Moore: Raimondo, Mattiello Squabble Over Budget Giveaways
Monday, February 27, 2017
There’s been one major growth industry in Rhode Island over the last two decades: government. And even with that being the case, the politicians around here just cannot dole out the freebies fast enough.
Just look at Friday’s Twitter brawl as proof.
The two most powerful people in the state of Rhode Island took to the social media platform to criticize one another over their budget priorities--both of which are designed to appeal to constituencies that both perceive they need in their corner to preserve their political futures. (Mattiello tweeted directly. Raimondo aide David Cruise came to her defense with a series of tweets).
House Speaker Nicholas Mattiello criticized the governor for her lack of enthusiasm towards eliminating the car tax. Mattiello wants to phase the tax out over a multi-year period, while the Governor wants to cut it by 30 percent.
Raimondo and her aides obviously feel as if they’re vulnerable to a political attack coming from the left. For instance, someone like Clay Pell, (or Lincoln Chafee, it wouldn’t be the first time he did it), could outflank the Governor and best her in a Democrat Primary by pointing to her cozy Wall Street and big business connections.
Raimondo, like the rest of us, understands just how much the left likes entitlement programs. By creating a new one--free college--she can effectively appeal to those voters, who admittedly have flexed their muscle in recent elections, most notably by giving Bernie Sanders the victory over Hillary Clinton in the presidential primary.
Mattiello, on the other hand, must face voters in his rather conservative western Cranston district. So it’s in his interest to try and appease that base by giving them tax breaks on their luxury vehicles.
“I have heard from the citizens of the state and I understand they want the burdensome car tax eliminated,” Mattiello tweeted.
“The Governor is tone deaf on this issue and should start listening to the people of Rhode Island”.
Mattiello also criticized Raimondo’s free college plan.
“What is truly unsustainable and fiscally irresponsible is her plan to make us the only state in...the nation to give away ‘free’ taxpayer-funded college tuition,” Mattiello tweeted.
Mattiello is correct to point out that Raimondo’s free college plan is flawed. It would devalue college degrees (the liberal arts degrees are worthless now anyways), and it lacks any accountability or reciprocity from the youngsters who will benefit from the program. There are also no income guidelines in the plan. Wealthy folks who can afford to send their children to college would benefit as well.
Mattiello’s car tax plan isn’t flawless either. His car tax cut would hold local communities harmless by refunding the loss of taxpayer dollars from the car tax to the communities. Those communities should be finding efficiencies instead of simply living off the state’s tax dollars.
But let’s face it: it doesn’t really matter if these plans are moral or just or fair or anything.
Here in Rhode Island, might makes right. And those who wield the power are always going to run roughshod over the rest of us.
Sad as that case might be, it does make this whole situation ever the more amusing, and entertaining.
It stands to reason that these two powerhouses are both better off if they’re getting along than if they’re not. So the fact that they’re arguing, instead of merely cutting a deal to do both things tells us that they are struggling to find the money.
That’s mind boggling.
The state of Rhode Island’s budget in the year 2001 was $4.8 billion. This year, the state budget proposal by Governor Raimondo stands at $9.2 billion. In just 16 years, the budget has almost doubled.
I went to the website of the Federal Bureau of Labor Statistics and calculated what amount of money would be needed today to have the same purchasing power as $1 back in 2001. The amount that I arrived at, according to the inflation calculator, was $1.37. That’s a 37 percent increase.
If the state budget had merely kept pace with inflation, the state budget today would be roughly $6.7 billion--not the $9.2 billion that’s proposed this year.
Yet even with $2.5 billion more than the inflation rate would have called for, the state’s two top politicians are fighting over how to fund their pet giveaways. And neither program would cost anywhere close to that much money.
That money, however, still cannot be found, because the state government is addicted to appeasing special interest groups at the expense of everyone else.
Until the state changes the way it does business, and taxpayers demand a fair return on their investment, and we eliminate all the waste, fraud, and abuse, Rhode Island is going to continue to struggle.
In the meantime, we may not be getting good government. But at least I’m being entertained.
Related Slideshow: Winners and Losers in Raimondo’s FY18 Budget Proposal
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.
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.”
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."
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.”
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.
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.
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.
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."
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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