Lisa Blais: RI’s Economic Assault On Average Taxpayers
Thursday, July 11, 2013
Another legislative season has come and gone, and the assault on Rhode Island's taxpayers has only gotten worse.
Judging by just two issues, the answer is that preserving local and state government takes clear priority over the economic well-being of taxpayers. As long as this mentality continues then the golden goose that feeds government’s budgets will continue to die a slow death. The two issues that exemplify this are the "Quality Family Child Care Act" and the property tax "adjustment" Mayor Taveras gave to Providence taxpayers.
The Two Issues.
The first issue was one particularly egregious bill cloaked in the emotional argument of “its for the kids, and so their caretakers can earn a living wage” mantra that was passed. It was known as the Quality Family Child Care Act – but referred to as the Babysitter bill by the Governor’s office. It allows private sector daycare workers who accept clients that pay for daycare services with taxpayer subsidized revenue to organize and collectively bargain with the Governor.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe second issue was legislatively blessing Providence Mayor Taveras’ request to eliminate the Homestead Act that has long been in place to protect Providence residential property owners from off-the-charts property taxes when real estate values actually increased! (Do you recall those days?) Both of these legislative actions will result in more costs for everyday citizens.
It is not a stretch to think that many folks may be priced out of their daycare services, but the SEIU will add plenty of money to their coffers on the taxpayers’ dime in new union dues, while others in Providence may face the reality of not having the money to pay their property taxes that have spiked as high as 26% for some homeowners in Providence.
Do either of these “policies” do anything to spur the economic well being of RI residents, or do they just do more harm? OSTPA firmly believes that they both do harm to the very people who pay the taxes to feed these bloated local and state budgets.
Breaking It Down.
Daycare subsidies were projected to be over $50 million in the Governor’s 2014 budget, of which about 10% is funded through the state’s general fund. These daycare providers are not employed by the state. Not only will all CCAP child care providers be required to pay union dues or an agency fee, whether or not they want to be in the union, but all daycare providers in the state will be required to pay some type of union fee. The cost for this union membership will be automatically deducted from the CCAP subsidies to the daycare provider. That means subsidies to these daycare providers will be reduced. It is likely that the providers’ customers will make up that difference. Taxpayers certainly will.
The “Quality Family Child Care Act” (who comes up with these names?) is nothing more than an aggressive effort to unionize recipients of government subsidies in order to lobby for more subsidies. The bottom line is that SEIU exists for dues revenue.
Rhode Island’s authorization to unionize daycare providers caught the attention of “Neighborhood Effects” a blog from the Mercatus Organization at George Mason University. Take a look at the stats provided in this piece but first consider this statement: “Where daycare workers unionize, SEIU immediately gains a windfall of new dues transferred from a program meant to help low-income families pay for daycare”.
An Oxymoron: Tough economic times so spike property taxes.
In a recent Projo article, Providence Mayor Angel Taveras responded to an inquiry about the death of the Homestead Exemption and the subsequent increased property taxes. Approximately 58% of Providence residents received the huge surprise when their property tax bills arrived in the mail last week. Taveras said, “The truth is that there are some residents who have felt a stronger impact than others. It is also true that every resident, every taxpayer — in some way — has felt the impact of the choices we have made over the last two-and-a-half years. Those choices, particularly in these tough economic times, were necessary but painful, and certainly not popular.”
Unless this author missed it, where were the headlines that Providence intended on dumping the Homestead Exemption with legislative permission? Indeed, many Providence residents had little to no knowledge of this visionless “plan”. One city councilman sent out a letter verifying that many residents were indeed asking about changes to the Homestead Exemption.
It is especially troublesome given that just last year every Providence resident had to prove that they actually resided in their property to retain eligibility for the Homestead Exemption. That made sense. But, why were residents made to jump through bureaucratic hoops just to have the exemption pulled out from under their feet a year later?
Unfortunately, part of the thought process to charge a $19.25 tax rate simply served up an example of the same mentality that pervades Rhode Island on so many fronts. We compare ourselves to ourselves which is the same as comparing regressive taxation to regressive taxation. Consider this statement: “Providence’s $19.25 rate for owner-occupied housing is better than most surrounding communities. East Providence, for example, is $22.78 per $1,000 of assessed valuation. It began phasing out its 15-percent homestead exemption 1 percent per year in 2012. Warwick’s residential rate is $19.79 per $1,000, and doesn’t offer a homestead exemption”. So if the others are going over the cliff, I guess we’ll jump too……. Brilliant!
There you have it.
A General Assembly that recessed without a clear set of goals and a vision to improve our economic climate, with a new source of union dues, and the Mayor of our Capital City (with the approval of six of the nine council members) claiming that 58% of residents will pay more, in many cases as much as 26% more in property taxes, is a move that is necessary in these “tough economic” times. The assault continues.
Lisa Blais is a board member of OSTPA, a taxpayer advocacy organization in Rhode Island.
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