December 20, 2014
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Competitive bids make for a viable enterprise system
My take on the news
Lonnie Barham

TAX INCREASE RAISES UGLY HEAD AGAIN:  Facing a projected $31 million budget shortfall for next fiscal year, house and senate legislators are grappling with what to cut.  It looks like a proposal to cut the corporate income tax, a move that would surely attract more business and tax revenue, may be an early casualty.  Of course the looming shortage is bringing tax increase proponents out of their holes.  Representative Maria Cimini is again pushing to raise the maximum personal income tax rate from 5.99 percent to 7.99 percent, a move that would surely provide another bullet to our faltering economy.

     Thankfully, House Finance Chairman Helio Melo, one of the brighter, more visionary members of our legislature, seems opposed.  Having lowered the income tax rate only two years ago, we need to give that effort some time to prove itself before panicking and raising it again.  Our state already looks like a bad place to invest because of its high tax rates and anti-business regulations.  Let’s not make our reputation worse by looking like we are so unpredictable that we play with tax rates every year or two. 

 

CHAFEE AGAIN TRYING TO INTRUDE ON FREE ENTERPRISE:  Against the opposition of environmental groups and National Grid, Governor Chafee is pushing to require National Grid to solicit bids for up to 150 megawatts of large-scale hydropower from Canada.  First, the statute Chafee is trying to twist to implement the requirement was meant to grow in-state renewable energy - thus, the environmental groups’ resistance.  Second, requiring National Grid to purchase a certain amount of energy from Canada destroys the electric company’s negotiating power with Canada and will result in imported electricity costing more.

When will our quixotic governor realize that trying to force his costly ideas on private companies is not only an affront to free enterprise that will help destroy our market-driven economy but, in many cases, is also contrary to the “green” philosophy he claims to espouse?  

 

WEEKLY VS. BI-WEEKLY PAYCHECKS:  Few of us realized before a few days ago that Rhode Island requires private employers to pay employees every week instead of doing what the state and the rest of the country do, distribute pay biweekly.  Only Rhode Island and Connecticut require weekly pay for private employers, and Connecticut issues so many waivers that it is virtually a biweekly-pay state.  Only in Rhode Island do we still suffer with an archaic law that makes a company’s payroll expenses twice that of companies in other states.

 A bill is being considered to change this silly, anti-business statute.  Surely our legislators will have the courage to pass the bill.  Otherwise, the General Assembly’s verbiage about wanting to promote economic development and make our state business-friendly is just empty rhetoric.   

 

GETTING RID OF COMPETITION:  A bill has been introduced in the R.I. Senate that would eliminate the requirement for competitive bidding for some large state projects.  The bill was introduced by Senator Joshua Miller, Democrat of Cranston, who admitted he really didn’t know exactly what is in the bill.  As far as who asked him to introduce it, Miller could only say “some people involved in construction.”  Since the bill is co-sponsored by Senator Frank Ciccone, a highly-paid official in two major labor unions, suspicions were raised immediately that unions were behind the legislation. 

A few days later, news leaked out that the “some people involved in construction” are the 20 percent of R.I. builders who are union employers, to include the giant Gilbane Construction Company.  The 80 percent of Rhode Island builders who are not bound by union contracts are objecting vehemently to the bill.  The Associated Builders and Contractors of Rhode Island, representing the non-union builders, said the bill “Discriminates against the majority, to the benefit of the minority...(and) would seriously curtail competition and drive up the costs of these projects.”   

Competitive bidding helps keep our free enterprise system viable.  It generally ensures fairness and protects the end user, especially taxpayers, from paying excessively because some special interest padded a project’s cost with unnecessary or overpriced work.  

We should all be holding on to our wallets when huge companies act in concert with unions to jack up the price of taxpayer-financed projects by eliminating their competition.  

 

CICILLINE WANTS TO GROW FEDERAL GOVERNMENT:  At at time when we should all be trying to find ways to reduce the size and cost of government, U.S. Representative David Cicilline wants to add rather than reduce.  He has introduced a bill to support so-called “social enterprises,” organizations that ostensibly seek to be a positive force for social causes.  The bill would create yet another federal government entity called the “Commission on the Advancement of Social Enterprise.”  Cicilline’s office has no idea what this expansion of government will cost taxpayers. 

If these non-profit and corporate “social enterprises” can’t get enough support on their own from citizens who think their goals are admirable, then they should go out of business.  Obviously, such lack of support indicates their goals and practices aren’t viable.  Should we expand government to support such non-viable organizations?  Absolutely not!  Why should taxpayers have to subsidize someone’s “great social idea” that has proven it can’t go anywhere on its own?

Sooner or later, people like David Cicilline and others of his ilk will realize that increasing big government is not the answer to all of society’s problems.  Growing government in order to throw taxpayer money to “social enterprise” organizations that can’t make it on their own is an abomination of our free enterprise system and an insult to taxpayers. 

 

WARWICK COUNCIL BEING PETTY:  The Warwick City Council refused to pay a $709 repair bill to an insurance company to compensate for damages caused when a Warwick police cruiser backed into one of the company’s insured customer’s parked car.  There is no controversy about who was at fault; the police officer was in the wrong.  The City Council based its refusal on the fact the repairs were made without three bids and the fact the insurance company did not have a representative at the city council meeting.  How petty can a public body get?  First, there is nothing in state law that requires car repairs resulting from an auto accident to have three bids.  Second, there is nothing in Warwick ordinances or City Council rules that requires a claimant appear in person before the Council.

Councilman Joe Solomon said the council works “on behalf of the people” and the insurance company should absorb the cost.  How does Councilman Solomon think insurance companies keep the cost of our policies down?  They do it by going after the parties who were at fault in order to reimburse themselves for the costs of repairs suffered by their policy holders who were not at fault.  Does the councilman want all of our insurance policies to go up?   

For an elected body that claims it promotes economic development and supports businesses, it seems strange it would try to deprive an insurance company of its just compensation - especially to deprive it based on such illogical and petty reasoning.    

  

QUOTE OF THE WEEK:  Once again, this week’s best quote comes from a comic strip.  In the Memorial Day edition of the comic strip Blondie, little Elmo asks Dagwood who’s his favorite superhero, Superman, Batman or Spiderman?  Dagwood’s response, “I like the heroes we honor on Memorial Day, Elmo...our brave soldiers who died fighting to keep us free.”  Elmo:  “...you’re talking about REAL superheroes, aren’t you?”

What’s disappointing about the comics page, however, is that on the one day each year devoted to remembering those who died in uniform to protect our freedoms, only one of the 20 comic strips mentioned anything at all about those we remember on Memorial Day.  Thank you, Dean Young and John Marshall - writers of the strip Blondie!


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