State budget blues: Again the citizens lose
Once again another legislative season is edging to a close, and once again the nothing of substance has been accomplished. No change in government operating paradigms was instituted, and no attempt at lowering the state’s outstanding debt was discussed. Nevertheless, the legacy of debt continues to rise to levels bordering on obscene.
As the leaders up on Smith Hill take a self-congratulatory victory lap, it is worth reviewing what burdens remain on the taxpayer’s shoulders and whether any austerity was even remotely considered.
The aspirations of the governor were granted minimally in the budget. Comparatively, the speaker predictably passed his version of a car tax elimination program and was brimming with pride about the final bloated budget. Equal to the Democrats’ contentment was the Republicans’ chagrin as they were once again ignored and belittled during the process.
The final figures of the budget were astronomical and fear-striking. When measured versus other states of similar size the numbers of Rhode Island’s expenditures are ridiculous and defy logic. Similarly, the scope of taxation in the state is downright oppressive. And, nothing that occurred in this year’s budget process changed that deleterious structure.
So, what pains must we citizens endure as a result of this year’s budget? Why are the results that are couched as victories simply more of the same mundane un-innovative methods that yield our continual malaise? In the best of wishful circumstance, what could the assembly actually do to secure a better more prosperous future for the state?
9.2 billion dollars spent in the smallest state in the union is a preposterous amount on its face. When you consider that other states with similar aggregate populations are several billion less in their state budgets, Rhode Island’s budget size begs a great many questions. For instance, Delaware has a state budget of $4.1 billion, South Dakota has a $4.5 billion budget, and New Hampshire has a $5.7 billion budget. Although these states have a similar number of citizens to Little Rhody, their budgets are substantially less. Correlatively, their per capita tax burden is also much less. Also, our land mass is considerably less than Delaware, and more than half that of New Hampshire and South Dakota. So the capacity to deliver services should cost less as there is less ground to cover. There are not as many roads to keep up, and a conceivably more centralized distribution of equipment for public upkeep and safety. Yet, our fire service is twice as costly as Delaware and three times as costly as South Dakota. Additionally, our roads and infrastructure are deplorable while the three other similar population states are in much better condition.
Those who live here and do not gage our state budget figures against other states of similar size are blind to the outrageousness of the bloated and reckless nature of our government. Other states do not have inventory taxes burdening merchants, nor do they have a high 7 percent sales tax, nor do they have property taxes as grossly high as our state, nor do they have ongoing vehicle taxes.
In regard to the latter, Speaker Mattiello prevailed ramming through his six year plan to phase out the car tax with an eventual cost per annum of a $220 million loss of tax revenue, with a $26 million cut the first year. This move should be applauded if it reaches fruition at the end of the six-year period.
However, the General Assembly rarely keeps its word. For example, the raised DMV license and registration fees that were supposed to be used for road upkeep were channeled into the black hole of the general fund. Also, the sales tax was originally supposed to be a two percent temporary tax to last no longer than three years. Furthermore, the raising of the sales tax from 6% to 7% in the wake of the RISDIC Rhode Island banking crisis in the early nineties was also supposed to be temporary. And the lottery proceeds were supposed to be used exclusively for education funding. That did not last long instead the funds went into the general fund. So one doubts the elimination of the car tax is imminent.
Nevertheless, Speaker Mattiello claims a great victory with this year’s outsized budget. “I think we have struck a really good balance that will serve our residents well.” And in reference to the car tax bill, “The state can’t afford not to do the car tax relief. The citizens are demanding it.”
We are also demanding a reasonable budget that cuts overall spending drastically so we can realize actual tax relief, not just token adjustments.
The GOP members of the assembly were essentially ignored. They criticized and carped about the need to not just nip around the edges of tax discounts. The budget failed to gain the endorsement of even one of the 11 Republicans in the House of Representatives. House Minority Leader Patricia Morgan stated the dilemma. “I can’t vote for this and I hope you won’t either, because it is built on a hope and a prayer.”
Specifically, there was over a $100 million hole in the budget that was plugged by $40 million in anticipated revenue from online retailers sales tax and a 50 cent per pack increase in cigarettes, and $12 million from an offered back tax amnesty program, and $25 million that Governor Raimondo is supposed to hunt down through unspecified spending cuts, and other stop gap measures. Unmistakably, this yearly ritual of shoemaking a final budget together to make up for shortfalls would not be necessary if a basic paradigm was changed.
Zero based budgeting determined by the true operating needs in government departments, suspension of union requirements that place people in positions not by their determined skill sets but by protected status, ending over-stratification in supervisory sectors, and cutting overall payroll by a significant percentage would all contribute to lessen the budget burden.
Unfortunately, the undisputable logic in those fundamental manners of efficiently operating the government is lost on an assembly jammed packed with teachers, unionists, inter-connected attorneys, and special interest champions. Similarly, the governor is too preoccupied with public relations photo ops to attempt to push for the true reforms needed to positively change our government for good. Her priorities are more for political show.
Disappointed, the constitutionally weak governor reaped some of her wishes, but her influence could hardly be considered significant in the formation of the final budget. Her greatly scaled down free college tuition plan “Rhode Island Promise” still gives her something to crow about on the campaign stump, but nothing close to what she sought. Four year colleges were not included and the funding was scaled down to $5.5 million. Also, only $19.1 million of the proposed $36 million of economic development money was approved giving Raimondo less funds to experiment with. Although, her long support of another boost in the minimum wage from $9.60 per hour to $10.10 per hour was passed, further adding to her heralding points in the next campaign. Simultaneously, this passage will force employers of low skilled workers to hire less people to protect their bottom lines.
With our approximately $20 billion in state debt, which is in the top ten states in the country even though we are the smallest, no effort is even discussed to develop a plan to chip away at it. That is over $18,000 in state debt burden per citizen. Also, our legislature’s operating budget is around $42 million when New Hampshire’s is $18 million, and they have 300,000 more citizens. Yet, no real effort is made to reduce the operating expenses. Again our state budget is $9.2 BILLION! Our leaders are spending money like drunken sailors on an extended liberty, our money!
If we Rhode Islanders want to pay less taxes we must lessen our expenses just like we do in our family budgets at home. Do not let the speaker or the governor or your representative think they have accomplished anything. Those claims are political double-speak. Let us call them to task and let us not let them take a victory lap when they have not run the race!