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Bishop: Government as a Business? After all, the Free Stuff From Government Isn’t a Loss Leader!

Thursday, March 30, 2017


When it comes to families, those who are supported by the breadwinners are called dependents. But Social Workers who represent a kind of in loco parentis network for the poor, disabled and elderly are generally taught to refer to their charges as “clients”. This is a bit ironic when matched with the bluster from the left about how wrongheaded the latest Trump initiative is. Jared Kushner has no business leading a task force to streamline government because, they say, “government is not a business”. How indeed does it have clients if it is not a business?

Locally the more politically androgenous fellow who occupies the airwaves on WPRO in the afternoon, Dan Yorke, was making a similar assault on Governor Raimondo a couple days back, asking why RIPTA has to run in the black, i.e. why do poor folks . . . eer clients . . . have to pay any bus fare at all? Why, Yorke asks, would “RIPTA balance its budget on the backs of seniors and disabled”.

Commentators can get away with such hyperbole without being accused of spreading false news, but the RIPTA plan to collect $3.3 million, about 2.5% of its $133 million budget, from the formerly free riding contingent that consumes 31% of the service could hardly be said to be keeping RIPTA in business at their expense. Simple math demonstrates that their trips are being subsidized to the tune of about $38 million dollars. But they are being treated in ghastly fashion because the subsidy used to be $41 million?

Yorke was set off by a news story suggesting that soup kitchens are serving noticeably less meals since the 50¢ discount fare was instituted. So, he maintains, RIPTA won’t collect the whole $3.3 million because folks will take less trips. Forgetting that fare collection models may have taken some of these realities into account, what of the argument that, for so paltry a sum, many will go hungry or miss counseling or medical appointments? Weren’t they, after all, only using up spare capacity that didn’t really cost RIPTA anything at all?

Barry Schiller, a long time transit advocate and one of the more sensitive and devoted citizen activists in the state asked RIPTA to simultaneously protect mass transit and weigh this marginal cost argument. He proposed restricting free rides at peak commute times when some buses are actually running upwards of capacity. In other words, he proposed that the transit system be run like, you know, a transit system -- and not as an indigent transport mechanism that incidentally takes a few working poor to work as well.

Governor Raimondo suggested that she herself ought to ride the bus, not as a matter of course, of  course. Just a time or two to set an example. No real commitment to making this a transit system for everyone. One has only to think back to the fabulous ensemble drama Crash and the dialogue between Anthony (Chris “Ludacris” Bridges) and Peter (Larenz Tate) in order to see where relegating the bus to the role of poor peoples’ ride gets us:


Anthony: What the hell do you think you’re doing right now, man?

Peter: Waving down a bus.

Anthony: Man, put your hand down. Dog, are you out of your mind? You actually expect me to get on a bus?

Peter: No, I was hoping we could push your car across town . . . 

Anthony: . . . You have no idea why they put those great big windows on the sides of buses, do you?

Peter: Why?

Anthony: One reason only: to humiliate the people of color who are reduced to riding on it.


Of course this does no more for the reputation of buses than for the reputation of those who ride. One should not assume that buses are a social work project or their principal function becomes subservient to this purported moral calling.

Soup kitchens themselves are a reminder that our own kitchens are somehow inadequate to the task. Indeed, the elderly and the disabled are not first “clients”; they are mothers and fathers and grandmothers and uncles and aunts and, god forbid, congregants, lodge members, etc. Where did we get the notion in the first place that it was the state’s purpose and job to see that such people can live independently. Taking them on as clients gives a more detached ‘professional’ relationship than tending to them as family and friends, but is that really desirable? 

To be elderly or disabled along with being poor may indeed be a sign that less social capital from friends and family is available. There is less likelihood that there is a friend with a car to give a ride to the doctor’s, or kin nearby with the opportunity to provide company and a meal. But society has also charted a course where dependent individuals want to be independent. That needs as much reconsideration as bus fares do! 

So this is not necessarily an all or nothing case. If society – and not just society’s clients – is convinced that we have not got this right, that doesn’t mean that the previous status quo was the right approach. Essentially teaching a third of the RIPTAs riders that the service has no value, at least not that they need concern themselves with, is a similarly bad idea to making college free, or health care, or anything else that is tough to afford.

After all, the reduced fares apply to those making all the way up to $23,500. It hardly seems that someone making that much is without the werewithal to direct a few quarters towards busfare. But perhaps a two tier system would be too complicated. In any event, it seems quite likely that Barry Schiller is right that we ought not be giving away capacity when it is needed for commuters, you know, the folks who even as working poor are paying some of the bills. Maybe RIPTA could charge a quarter off peak and a dollar on for reduced fares.

Its not only about the $3 million dollars, its about respect for the service, and respect for those who ride it.

Brian Bishop is on the board of OSTPA and has spent 20 years of activism protecting property rights, fighting overregulation and perverse incentives in tax policy. 


Related Slideshow: Winners and Losers in Raimondo’s FY18 Budget Proposal

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Criminal Justice Reform

Per recommendations from the Justice Reinvestment Working Group, the Governor is proposing nearly $1 million in investments such as the public defender mental health program ($185,000), improved mental health services at the ACI ($410,000), recovery housing ($200,000) and domestic violence intervention, in her FY18 budget. 

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English Language Learners

Under the heading of “promoting 3rd grade reading,” Raimondo proposed adding $2.5 million to make English Language Learning (ELL) K-12 funding permanent.  The Governor’s office points out that RI is one of four states that doesn’t have permanent funding.

The suggestion was one made by the Funding Formula Working Group in January 2016, who said that “in the event that Rhode Island chooses to make an additional investment in ELLs, the funding should be calculated to be responsive to the number of ELLs in the system and based on reliable data, and include reasonable restrictions to ensure that the money is used to benefit ELLs — and promote the appropriate exiting of ELL students from services.”

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Car Owners - and Drivers

Governor Raimondo wants to reduce assessed motor vehicle values by 30% - a change that would reduce total car tax bills by about $58 million in calendar year 2018. Speaker of the House Nicholas Mattiello, however, has indicated that he might want to go further in its repeal.  

In her budget proposal, Raimondo also put forth adding 8 staffers to the the Department of Motor Vehicles to "address wait times."

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T.F. Green

The “Air Services Development Fund” would get an influx of $500,000 to “provide incentives to airlines interested in launching new routes or increasing service to T.F. Green Airport.” The Commerce Corporation set the criteria at the end of 2016 for how to grant money through the new (at the time $1.5 million fund).

Also getting a shot in the arm is the I-195 development fund, which would receive $10.1 million from debt-service savings to “resupply” the Fund to “catalyze development & attract anchor employers.”

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Minimum Wage Increase

An increase in the state minimum wage is part of Raimondo’s proposal, which would see it go from $9.60 an hour to $10.50 an hour.  Raimondo was unsuccessful in her effort in 2016 to bring it up to $10.10 — it was June 2015 that she signed legislation into law that last raised Rhode Island’s minimum wage, from $9 to 9.60.  

The state's minimum hourly wage has gone up from $6.75 in January 2004 to $7.75 in 2013, $8 in 2014, and $9 on Jan. 1, 2015.  Business groups such as the National Federation of Independent Business however have historically been against such measures, citing a hamper on job creation.  

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Cigarette Tax

Like the minimum wage, Raimondo is looking for an increase - in this instance, the cigarette tax, and revenue to state coffers.  Raimondo was unsuccessful in her effort to go from a tax of $3.75 to $4 last year. Now she is looking for an increase to $4.25 per pack, which the administration says would equate to $8.7 million in general revenue — and go in part towards outdoor recreation and smoking cessation programs.  

The National Federation of Independent Business and other trade groups have historically been against such an increase, saying it will hurt small businesses - i.e. convenience stores. And clearly, if you’re a smoker, you’re likely to place this squarely in the loser category instead. 

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As often happens in the state budget, winner one year, loser the next. As GoLocal reported in 2016, “the Rhode Island Hospital Association immediately lauded the budget following its introduction, and addressed that while it is facing some reductions, that it "applauds" this years budget after landing on the "loser" list last year.”

This year, it falls back on the loser list, with a Medicaid rate freeze to hospitals, nursing homes, providers, and payers — at FY 2017 levels, with a 1% rate cut come January 1, 2018. 

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Online Shoppers

The taxman cometh — maybe.  Raimondo proposed an “Internet Sales Tax Initiative” — which would purportedly equate to $34.7 million in revenues.

"Online sales and the fact that online sellers do not collect sales tax has created a structural problem for Rhode Island's budget — our sales taxes have been flat," said Director of Administration Michael DiBiase, of the tax that Amazon collects in 33 states, but not Rhode Island. "We think mostly due to online sales, we’re able to capture the growth. The revenue number is $35 million dollars — it improves our structural deficit problem. It’s an important fiscal development."

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Long Term Care Funding

The Governor’s proposal recommends “redesigning the nature” of the State’s Integrated Care Initiative, by transferring long-term stay nursing home members from Neighborhood Health to Medicaid Fee-for-Service and repurposing a portion of the anticipated savings (from reduced administrative payments to Neighborhood Health) for “enhanced services in the community.” “The investments in home- and community-based care will help achieve the goal of rebalancing the long-term care system," states the Administration. 

Cutting that program is tagged at saving $12.2 million; cuts and “restructuring” at Health and Human Services is slated to save $46.3 million. 


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