Riley: Providence Should Fine Even More & Pay Off Pension Debt

Tuesday, March 13, 2018

 

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Riley argues Providence should fine even more with speed cameras.

Maybe the cameras catching and charging speeding vehicles in Providence $95 a shot is a good thing. It is definitely a “money grab," but it is also a sin tax or user tax -- rather than charging all Rhode Island residents who do not live or work in Providence for lousy municipal fiscal management and purposely lying about pension debt.

These speeding violation revenues should be dedicated to paying off the Providence pension debt that threatens all taxpayers in Rhode Island.

A good target would be emergence from “critical status” or until the pension fund is at least 60% funded. At a ticketing rate of 20,000 tickets per month, the city gets about half or $1,000,000 per month. Contributing that $12 million a year to pay down the pension debt, it will the allow Mayor Elorza to stop lying and use a 7% investment return to calculate contributions to pension plans.

The difference between 8% and 7% is over $200 million dollars in present value. Heck, it might only take only 20 years of these revenues to get to 60% funded (critical status) Raising the fines could help even more.

This seems fair to me. I don’t drive that often in Providence. I don’t live in Providence. Why should I pay for the use of their streets or their legacy fiscal mess? People who speed should pay just like people who park in Providence. Trucks now will pay tolls in Rhode Island in order to pay for Infrastructure according to the Governor. Providence should consider taxing all types of behavior to avoid bankruptcy. Speeding is an excellent start, but there is so much more to fine.

Consider Pagedale, Missouri where all kinds of behaviors are fined. One resident, Valerie Whitner, has been fined for having chipped paint on the outside of her home and for not attaching a screen door to her back door. She’s been told by city officials she must replace her rain gutters, her siding and put up storm windows.

They also told her to mend her fence, cut her lawn and seal up cracks in her home’s foundation. As of December 2015, she owed $2400 in fines. Other violations in Pagedale include mismatched curtains and failing to have blinds in every window, basketball hoops, plastic pools or doghouse in their front yards. Satellite dishes are illegal. So are barbeque grills!  Now come on Mr. Elorza you could use the same traffic cameras or maybe the police could actually wear and turn on their “body cams." The city awarded  $1.37 million to TASER International for 5 years and 250 body cams.

Those “cams” are being underutilized and could produce significant revenue by exposing parking violations, expired vehicle registrations, and posting, affixing, bills, posters, signs, notices to structures (currently $75 first offense, $150 2nd).

Providence Progressives would love this solution

If these efforts fail to raise the appropriate revenues for the bankrupt City of Providence, may I suggest Mayor Elorza impose a progressive dream that currently exists in Finland. They base their fines on the violator's net worth and not the violation itself. This must be an Aaron Regunberg utopian fantasy and would have the socialist RI Future dancing in the Streets.

A Finnish businessman caught going 65 in a 50 km/h zone was fined over 50,000 Euros. NHL player Teemu Selanne incurred a $39,000 fine. In Finland, some traffic fines, as well as fines for shoplifting and violating securities-exchange laws, are assessed based on personal earnings.

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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: Providence Speed Cameras Defaced.

Photo credits: Anthony Sionni

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