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Why don’t we demand a winner?
Rhode Island is a last place team. The Red Sox (for the time being) are a last place team. Most of our RI citizens are resigned to doom. Red Sox nation is outraged. If only RI citizens were like Red Sox fans.
In the race for people, wealth and business, RI simply is not competitive with other states. Yet we find little leadership from our elected officials and far too few jeers from the public. Most reform advocates debate less important issues. Nobody seems to be focused on winning!
With the budget debate in RI and the Red Sox season now under way, we can clearly see why RI never improves its standing. The contrast is stunning.
The current tax reform policy will actually make Rhode Island LESS competitive. In RI, we debate balancing our budget and how to raise enough revenues to do so. We debate the merits of trading this tax rate for that tax rate. We debate whether we should keep funding this promise or amend those rules and regulations. We keep debating everything as a one-off item, yet we do not have a master plan or a strategy to win. And we always seem to end up in the same place … last place.
We all know that RI ranks at or near the bottom in far too many areas when it comes to education and economic outlook. Our perpetual poor rankings indicate the utter failure of the status quo team. But, we cling to what we have, we put the same players back on the field with the same rules, and we seem pleased with ourselves if we can just figure out how not to worsen the situation.
But we are indeed worsening the situation. OSPRI’s revealing “Leaving Rhode Island” study proves that our current collective, oppressive tax structure is driving people and wealth out of our state. Recent headlines about our education are equally disturbing. To build a sustainable economy, we need educated, productive citizens as well as capital. To successfully compete with other states, we need more of both. Maintaining the status quo means we will continue to hemorrhage even more of these valuable resources.
Even the Governor half-agreed with our study’s findings on a recent television show, stating that raising taxes on the wealthy would cause them to move. True. But our study also showed that non-rich Rhode Islanders will also go to other states if they are over taxed. The same is true, I’m sure, with businesses and consumer purchasing.
Raising taxes – any taxes – in order to balance our state budget will only server to make us LESS competitive! We will continue to lose citizens and money; and we will squander yet another opportunity to improve our chance of winning. Balancing the budget is the wrong game.
THE GAME SHOULD BE ABOUT HOW TO IMPROVE OUR STATE’S COMPETIVENESS AND TO WIN BACK PEOPLE AND WEALTH!
Are Red Sox fans settling for a last place team? Would they be mollified if the team could only balance its books? Would they really care how much players were paid? Would they be satisfied if the manager merely shuffled the same old lineup? Would they accept increased ticket prices for a perpetual last place team? Nothing else would matter much if the team were a winner. But this is exactly what our public officials want us to accept about the state of our state.
In RI, little else should matter unless we grow the economy and reform education for the prosperity of our citizens and the future of our children. The primary standard should be whether or not we are improving our competiveness with other states … not balancing the budget.
As long as we continue to play by rules that decrease our competitiveness, and because we lack a clear vision from our leadership, RI will continue to be a cellar-dweller, even if our economy recovers to some small degree.
In the sports world, where competition and free market principles mainly prevail, a last place team will embark on a “rebuilding” strategy, where it’s “out with the old” and “in with the new”. This may mean a few years of potential struggles here and there while the “new” takes hold, but when it does, if the plan is designed properly, the situation will improve.
Trouble is, in our ocean state world, we don’t seem to have many strategic thinkers with the courage to admit that long term reform can only happen with some near term pain. And you won’t hear much from our state’s ‘fans’ (we the citizens). Nor do we find cutting commentary from the media demanding a better team or an improved standing. Imagine the Boston Globe endorsing a perennial last place Red Sox team that refused make wholesale changes.
Red Sox nation demanded a winner and the Red Sox successfully broke its “curse” by winning two world championships! It took the vision of a young and talented GM. The state of RI must do the same … but we are left to wonder where we will find that kind leadership and that kind of public outrage.
How do we bring out the Red Sox fan inside each of us?
Mike Stenhouse is Executive Director of the Ocean State Policy Research Institute
Posted in Economy, Government Intervention
As you may know, after the PUC decision to approve the Deepwater Wind project the RI Attorney General, Torray Plastics, PoliTop, and the Conservation Law Foundation, filed appeals with the RI Supreme Court, along with amicus briefs filed by OSPRI and the RI Manufacturers Association.
Tomorrow, the RI Supreme Court will hear oral arguments on the issue of “standing” in this case.
These litigants participated with OSPRI before the PUC
with the withdrawal from the case by the new AG, the court has decided of its own accord to examine whether CLF or Toray have interests allowing them to appeal.
Regardless of what you think of the substance of the case, if significantly affected businesses, like Toray and PoliTop, and public policy institutions, like CLF and OSPRI, are denied access to the courts, all Rhode Islanders will suffer from this lack of accountability.
While Toray and PoliTop seem clearly to have standing, with millions of dollars and the jobs they provide on the line, both they and CLF will also argue that this is a compelling public policy issue meriting a “prudential” grant of standing. One way the court will know this is a critical issue of public policy, is if the gallery is full of “the public.”
Please make time to attend the hearing tomorrow at 9:30 AM at the Supreme Court Building, 250 Benefit Street, Providence, RI 7th floor – supreme court chambers.
Posted in Attorney General, Energy, Off-Shore Wind, The Courts
OSPRI Press Release
McConnell Nomination Leaves DuPont Settlement Unsettled
The Ocean State Policy Research Institute (OSPRI) continues to pursue the truth in regards to the behind-closed-doors negotiations between then Attorney General Patrick Lynch, DuPont and Obama nominee for the U.S. District Court, John J. McConnell whose controversial nomination cleared the Senate Judiciary Committee today in a pitched 11-7 vote.
In an environment of mass torts where billions of dollars are at stake and the office of Attorney General can essentially be auctioned to trial lawyers, why has OSPRI’s Founders Project doggedly pursued the allocation of a paltry couple of million dollars? Because the lack of candor surrounding this affair hints at the deeper problem of conflicts arising when an entire state citizenry can be scooped up as clients without their approval.
In a recent answer to questions from the U.S. Senate Judiciary Committee, Attorney McConnell emphasizes his own confusion on this topic by calling Attorney General Lynch “his client”. This epitomizes the inappropriate perspectives attending contingency fee arrangements where lawyers see their responsibility as to the decision makers awarding the contracts rather than the citizens they represent.
This reference is only the first questionable answer that McConnell recently delivered to the Senate Judiciary Committee. In defending the gerrymandering of funds from the DuPont Deal to cover a pledge of his law firm to the Brigham and Women’s hospital, McConnell has suggested that the moneys were tantamount to a fee. They weren’t a fee he says, but a fee would have been due if his firm did not waive it.
“We disagree that a fee was due” said Brian Bishop for the Founders Project. Attorney McConnell misstates his contract with the state in his recent responses to the Senate. He says: “My law firm entered into an agreement with the State of Rhode Island that set forth the attorney fees as 16 2/3% of any recovery obtained as a result of the litigation.” In fact, the contract says: “In the event the litigation is resolved, by settlement or judgment, under terms involving the provision of goods or services, equitable relief, or any other in-kind payment, the parties hereto agree to seek . . . compensation for [Contingent Fee Counsel]”
“The fee agreement is triggered by “Settlement or Judgment”, neither of which occurred in the DuPont Deal by the testimony of both Dupont and Attorney General Lynch and, in any event it is an agreement to seek fees, not to obtain them”, said Bishop.
Senator Grassley also asked: “Was DuPont aware of your firm’s pledge to Brigham & Women’s Hospital? If not, was it ethical to withhold this knowledge from DuPont and/or its counsel?”
Attorney McConnell responded: “Yes”.
“Yes what? Were they aware; or is he saying it was ethical if they were not?” Bishop continued, “The public record is replete with statements from DuPont indicating they were not aware of this relationship and objected to their donation being credited to McConnell’s firm. We think it an ethical blind spot if this answer should instead be taken to suggest it was ethical to dupe opposing counsel rather than openly insist on a fee.”
Finally, when asked if it was made public that the DuPont monies were used to fulfill the firm’s pledge, McConnell says it was and points to information revealed in an investigative report over a year after the DuPont Deal was announced.
“If this were so above board and already known to other counsel why wasn’t it made public when the deal was done? We think that says all that needs to be said about the inappropriate lack of transparency here. It is not for us to say whether this is disqualifying for a seat on the federal court, but it certainly doesn’t reflect qualities we would wish to see displayed there,” said Bill Felkner, Founder and Director of Policy for the Institute.
Posted in Justice System, Obama Administration
In OSPRI’s recent OpEd in the Providence Business News, “Rhode Island spending well above documented need,” we use a comment from Richard Licht to make the point summed up in the title. Here’s what we said:
Rhode Island Department of Administration Director Richard Licht nailed it at the New England Public Policy Center at the Federal Reserve Bank of Boston presentation recently, when he pointed out that the cost of government in Rhode Island is so far above the calculated “need” that if we just lowered it to that level, our deficit would be gone. (March 3, 2011, The Rhode Island Foundation) At that point, I considered the day a success.
Mr. Licht’s statement came in reaction to the presentation, “How does New Hampshire do it,” which diagrams the Granite State’s ability to operate at a cost 20 percent below the New England average. New Hampshire also spends well below the “Expenditure Need,” a metric calculated by a state’s poverty rate, prevailing wages and other demographics, weighed against the New England average. No surprise, Rhode Island spends well above that calculated “need.”
Licht quickly, with a back of the napkin calculation, said that the amount we spend above that need threshold is about the same amount of our current deficit – approximately $295 million. That’s right! Rhode Island spends more than we “need” to. But how do we spend less?
Much to our surprise, Licht took exception to this piece on the Dan Yorke show yesterday (podcast available here). Compare the bold sections above where I paraphrase the comment made by Mr. Licht at the event to the bold section below where Mr. Licht describes on the Yorke show what he meant to say.
“First of all, I did not say what Mr. Felkner said, or, first of all I didn’t use the words he said- secondly, I did make a comment it’s totally out of context and has no, didn’t understand the tone of which I said. . . I did, without an envelope, because I didn’t need an envelope I could do it in my head, it showed a little, that we spend close to 8 billion, and it was a bar graph so it didn’t have exact, but the amount of space it looked like it was a $300 million difference, so I said, by the way, this difference of 300 million, I deal with every day, that’s our budget shortfall and if just had that I could solve our budget problems, I said it lightly, and I said it jokingly everybody laughed in the room, and I went on to say, really what my point was… How do you define need? I was giving an explanation that I’m hard pressed to repeat because I didn’t understand it. I went up to the women (who gave the presentation) afterwards, Dan, and said, your numbers on need are based on 2007 fiscal yr, which was from July 06 to June 07, I said, that was at the height of the economic boom, have you done an analysis for 2010? “
YORKE: “Gotcha, so you’re suggesting that’s he’s completely misinterpreted your reaction to the presentation.”
I never said, nor did I imply, that Richard was deadly serious about using this analysis as a template for cutting the budget. I apologize if he took offense (but I’m not sure why). Yes the observation he made was obvious and off the cuff — if not the back of an envelope. But taken under the rule that one’s first intuition is best, it is clear that the presentation had an impact. Indeed he goes on to say he followed up afterwards looking for updated figures, implying that “need” may have risen as the economy cooled.
This doesn’t impress me as the response of someone who thought Rhode Island’s overspending relative to a low tax neighbor unimportant, or the comparative approach nothing but a joke. If you think people aren’t telegraphing when they joke, think again. Bob Walsh of the NEA followed up Richard’s comments by pointing out that Rhode Island fairs better by comparison to Southern New England, so maybe we should be spending $100 million more. Yeah, people laughed at Bob’s comment too, but do you think he was kidding?
I’m not suggesting that Licht came into the room as a tax and spender and left as a fiscal conservative. But even a joking acknowledgment of the obvious relation of our deficit to overspending is a step in the right direction. I know that when he is not joking Licht is a consummate administrator and I hope he will take the message of state competition seriously as he helps guide the Chafee administration through budget negotiations.
It does appear that Mr. Licht, or perhaps the Chafee administration in general, wants to distance itself from the idea of cutting the RI budget by reducing the number of people we provide government services to – which was the point of my article. But, I didn’t imply the administration supported the changes to Medicaid eligibility I outlined. I did take advantage of the subject of spending beyond need being raised to open the tough discussion of trimming our priorities.
Even if the “need” is higher in 2010, I believe Rhode Islanders think it is no joke that we are overspending, indeed if our services, benefits and eligibility have been relatively generous, they should be trimmed in order to insure that our safety net remains available to those actually facing real poverty. To be faced with a proposal for $160 million dollars in structural tax increases with no structural cuts in expenses has not distinguished the Chafee effort coming out of the box. The general economic rule is that you can’t tax yourself out of a structural deficit. You must cut $3 for every $1 raised. I’m a no new taxes guy and I’m bidding against myself by pointing this out, but if frank discussion is necessary at this juncture, so be it.
I trust the administration is actually committed to the same. True, the figures at that presentation were for 2007, but are they willing to consider cuts based on 2010 figures?
PS. If they are interested, may we suggest reviewing our report on Medicaid spending – Doing Long Term Care RIght.
Ever since PolitiFact gave us a “False” grade on our report we have been diligently crafting a thorough response – not only will there be an OpEd length response submitted to the ProJo but a more lengthy and in-depth analysis of their claims will also be forthcoming (8000 words so far and still working).
But, in the mean time, we see that financial planners have stepped up to tell PolitiFact they got it wrong. As you may recall, PolitiFact contends that people, especially the wealthy, don’t move because of our estate tax. Here is an example of some of the letters submitted to PolitiFact:
Richard Petrucci, a Cranston estate planning attorney, wrote: “I can assure you that in my experience working with clients, avoiding the Rhode Island estate tax is a significant reason, if not the most significant reason, why they plan to leave to Rhode Island and move to a state with no state estate tax (like Florida or New Hampshire) before they die.”
Of course, they have to throw in someone supporting them but i find the argument very weak (actually, there is no substantive argument at all). And we can only assume this is the best criticism they could find:
Ron Salavon, of Wakefield, had a different view: “Thank you for the article debunking the OSPRI “study,” he wrote.
Ouch!
On a related note – we submitted testimony to one of the bills addressing the estate tax issue that also disputes some of the PolitiFact claims – that testimony can be found HERE.
Posted in Advocacy, Economy, Estate Tax, Media Bias, Political Correctness
Today’s Human Events has an article from John Gizzi on the Wyden Brown bill being supported by President Obama. This bill would allow individual states to craft their own style of ObamaCare. The only freedom states have is in the type of universal healthcare they create, not whether or not to make this radical change in the first place.
“In other words, this will allow the states to follow their own path toward health care so long as that path leads to the same goal that is reached by the ‘Affordable Care Act’-ObamaCare,” said Bill Felkner, director of policy for the Ocean State Policy Research Institute, the Rhode Island-based think tank that has long been in the forefront of calls for waivers for the states to work out fresh solutions to the problems of Medicaid and other health care issues.
Felkner explained that the measure the President endorsed yesterday (and Carney later explained) “will allow states to set up an exchange, or set up a single-payer program or anything else, as long as they end up in the same place as set out in ObamaCare.
“And that means dictating to the provider, taking the consumer out of the picture, and no free-market competition.
You can read the entire article HERE.
It probably shouldn’t surprise us that Democrat Senator Wyden (Oregon) and Republican (the only R co-sponsor) Senator Brown (Massachusetts), with co-author Socialist Senator Sanders (Vermont) come from states that already have some form of “ObamaCare.” This bill would allow them to continue with their own version, which is fine, but it also requires all other states to create their own programs that will meet the Affordable Care Act goals.
And most importantly, as I point out in the article, the bill does not allow substantive freedoms to the states such that they may deal with the largest driver of healthcare costs – long term care via Medicaid.
One interesting note to make here is that when the Stimulus money flooded into the states, the Medicaid portion had a bonus of about 6% but it came with strings – the state could not change eligibility requirements of recipients. As an example, the current Medicaid system allows someone with millions of dollars in a trust fund to qualify for taxpayer funded healthcare because they technically have a low “income” (and, yes, this is happening right her in RI). We may all agree this is silly, but we can’t change the rules of eligibility.
This is only one example of how the state uses tax dollars to provide healthcare for the middle class and wealthy – we outlined much more in our report, Doing Long Term Care RIght, released last year.
But as the stimulus strings go away, ObamaCare takes up the slack. The Affordable Care Act also restricts states from altering the eligibility requirements. This means that the number of people on the system will continue to increase and leave few options for saving money.
In short, there are three things legislators can do to save money on healthcare
1) cut the payments to providers – results in poor quality providers.
2) cut services provided – results in poor quality care.
3) cut the number of people given services – results in only using taxdollars for those who really need it.
Interesting fact we outlined in our report – “Over 80 percent of seniors own their homes and over 70 percent of these own their homes free and clear. State staff told us 1,140 LTC recipients (Medicaid) or only about 12.7 percent of the caseload still own homes.”
Where did all those homes (assets) go???? The “disappearing asset” issue is a result of the perverted system of Medicaid, which says if you can hide your assets (simply by transferring ownership to children sometimes) then the taxpayers will pay for your healthcare.
We must remove those who can afford to take care of themselves from the Medicaid roles. Otherwise we will all be doomed to healthcare provided by inferior providers only offering limited services.
Read (or re-read) our report, Doing Long Term Care RIght, and talk to your friends, neighbors, and legislators about it. We can’t ignore the problem any longer.
WOMENS-ENEWS: Missouri’s State Senate is about to consider whether to subject welfare recipients to drug testing. Numerous other states have said no to the idea and an anti-poverty group has re-released a report calling it a waste of money.
This article, in my eyes, highlights the core problem with state administered charity – the actions of the welfare provider (the government in this case) does not reflect the culture of America. But, if charity was, once again, provided by private entities, then the actions of those providers would be held accountable by the people donating to them. If you don’t want welfare given to someone abusing drugs, then just don’t give to charity providers that allow it.
While that scenario may not be in our immediate future, it is not unreasonable to require some bit of accountability. We expect people on unemployment insurance to look for a job and we now require people on welfare to work or participate in education for their improvement. Is the proposal in MO too much to ask for?
Posted in Advocacy, Political Correctness, Welfare
Posted in Unions
OSPRI BLOG 