican budget calls for deep cuts in highway funding, reducing transportation spending by at least 25 percent over 10 years. It slashes much-needed infrastructure investments that would put thousands of Rhode Islanders back to work.
I have no doubt that there are unemployed construction workers. Some of my neighbors are in the construction industry, I hear their stories all the time. However, if there was more funding given to highway projects, what are the odds that it would be given to the unemployed? Or would it be given to one of the usual, big-name construction companies that we always see by the side of the road? Would they be taking people off the unemployment line too or would they simply finish one job and move their people on to the next job? Just like when PolitiFact gave Sheldon Whitehouse a "False" rating for fudging his numbers when it came to putting people back to work, I see much of Cicilline's rhetoric in the same way. If we started handing out highway contracts, how many people would it pull off the unemployment lines and not just how many people would be employed. In spite of Senator Whitehouse's math, one guy working a job this week and working a job next week is still just one job.

To me, getting people back to work is and should be the number one issue going forward. When people are working, lots of other problems seem to disappear (a pessimist might say it merely hides the structural issues). Getting people off the actual employment lines should be the top priority for everyone running for and already in office.

Woonsocket City Council Meeting, May 21

Carroll Andrew Morse

Good evening, from the city of Woonsocket, where I will be liveblogging tonight's Woonsocket City Council meeting that includes an agenda item requesting that the state appoint a budget commission for the city.

[6:56] Official start time of the meeting is 7:00.

[7:01] Meeting called to order.

[7:04] Public comment portion of the meeting. On the order of 40 people in the room,

[7:07] Speaker compliments Mayor Fontaine on how he has represented Woonsocket with regards to the cross issue.

[7:10] Speaker asks Council President John Ward and Mayor Leo Fontaine to recuse themselves from the budget commission, to get an outside perspective. Mayor Fontaine responds, the budget commission is specifically designed to incorporate both local and outside perspectives.

[7:15] Speaker would like to know exactly how much money is missing from the school department. Mayor Fontaine answers $10M, about $2.7 from last year and the balance from this year, and the money isn't "missing" -- it was overspent.

[7:17] Speaker, at a Woonsocket City Council meeting for the 1st time, says a $10M deficit from the budget means $10M has to be cut, and he'd like to learn how to be involved with city government to help with the problems.

[7:20] The council is moving through appointments and licensing and other local governance issues.

[7:25] Here is the agenda for the meeting.

[7:33] Deliberating a petition from a Woonsocket resident regarding road repairs.

[7:38] Council President Ward wants to know when the last time Woonsocket spent $$$ on a capital item called "street repair". He can't remember one, nor does he know of any ongoing program for street repairs. How do streets to get repaired actually get picked?

[7:42] Council President Ward reinforces the point that the city can't give residents an honest answer on when their streets will be repaired, if there isn't some kind of systematic program for doing so. "We don't make any provision in our budget every year to take care of roads".

[7:44] Mayor Fontaine responds: As the urbans are pushed further and further to the bottom, these are the kinds of things that get left out.

[7:49] Some more discussion; Council votes to put the communication on file.

[7:54] Into the "Good and Welfare" portion of the agenda. Councilman Gendron is discussing various issues with the city officials in attendance.

[7:58] Councilman Jalette would like to know if there are any updates on two employees caught taking money from the city. City official answers that the matter is proceding through the courts. Then a question about non-utilization tax, regarding foreclosed properties. City official suggests a work session on the issue.

[8:03] Councilman Moreau asks the Fire Chief about the number of openings in the Fire Department. Answer is 9.

[8:07] Council President Ward says that the City Council cannot request a receiver under the fiscal stabilization law, they can only request a budget commission, and he wants the Woonsocket General Assembly delegation to know that they can't legally (or otherwise) make a request for a receiver a condition of approving the supplemental tax increase.

It's pretty obvious that Ward is going to hold the state to the letter of the law on this.

Describes having to request a "budget commission" as an unfortunate position to be in.

[8:11] Council President Ward suggests this City Council can pass ordinances that impact retiree benefits, just like the Providence City Council can.

[8:13] Ward hopes GA won't mess up supplemental tax with bill with unnecessary amendments. Singles out an amendment from Rep. Phillips he's heard about as especially bad.

[8:24] Councilman Brien (not Jon or Todd) says that school department spent $66M, as in past years, when they were only given $59M. I'm not quite following him, except I'm sure he's blaming a consultant for the problem. Brien says there wasn't a problem with overspending, there was a problem with underfunding.

[8:25] Councilman Brien (not Jon or Todd) wants to take money from the city pension fund, and use it to close the budget deficit. City official is trying to explain, as nicely as possible, no one in their right mind will let the City do that.

[8:30] Brien sticks to his point; borrowing from the pension fund is something that should be kept in mind if all else fails.

[8:33] Councilman DuBois asks about money remaining in the snow removal budget. City official answers about $250K. Councilman DuBois suggests putting that money towards road repairs. City official responds that it's important that any surplusses stay intact within the general fund.

[8:36] Motion from Councilman Gendron to consider the budget commission item immediately.

[8:36] Approved.

[8:37] Councilman Gendron will make a motion to table the request for a budget commission until a special meeting on Thursday.

[8:38] Councilman Beauchamp supports tabling the request.

[8:41] Councilman DuBois supports tabling, would have voted no, doesn't think a budget commission vote should precede the GA acitons tomorrow (almost all of the Councilmen who have spoken have made that point).

[8:42] Councilman Ward asks City official if muni budget info has been shared with members of the General Assembly. City officials answers leadership, finance committees, and the Woonsocket delegations have been provided copies of the budget. 26 copies in total distributed.

[8:47] Councilman Brien will vote no on tabling, would have voted no on the resolution.

[8:48] Councilman Gendron makes motion to table the resolution requesting a budget commission. Motion to table approved. No request for a budget commission tonight

[8:52] Councilman Brien was the only vote against.

[8:59] Back to the original agenda. Signing off of the liveblog; I will try and get a few reactions after the meeting is over.

38 Studios: Why Wasn't the Result of the EDC's 2010 Risk Assessment Properly Circulated?

Monique Chartier

A fascinating and eye-opening article by Mike Stanton in yesterday's Providence Journal describes how, to paraphrase Stanton, the state jumped into the game business.

We learn, for example, that the decision to provide 38 Studios with a $75 million loan guarantee from the taxpayers of the state was definitely a joint one reached by then-Governor Carcieri and legislative leaders,

One week later, the new executive director of Rhode Island’s Economic Development Corporation, Keith Stokes, said that both Carcieri and Fox, the House speaker, told him in separate conversations that he should meet Schilling.

On March 16, Stokes and Fox met Schilling and 38 Studios director Tom Zaccagnino at the downtown Providence law office of Michael Corso, a friend and campaign supporter of Fox’s who was working with 38 Studios, sold tax credits, and had helped rewrite Rhode Island’s historic-preservation tax credit law

and not a solo venture by the Executive Branch. [Note to Pat from Cumberland who called the Helen Glover Show this morning and tried to pin responsibility exclusively on Carcieri and the Republicans: HA! Repubs only WISH they had that kind of power.]

We also learn from Stanton that IBM was hired as the third party monitor. But now, IBM

has declined to provide The Journal with any details of the agreement. When the newspaper asked for copies of IBM’s written reports, the EDC said there are no written reports, just verbal updates.

No written reports by the third party monitor: was that to facilitate deniability for our officials should it be needed down the road?

Perhaps the most troubling item that emerges from Stanton's article, however, is that something went seriously wrong with the communication of the results of EDC's risk assessment, which did not come back entirely rosy.

Meanwhile, analysts hired by the EDC rushed to assess the viability of 38 Studios, and warned of the high risks of an unproven company in a competitive market. 38 Studios’ attempts to develop a massively multiplayer game, one analyst wrote, “is analogous to an ‘all in’ hand in poker.”

Now the question is, who was aware of these conclusions and why did they remain silent? Certainly the EDC had to be aware. Yet it appears that then-Executive Director Keith Stokes actually implied the opposite.

Responding to criticism from Democratic Rep. Charlene Lima of Cranston, Stokes wrote her that the EDC has gone to “great lengths to safeguard Rhode Island taxpayers.” ...

Stokes said the deal had been carefully vetted by the EDC board, which included Rhode Island’s “top business, labor, higher education and civic leaders,” and that a “lengthy and comprehensive due diligence” had concluded that 38 Studios was “a sound company in a high-growth interactive entertainment market projected to reach $124 billion by 2013.”

Was Governor Carcieri aware? Had then-Speaker Fox been apprised of these troubling conclusions about the risk of the loan guarantee to 38 Studios?

How about House Finance Chair Steven Costantino? If he wasn't aware that a risk assessment had been undertaken or the results, why was he making representations as though he were in the know?

Costantino countered that defaults were rare. The EDC, he said, “has been very, very successful in reducing the risk to the state…. They go through a very intense risk assessment.”

In GoLocalProv today, former Rep John Loughlin describes the 38 Studios loan guarantee as a

pie-in-the-sky, Hail Mary deal

But the EDC's risk assessment provided specific information at the time that this might be the case. The critical question is, who had this information and failed to disseminate it, thereby preventing a properly informed decision from being made about the $100+ million tax dollars at stake?

Coming up in Committee: Ten Sets of Bills Scheduled to be Heard by the RI General Assembly, May 22 - May 24

Carroll Andrew Morse

Local Impact: Coventry, Cumberland, Foster 2, North Kingstown, Richmond 2 3, Smithfield, Warwick.

10. H7866: A package of zoning law changes, including a cap on the minimum allowed size for buildable lots, an exclusion on considering slope as a development potential criteria, and the addition of "protecting natural resources and promoting efficient use of land" to the list of factors to be taken into account in zoning ordinances (H Municipal Government; Thu, May 24).

9. H7136: "Notwithstanding any law to the contrary, a foreclosing owner shall not evict a tenant except just for just cause or unless a binding purchase and sale agreement has been executed for a bona fide third party to purchase the housing accommodation from a foreclosing owner and the foreclosing owner has disclosed to the third-party purchaser that said purchaser may be responsible for evicting the current occupants of the housing accommodation after the sale occurs" (H Judiciary; Tue, May 22).

8. S2712: Extensive new regulations on quasi-public corporations. In addition to mandating that public corporation board members must do things like "understand operational decisions" of their corporations, this bill also requires the establishment of executive compensation and governance committees by quasi-publics... (S Finance; Tue, May 22) ...but the best part is the new section 42-155-4(3) of the law, which would the extend to quasi-public corporations the code of ethics that the legislature refuses to accept for itself!

7. H7359: Allows out-of-state businesses to operate in RI during a declared disaster without being immediately treated, for purposes of taxation and regulation, as having opened a branch office in RI (H Corporations; Wed, May 23).

6. H8024: Charges the Economic Development Corporation with reviewing all state regulations (within 4 years) for their impact on small business. One criteria to be examined, new to Rhode Island law, is whether "the benefit conferred by the regulation is outweighed by the cost" (H Small Business; Tue, May 22). On the one hand, this might be a better mission for the EDC than making dubious loan guarantee deals. On the other hand, if this becomes a core mission of the EDC, it might make sense to pull it directly into the executive branch. Then again, it may make sense to end the EDC's debt-issuing powers and pull it into the executive branch in any event.

5. H7283: Replaces a 5-section/7-subsection part of the law prohibiting for-profit "corporations, subsidiaries, or affiliates" from applying to "convert" more than 1 hospital in a 3-year period, with 1 section (sans subsections) expressly stating that for-profits can apply to "convert" more than one hospital per year (H Corporations; Thu, May 24).

4. H8143: Allows "any elected Rhode Island state or municipal official" to designate "a structure, sculpture, inscription, or icon, or similar item" on public property and meeting certain other criteria as a "category one memorial item", and explicitly states that such a designation is not an attempt to establish a religion (H Judiciary; Thu, May 24). I don't think the courts will care about the category one designation in their decision making. However, the bill also makes it a state responsibility to pay the legal costs associated with lawsuits demanding the removal of a category one memorial item...

3. H7859: An attempt to bring independent electioneering expenditures under a campaign-finance regime. Anyone -- including individuals, not just corporations -- who wants to independently spend more than $250 in a calendar year supporting/opposing a candidate for office or a position in a referendum would have to register with the Board of Elections (H Judiciary; Thu, May 24).

2. H7112/S2179: Eliminates good-behavior reduction of prison sentences for individuals convicted under sections 11-23-1 (Murder), 11-26-1.4 (Kidnapping of a minor), 11-37-2 (First degree sexual assault), 11-37-8.1 (First degree child molestation sexual assault) or 11-37-8.3 (Second degree child molestation sexual assault) of Rhode Island law (H Judiciary; Tue, May 22).

1. S2872: The Woonsocket supplemental property tax. Related; S2860 would adjust the education aid "funding formula" so if Woonsocket moves to full-day kindergarten, "the kindergarten students in the city of Woonsocket shall be considered full-time equivalent students, and the reference year used to determine the average daily membership for the city of Woonsocket shall be moved forward one year and projected into the fiscal year for which the appropriation is to begin" (H Finance; Tue, May 22).

The Current Week 05/14/12 - 05/18/12

Justin Katz


Fiscal Oversight as a Path to MERS, Central Falls and Beyond - Analysis
A bill by Sen. Crowley and the Dept. of Revenue would allow cities and towns to use the state oversight process to move retirees into the state-run MERS pension system.

Backstopping and Insulating Local Pensions via Legislation - Analysis
Legislation bringing Central Falls and other municipalities into MERS limits pension cuts to 25% and may set precedent for repeated state bailouts.

05/17/12 - Committee on Finance - Liveblog
Justin writes live from the RI Senate Committee on Finance, including Central Falls retirees and a path to MERS.

Raimondo Raises Concerns About Central Falls Transfer into MERS - Analysis
General Treasurer Gina Raimondo expresses concerns about a bill to bring Central Falls and other struggling pension systems into MERS.

Justin's Case

Government Second Only to Finance for Fraud - Analysis
Government and public administration has moved up to 2nd on a list of fraud-prone industries, with health care and education climbing quickly.
State in Decline, Employment in RI Cities and Towns: Narragansett - Research
At 8.5% (not seasonally adjusted) Narragansett's unemployment rate is low, for RI, but the reason is that its labor force adjusts more than usual to gained and lost employment.

State in Decline, Employment in RI Cities and Towns: New Shoreham - Research
New Shoreham's March unemployment of 29.5% (not seasonally adjusted) is high by any measure, but it may be more concerning that both summer peaks and winter troughs have been lower than any time since 1994.
"Did You Know" All Presidential History Points to Obama? - Opinion
President Obama's staff has been promoting his agenda on the biographical pages of previous presidents.
One Group Leaving RI: Young, Single, and College Educated - Analysis
During no period, from 1965 to 2000, did young, single college graduates increase in number in Rhode Island, according to the U.S. Census.
A Little Perspective on the 38 Studios "Hook" - Opinion
It is definitely a matter of concern that 38 Studios may cost RI some large portion of the debt that it guaranteed, but Justin suggests a little perspective might be in order to learn from the experience.

State in Decline, Employment in RI Cities and Towns: North Kingstown - Research
North Kingstown's low-for-RI unemployment rate disguises a town that hasn't grown much and now has an historically low number of employed residents.
The High Cost of Mandates, Wind, and Energy - Analysis
Rhode Island has the seventh highest energy costs, and renewable energy standards are a likely contributor.

State in Decline, Employment in RI Cities and Towns: Richmond - Research
Richmond has the second lowest unemployment in Rhode Island, but its longer term trends are arguably the healthiest.
Common Sense and the Google Windfall - Opinion
Using a police windfall award to (possibly) eliminate pension problems may seem like common sense, but when the dynamics of government are considered, Justin suggests rationality goes in the other direction.
Senator's Wife Caught Up in RI Licensing - Investigative Report
Sen. John Tassoni's wife lacked a license for her day care center, but he won't comment about whether RI's licensing regulations are too burdensome.

RI Sees Largest Year-Over-Year Employment Decline - Analysis
Not only has RI's sharp drop in employment continued, but its trend is increasingly opposite that of the nation.
Rhode Island Doubling Down in Risky Economic Development - Opinion
38 Studios has brought into stark relief the problems of government-run economic development.
State in Decline, Employment in RI Cities and Towns: South Kingstown - Research
South Kingstown as seen significant growth over the past two decades, but the trend has begun to reverse, over the past few years.

May 19, 2012

What Is The Point Of Tax Credits?

Patrick Laverty

A state will offer tax credits in order to incentivize a certain behavior that they wish. The holder of those credits then then use them to offset their own tax liability to the state. I have a friend who earns tax credits in various states by building affordable housing. Sometimes, his tax credits exceed his tax bill, so those credits become useless. Except, the state does allow the credits to be transferred. He'll then sell those earned credits to another business for cash and for less than the value of the credits. It's win-win-win. My friend wins because he gets cash, the other business wins because they're getting discounted money in the form of the credits and the state wins in that they get the affordable housing they desire.

Rhode Island has gotten into this game as well with the RI Film and TV Office. The state wanted to incentivize movies and television shows being made in Rhode Island, so they hand out tax credits for filming in RI and hiring Rhode Island businesses and citizens.

According to Ted Nesi, 38 Studios has applied for $12M in film tax credits for this year and has also submitted an application for $8.7M in credits for last year. So how in the world is 38 Studios going to justify applying for these tax credits? Are they going to get into the movie or television business now? The Film Office's definition of a motion picture does include video games, but only for theatrical or television purposes. I don't know that the definition fits.

If for some reason the state grants these requests, the only logical use for them is to sell them. Go back to the original scenario I described. A state wants a certain outcome, they incentivize it, someone grants the outcome and ends up with a surplus of credits in some instances. That's not what's seems to be happening here. It appears that 38 Studios would be applying for the tax credits for the sole purpose of selling them. If they plan to make a movie or television show and film it in RI with RI businesses and citizens, then great, give them the credits. If the sole purpose is to sell them, then no, the applications should not be approved.

During Governor Chafee's press conference yesterday, he also said that he will be proposing a bill that would cap the amount of tax credits to a single source at $5M. That's just in case you were wondering how the Governor felt about the state handing 38 Studios all this money.

I think if Chafee wants to go the distance on this one, add in that the credits cannot be transferred. Or, if that's too draconian, add in a provision that they cannot be transferred unless some portion of them (at least 50%?) have already been used by the requestor. To me, that makes perfect sense. It fits the original intended purpose of tax credits.

Bottom line, make a film or disallow the applications.

May 17, 2012

Meanwhile, About that 13% Supplemental Tax Bill ...

Monique Chartier

Without losing sight of the 38 Studios situation, other matters around the state continue to move inexorably forward and, therefore, command our attention. Not the least of these is developments regarding the city for which, ominously, a budget commission has already been assembled, though not sent in.

So, in order to stave off that budget commission and the route of receivership which it represents, Woonsocket solons had requested from the General Assembly approval for a 13% supplemental tax (which would then form the basis for the tax rate going forward). The Senate approved it in early May. Next stop, the House. Finance heard it Tuesday but

After hearing testimony from both residents and city officials Tuesday, the state House Finance Committee postponed action on legislation that would have authorized the unpopular 13 percent assessment.

Thank you for interpreting the legislative tea leaves, Mr. Bruce.

The city's finance director, Thomas Bruce, said later he assumes the bill will not come out of committee.

With the end of the fiscal year approaching and unpaid (to the tune of $5.9 million) vendors understandably stirring around, time is fast running out. Unfortunately, the passage of time doesn't change the strong likelihood of a supplemental tax, only the party asking for it.

Insiders suspect that [State Director of Dept of Revenue, Rosemary Booth Gallogly] may act quickly to put a city Budget Commission in place, stepping up the state's intervention in Woonsocket's fiscal problems.

City residents shouldn't make any extravagant purchases if they have extra money set aside for the tax just yet, however. The Budget Commission could make another attempt to get the supplemental tax bill passed by the state. If new legislation is submitted, the process will start over, and the bill will head back to the Senate.


In comments, City Council President John Ward advises

So, the day has come. Our House delegation has delayed our supplemental tax legislation long enough to bring us to where the school department accounts were overdrawn yesterday by almost $300,000. RIDE is withholding state aid because payments can't be made to special education vendors. We can't rely on our Reps to get the bill through, and we can't borrow money without passage of the bill. The same General Assembly created an education funding formula that punishes poor cities just because they are poor. So on Monday's Woonsocket City Council agenda is a resolution requesting that the state appoint a budget commission for Woonsocket. Not because we don't know how to solve the problem, but only because our local rep's delayed a good plan until the cash crunch caused a collapse. And now they'll try to blame us.

We will manage this problem to a successful conclusion despite this unnecessary setback.

And today, the Woonsocket Call reports on a highly related development.

The bill to allow Woonsocket to assess a 13 percent extra tax on property and vehicles in the city appears to be headed for passage.

The House Finance Committee has scheduled a special meeting for Tuesday afternoon at the Statehouse and a vote on the Woonsocket bill is the only item on its agenda. ...

How about when it comes to the House floor? “It all depends on the amendments that are proposed,” [House Spokesman Larry Berman] said. “Put it this way, in the normal course of events, when a community asks to raise taxes and they have the support of the local representatives and the local officials, we normally do pass them.”

It's not at a clear whether this will be soon enough to forestall the Council's resolution to precipitate a budget commission or, even more critically, address the dire situation of unpaid school vendors.

How Are The Presidential Polls Looking?

Patrick Laverty

Speaking of polls, how are the polls looking for President? After a tough primary season, what are Romney's chances against Obama?

I think the go-to site for national polling is They're a site that aggregates a few of the major polling organizations and comes up with an average of them all. Currently, they're showing Obama with a 2.5 point lead over Romney.

However, when looking at polls, all pollsters will agree that when your sample includes "likely voters" and not just "registered voters", you tend to get better and more realistic results. Real Clear Politics includes both types, but what happens when we only look at the polls that questioned the "likely voters"?

PollDates TakenSampleObamaRomneyLeader
Rasmussen Tracking5/12 - 5/15 1500 LV 46 47 Romney +1
Wash Times/JZ Analytics 5/11 - 5/12 800 LV4344Romney +1
Politico/GWU/Battleground4/29 - 5/31000 LV4748Romney +1
Democracy Corps (D)4/28 - 5/11000 LV4747Tie
*Data taken from

Well, I don't know if it can get much clearer than that. Who cares if someone is registered to vote. They don't matter. The people that do matter are the ones who will vote. That's why the polls that include the likely voters are often more accurate than those with just the registered voters. And when we look at the likely voter polls, we see that President Obama could be in for a tough run going forward. But there's still a long way to go.

May 16, 2012

Spending More Money Gets Us Better Education, Right?

Patrick Laverty

On Monday, released their annual high school rankings for Rhode Island. 51 public high schools ranked on a variety of factors. I was speaking with a friend of mine from Cumberland and we were lamenting our home town's disappointing ranking at 34th. "That's what you get when you have the lowest per-pupil spending" he mentioned. Which then got us thinking. Is that true? Does Cumberland rank 34th because it has the lowest per-pupil spending rate at $11,090? So we decided to take a look and test correlation.

The correlation we tested was per-pupil spending against the GoLocalProv rankings. Argue against how they ranked them all you want, but they are what they are. The Barrington and EG schools are at the top and the Providence schools are near the bottom of the rankings, as we often see.

If you want to brush up on correlation, here's the Wikipedia page.

What we found when we did the correlation was a -0.14 relationship. Very, very weak. If you want to conclude anything, spending more money does not get you a higher ranking on the GLP charts. If anything, in a very, very weak way, more money gets you a lower ranking. But just for the sake of the argument, let's call it no correlation at all.

We hear of people in education telling us that if we just spend more on education, we'll get better results. Even though, we are one of the top spenders in the country for education and we have some of the worst results in the country for that money.

Also, when schools are in trouble, like in Central Falls and some in Providence, we're told that the problem is more with the student's home life and with the parents. When the Central Falls teachers were all laid off, we were told they were just scapegoats for inattentive parents or parents who didn't value education. The teachers are scapegoats for lazy kids according to others.

If that's the case, the problem is with bad parents, then how will throwing more money at the problem solve it? The teachers have told us that the problem isn't with them, the problem is with the parents. The solution is that we should spend more on the schools? The top ranked school in the state spends less per pupil than the last ranked school. The school paying the most is ranked 21st. Similar examples are seen throughout the chart. I know there are other factors that go into good schools, but this doesn't point to "more money" being the solution.

Shut Down the E.D.C. So That We Have an Unobstructed View of the Real E.D.C.

Monique Chartier

... though not because the Schilling deal, facilitated by the Economic Development Corp, might leave taxpayers on the hook for upwards of $100 million.

By almost any measure, Rhode Island has a very poor business climate. High taxes, too many fees, too many regulations, many of which were intended to protect consumers but, in reality, treat them like dull children. This condition has nothing to do with "irrational negativity" on the part of some residents or commentators but was legislated into existence on Smith Hill by some well-intentioned and badly misguided law-makers.

Patrick points out that this climate compels the state to occasionally turn to "gimmicks" like loan guarantees to entice businesses to come here. But gimmicks and one-off tax arrangements do not constitute an economic development strategy. The solution is to ameliorate the state's business climate. Only one body can do that and it's not the R.I.E.D.C.

The charade is over. It's time to disassemble the false-front E.D.C. so that the real E.D.C., its actions and, more importantly, its inaction, can come clearly into focus.


I'm happy to re-state and amplify, at Russ' request, that my views about abolishing the E.D.C. for the indicated reason long pre-date this week's development in - or deterioration of - the 38 Studios arrangement. Said deterioration simply posed an opportunity to comment on the larger issue of Rhode Island's poor business climate and exactly who is responsible for it.

That Governor Donald Carcieri might have made a bad call with 38 Studios (and definitely made a bad decision with regard to the They-Think-We-Have-Deep-Pockets-For-Blowing-In-The-Wind-Energy project ... er, with regard to Deep Water Wind) does not change my high opinion of him as governor. Far more importantly, it does not change the reality of the poor economic conditions that made such a "gimmick" seemingly necessary or shift responsibility away from those who created those conditions over the last three to four decades.

May 15, 2012

Fundamental Questions (as in Business Fundamentals) About 38 Studios Running Aground When It Has

Carroll Andrew Morse

Say you've got a company that has 5 products on the market, and plans to release a new one in the next year. Which products should existing teams and new hires be assigned to work on? Maybe your existing customer base is willing, in large numbers, to pay for a new release of one of your older products. On the other hand, maybe a new product would be nearly as popular, and be more likely to bring in new customers. But the less popular upgrade might be more profitable, if a small team can get it to market (and start revenue flowing into the company) in 6 months, while developing the new product would take a larger team and at least 18 months -- but then again, if the small team is added the new product effort, maybe its time to market could be cut to 15 months. Figuring out how to balance the kinds of considerations is the job of a "product management" group in a traditional business organization.

For 38 Studios, the troubled Rhode Island software company, the problem should be much simpler. 38 Studios is at a business stage where they have only one product to develop. Their market is a retail one, i.e. they are selling individual units to a large pool of potential customers (though, if successful, their business would eventually involve a subscription component).

To first order, business planning for a company that is focused on one new retail product should be very straightforward. Money doesn't start coming in until the new product starts being sold. The product can't be sold until it is finished (to the people in the software biz laughing uncontrollably at that last statement, remember we're talking about a retail product here, not about getting an existing customer to cough up an extra year of maintenance fees and then giving them a break on their next full upgrade that's already six months overdue, etc). The cost of building the product should be highly predictable: the cost of programmers and their development hardware and software, facilities costs, and some standard business overhead. Nothing like a spike in the cost of high quality "1"s and "0"s needed to make computer chips work is going to negatively surprise the company.

You don't need to be a rocket scientist (as they still say in the software industry) to figure out how much money is needed to make a one-product-at-a-time retail business model work. If it's a year until the next release, enough money is needed to pay your employees and provide them with a place to work for a year. (I said you didn't need to be a rocket scientist; I didn't say that an MBA was going to be able to figure this out *rimshot*). Making up some round numbers, if it's going to take a year to develop a product, and you have a team of 20 programmers making 85K apiece, you need $1.7M to pay their salaries until the next release.

The point is, for 38 Studios to have run out of money in between two major releases, when the earlier release was supposedly successful, is odd to say the least. A few possible causes are:

  1. They wildly overprojected how successful their last release would be, and didn't have as much money from it's sale as they were counting on.
  2. Some other outside financing that was anticipated and built into their planning either pulled out or never arrived.
  3. A bunch of folks with product knowledge left the company, and they haven't been able to replace them, and have fallen so far behind schedule, there's no hope of catching up.
  4. The company was mismanaged from the start.
If 38 Studios really has run out of money at this stage, the proximate cause has to be something on the scale of the list above.


To avoid any confusion, I've backfilled the original simple numbers example, based on the average salary figure reported in this Providence Business News staff report from the end of last year. But the immediate concern isn't the absolute numbers; whether you are discussing the most efficient operation in the world or the least, if your company uses X dollars per month to develop a product, and the product needs Y months of development before it's ready for the market, then X*Y dollars from other sources is needed, to have any shot of making it to release. Since 38 Studios was focused on producing a single, retail product, this ridiculously simple model directly applies to the company as a whole.

It's been presumed that 38 Studios had a plan which it shared with the Economic Development Corporation explaining where the X*Y dollars needed to keep the lights on (maybe a bad metaphor to use here) until the new product was ready for market would have come from. Given that costs are very predictable in this industry, what went wrong, with either the planning or the execution?

You Can't Have It Both Ways

Patrick Laverty

For those who are seemingly dancing on the grave of 38 Studios already, keep in mind the reasons for things like the EDC's $75M loan guaranty. I'm hearing and seeing various people crowing with their "I told you so" and explaining that the state should not be in the business of picking winners and losers. They're questioning why conservatives like Carcieri and Schilling would be in favor of government intervention only when it suits them.

That's all fine, and I'm in agreement that the government should not be making such risky investments and putting taxpayer money on the line. But why do they have to? Why do many businesses need to negotiate some kind of deal with the Governor and/or General Assembly to find Rhode Island more appealing or even fiscally possible? With the many different regulations and taxes (boiler inspections and inventory tax just being a couple examples) why would a business want to come to Rhode Island? Well, the answer is, they don't. Unless someone reaches out to them and makes an offer for things like property tax breaks (GTech), film credits (Body of Proof) or the current 38 Studios loan guarantee in exchange for 450 jobs.

I've said this before, but let's try it again. Rather than one-off, quick fix gimmicks, how about we just overhaul the system. Create a set of business regulations that we can be proud of and advertise and that will be enough to entice businesses to move here.

If we want to have jobs in Rhode Island, we need to have businesses in RI. As others have said, we need to start looking at businesses as job creators and not piggy banks for new taxation. Let's generate it through the income tax of thousands of new employees at these businesses and the increased value of real estate.

The problem unfortunately is I expect most will only see half of this issue and merely conclude, "See, I told you it was bad to give money to a business." without looking at any of the reasons for why it was necessary to do so in the first place.

Coming up in Committee: Thirteen Sets of Bills Scheduled to be Heard by the RI General Assembly, May 15 - May 17

Carroll Andrew Morse

Local Impact: Central Falls, Coventry 2, Cranston, Glocester, Narragansett, Middletown/Newport 2, Newport 2, North Providence 2, Pawtucket, Tiverton, Warren, Warwick, West Greenwich, West Warwick 2.

13. S2883: A capital gains tax exemption for "new investments in Rhode Island businesses" that meet certain conditions (S Finance; Thu, May 17).

12. S2631: Adds to the state's payment-in-lieu-of-taxes program a reimbursement to cities and towns of 27% of the property tax value of land occupied by Federal military installations (S Finance; Tue, May 15).

11. Seven different bond issues for Pawtucket (H8085, H8086, H8087, H8088, H8089, H8090, H8102) (H Finance; Tue, May 15). Normally these would be in the local impact section, but seven bond issues for the same community on one agenda is highly unusual.

10. S2538: Mandates that portable electronics insurance can only be sold by someone with a license to sell such insurance (H Corporations; Wed, May 16).

9. H8044: Reduces not wearing a seatbelt to a secondary offense (H Judiciary; Tue, May 15).

8. H7950: Gives city and town solicitors the power to investigate false claims against the state and municipalities, and bring civil actions against the perpetrators (H Judiciary; Wed, May 16).

7. H8052: Lifts a moratorium, currently not set to expire until June 30, 2014, on the Board of Regents for Education not approving new "school housing projects" (H Finance; Tue, May 15).

6. H7948: Moves the "control of firearms...regarding their ownership, possession, transportation, carrying, transfer, sale, purchase, purchase delay, licensing, registration, and taxation" from state to local jurisdiction (H Judiciary; Wed, May 16). I'm going to speculate that this bill is motivated more by an intent to move attempts to end-run the second amendment and the Heller regime down to a level where fewer people might notice than by any broader desire to devolve the functions of government.

5. S2631/H7735: Detailed procedures for dealing with and possibly altering a patient's "medical order for life sustaining treatment" (MOLST), defined as a "request regarding resuscitative measures that directs a health care provider regarding resuscitative and life sustaining measures" (H Health Education and Welfare; Wed, May 16 & S Health and Human Services; Wed, May 16).

4. H8074: According to the official description, "this act would relieve municipalities from the mandatory obligation of providing suitable transportation for pupils of nonprofit private schools" (H Housing and Municipal Government; Thu, May 17).

3. H7853: State constitutional amendment allowing legal resident non-citizens to vote in state and local elections (H Judiciary; Wed, May 16).

2. S2872: Supplemental property tax for Woonsocket, to help straighten out the city's finances (H Finance; Tue, May 15).

1. S2955: Moves Central Falls pensions into the MERS system, and restores a portion of the pension benefit reduction that was part of the Central Falls bankruptcy settlement (S Finance; Thu, May 17) ...but without any obvious mention of how the restored benefits will be paid for.

May 14, 2012

Questions About 38 Studios' Solvency?

Monique Chartier

John Depetro alluded to it earlier today. But it looks like WJAR/NBC10/Turn to 10's Bill Rappleye got what can only be viewed as a confirming quote from Governor Chafee.

State officials have been meeting with the video game company owned by former Boston Red Sox pitcher Curt Schilling, Gov. Lincoln Chafee told NBC 10 on Monday.

"We're always working to keep Rhode Island companies solvent, and that's what we're doing with 38 Studios," Chafee said.

Potentially at stake, of course, is $75 million tax dollars, as WPRI's Ted Nesi and Steve Nielsen point out.

The R.I. Economic Development Corporation gave 38 Studios a $75 million taxpayer-backed loan in 2010 with the strong backing of EDC Executive Director Keith Stokes and then-Governor Carcieri.

Let the record show that Governor Chafee was strongly opposed to this arrangement from the beginning.

It is to be hoped that these reports are overblown and 38 Studios will successfully navigate some purported rough seas. Nevertheless, it is hard not to hear and read these reports and come to one inexorable conclusion: however small these loan guarantees are compared to the total of economic activity in the state, this is not a realistic approach to economic development. Taxpayer capital cannot begin to substitute for a good (or even just neutral!) business climate. This, in turn, can only be created at the General Assembly by legislators who are willing, in the words of small business owner Roland Benjamin, to

look at the small business community as a growth engine in the economy, not a tax revenue source

I would only quibble by omitting the adjective "small". Big and small; we need them all.

Marriage and the Rule of Law

Justin Katz

Here's the thing with Governor Linc Chafee's executive order: It simply isn't possible to support it and plausibly believe that government should represent an even playing field with divided powers, agreed-upon definitions, and consistent rules for changing policy toward one's own preferences.

Look, I was arguing against same-sex marriage before the topic was hot. And for a few months before that, I was arguing for same-sex marriage before that was cool. I state that merely by way of claiming some authority for the assertion that the arguments really haven't changed much.

What has changed — or rather, what never materialized — is a lack of concern among either vociferous or passive supporters of same-sex marriage about the means of its implementation. I do believe that a society that denies itself the ability to treat responsible procreative pairings as something special has increased its likelihood of deterioration, but if it undermines the rule of law in doing so, it's surely doomed.

Back in 1904, the Rhode Island Supreme Court made a much-cited ruling in a case called Ex Parte Chase that a marriage performed in Massachusetts was valid in Rhode Island. Specifically, the marriage involved a couple that had crossed the border in order to evade Rhode Island's guardianship laws. The non-consenting parents were not able to undo the license.

Nobody questioned that the relationship was a marriage. Indeed, the pair could have been married in their home state if their parents had been more permissive.

That's a long, long way from insisting that one state can change the very definition of the relationship that marriage is meant to indicate, forcing others to recognize them as something that they do not believe them to be. Yet, in February 2007 RI Attorney General Patrick Lynch took the opportunity of a request for an advisory opinion to do just that.

While offering his office's legal opinion on the narrow matter of a government agency's providing employee benefits on the basis of a Massachusetts marriage, Lynch let his thoughts wander to much broader legal matters. In the final paragraph, though, the scope of his project returns to its actual (though still objectionable) authority: "we advise the Board of Governors that it should accord marital status to its employees who were lawfully married in Massachusetts."

Basically, it was a legal CYA memo that the official legal counsel for the State of Rhode Island would defend a particular side of the argument in court. If anything, though, Lynch's reasoning has less force now, because the state has enacted civil unions as something explicitly different from marriage. In a rational world, it would be acknowledged that same-sex marriages are against the state's public policy.

But we don't live in a rational state.

Instead, we have a governor returning to his regular practice of pushing executive authority to (and past) its limits. His executive order on same-sex marriage goes well beyond the in-house distribution of employee benefits:

All executive state departments, agencies, and offices shall recognize the lawful marriages of same-sex couples as valid for any purpose arising with the execution of its duties.

Gay & Lesbian Advocates & Defenders (GLAD) lists a few of the instances in which the governor's order will change policy, but their compilation is surely too limited. The "duties" of state agencies are pervasive and reach well into the private sector. State agencies license; they regulate. What the governor issued today was an invitation for the filing of lawsuits.

I'd be surprised if local activists don't already have some targets in mind. Are agencies tasked with investigating discrimination now required to "execute their duties" when private parties don't recognize Massachusetts marriage licenses? Are bureaucrats that promulgate regulations now to enforce a new definition of marriage?

Be a little creative, and possibilities come quickly to mind. And with the route by which advocates have pursued the incremental imposition of their policy preference outside of the democratic process, it is less likely that their opposition will win protections that might otherwise have been carved out during legislative negotiations. Continued tolerance of private citizens with a different view will be reliant upon the benevolence of those imposing the definition.

Thus, the whole project comes back around to recasting our government as one governed by pure power.

Undoing the Central Falls Settlement with Some Last Minute Legislation?

Carroll Andrew Morse

Can't talk about the bill, it's still in committee...
Can't talk about the bill, it's still in committee...
Can't talk about the bill, it's still in committee...
Why do you want to talk about that bill? Everything important about it was decided in committee.
Justin Katz of the Ocean State Current (and Anchor Rising too) has a report on what looks to be the first salvo in the hurry-up final phase of the legislative session. Senator Elizabeth Crowley of Central Falls has submitted a bill, apparently at the request of the RI Department of Revenue, that would allow any municipality under state oversight and running a local pension system to move into the MERS system. In part, this bill is a follow through on a promise that was made as part of the Central Falls bankruptcy settlement, where the Governor agreed to help Central Falls transition to MERS.

But there may be more to the promise -- or, as pols have become fond of saying these days, perhaps the promise has evolved. In addition to facilitating a move to MERS, the Governor's office has also been advocating for a $2 million to $2.6 million so-called "transition fund", designed to temporarily soften the effects (for a period of five years) of the bankruptcy agreement which reduces the benefits that will be paid to Central Falls pensioners. As a Projo staff report from the end of April mentioned, the creation of the "transition fund" also serves the purpose of helping to convince some people impacted by pension changes not to pursue a lawsuit.

Meanwhile, Senator Crowley's bill is separate from the transition fund. She told the Current that its intent is to "return [Central Falls] pensions to 75% of the payments that they had been receiving before the receiver and a bankruptcy judge reduced them". Though such a provision is not explicit in the current Senate bill, a reference to a "base retirement allowance" of not less than 75% of the pre-settlement benefit for Central Falls retirees is written into the House version of the bill, introduced by Representative James McLaughlin.

If the "transition funds" are approved, and if a floor on benefit adjustments is set at 75% of pre-settlement value, either directly in law or through an amendment to the settlement agreement, and taking effect immediately after the transition period has ended, then it is very possible that the much publicized 55% benefit cut in Central Falls will never occur.

Is this all a good idea? As far as the transition funds are concerned, the question (though not the answer) is straightforward -- should there be a state bailout of the Central Falls pension system, so that the cuts needed to restore solvency aren't quite as deep, at least in the early years. As regards the longer term issues involved in the Crowley/McLaughlin bills, some basic information is needed by both legislators and the public, which the authors and sponsors of the bills should provide with all due speed:

  1. Is this proposal revenue neutral, with respect to the existing Central Falls settlement agreement, and...
  2. ...if not, where's the extra money coming from to pay for it: a) higher taxes on Central Falls, b) directly appropriated state subsidies, similar to the "transition funds" and/or c) some kind of Rube Goldberg financing via the working of the state pension system.
With recent events in West Warwick, to name just one community, the transition fund proposal and the Crowley/McLaughlin bills also raise the question of whether other communities would be in line to get the same bailout that Central Falls might.

Science and Religion Winding Through a Summer's Day

Justin Katz

According to the Chinese calendar, 2012 is another year of the dragon. By the cyclical calendar of the United States, it's another year of the campaign, and early indications are that it will be a fierce one. No doubt, when the post-election chill deadens the flames this winter, we'll all be very relieved to see it over.

Already, we news consumers have been treated to institutionalized schoolyard taunts. Apparently, as a young father, Republican presidential candidate Mitt Romney built a shielded crate for his dog, to transport the pooch on top of the family car. President Barack Obama, for his part, dined on canine meat as a boy. We can be assured that these automotive and culinary anecdotes are a mere foretaste of the potluck fare to which we'll be treated as the months advance.

Whatever the personal aftertastes with which voters are left, few can doubt that ballots will be cast with larger matters in mind. The economy loiters in the neighborhood between stagnation and depression. As a matter of political philosophy, secular healthcare advocates mix shouts across the intersection of human rights with those espousing freedoms of conscience. Such are the substantive topics of our day.

Still, history may show even these battles to be the seasonal oscillations of a society too comfortable that existential questions have either been answered or are immaterial. Even as we have heated debates about whether elite law-school students ought to have to pay for their own contraception, the expanding capacity of science to do is making ever more immediate the discussion about whether to do.

It will, therefore, be a welcome diversion into weightier matters to attend the Portsmouth Institute's conference addressing "Modern Science/Ancient Faith" in the waning days of June. Every summer for the past three, the institute has hosted speakers and audiences on the campus of the Portsmouth Abbey School, but this is the first that centers around a topic rather than a personality.

As its first election-year event, too, the institute experience will contrast all the more with the rancor of daily life. While in the midst of such decisions as drive us haphazardly through each day, the notion that we can choose what air to breathe feels frivolous, and that is what a brief pause for intellectual pursuits is like. Away from the challenges of making a living is the space to consider subtle ideas with the gravity that they deserve.

The topic of the year illustrates the point very well. How we individually balance science and faith (consciously or implicitly) will affect how we choose to live. It is not irrelevant. It should not, moreover, be a mere marker of our philosophical tribe or political party.

Yet, that is what we tend to do. It is the Sciencers versus the Faithers, like warring gangs in dancing knife duels. Pick a side.

The other option is the passive version of the same tendency: dismissing the debate as an attempt to pit apples versus oranges when no overlap should be acknowledged. The error, here, is in failing to see that science and religion really do collide, at least in their practical application in the hands of human beings.

Despite its many innovations, science has not freed humanity from our inclination toward bias, in particular the bias for one's own will imposed upon another. Just as those who've abused people's natural religious impulses have sold their own personal interests as God's will, "the science shows" can be a key phrase in the demagogue's arsenal.

It is to the benefit of such would-be demagogues to place excessive emphasis on the "ancient" in "ancient faith." Thus, they give the impression that religion, particular religious doctrines, emerged once, long ago, in perfectly expressed fashion. In this view, if the Bible, for one, applies only obliquely to a modern situation, it must therefore be a fad of the past.

A faith frozen in its state millennia ago is juxtaposed with a fresh new science, full of modern comprehension of the world around us. It would be more true to suggest that what is ancient, in religion, is the framework around which we've ever since draped human experience, giving form to a reality that we are too limited in our vision to see.

The dragons winding their way through Chinese New Year parades have evolved in the materials used to create them. Their form remains largely the same, however.

Their import, well, that's another matter, as is the appropriate balance of technology and tradition — one that is well worth considering for an enjoyable few days in June, in the terms of science and religion.

Of Slippery Slopes

Patrick Laverty

I figured I'd take some backlash for my post supporting the bill that would ban smoking in cars with young children. Even Justin offered his own criticisms. After having a few days to think about it all, I'm going to stick to my guns and try to respond.

It seems that one of the common threads was the "slippery slope." If we allow X, then eventually we'll allow Y and that's just going too far. So let's look at the slope a different way. Rather than looking downhill, let's look uphill. Many people took things to a ridiculous extreme such as "eating lots of chocolate cake" and "eating lollipops while driving." It seems that the concern is with the government "Extinguishing parents liberty to raise THEIR children", as one commenter mentioned. So let's take that to the other extreme.

Many of us believe in the Second Amendment, as in the right to keep and bear arms. I should be allowed to shoot my gun as well. What if it hits someone? Are you going to put me in jail for that? I mean, all I was doing was exercising MY rights.

I like to play baseball. I need to practice swinging a baseball bat. Maybe it hits someone while I'm swinging it. Maybe I choose to swing it as I'm walking down Main Street. I don't have a right to do that? What's next? Are you going to ban something as American as baseball?

All "slippery slopes" have a gray area. Some parts of the slope are black and white, Shooting someone with a gun or hitting them with a baseball bat is black and white. Most of us feel that's wrong. For others, smoking in a car with children present is a gray area. As another commenter mentioned, there is a line that we cross from one end, "shooting our child in the leg" to the other "feeding our child a Kit Kat." And lots of things in between. Where exactly is that line? For each of us, it is in a different place. For some people, spanking is on the "ok" side of the line, for others, it's not. For some people, smacking a child across the face is ok, and for others it's not. Clearly, smoking in a car feels ok to some people, where for others, it's not.

One of the things that also struck me here in the comments was how the vast majority of them were concerned with the parent's rights. How dare we take away the parent's rights to smoke in a car with children? How dare we challenge that person's rights to parent their child. I don't think a single commenter even mentioned the child's rights, which is exactly how I started the original post. Your rights end where mine begin. Your rights end when you start harming me.

So that leads to the question of how much harm is there. Someone even questioned whether second hand smoke is harmful at all and said the studies are unclear. Well, if you believe the tobacco lobbyists and corporations, smoking isn't even harmful. Do you believe that too?

Others wanted studies. Writing for Anchor Rising isn't a full time job for me, so I don't have time to do the kind of research I've done when I was in school. Sitting in libraries, researching and reading many studies and dissecting. I can run a few simple Google searches and come up with some things. Of course Google quickly comes back with multiple recommendations from doctors about banning smoking in cars, along with lots of other cities and a few states who have done it. But doing the next level of research, I come up with studies like:

Like I said, this isn't exhaustive research and you can denigrate the studies linked all you want, like I said, I wish I had the time to do the proper digging.

However in the meantime, I'll take my chances with this altitude of the slope and re-state my support for Senator Sosnowski's bill.

The Current Week 05/04/12 - 05/11/12

Justin Katz


Medicaid Waiver Reform Saved Tens of Millions, Although ObamaCare/ARRA Curtailed Savings - Investigative Report
Despite some local journalists' reports, RI's Medicaid Global Waiver reform has saved $55.2 million within the first year and a half of implementation, and would have saved more but for ObamaCare and federal stimulus legislation.

05/08/12 - Tiverton School Committee Meeting - Liveblog
Justin liveblogs from a Tiverton School Committee that promises controversy over tactics used while advocating for particular budgets.

Rhode Island, nos trata a todos como extraños - Opinion
Al igual que un conductor que no sabe donde los edifi cios que solían ser, los que no conocen los canales secretos del gobierno de RI tienen tres opciones

Justin's Case

State in Decline, Employment in RI Cities and Towns: Smithfield - Research
Smithfield's unemployment rate has improved a little since 2010, but the reason is that its labor force has fallen off while its number of employed residents has mostly stagnated.
Transportation Infrastructure: Making a High Priority Low - Opinion
Local transportation funding is vulnerable to federal vicissitudes because it is entirely federal dollars build on a bed of local borrowing. That ought to raise questions among voters about the management of the state.
Shrinking Government?  Not Quite. - Analysis
The New York Times' claim that President Obama has shrunk government shrivels under examination.

State in Decline, Employment in RI Cities and Towns: Woonsocket - Research
Woonsocket's number of employed residents has never been lower, in the 22 years of DLT data, and the only thing keeping its unemployment rate steady is the rapid decrease in labor force.
Tax Breaks for the Trendy, Not the Ordinary - Opinion
Tax breaks for artists raise the question of why all Rhode Islanders shouldn't have more control over their own destinies
Various Lifestyle Stories Vaguely Related (Taking Our Treats Away) - Opinion
A jumble of news and commentary headlines leads Justin to wonder where the cause and effect lie in entitlement and nanny-statism.

State in Decline, Employment in RI Cities and Towns: Charlestown - Research
Charlestown's unemployment puts it well above the overall rate for the state and results from more than four years of continual employment declines.
RI 14th Most Licenses for Low/Mod-Income Professionals; 22nd in Overall Burden - Analysis
RI requires licenses for the 14th highest number of lower-income occupations in the U.S., imposing the 22nd greatest overall burden, disproportionately affecting men and minorities, whom the recession has hit hardest.

State in Decline, Employment in RI Cities and Towns: Exeter - Research
Throughout the '90s and most of the last decade, Exeter was on a path of growth, but 2007 brought an end to employment increases, and 2008 lost jobs. Now, the town's unemployment rate is 12.2% (not seasonally adjusted).
A Math Technique Custom Made for Government - Opinion
New methods of math education remind Justin of the math that professionals and politicians are using, even now, to conceptualize pension funds.

State in Decline, Employment in RI Cities and Towns: Hopkinton - Research
Hopkinton grew, in population and economically, over the last decade, but since 2010, employment has stagnated as the labor force recedes.
Clarification on Pension Projections - Investigative Report
The General Treasurer's office clarifies, for the Current, a chart showing a brief period of pension investment returns below expectations.
Kauffman/Thumbtack: RI Small Business Friendliness an F - Analysis
In keeping with past experience, Kauffman/Thumbtack study finds RI to be dead last in the nation for small business friendliness.

Moving Forward, Double Dip or Not - Opinion
The specter of a double-dip recession brings into stark relief, for Justin, the lack of vision among those leading the state.

May 13, 2012

Rhody Confirmation Bias: An Anecdote

Marc Comtois

This past Friday, Justin wrote a piece for The Current about Rhode Island's business-unfriendliness (worst in the nation). Not that causation=correlation or anything, ahem, but he ended the piece with this bit:

The page for Rhode Island also presents data and rankings based on the U.S. Census. Notably, the state had the second worst debt per capita in 2011 ($9,113) and the highest Democratic voting percentage (61.1%). (emphasis mine)
Earlier in the week, I heard a couple people in the office talking about how Governor Chafee's stance regarding the Pleau case was nuts and how they were very disappointed in him. In the past, they (like most of us) have complained about how bad things are in the state. As for Chafee, they had liked him as Mayor of Warwick, after all (and they like Avedisian, too!), but they don't know what happened to him. They even voted for him when they usually vote Democrat (though, of course, they're "unafilliated")! Just goes to show that they get screwed whenever they vote for someone who's not a Democrat, I guess. Right? Right?

It's no wonder some of you (and I'm getting there...) think this place is hopeless.

Unemployability of Illegal Alien Students - Rating the Blindingly Obvious

Monique Chartier

PolitiFact decided to rate the statement by RIILE's Terry Gorman that

When these [undocumented] students graduate from college, they're still illegal aliens. They cannot get a job.

They rate it a "True".

As they gave such a rating to someone with whom I agree on the underlying issue, I'm sorry to complain, really, I am. But why did they undertake to rate this statement? Under US law, Illegal aliens, whatever their age demographic, cannot work in the United States. Obtaining a degree of any sort does not change that.

Conversely, I do look forward to an analysis, in due course (it's a little early now), by PolitiFact or someone of the statement by freshly inaugurated Governor Lincoln Chafee as to the positive impact on economic development in Rhode Island of the rescinding of e-verify.

Happy Mother's Day!!!

Marc Comtois

May 10, 2012

New York Times Editorial Board Says that When the Likely Outcome is Good Enough for our Sensibilities, the Law Should Be Ignored

Carroll Andrew Morse

Reacting to the decision made by the First Circuit Court of Appeals that Jason Pleau must be turned over to the Federal government to answer the indictment for the murder of David Main and potentially face the death penalty (though that is far from certain), the New York Times editorial board wrote that the court "was wrong to insist on the prisoner transfer".

The reasoning in the editorial was not that the court misapplied the Interstate Agreement on Detainers Act, the interstate compact that mandates that Pleau be turned over. Nor did the editorial argue that the IDA itself is unconstitutional. Instead, to reach the outcome that anti-death penalty advocates favor in spite of the law, the Times' editorial board skipped over legal reasoning altogether and asserted that, since it's been awhile since anyone received a Federal death sentence and juries more frequently choose life sentences over death when given the option, the court should have just ignored the law...

It’s been nine years since anyone was executed for a federal crime. In the last decade when federal juries have had a choice between imposing a life sentence and the death penalty, they have chosen a life sentence by better than two to one. The government is turning this case into a pointless state-federal clash. The First Circuit was wrong to insist on the prisoner transfer.
We all understand that Rhode Island Governor Lincoln Chafee opposes the death penalty in all cases. If the Governor wishes to take a "principled stand" on his policy preference, then the proper way for him to do so is to work for the repeal of Federal death penalty statutes, and not to demand that the state government -- whose laws he is charged with faithfully executing -- and the Federal courts ignore the law.

And the New York Times editorial board should try to show an understanding of the rule of law that extends beyond the attitude of "whatever we like is legal" that this editorial shows.

Re: The Nanny State, Part 3, But...

Justin Katz

Wow is that slope slippery!

Reading of Patrick's support for laws to adults for smoking in the car with children present makes me wonder two things. First, how common is the problem? I wouldn't even be comfortable asserting that "we've all seen" an example. Personally, I can't think of an example in the past decade or so. (Go back far enough, though, and I was an example.)

Maybe I just haven't been paying attention, but I'd like to see some sort of numbers, but I think we ought to know how big a problem we're trying to solve. Otherwise, such legislation looks mainly like pats on the back for the righteous.

Second, wouldn't it be safe to suggest that, in this day and age, children in the custody of people who would smoke in a small glass box with them are more likely than average to have larger problems than that which they inhale? It seems to me that a fine for the parents is not likely to have a net beneficial effects for the children we're ostensibly trying to help.

Is second-hand smoke worse than losing out on activities because insufficiently mature parents dread cigarette-free car rides with their children? Or what about car rides that replace the smoke with a highly tense and stressful atmosphere emanating from adults who think they need a cigarette?

I ask these things because Patrick is ceding a huge principle, here, when he writes, "when your choices affect children, it's people's responsibility to do something about it." Where is the limit there? Worse, yet, who gets to decide? England has provided a glimpse of that road, as it removes children from the homes of obese parents.

Personally, I'll go far enough with Patrick (perhaps to the disappointment of libertarian readers) and suggest that we do have the responsibility that he suggests. It's the "do something about it part" that requires reevaluation in our society. The something should be, first, taking the personal and often distasteful responsibility of passing judgment and imparting shame and, second, working toward the type of society in which people are more likely to choose to be good.

That's the harder part, because it requires us to restrict our own choices on matters in which we're perfectly capable of moderation... in everything that affects the whole jumbled mess of modern life and culture. I'm not saying that everything must be discarded, but we must be conscious of each decision we make, from our views on marriage to the music that colors our daily background.

It's as if, having chased the rabbit of tolerance and non-judgementalism down its hole, we're looking to the government to impose a sort of shame by proxy and by fee. One needn't rely on slippery-slope thinking to discern the danger in that.

The Nanny State, Part 3, But...

Patrick Laverty

So here we go with the libertarianism again. The way I understand it, being a libertarian means that my rights end where yours begin and vice versa. Nothing I do should harm you and the same in return. So this is one place where the nanny state seems to be a good idea, especially when it comes down to protecting those who can't protect themselves, as in this case, one person's rights are going too far and affecting someone else.

The Providence Journal reports that State Senator Susan Sosnowski has sponsored a bill that will fine motorists for smoking in a car with children young enough to be in a restrained seat. The law would make this a secondary offense, meaning police may not pull the driver over just for smoking in the car with a child present.

I've long thought that when I see people smoking in the car with small children, it's a form of child abuse. You can often see the blue fog filling the car, and sometimes the car will have more than one smoker adding to the haze. Of course in the winter, the windows are rolled up and the the children are sitting back there breathing in that second hand smoke.

I imagine people may comment "Oh great, what's next, outlawing chocolate cake too? You're going to stop me from having dessert next?" No, that's not it at all. You can do whatever you want to your own body, if you're an adult. Eat yourself into oblivion. I wish you wouldn't, for your own sake, but that's your choice. However when your choices affect children, it's people's responsibility to do something about it.

I'm not sure a $25 fine for a secondary offense will be enough to stop people from "exercising their rights," but it's a good start, a good first step. I support Senator Sosnowski's efforts here and I hope this does get passed into RI law.

May 9, 2012

Contradictions From Cicilline

Patrick Laverty

This would be funny if it weren't so sad. The incumbent Congressman's staff put out press releases on his behalf that contradict each other. According to one, it's a bad thing that out-of-state groups support Republican Brendan Doherty. But then the other hand, Cicilline wants to tout the fact that out-of-state, national groups support his own candidacy. Check out excerpts from two press releases sent out recently.

Included in a release yesterday:

David has also secured endorsements from AFL-CIO and the National Education Association.
If the endorsement is from a group that he likes, such as these two national organizations, then it's a good thing.

But then in today's press release:

an out-of-state Republican-allied group is going up on the air here in Rhode Island today touting David’s Republican opponent
But wait, it gets better:
Thank you for helping us to combat this secret out-of-state money that is trying to influence the outcome of this election.
Quite the contradiction, eh? It's ok for him to get endorsements and money from out-of-state national organizations, but it's not ok when Doherty does? And are they really saying that AFL-CIO and NEA money will not attempt to influence the outcome of the election? Seriously?

I guess when you're dealing with the team that had to apologize for misleading the public, you can't always expect consistency in something as simple as press releases.

Still Nothing From Sen. Felag

Patrick Laverty

As you might remember, I sent a few questions to State Senator Walter Felag on April 30. I guess Hummel was right when he showed us that members of the Assembly do not respond to non-constituents. More than a week later and no response from the Senator. I guess I shouldn't hold my breath, but it's just another example of how the don't feel accountable to the taxpayers and voters of Rhode Island.

Investigative Reporter Sought for Ocean State Current

Justin Katz

If there are any journalists in the Anchor Rising audience who are out of work or looking for a new opportunity, the Ocean State Current is now seeking a full-time investigative reporter.

The position will have a great deal of independence, but the main focus will be investigative reports and human interest stories centering around what might be called the free market and small government beat.

The opportunity extends to candidates of varying experience and education, but the baseline requires a demonstrated ability to find and develop journalistic stories. Familiarity with Rhode Island is also required.

We're looking to move quickly, so don't delay!

See here for details.

May 8, 2012

You Can Lead a Horse to Water...

Patrick Laverty

It seems that locally some people are on a "Full Time Assembly" kick and I'm not sure why. I don't see how this is possibly a good idea. One of the latest people to suggest it is URI Professor Len Lardaro in an On Politics blog post with Ian Donnis today. Ian lists out Lardaro's suggestions on what would help Rhode Island.

(1) Have a full-time legislature;
(2) Dramatically reduce the size of the legislature to about 50 persons;
(3) Institute four-year terms for the legislature;
(4) Have term limits of two (four-year) terms;
(5) Give the governor a line item veto authority; and
(6) Earmark all revenues generated by increases in taxes or fees to investment-oriented uses.

I believe some are better than others, but the bad ones are pretty bad. But first, a little other background from Ian's article. Earlier in the post, Lardaro says:

In spite of a very severe crisis, where the global economy flirted with depression, Rhode Island made very few changes to either eliminate or moderate its major structural deficiencies
Prof. Lardaro is explaining that the Assembly has done little to help avoid the economic downturn that the state is experiencing but then one of his suggestions on how to fix it is to have a full-time legislature? I don't really understand that logic. I don't think the problem is that the Assembly doesn't annually have enough time to do what needs to be done. They have plenty of time. So how would a full-time Assembly fix that?

Looking at some of his other points, on number two, I think it's also a bad idea to drop to just 50 people in the Assembly. What happens when you concentrate power into fewer people? When they are corrupted, the smaller numbers can do more damage. Plus, it's fewer people for the special interests to sway. It takes less money to influence the fewer people. Plus, when you cut the Assembly down to less than half of what they have now, it's harder for the members to associate with their constituency. So for me in that regard, the more the merrier!

On the four-year terms, I don't think it's as big of a problem, especially if it is coupled with a two-term term limit. However there is very little accountability to the public that way. I do love the idea of term limits. I can never understand why an office like Governor or President has a term limit but Congress and the State Assembly don't. Clearly that just gives more power to the career politicians and that's not what our system of government was intended to be.

Line item veto? Absolutely. Great idea.

Earmark tax increases for investments? This sounds great. Of course it makes the budgeting and accounting process more difficult, but if you want to raise our taxes on something, tell us what it's for and then use the money for that purpose.

While we're at it, why not a couple more? Zero based budgeting. We keep hearing all these little stories about waste and fraud and I'd love to have the department heads come to Smith Hill and justify everything. Let's go with a couple suggestions that commenter Dan has put forward a few times. How about a completely volunteer Assembly. If it really is all about public service, as they indicate when they want your vote, then show it. Completely volunteer. No salary, no benefits. Also, let them convene every two years. If it works for a state the size of Texas, it can certainly work in Rhode Island. They can have election years off to come up with the lists of bills that they'll bring forth in the odd year.

Like Ian indicated, it's a virtual lock that these will not be adopted in their entirety and also very unlikely that any would be adopted. However, they might be a good start to just getting the Assembly out of the way.

West Warwick Disability Pensions: Questions Asked of the Pension Board and the Troubling Or Non-Responsive Answers

Monique Chartier

The news has now broken that not only is the West Warwick pension system in deep trouble but that it may well drag the entire city over the receivership cliff. This would be a good point, accordingly, to post the e-mail exchange between myself and the WW Pension Board of six months ago. (My questions were asked pursuant to Rhode Island's Open Records law.)

1.) What percentage of all West Warwick pensions are disability (versus ordinary retirement)?

With respect to your request for information #1 concerning a breakdown of the types of pensions within the Town's Pension Plans covering Police Officers, Firefighters, and Municipal Employees, there are presently 319 retirees covered by the Plans, of which 262 are service retirement pensions, 51 are accidental disability pensions, and 6 are non-accidental/ordinary disability pensions. Thus, 17.8% of the total number of pensions covered by the Plans are disability pensions (i.e. 57 of 319 pensions).

2.) Regarding disability pensions, what is the percentage breakdown between physical and psychological?

With respect to your request for information #2 concerning a breakdown of the percentage of physical versus psychological disability pensions within the Town's Pension Plans (i.e. of the 57 disability pensions), please be advised that your request is hereby denied as it seeks information exempted from disclosure by the Rhode Island Access to Public Records Act.

Specifically, the Rhode Island Access to Public Records Act, in Rhode Island General Laws §38-2-2(4)(i)(A)(I), states that the following categories of records (i.e. information) are not deemed to be "public records" (with emphases added):

"All records which are identifiable to an individual applicant for benefits, client, patient, student, or employee, including, but not limited to, personnel, medical treatment, welfare, employment security, pupil records, all records relating to a client/attorney relationship and to a doctor/patient relationship, and all personal or medical information relating to an individual in any files, including information relating to medical or psychological facts, personal finances, welfare, employment security, student performance, or information in personnel files maintained to hire, evaluate, promote, or discipline any employee of a public body..."

Because the information that you have requested through your request for information #2 concerning a breakdown of the percentage of physical versus psychological disability pensions within the Town's Pension Plans could be "...identifiable to an individual applicant for benefits...", pertains to "medical treatment", and constitutes "...personal or medical information relating to an individual in any files, including information relating to medical or psychological facts...", such information is deemed covered by the exempted categories of information listed above, and your request must be denied.

Moreover, your request must also be denied because, in the Rhode Island Department of the Attorney General's opinions in Palazzo v. Town of West Warwick, (PR 07-01; 2/15/07) and Finnegan v. Scituate Police Department, (PR 96-10B), the Attorney General's Office ruled that the type of information you are seeking with regard to the Town of West Warwick Pension Plans is also not covered by the otherwise broad provisions set forth in Rhode Island General Laws §38-2-2(4)(i)(A)(II) of the APRA.

Pursuant to the Rhode Island Access to Public Records Act you have the right to appeal this denial to the Chief Administrative Officer of the Town of West Warwick.

3.) Once a disability pension is granted, does West Warwick have a re-certification process? Is the disabled retiree required to prove that s/he is still disabled? If so, what is required of the retiree and how often must it be carried out? i.e., once a year, once every two years?

4.) Has West Warwick observed the requirements of its own re-certification process? When were disability pensions last re-certified?

With respect to your requests for information #3 and #4 concerning the Pension Plan disability pension recertification process, the Pension Plans provide for a so-called "medical disability recertification process" under which the Pension Board may require those disability pensioners who have not yet attained the age and/or date of "normal retirement" under the Plans to be examined by a Board-appointed physician (i.e. paid for from Pension Plan assets) to determine if the pensioner is still disabled from performing his/her previous employment with the Town. However, the Pension Plans do not mandate that the "medical disability recertification process" be utilized, and do not provide specific required time intervals between medical recertification examinations. The Pension Board has in the past several years utilized the medical recertification process on a random basis for some eligible disability pensioners.

Report: West Warwick Pension System Broke By 2017

Monique Chartier

WPRI's Matt Smith reports that at a special meeting held this evening,

town leaders said if West Warwick continues on the same path as they are currently on, there will be no assets in the pension fund by 2017.

Officials also said they believe the town is on the same track as the bankrupt City of Central Falls.

The town council was joined by the school committee, town pension board, and Rhode Island department of revenue.

Did he say the Rhode Island Department of Revenue??? Cue ominous music: that's the department which decides whether a municipality gets started down the road of receivership.


Ted Nesi kindly passed along the link to his lengthy and detailed report. One telling excerpt:

The shortfall in West Warwick's pension fund totaled $98 million as of July 1, 2010, which made its funded level just 26%, according to the most recent study by Milliman Inc., the town's actuary. That's nearly as much as last year's entire $107 million town budget.

By the way, Nesi reports that

One in three police and fire retirees in West Warwick receives a disability pension, which are tax-free and worth two-thirds of final salary if the retiree got disabled on the job.

But the West Warwick Pension Board told me that "17.8%" of West Warwick's pensions are disability. Why this discrepancy between what the Board told me and what Nesi is reporting?

State Budget on the Horizon?

Carroll Andrew Morse

It's not surprising that, in an election year, the Rhode Island General Assembly would like to finish up as quickly as possible and free themselves up for the campaigning phase of the political cycle. A few folks familiar with the budgetary process believe that the schedule will be as aggressive as the House Finance Committee approving a budget by the end of next week, with all legislative business for the year -- state budget, Governor’s municipal relief package (approved or not) and everything else -- being completed by the first day of June, and with any unexpected twists in the process unlikely to carry the session beyond the first full week of June.

Those who believe that the Rhode Island legislature's traditional end-of-session flurry of business is the time when the most scrutiny is required may want to plan their schedules accordingly.

May 7, 2012

First Circuit Court Rules the State of Rhode Island Cannot Prevent Federal Prosecution of Jason Pleau from Going Forward

Carroll Andrew Morse

The First Circuit Court of Appeals has ruled 3-2 that the state of Rhode Island cannot refuse to deliver Jason Pleau "into federal custody to answer the federal indictment" resulting from his alleged role in the murder of David Main in Woonsocket (h/t Katie Mulvaney).

The court's opinion touches on a number of technical issues in the law, in particular, the nature of interstate compacts and the obligations of states under the "Interstate Agreement on Detainers Act", ultimately reaching the conclusion that state prison cannot be used as a sanctuary from Federal charges...

Were Pleau and Governor Chafee to prevail, Pleau could be permanently immune from federal prosecution, and the use of the efficient detainer system badly compromised. He is currently serving an 18-year term in Rhode Island prison and, if the writ were denied, might agree to a state sentence of life in Rhode Island for the robbery and murder. Footnote Even if Pleau served only his current 18-year term, needed witnesses for federal prosecution could be unavailable two decades from now. Instead of a place of confinement, the state prison would become a refuge against federal charges.
Comments from people familiar with criminal law are, of course, welcome.

Coming up in Committee: Seventeen Sets of Bills Scheduled to be Heard by the RI General Assembly, May 8 - May 10

Carroll Andrew Morse

Local Impact: Barrington, Central Falls, Coventry 2, Exeter, I'm pretty sure, Middletown, Newport, North Providence 2 3, Providence, Smithfield, Warren, West Greenwich.

17. H8084/S2905: In the same week, both chambers of the state legislature will hear a bill to approve $250,000 in new "Promotional Points" for the state's slot parlors (H Finance; Tue, May 8 & S Special Legislation and Veterans' Affairs Wed, May 9). Why is this a priority?

16. H7801: Provisions for the removal of derelict and abandoned vessels in state waterways (H Finance; Wed, May 9). Are we sure we don't have something in the law for this already? And why did this bill get moved from Environment and Natural Resources to Finance?

15. S2670: The weirdest bill yet in this session's continuing battle to impose strange new regulations on the rental of motor vehicles. This one says that "examiners, field investigators, hearing officers, regulatory inspectors, and other employees of the Public Utilities Commission "designated by the administrator" will be granted "all powers of police officers" with respect to the sections of Rhode Island law pertaining to motor carriers of property, towing storage, motor passenger carriers, taxicabs, and public motor vehicles (H Corporations; Tue, May 8).

14. Auto body shop and insurance company bills (S2661, S2662, S2664, S2665, S2667, S2674, S2686). Also new regulations for being allowed to remove motor vehicles from accident sites (S2514) and a lift on the ban on mobile automobile glass repair (S2663) (S Judiciary; Tue, May 8).

13. S2878: Organizations "established and licensed by the department of behavioral healthcare, developmental disabilities and hospitals for the purpose of providing either employment, vocational supports, residential and/or day support services for adults with developmental disabilities" would be allowed to join together to form their own health insurance company for "employees, retirees and other beneficiaries" (S Health and Human Services; Wed, May 9). But if this is a good idea for some organizations, why isn't it a good idea for the rest of us?

12. Various taxation changes. H8057 is a capital gains tax exemption for "new investments in Rhode Island businesses" that meet certain conditions; H7969 changes how farmland is assessed for estate-tax purposes and H7198 requires "corporations doing business in the state of Rhode Island shall add back into their taxable income any amount deducted under the federal "domestic production deduction" (H Finance; Tue, May 8).

11. H7910: Requires monitoring for the Johnston landfill, specifically for "the presence of odorous contaminants from landfill gas" (H Environment and Natural Resources; Tue, May 8).

10. S2606: Prohibition on price gouging of essential commodities; price gouging would be prohibited not only during a "a declaration of a state of emergency by the governor, or federal disaster declaration by the president", but also during any "actual or anticipated market emergency or economic emergency" (S Corporations; Tue, May 8). Do the past several years count as an economic emergency that would trigger this bill?

9. H7341: Sales-tax permits that retailers must obtain in order to do business in Rhode Island would be valid in perpetuity, instead of having to be renewed annually (H Finance; Tue, May 8).

8. H7456: On its face, this bill appears to lower the minimum corporate tax in Rhode Island from $500 to $50... (H Finance; Tue, May 8) ... but in reality, this bill, by itself, will have no impact on the taxes that businesses pay. It impacts only the minimum income tax and not the franchise tax, which with the way that RI law is currently structured, means that business owners who pay this tax still owe the state $500, $50 in corporate minimum tax and $450 in franchise tax.

7. H7072: Creates a position of Inspector General for the state of Rhode Island "charged with the purpose of preventing and detecting fraud, waste, abuse and mismanagement in the expenditure of public funds" (H Finance; Wed, May 9).

6. H7237: A $75,000,000 bond question "to provide funds to the Housing Resources Commission to be allocated to finance the cost of the Neighborhood Opportunities Program" to be placed on the November ballot (H Finance; Wed, May 9).

5. S2307, to paraphrase the official description, repeals the section of the law allowing pay-day lending; S2832 creates new regulations governing pay-day lenders (S Corporations; Thu, May 10).

4. H7132: Restores and freezes the regionalization bonus in the state education aid "funding formula" at 2% (H Finance; Wed, May 9).

3. H7454: Creates a new 10.09% tax-bracket on "head of household, unmarried individuals, married individuals filing separate returns and bankruptcy estates" making more than $200,000 per year and on "married individuals filing joint returns and qualifying widow(ers)" making more than $250,000 per year (H Finance; Tue, May 8).

2. S2251: Authorizes the use of a system "(1) Consisting of an electronically automated scanner and sensor; and (2) Capable of producing one or more digital images of the registration plate of a motor vehicle" (presumably linked to an appropriate database) for detecting automobile owners who do not have insurance (S Judiciary; Tue, May 8).

1. H8056: Foundation for a single-payer health insurance system in Rhode Island (H Finance; Wed, May 9), containing such intriguing phrases as...

  • "EOHHS [The executive office of health and human services] shall maintain enrollment and expenditures to ensure that expenditures do not exceed amounts available in the fund, and if sufficient funds are not available to cover the estimated cost of program expenditures, EOHHS shall institute appropriate measures to reduce costs",
  • "EOHHS is authorized to seek appropriations from the general fund in the form of loans to the healthy Rhode Island program trust fund", and
  • "In the event that EOHHS reasonably expects that the cost of healthy Rhode Island program will exceed the available funds, coverage for eligible individuals shall continue until the annual redetermination of each eligible individual, after which time EOHHS shall immediately transfer the eligible individual to coverage in the state’s health insurance exchange." (i.e. when this program proves too expensive to manage, we'll transfer people to a magic exchange where magic money will appear to pay their costs).

The Current Week, 04/30/12-05/04/12

Justin Katz

Justin's Case

State in Decline, Employment in RI Cities and Towns: North Providence - Research
North Providence's low-for-Rhode-Island unemployment rate masks the fact that the city's number of employed residents has never been lower in the DLT's 22 years of data.
What's Nuttier than a 7% Rate of Return Expecation? - Opinion
Polemics can give a sense of the debate concerning reasonable predictions, and investment returns are no different.
As State Legislatures Go, the General Assembly Is Pretty Liberal - Analysis
Empirical data related to the ideology of state-level legislators suggests that, yes, Rhode Island is very liberal.

State in Decline, Employment in RI Cities and Towns: North Smithfield - Research
North Smithfield's unemployment rate of 10.1% (not seasonally adjusted) is largely attributable to the rapid growth of its labor force during the last decade.
The Technocrats' Deal with the Devil - Opinion
The intricate machinations suggested by Gary Sasse in the "tax-the-rich" debate raise the question of whether RI can afford the risk (or the wait) involved with technocratic designs.

State in Decline, Employment in RI Cities and Towns: Pawtucket - Research
Standing in static comparison with other RI cities and towns, Pawtucket's employment statistics are bad, but not state-leading. It's the longer-term view of the city's decline that ought to be a matter of concern.

State in Decline, Employment in RI Cities and Towns: Providence - Research
Although no employment pictures are positive, in Rhode Island, Providence's is a mixed bag. Still, all positive spin must be tempered with the fact that so few of its residents are interested in working, with only 40% actually employed. Its unemployment rate would be around 30% if it were like other cities and towns.

State in Decline, Employment in RI Cities and Towns: Scituate - Research
Scituate's employment and population trends aren't far from the typical RI town, and its not-seasonally-adjusted unemployment rate is below the state's overall number. However, the town has been on a consistent downward drift for a number of years.

May 5, 2012

Speaking of John C, When Will That $75,000 Get Paid Back?

Monique Chartier

So as you probably heard, Congressman David Cicilline's brother, John, made the news yesterday.

Which reminds me. When is either John Cicilline or David Cicilline going to pay Providence back that $75,000 - or is it $150,000 (two checks @ $75,000)? Is there any question that this highly questionable maneuver would never have taken place if the person tendering the checks had not been the brother of the mayor?

Rumors have been circulating that a post in President Obama's administration for Congressman Cicilline might be arranged if polling of the First District race does not improve sufficiently for the incumbent. Looking down that road for a moment, is there any question that this matter would not come up in a vetting process or during Senate confirmation proceedings? ("Congressman, are we to understand that, during your tenure as mayor of the city, your brother stiffed Providence for $75,000 or $150,000?")

Of course, President Obama could avoid Senate scrutiny and go the czar route for bringing the congressman on board. For example, in the highly unlikely event that, in the midst of campaign season, President Obama wanted to hide just how bad the federal deficit is, Congressman Cicilline is eminently qualified to become the Czar of Freezing Out Federal Auditors And Covering Up The Egregious Budget Situation Until We're Safely Past Election Day. ("Sure, Mr. Axelrod, here's how we did it when I was mayor ...")

Providence's $5 Million Advance

Patrick Laverty

According to a Ted Nesi article on yesterday, Providence will be receiving a $5 million advance from Johnson & Wales University (JWU) immediately. Back in February, JWU agreed to commit $6.4 million to the city over the next 10 years.

What also makes this interesting is the city's explanation on what they'll do with the money and the accounting now.

“JWU is advancing the city $5 million on their agreement because they knew the city needed cash,” Taveras spokesman David Ortiz told “However, we are only recognizing $650,000 in revenue this year and for each of the next nine years, so not all $5 million goes to the budget.”
The mayor's spokesman also added:
The City Council agreed to accept the cash now and budget it over time
So this sounds like the city is going to take the $5M (of the $6.4M) now, spend it, but write down that they spent $650,000. And then in subsequent years, again write down $650,000 on the budget.

I'm no CPA or anything like that, but shouldn't what is on the budget actually match what you're doing? If you're going to spend five million dollars, shouldn't the ledger reflect that? Plus, what happens in future years when the budget says you're spending $650,000 of the money from JWU and the money isn't there? What happens when Angel Taveras is no longer mayor and the next mayor's administration tries to make sense of this accounting? Will they simply refer to "prior administration's fiscal mismanagement?" I'm not calling it mismanagement, I just know that pols love to blame the previous guy. Well, except in Taveras' case.

I understand the reason for the advance. Plain and simply, the city will run out of money and checks will bounce without doing it. However the accounting sounds like something that's happened around here before, plugging budget gaps by using the tobacco settlement money or creating jobs and departments with one-time federal stimulus money. It works great to keep the creditors at bay for now, not so good for next year.

On another angle, what will the bond rating agencies think of this?

Matthew Stephan, an analyst at Standard & Poor’s, said this week the additional payment from Brown to Providence “could help firm up cash” for the city through the end of June.

“Given the relatively small amount of the projected shortfall and the recently agreed upon Brown University payment, we understand the city will manage its cash flow very carefully through the end of the fiscal year and does not expect to borrow for cash flow,” Stephan wrote in a note to investors obtained by

“However, if the city were to experience a delay in the JWU and/or Brown University payments or if there were unexpected negative budget variances, we believe it is possible the city would need to issue short-term cash flow notes to provide liquidity through the end of the fiscal year,” Stephan continued.

However, I believe this statement was issued before City Councilors Hassett and Igliozzi let it be known that they will submit an amendment to the recently passed ordinance to reduce the amount cut from the pension system. If their amendment were to pass, then there is a "negative budget variance" and the city would possibly need to "borrow for cash flow."

This just seems like some pretty interesting accounting and I'm hoping I'm wrong on how it works. I'm just confused when the mayor says he needs a certain amount of money per year and then spends a large chunk of that in year one. What happens next year? Or is that when the heat gets turned up on Providence College, RISD and the other tax-exempts?

May 4, 2012

AFL-CIO: Don't Fund Partisan Org's w/Taxpayer $'s!

Marc Comtois

As Bob Plain reports:

Writing on behalf of the 80,000 members of the AFL-CIO, union leaders George Nee and Maureen Martin sent a letter to every member of the legislature asking that ALEC memberships not be funded with taxpayer money.

“If the views and priorities of ALEC align with your personal beliefs, then by all means remain a member,” they wrote in the letter. “We only ask that the Rhode Island taxpayer not be responsible for paying your membership dues to a right-wing, business backed lobbying group, just as no one would ask the taxpayer to be responsible for paying any members dues to liberal organizations such as Ocean State Action, Emily’s List, or”

No word on how the AFL-CIO feels about compulsory dues being paid to their organization by unionized public employees whose salaries are funded by taxpayer dollars. I guess that one-degree of "separation" is enough. Or something.

The Media On Student Loans

Patrick Laverty

We have a debate going on in Congress about raising the rate on student loans from the current 3.4% to the old interest rate of 6.8%. There is very little coincidence that the Democrat-controlled Congress who passed this change set the expiration date for an election year. Either continue with the Democrat chosen rate or deal with the consequences in November.

However, my issue here is with the media. I've read so many sources about this situation and many of the writers aren't telling the full story. I don't want to pick on the Warwick Beacon because I've seen the same sort of thing in many different news sources, but this is just the one that I'm using for illustration.

For some Americans, increasing an interest rate by 3.4 percent may not be a cause for alarm. For Cranston native Andrew Iasimone, however, who has incurred $32,000 in student loans in his freshman year at Roger Williams University, this could be a big problem. Iasimone still has five years to go in his pursuit of a double major in political science and psychology with a concentration in forensic science.

Paying back his loans may become even more difficult this summer should Congress increase the interest rates for the Stafford Student Loan from 3.4 to 6.8 percent. If that is the case, students like Iasimone may be looking to pay an additional $4,000 to $5,000 more in interest costs, according to Charles Kelley, executive director of the Rhode Island Student Loan Authority.

Later in the article, Mr. Kelley states:

An increase in the interest rate would affect 36,000 Rhode Islanders with Stafford loans amounting to a total of $150 million, said Kelley.
To me, that's either simply untrue or really misleading. Let me ask you this, based on what you read there, if you had a pile of student loan debt and Congress changes the interest rate to 6.8%, would you think your payments are going to go up? Of course you would! Not so fast.
The increase would only affect interest rates for subsidized Stafford loans for undergrad students issued after July 1, 2012. Interest rates for existing loans won't change.
Any Stafford loans originated before July 1 of this year, will keep the old interest rate. So your pile of debt is unaffected by this change. If Congress raises the rate to 6.8%, then don't use the Stafford program, go to a bank and get a lower rate.

Additionally, the Beacon article mentioned this one student's $32,000 in loans for his first year, however this rate change will only directly affect federal Stafford loans and not all of that $32,000 is Stafford. We know this because again from the USA Today article:

That estimate is based on a borrower with $23,000 in subsidized Stafford loans, the maximum allowed for undergraduate dependent students.
That's one of my big frustrations with the media today. You try to be informed and you read the news but often they struggle to get the whole story out.

May 3, 2012

North Smithfield Running a Deficit

Carroll Andrew Morse

Central Falls, Providence, East Providence, North Smithfield can be added to the list of Rhode Island municipalities running a budget deficit, according to Sandy Phaneuf of the Valley Breeze...

The benefits in contracts for town employees are growing at a faster rate than the town can legally afford to cover them, warned the North Smithfield Budget Committee in a communication to the Town Council this month. The gloomy prediction foreshadowed even more bad news this week from auditors: North Smithfield ended fiscal year 2011 with a deficit.
Rhode Island is way past the point where its fiscal crisis can be believed to be confined to a few, historically unique situations.


Via Twitter, Ted Nesi of WPRI-TV (CBS 12) reminds me that I left Pawtucket off of the above list.

Councilmen Against It After They Were For It

Patrick Laverty

According to multiple reports today, two Providence Councilors, John Igliozzi and Terry Hassett now are seeking to amend the ordinance that the City Council just voted on a few days ago, to now lessen the cuts by $3-4 million.

From the RINPR blog:

“I am acting in what I believe to be a much fairer manner in order to provide enhanced security for retirees while continuing to improve and stabilize the entire pension system,” Igliozzi said.
Ok, that's all well and good, but what's changed since Monday night? Why have these two councilors had a change of heart? Maybe they didn't have enough time to think the ordinance through before they voted on it? Well, that certainly wouldn't be true for one as Ted Nesi tweeted today:
It gets better: Hassett is on the council committee that unanimously OK'd the pension changes first. Did he vote for the bill *three* times?
So Hassett voted for this in his committee, then voted for it with the full Council and now he has reservations?

The only answer I can find about why the change is from Ian Donnis:

Igliozzi and Hassett say they’ve reflected on their pension overhaul vote on Monday, regret it, and don’t want to abandon hard-working police and firefighters. That’s about as detailed as they’re getting in explaining why they no longer support something that they did three days ago. Igliozzi told me:

"Regret is abundant. It’s clear that what we might have thought was good is not turning out to be what it should be. It was too draconian."

If the COLA freeze wasn't enough to fully save Providence, and now these Councilors want to move the needle backwards by $3-4 million, where will that get made up?

It may not be a problem, as Mayor Angel Taveras has vowed to veto the amendment.

I'm sure there's much more to come.

Providence Pension Ordinance in The Economist

Carroll Andrew Morse

Further evidence we're on the cutting edge of history here in Rhode Island -- The municipal pension changes proposed by Mayor Angel Tavares have already made the Economist (that's the famous British periodical, not some blogger with that handle)...

Thus this week’s ordinance, in which the city suspended the cost-of-living adjustments (COLAs) by which pensions are increased each year. Some pensioners’ payments were rising by a compounded 6% a year, bringing a fire chief who had earned $63,510 the year before he retired in 1991 to $196,813 now. With such cases in mind, the ordinance also caps yearly payouts at 1.5 times the state’s median household income, which comes to about $78,000. The changes are expected to save the city $19m in the coming year, and to reduce its unfunded pension liability from $900m (the plan currently has only 34% of the assets it needs to cover future costs) to $660m. Should the funding ratio ever reach 70%—something that will take decades under current plans—COLAs will be reinstated.
And, of course, you can't really be cutting-edge on this issue, without a reference to how the bond markets are a top priority, in anything that happens with municipal government...
The bankruptcy of Central Falls is instructive in another sense, points out Matthew McGowan, a lawyer for the city’s pensioners, in that such proceedings are fraught with legal uncertainties. Just 19 days before the city went into receivership, the Rhode Island state legislature passed a law granting priority to bondholders over other claimants in municipal bankruptcy proceedings. Mr McGowan’s clients agreed not to challenge the law thanks in part to the promise of the one-off payment. But a challenge might well be successful. Workers and pensioners who have had their COLAs trimmed in other states have sued their governments claiming breach of contract. “We’ve hit rock bottom in this state,” says Mr Chafee. Perhaps, but a few adverse court rulings could dig Rhode Island much deeper.

May 2, 2012

Coming up in Committee: Nine More Sets of Bills Being Heard by the RI General Assembly, May 2 - May 3

Carroll Andrew Morse

Local Impact: Central Falls/Cumberland 2, Cumberland, Newport, Warwick.

9. H7197: "The general assembly shall not authorize, award or allow legislative grants. For the purposes of this chapter legislative grants are hereby defined as monetary award to nongovernmental, or nonquasi-governmental entities" (H Finance; Thu, May 3).

8. S2473: Makes explicit that municipal fiscal stabilization procedures relating to budget commissions do not "impair any protection and/or indemnification of elected officials provided in any city or town charter, or restrict the protections afforded by the constitution of the United States, the constitution of the state of Rhode Island, or the United States Supreme Court", then specifically noting something called "the Noerr-Pennington Doctrine" (S Finance; Wed, May 2).

7. H7996: Establishes conditions that must be met, which go beyond the IRS regulations currently in use, for someone to be considered a contractor and not an employee (H Labor; Wed, May 2).

6. H7478: Mandates that portable electronics insurance can only be sold by someone with a license to sell such insurance (H Corporations; Wed, May 2). It's worth noting that the second sponsor of this bill is William San Bento of Pawtucket, whose official House bio includes mentions "Insurance Agent/Business Owner" under employment, and "Professional Insurance Agents; Independent Agents Association..." under general background.

5B. H7811: A maintenance of effort provision for the annual taxpayer contribution to the state pension system, until the system is 80% funded (H Finance; Wed, May 2).

5A. H7131: Establishes "a special escrow pension lawsuit satisfaction fund which shall be used to pay any financial court judgments rendered against the state as a result of successful pension law challenges. All state fiscal year end budget surplus revenues shall be deposited in this fund" (H Finance; Wed, May 2).

4. S2764: The official description says this bill "eliminates the two-tiered time limit", i.e. creates a single time-limit, for direct welfare cash-assistance. Among other changes, a time limit of 24 months for people participating in "The Rhode Island Works Program" is replaced with a time limit of 48 months (S Health and Human Services; Wed, May 2).

3. S2361: Detailed procedures for dealing with and possibly altering a patient's "medical order for life sustaining treatment" (MOLST). A MOLST is defined as a "request regarding resuscitative measures that directs a health care provider regarding resuscitative and life sustaining measures" (S Health and Human Services; Wed, May 2). The question around this bill continues to be whether it is intended to make it easier or harder to end life-sustaining treatment for a patient who cannot make decisions for him or herself, relative to existing law.

2. S2870: Authorization of the East Bay Energy Consortium (S Environment and Agriculture; Wed, May 2). Justin covered the first hearing on this bill for the Ocean State Current (starts at 7:27), where some interesting detail, including why the consortium is seeking eminent domain power (so that it can sell bonds that it will finance with charges on National Grid Ratepayers) was deliberated.

1. 3 bills relating to civil unions and same-sex marriage. H7845 would permit same-sex marriage in Rhode Island; H7752 would allow same-sex couples married in other jurisdictions to divorce in RI (even if same-sex marriage isn't approved) and H7753 restricts the conscience protections in Rhode Island's current civil-unions laws to organizations "whose principal purpose is the study, practice, or advancement of religion" (H Judiciary; Wed, May 2).

Woonsocket War Memorial: Rally and Defense Fund

Monique Chartier

... yes, even the self-described "stickler about church and state separation", Jim Baron, says it's a war memorial.

But the war memorial at Place Jolicoeur is different — materially, qualitatively and significantly different. It is different because it is not a religious symbol at all. Cross or no cross, it is not a religious symbol, it is a war memorial.

Its purpose — its reason for being, and for being where it is in the public square — has nothing to do with faith or religion. It is there to remember, and recognize the sacrifice of, the soldiers it honors: William Jolicoeur and Alexandre, Henri and Louis Gagne. The cross at the top is ancillary; it is, in effect, a decoration on the monument and what it denotes, any religious significance aside, is that this is a substitute for the graves these men will never have in their home city. They are buried on the faraway battlefields where they fell in service to their country.

The rally kicks off at 4:30 today and takes place at the memorial, 5 Cumberland Hill Road, Woonsocket. (From the south, take either Route 146 North or Route 295 North, then pick up Route 99 North. At the end of 99, take a left at the light and keep driving until you get to the fire station which will be on your left. Look for signs and police officers directing cars to parking areas.)

Last night, as Council President John Ward described it via e-mail, the Woonsocket City Council voted to establish

the creation of a separate account in order to accept donations to be used for the memorial defense costs and monument rehabilitation.

Those who are inclined to contribute to the fund will find information on the front page of the city's website.

May 1, 2012

Standard & Poor’s Whacks Providence's Bond Rating

Monique Chartier

Last night, the Providence City Council voted to approve substantive, though compared to the shortfall, modest, pension reform. At the meeting, an irate firefighter demanded to know

Can you tell us what the rush is?

Today, Standard & Poor's supplied the answer.

S&P lowered Providence’s credit rating to BBB, two steps from junk-bond status, from BBB+, citing the “ongoing fiscal pressure affecting the city,” and said the outlook is negative, meaning it could be cut further.

Elizabeth Warren Engaged in "Poached Diversity"

Monique Chartier

... that's not my characterization, it's Margery Eagan's, not exactly a raving right winger.

To back up a little, last week, the Boston Herald learned that Elizabeth Warren, the Dem opponent of Senator Scott Brown (R-MA; can you believe it?!), had claimed Native American heritage.

Elizabeth Warren’s avowed Native American heritage — which the candidate rarely if ever discusses on the campaign trail — was once touted by embattled Harvard Law School officials who cited her claim as proof of their faculty’s diversity. ...

The Ivy League law school prominently touted Warren’s Native American background, however, in an effort to bolster their diversity hiring record in the ’90s as the school came under heavy fire for a faculty that was then predominantly white and male.

My question is, was this a factor in Harvard's hiring of Ms. Warren?

A genealogist has now apparently determined that Ms. Warren is 1/32 Cherokee. However, this will not satisfy the Boston Herald's Margery Eagan.

You’ve grabbed for minority cred without enduring the minority grief. It’s poached diversity. It’s glommed onto, what, five generations removed, assuming there were some facts way, way back when, as your campaign aides claimed last night. ...

Here’s the problem for you, Liz: We’re not talking some elaborate, arcane, confusing financial irregularity here that nobody can understand. Everybody gets this. It’s letting everyone think you’re something that you’re not. It’s letting stand the idea that you’re part of an aggrieved class of people. It’s a sin of omission, which is not as bad as a sin of commission — like, you know, the typical political ploy of pumping up resumes with fake claims of combat heroism and purple hearts. But it’s a huge problem nonetheless.

Campaigning in Afghanistan*

Marc Comtois

Despite attempts to quell rumors to the contrary, we've learned that President Obama is indeed in Afghanistan and will hold a live press conference from there. The purpose of the trip is to sign a new treaty with the Afghan government.

The countries have been negotiating a strategic agreement that would outline the basis for U.S.-Afghan cooperation after most U.S. and allied troops withdraw in 2014. Obama and Karzai are expected to sign the agreement on Tuesday, according to the senior administration officials who briefed reporters on the flight.

The Strategic Partnership Agreement provides a framework for the U.S.-Afghanistan partnership for the decade following the U.S. and allied troop withdrawal, the officials said on condition of not being identified.

All of this happens on the 1st anniversary of the take down of Osama bin Laden. The President is now on day 3 (or so) of not spiking the football this year.

*File under, "What if Bush had done that?"

Coming up in Committee: Fourteen Sets of Bills Scheduled to be Heard by the RI General Assembly on May 1

Carroll Andrew Morse

Here are the RI General Assembly bills of interest for Tuesday (a few with hearings already underway):

Local impact: New Shoreham, Pawtucket

T14. H8020: "The director of administration shall not approve any contract or contract for services with a nonprofit organization or agency unless the organization or agency fully discloses all executives’ compensation and administrative costs" (H Finance; Tue May 1).

T13. 7406: Sets a minimum price of $35.00 for transportation provided by "public motor vehicles", i.e. privately owned non-taxicabs hired for individual trips (H Corporations; Tue, May 1).

T12. H7468: Bans persons under 21 from admittance to nightclubs where alcohol is served (H Judiciary; Tue, May 1).

T11. H7359: Allows out-of-state businesses to operate in RI during a declared disaster without being immediately treated, for purposes of taxation and regulation, as having opened a branch office in RI (H Corporations; Tue, May 1).

T10. Various changes to criminal law submitted at the request of the Attorney General. A candidate for the most interesting is S2650 which criminalizes residential mortgage fraud (S Judiciary; Tue, May 1).

T9. H7130: No tolls on the Mt. Hope bridge. Also, H7457 would transfer control of the Sakonnet River bridge to a newly created "Turnpike and bridge division" within the department of transportation (H Finance; Tue May, 1).

T8. H7409: A prohibition on price gouging of essential commodities "upon a declaration of a state of emergency by the governor, or federal disaster declaration by the president, or during an actual or anticipated market emergency" (H Corporations; Tue, May 1).

T7B. H7374: The official description says this bill "eliminates the two-tiered time limit", i.e. creates a single time-limit, for direct welfare cash-assistance. Among other changes, a time limit of 24 months for people participating in "The Rhode Island Works Program" is replaced in the law with a time limit of 48 months (H Finance; Tue May 1).

T7A. H7105/S2284: Extends the state's child-care subsidy to families at 225% of the Federal poverty level from 180%, if "the family requires child care in order to work at paid employment" (H Finance; Tue May 1 & S Finance; Tue, May 1).

T6. S2254: "Any private contract or employee who has worked more than thirty-six months whether or not consecutive, at a state department, performing services similar to or in substitution of work normally performed by state employees within that department, shall be automatically converted to a fully funded full-time equivalent position within that department" (S Finance; Tue, May 1).

T5. H7710: Government funded "family planning" through "eligibility pursuant to section 1902(a)(10)(A)(ii)(XXI) of the social security act" (Medicaid?) for individuals "whose income is no greater than two-hundred fifty percent (250%) of the federal poverty level" (H Finance; Tue May 1).

T4. H7265: A $75,000,000 bond question "to provide funds to the Housing Resources Commission to be allocated to finance the cost of the Neighborhood Opportunities Program" to be placed on the November ballot (H Finance; Tue May 1).

T3. S2201 raises the value of estates exempted from the estate tax to $1,500,000 (to be annually adjusted for inflation); S2172 changes estate tax rules on "farmlands and other real and tangible property associated with agricultural operations" (S Finance; Tue, May 1).

T2B. S2108: Restores and freezes the regionalization bonus in the state education aid "funding formula" at 2% (S Finance; Tue, May 1).

T2A. S2757: Changes how debt service is considered in maintenance of effort calculations for school-district budgeting. (S Finance, Tue, May 1).

T1. S2656:/H7899: Resolution calling for Congress to approve a Constitutional amendment that would allow the government to restrict the political activities of corporations and individuals (H Judiciary; May 1).