Russ Moore: RhodeMap RI, Full of Fury, But Insignificant

Monday, December 15, 2014

 

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Governor Chafee

If you didn't know any better, you'd have thought the sky had fallen last Thursday after the state planning commission adopted the RhodeMap RI plan. At least that would be the case if that you only listened to the Chicken Littles who were up in arms and calling commission members outlandish names such as communist and comrade.

The RhodeMap RI plan does not read like The Communist Manifesto, however. Instead, it lays out relatively vague goals of improving the economic outlook of Rhode Island's minority populations, improving education to better serve out economic needs, focusing on the state's economic strengths, and aligning the state's housing and transportation investments to better meet the needs of the economy. Oh, and it also supports affordable housing. The horror!

Worthwhile Goals

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All of those goals, in my estimation, are worthwhile. The plan is relatively short on specifics, but that's not something that will hurt the state. It may not help it much, but there won't be any harm due to a lack of detail.

Most of the criticisms of the plan are either flat off or borderline paranoid. For instance, some of the plans critics say that they fear eminent domain could be used to take away their homes in favor of more affordable housing. But the document doesn't assert that that should take place.

Secondly, some critics have said that the plan could upend the property tax cap law that was enacted by the general assembly, at then Senate Majority leader Teresa Pavia-Weed's behest in 2006. It's true, the document does recommend that the state legislature consider lifting the cap in high growth centers. But that makes sense. 

Tax Cap Sensibilities

The property tax cap, contrary to popular belief, is not a cap on the tax rates of communities. It's a cap on the levy. The property tax cap levy caps the rate of growth that the municipalities can rake in on a yearly basis. In other words, if a city's total budget is $1 million in the previous year, the next year's budget can't grow by more than 4-percent, which would be $40,000. In a year with a great deal of economic development, that would mean the municipality would be mandated to cut the property tax rate. Conversely, in a year during a recession, the rate may be allowed to increase by even 10 percent in order to maintain the previous year's tax levy.

The rationale behind suspending the property tax cap would be to facilitate large scale economic development in the so-called growth centers.

But let's face it: it didn't matter what the economic development plan suggested, there would be critics who criticized it because at it's essence, the plan is just that--a government plan. To some people's minds, that's communism.

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Oh, The Irony

The great irony here is that many of these very same people who are highly critical of the RhodeMap RI plan are the very same people who would be criticizing the state for not having a plan in the first place.

In the same respect, another of the major criticism of the plan is the fact that it recommends aggressively pursuing grants. The grants come with strings attached, however, and the critics say that would force communities to cede local control to the federal government. Yet for the most part, these same critics haven't been happy with the way their local governments have been run either. Local government isn't always preferable. Call me crazy, but if the local governments are poorly, I'd rather see the federal government dictating policy.

It’s Toothless

And perhaps what's most important about the plan is the fact that it's toothless. The plan does not compel the Governor-elect, the Speaker of the House, or any local governing bodies to take any action. Instead, the plan merely serves as a guideline to policy makers throughout the state. It's a tool for decision makers to use to maximize the state's capabilities. There's absolutely nothing binding about the plan.

Having followed the inner workings of RI Government for close to a decade, I can tell you that if a state department discovered a way to turn base metal into gold, the rest of the state government would ignore the plan. One of the state government's key weaknesses is its lack of coherence. With that as a weakness, there's no reason for people to be up in arms over a simple report filled with recommendations.

In the end, RhodeMap Rhode Island is actually a good thing because it's got people talking about the best approach to economic development and long term planning in The Ocean State. That may very well be Governor Lincoln Chafee's biggest economic accomplishment in the waning days of his administration.

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Russ Moore

 Russell Moore, a lifelong Rhode Islander, and avid politics and sports fanatic has worked on both sides of the desk in Rhode Island media, in both newspapers and on political campaigns. Follow him on twitter @russmoore713.

 

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Rhode Island is 2015's 4th Worst State to be a taxpayer, according to a recent WalletHub report. 

Rhode Island ranks 48th of 51 with an average state and local tax price of $7,159 which is good for a 27% difference from the national average. 

The states that are directly behind Rhode Island are Wisconsin at $7,159, Nebraska at $7,298 and Illinois at $7,719 for a 37% difference from the national average.

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WalletHub

Rhode Island has the highest vehicle property taxes in the country, paying an average of $1,133 according to a report from WalletHub.

Virginia and Kansas are the two states just ahead of Rhode Island in the 49 and 50 spots, paying $962 and $905 respectively. 

RI also ranks 42nd in average real estate tax, paying an average of $2,779, according to the WalletHub report.

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WalletHub

WalletHub has ranked Rhode Island as the 7th worst state to be rich in in a recent in depth analysis of 2015's Best States to be Rich or Poor From a Tax Perspective

On a scale with 1 being the best, and 25 being average, Rhode Island ranks 37th in low income earners, 42 in middle income earners and 45th in high income earners. 

To see the full report, click here. 

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Gallup gives the Prov-metro area an index score of 23, the lowest score is the New York- New Jersey area with 20. 

Salt Lake City, Utah and Austin-round Rock, Texas rank the highest with a score of 37. 

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Forbes

The 2014 state rankings by Forbes has just been released and Rhode Island moved up two spots from #48 in 2013 to #46 in 2014.

What does Forbes say about RI's business environment"

After Michigan and Illinois, Rhode Island has experienced the third worst net migration out of its state in the country over the past five years. With a recent unemployment rate of 7.6%—lower than only Georgia and Mississippi—residents are leaving the state in search of jobs. Rhode Island has been stuck in the bottom five overall for six straight years. One plus: labor costs are 5% below the national average, which stands out in the expensive Northeast.

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Tax Foundation

Findings from The State Business Tax Climate Index were released this morning by Tax Foundation which found Rhode Island to have the 45th best tax climate for businesses for 2015. The state's rank has not changed since last year after The Index analyzed 100 different tax variables in multiple categories. 

Read more about the report here

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WalletHub

After conducting an online suvery consisting of 1,050 individuals from both parties across the nation, WalletHub ranked Rhode Island as having America's 33rd fairest tax system.

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Thumbtack/Kauffman

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The Economist

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CNBC

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Forbes

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The most damning in the commentary:

After Michigan, Rhode Island has experienced the second worst net migration in the country over the past five years.

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The most damning in the commentary:

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Tax Foundation

#46 Tax Foundation

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Wallet Hub

#24 Wallet Hub

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ALEC

#47 ALEC

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Kauffman Foundation

#50 Kauffman Foundation

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Entrepreneurial activity generally is highest in Western and Southern states
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#47 Free Enterprise

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The Pew Charitable Trusts

#40 The Pew Charitable Trusts

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Gallup

10th Worst in Gallup's Annual Ranking of State Job Markets 2014

Rhode Island has been ranked 10th worst for job creation in Gallup's annual ranking of state job markets in 2014 with a job creation index number of 21

Rhode Island is one of two (Connecticut) states to rank in the bottom ten each year since 2008.

The 2014 State level findings have were drawn from 201,254 interviews with employed adults across the nation. 

See the full list of rankings here. 

 
 

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