Russ Moore: 5 Ideas To Improve The Economy

Monday, December 29, 2014

Russell J. Moore, GoLocalProv MINDSETTER™

Gina Raimondo

As Inauguration Day approaches, Rhode Islanders are beginning to sound optimistic.

And that's understandable. After all, on January 6, the state will swear in Gina Raimondo as our next Governor and let's face it, on paper, there's very little not to like about the resume she brings into office. Her education credentials can't be surpassed--she's a LaSalle High School Valedictorian, a graduate of Harvard University, Yale Law School and a Rhodes Scholar at Oxford. Raimondo was successful in the private sector. And as General Treasurer, she used the bully pulpit to spearhead pension reform, which saves will save taxpayers hundreds of millions of dollars over the next decade.

But if Raimondo is able to jump start the Rhode Island economy and get the state on the path of long term economic growth, all those previous accomplishments will pale in comparison. That's probably why Raimondo held Her Economic Summit of Thoughtful People a few weeks ago to harvest ideas from Rhode Island business and nonprofit leaders.

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I think my invitation to the Meeting of Thoughtful People got lost somewhere in the mail, but that’s not a big deal. Here are five ideas that would have a positive impact on the state's economy.

1) Slash the Income Tax

It stands to reason that when people have more money in their pockets, they will be more likely to spend it. And when they spend that money, it creates an economic multiplier that does wonders for the economy. That's why President Obama suspended payroll taxes in 2009 and it helped jumpstart the national economy that year.

If Rhode Island were to cut its income taxes in half and across the board (so that everyone would have more money in their pockets, not just rich folks), it would be a tremendous boon to our economy.

2) Cut Government Spending

Critics of this plan and others who like taxes (and those who like taxes like them because they believe the government i.e., they, can spend your money better than you can), will correctly point out that the government will be short of money once this is done. To solve this problem, the state government must cut spending. That’s why it was so encouraging to hear House Speaker Nicholas Mattiello say that he plans to compare Rhode Island's government spending to neighboring states in an attempt to make the state more efficient. Rhode Island needs to spend less money. There's simply no other way around that fact.

This won't be easy at first, but it's the key to "growing" our way out of our economic malaise, which is exactly what Raimondo said the state needed to do during the election this year.

3) Regionalize Municipal Government

Another way to save taxpayer dollars that would be lost due to cutting the income tax would be to regionalize our municipal system of government. One century ago, when travel was difficult and the interstate highways weren't yet in existence, it made sense for Rhode Island to have 39 cities and towns, and 36 school districts, and six fire districts in the Town of Lincoln alone. Yet in the 21st century, there is simply no need to have such an archaic system of municipal government and multiple fire districts in a single municipality.

If done properly, Rhode Island could regionalize the systems of local government in our state. That would create a huge economy of scale for purchasing and eliminate the need for such a large level of administrative bureaucracy in our state. That means taxpayers would save millions on a yearly basis.

4) Enact a Statewide Teacher Contract

Similar to regionalization, there's no need for the state of Rhode Island to have 36 different teacher contracts. If the state enacted a single teacher contract, it would bring much-needed transparency to the way teachers in Rhode Island are compensated and what's expected of them. A statewide teacher contract would save millions of dollars because all of the hours that are spent on collective bargaining would be curtailed, and the bureaucrats needed to negotiate the contracts would become unnecessary.

Whenever the taxpayers aren't forced to spend more of their money on government, that's more money that can be injected into the economy--and that means economic growth.

5) Legalize Marijuana

Rhode Island has a long history of giving people what they want. With plenty of beautiful beaches, awesome restaurants, excellent theatres and sports teams. Tourism and entertainment remain a cornerstone of the state economy. But we could do better.

The state has a tremendous opportunity to get ahead of the curve (for once) in the region by legalizing and taxing marijuana. As Colorado has experienced, the state would see a large injection of revenue into its coffers due to the taxes gained from marijuana sales and Rhode Island would be a destination for people who want to buy marijuana, which means other Rhode Island businesses would see a corresponding boost.

None of these ideas on their own, and even in total, would solve the state’s entire economic problem. But these reforms would "move the needle" in the proper direction in making Rhode Island economic power house it once was and should once again become.

Russ Moore: 5 Ideas To Improve The Economy

Related Slideshow: Raimondo Policy Summit Suggestions

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