NEA Yardstick – a few inches short

If your child came home with a report card that simply said, “Has Improved,” would you be satisfied with that as an accurate description of their education? Wouldn’t you want to know how much of an improvement there was, how it compares to the past, other students in the class, or even how it compares to the competition they will face in our global economy?

That non-descript accounting is exactly the kind of sale pitch Pat Crowley used in his commentary, “Deconstructing corporate myth that taxpayers are fleeing the state” (January 10), when he claimed that Rhode Island’s onerous tax policies are NOT forcing people and wealth to leave the state. His pitch contains a limited perspective that doesn’t compare our state to the rest of the country.

The Ocean State Policy Research Institute will be releasing a comprehensive report called “Leaving Rhode Island” later this month that will address this issue, but Mr. Crowley’s commentary necessitates a sneak peek now because the data presented in our report provides the entire picture – not selectively picked data that gives a skewed vision of our state.

Mr. Crowley supports his claim that people are not leaving the state by saying, “Rhode Island’s population is the highest it has ever been.” Wait. Isn’t the population of the entire country “the highest it has ever been”? Yes. So, the question for critical thinkers to ask is, how does Rhode Island’s population growth, an indicator of economic vitality, compare to the rest of the country?

Overall, the country saw a 9.7% population growth over the last decade. Rhode Island increased its population over that same time 0.4%, the lowest rate of growth in the nation. Only Michigan, the sole state with a population decline, did worse. Mr. Crowley has pinned a 49th place ribbon on Rhode Island and wants us to consider ourselves winners.

He goes on to claim that our tax climate has not sent wealth out of the state either because the data he is looking at showed that “Rhode Island added high-income taxpayers in the middle years of the decade.”

Putting aside his limited view of the timeline, we must again compare our state to others so we can see how effective we are in relative terms. But most importantly, we must also look at the net result of wealth migration. While people are moving into the state, others are moving out. Evaluating the difference between those two groups can be revealing.

Between 1995 and 2007, the most current IRS data available, people leaving the state made on average much more money than did the people moving into the state. The amount of total net income (in–migration minus out-migration) leaving the state during that period averaged $78,468,000 every year.

Compounding this figure over the thirteen years examined shows that the state has cumulatively lost $4.6 billion in income and $540 million in state and local tax revenue due to out-migration. The bottom line is this: Yes, Rhode Island has an increasing population with an increasing income. Unfortunately, when compared to the rest of the country, we are doing so very poorly and it is hurting our economy.

I don’t know what’s worse, Mr. Crowley trying to fool the people with misleading statistics or the fact that this is being perpetrated by the same people who claim to help teachers instruct students on critical thinking.

The last error Crowley made in the piece was when he claimed that people who fear the loss of high income taxpayers in the state are only “looking to cut taxes on the elite and shift the burden of paying for government onto the backs of the middle and working classes.”

No, we don’t want to shift the burden anywhere. We want to remove the burden. We must enact policies that show our state is serious about attracting middle-class and wealthy people, along with their human and capital resources.

We propose many solutions in our various reports, but we cannot have reasonable dialog when those on the other side continue to put their head in the sand and refuse to see the problem. People and wealth are leaving Rhode Island because our tax structure is not competitive. OSPRI’s study, “Leaving Rhode Island,” being released this month, will make that fact crystal clear.

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