‘Flawed RI business brand’ critiqued by RI Taxpayers group


More than changes to tax policies and regulations are needed for the state to climb out of its dismal rankings as a place to do business and for the economic climate to improve.

That’s what Ken Block told members of the RI Taxpayers Saturday at the organization’s annual meeting. Block, the founder of the Moderate Party and president of RIT, said, “It’s the whole package,” that businesses look at when considering the state.

“They [businesses] have a lack of confidence that the right thing will happen,” he said near the conclusion to the two-hour meeting held at the Airport Radisson.

The session focused on the economy and an appeal for the legislature to address serious issues. Block cited the high cost of unemployment insurance and temporary disability insurance as two examples of changes that would enhance the business climate. Apart from those, he spoke of his campaign to eliminate the “master lever” from the ballot, and of how that effort appears doomed in this General Assembly, fostering more uncertainty. Government needs to operate with transparency and stability for businesses to operate, he said.

RIT board member and business consultant Larry Girouard echoed Block.

“The Rhode Island business brand is seriously flawed,” he said.

Girouard questioned why businesses would want to move here and asked how the state can be marketed. Girouard said the state is losing higher income jobs, which means that a greater portion of the cost for governmental services will fall on the shoulders of those with lower pay.

As an example, Girouard cited fire projection that costs $139 per capita across the country is $284 here and “higher than any other state in the country.”

Turning to the General Assembly, Girouard said 2,035 bills were introduced this session, of which 80 percent are a waste of time, he said. He listed a dozen bills, but got the greatest laugh over the attention given to naming calamari the state appetizer.

Block targeted temporary disability insurance as an issue that could be corrected. In Rhode Island, workers pay 1.2 percent of their gross salary up to $60,000 into the fund. That amounts to $720. New Jersey is one of the few states that also have a state-managed fund, but the annual cost there is $342.

Digging further, Block found that more Rhode Island workers use TDI each year, as compared to 3 percent in New Jersey.

More than 9 percent use TDI in Rhode Island, supposedly so sick they can’t work. Block attributed the excessive use of the fund to “monkey business” and physicians who are all too willing to provide workers with written notices.

“Why is it that our government doesn’t fix it?” he said. “It’s not that hard to fix.”

Block called the state’s unemployed insurance rate “the most expensive” in the country.

“We’re going to go broke again. We have to fix what is structurally broken,” he said. Block said some businesses lay off workers year after year, requiring other businesses to “subsidize these frequent flyers.”

“We have to address what drives the deficit,” he said.

He pointed to seasonal businesses such as landscapers and construction companies that use layoffs to offset slow business periods. He said the state needs to define seasonal businesses and establish limits on their use of unemployment insurance.

Block credited House Speaker Gordon Fox for taking an interest in abuses to the TDI fund, saying, “that’s spectacular and that’s great.”

But earlier in his remarks he blasted Fox for holding up legislation that would eliminate the master lever from the voting ballot, although the measure won overwhelming support from Representatives and Senators. In addition, the campaign garnered the signatures of 2,600 favoring the abolishment of the master lever enabling voters with a single stroke to cast their ballot for members of a single party. In his campaign Block showed that many voters didn’t understand the master lever, assuming it was a choice of their political leaning, not a vote.

Block predicted the legislation would not come up for a vote.

“This is where our government breaks down,” he said, “every legislator secedes their power to vote to the speaker.” He called Fox’s action to hold the bill in committee a display of “massive disrespect” to those petitioning to change the ballot and a “poke in the eye.”

Block vowed to rally even greater numbers to push for the bill next year.

Looking ahead, Block didn’t have a bright forecast.

With Massachusetts casinos coming online and “pension funds not really fixed,” he said, “large future year deficits are coming at us.”

Harry Staley, RIT chairman, however, wouldn’t let the meeting end on such a downer.

While saying there has been a loss of faith in government and “an attitude of surrender to fate,” he said there is the power to defeat apathy and to take control of our destiny. The challenge, he said, is to engage young people and to build “an educated, thoughtful, involved citizen-taxpayer organization that can make a positive contribution to the solution of the problems of this state.”


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The elephant in the room that seems to elude people is the state's confiscatory tax structure. More specifically, the existence of a state income and sales tax. Why? What specific services do residents of RI receive, as a function of these taxes, that NH residents do not receive, as a function of not having these taxes? And yet Rhode Islanlders, who retain the distinction of having the second lowest median adult education level in New England, seem perfectly happy to pay these taxes while re-electing the same dolts, year after year, who will do nothing to change this tax structure. Regulations, graft, and cronyism will not change until money stops flowing freely to the state house. And the money flow will not change until taxes are dramatically altered. But that will require either courage (unlikely), or a new breed in the GA. And with 1 of every 6 Rhode Island adults linked to a public payroll, a new breed is unelectable. Result: Higher income producers will continue to flee, while Takers will continue to move here. RI is clearly becoming a mocrocosm of Obama's vision for America: Punish producers, enable takers, expand government, and make as many citizens dependent upon government as possible. RI's future, like America's, is simply unsustainable because, as Thatcher said: "...eventually you run out of other peoples' money."

Tuesday, May 14, 2013