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Riley: Providence Receives “F” in National Report

Wednesday, January 31, 2018

Michael G. Riley, GoLocalProv MINDSETTER™

Because government financial statements do not report all liabilities, elected officials and citizens are making financial decisions without knowing the true financial condition of their government.

The lack of accuracy and transparency in government accounting prevents even an experienced user of government financial documents from understanding and evaluating a public-sector entity’s financial health.

Truth in Accounting (TIA) believes it is imperative to provide an honest accounting of each city's financial condition.

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Therefore, we developed a sophisticated model to analyze all the assets and liabilities of the nation's 75 most populous cities, including unreported liabilities.

This is the second year TIA has released an annual FSOC study, documenting the truth about each city’s financial position.

Providence Rhode Island

The report issued last week by Truth-in-Accounting did not include Providence because it is not one of the most populous cities in America (it’s around 174th). However, Providence is one of the most debt-burdened cities in the United States and is ranked in the top 5 worst for honest accounting and taxpayer burden.

We had a separate study done for Providence 3 months ago in order to inform Rhode Island citizens and government officials just how bad things are. Providence's taxpayer burden was only worse than Chicago, Illinois, and New York City. Per citizens, the burden sits at $34,200.

Why should we care as citizens?

Providence Mayor Elorza and Cicilline and Taveras before him are famous for passing on the lies to the next administration. Mr. Elorza has been notoriously slippery about true pension costs and what he plans to do about them annually issuing misleading numbers to municipal bondholders. But even if Providence achieves 8% compounded returns Elorza has no chance of achieving even 50% over the next decade and that’s a very sad statement.

Truth in Accounting delineates why all citizens in every State should care:

A lack of transparency in government finance leads to the following problems:

Accounting tricks allow elected officials to claim balanced budgets, giving residents a false sense of security, while cities sink further into debt.
Residents do not know the true cost of their city government, and elected officials are able to spend amounts larger than the city’s revenues.
Complex pension systems, which both citizens and elected officials have difficulty understanding, rack up massive debts, putting cities further in the red.
Voters re-elect leaders based on false claims that budgets were balanced.
Elected officials create and continue new programs and increased services without knowing the true cost of government spending.
Our representative form of government is undermined because citizens become cynical and do not trust their governments.

There has been no leadership on the issue of a bankrupt Providence and their phony budget and we are headed straight into a state taxpayer-funded bailout. Raimondo and Elorza should both be blamed for being silent and not acting.

Michael G. Riley is vice chair at Rhode Island Center for Freedom and Prosperity and is managing member and founder of Coastal Management Group, LLC. Riley has 35 years of experience in the financial industry, having managed divisions of PaineWebber, LETCO, and TD Securities (TD Bank). He has been quoted in Barron’s, Wall Street Transcript, NY Post, and various other print media and also appeared on NBC News, Yahoo TV, and CNBC.

Related Slideshow: GoLocal: Benchmark Poll, October 2017

Sponsor: GoLocalProv

Sample: N=403

Rhode Island General Election Voters Margin of Error: +/- 4.9% at 95% Confidence Level

Interviewing Period: October 9-11, 2017

Mode: Landline (61%) and Mobile (39%)

Telephone Directed by: John Della Volpe, SocialSphere, Inc.

Are you registered to vote at this address?

Yes: 100%

When it comes to voting, do you consider yourself to be affiliated with the Democratic Party, the Republican Party, Moderate, or Unaffiliated with a major party?

Unaffiliated: 49%

Democrat: 32%

Republican: 15%

Moderate: .4%

Next year, in November of 2018, there will be a statewide general election for Governor and many other state offices. How likely is it that you will vote in this election?

Will you definitely be voting, will you probably be voting, are you 50-50...

Definitely be voting: 78%

Probably be voting: 13%

50-50: 9%

In general, would you say things in Rhode Island are headed in the right direction or are they off on the wrong track?

Right track: 39%

Wrong track: 45%

Mixed: 10%

Don't know/Refused: .6%

What would you say is the number one problem facing Rhode Island that you would like the Governor to address?

Jobs and economy: 21%

Education: 12%

Taxes: 12%

Roads: 12%

State budget: 9%

Corruption/Public integrity: .8%

Healthcare: 3%

Governor: 3%

Homelessness: 2%

Immigration: 2%

Other: 7%

Don’t know: .9%

Over the past three years or so, would you say the economy in Rhode Island has improved, gotten worse, or not changed at all?

Changed for the better: 35%

Changed for the worse: 16%

Not changed at all: 43%

Don't know/Refused: 5%

Over the same time, has your family's financial situation improved, gotten worse, or not changed at all?

Changed for the better: 26%

Changed for the worse: 19%

Not changed at all: 54%

Don't know/Refused: 1%

Recently, a proposal has been made to permit the issuance of $81 million in bonds by the State to build a new stadium for the Pawtucket Red Sox. If there was an election today on this issue, would you vote to approve or reject issuing $81 million in financing supported moral obligation bonds to build the stadium?

Net: Approve: 28%

Definitely approve: 15%

Probably approve: 14%

Net: Reject: 67%

Probably reject: 19%

Definitely reject: 48%

Don't know: 4%

Could you please tell me your age?

18-24: 7%

25-34: 15%

35-44: 15%

45-54: 20%

55-64: 17%

65+: 25%

Don't know/refused: 1%

What was the last grade you completed in school?

0-11: 2%

High school grad: 16%

Technical/Vocational school: 1%

Some college: 23%

College grad: 34%

Graduate degree: 24%

Don't know/refused: 1%

The next question is about the total income of YOUR HOUSEHOLD for the PAST 12 MONTHS. Please include your income PLUS the income of all members living in your household (including cohabiting partners and armed forces members living at home).

$50,000 or less: 27%

More $50,000 but less than $75,000: 13%

More $75,000 but less than $100,000: 13%

More $100,000 but less than $150,000: 17%

$150,000 or more: 13%

Don't know/refused: 17%

What particular ethnic group or nationality - such as English, French, Italian, Irish, Latino, Jewish, African American, and so forth - do you consider yourself a part of or feel closest to?

American/None: 21%

English: 13%

Italian: 13%

Irish: 12%

Black or African American: 6%

Latino/Hispanic: 6%

French: 6%

Portuguese: 3%

Jewish: 3%

German: 1%

Would you say that Donald Trump has done an excellent good, fair or poor job as President?

Excellent: 13%
Good: 12%
Fair: 14%
Poor: 57%
Never heard of: 0%
Cannot rate: 3%

Would you say that Jack Reed has done an excellent good, fair or poor job as a United States Senator?

Excellent: 22%
Good: 29%
Fair: 23%
Poor: 15%
Never heard of: 6%
Cannot rate: 6%

Would you say that Sheldon Whitehouse has done an excellent good, fair or poor job as a United States Senator?

Excellent: 17%
Good: 22%
Fair: 21%
Poor: 28%
Never heard of: 6%
Cannot rate: 7%

Would you say that David Cicilline has done an excellent good, fair or poor job as a Member of Congress?

Excellent: 9%
Good: 29%
Fair: 21%
Poor: 27%
Never heard of: 6%
Cannot rate: 8%

Would you say that James Langevin has done an excellent good, fair or poor job as a Member of Congress?

Excellent: 7%
Good: 30%
Fair: 20%
Poor: 18%
Never heard of: 13%
Cannot rate: 11%

Would you say that Gina Raimondo has done an excellent good, fair or poor job as Governor?

Excellent: 6%
Good: 28%
Fair: 30%
Poor: 31%
Never heard of: 1%
Cannot rate: 3%

Would you say that Daniel McKee has done an excellent good, fair or poor job as Lieutenant Governor?

Excellent: 3%
Good: 16%
Fair: 21%
Poor: 8%
Never heard of: 26%
Cannot rate: 25%

Would you say that Peter Kilmartin has done an excellent good, fair or poor job as Attorney General?

Excellent: 3%
Good: 20%
Fair: 28%
Poor: 17%
Never heard of: 13%
Cannot rate: 19%

Would you say that Seth Magaziner has done an excellent good, fair or poor job as General Treasurer?

Excellent: 4%
Good: 18%
Fair: 24%
Poor: 13%
Never heard of: 21%
Cannot rate: 21%

Would you say that Nellie Gorbea has done an excellent good, fair or poor job as Secretary of State?

Excellent: 5%
Good: 21%
Fair: 21%
Poor: 10%
Never heard of: 20%
Cannot rate: 23%

Would you say that Jorge Elorza has done an excellent good, fair or poor job as Mayor of Providence?

Excellent: 4%
Good: 24%
Fair: 24%
Poor: 22%
Never heard of: 9%
Cannot rate: 15%

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