Central Falls out of the frying pan and into the cauldron

Well it seems that a touch of reality has entered the Central Falls (CF) school crisis. When the union members discovered that there are over 700 - 800 teachers from around the nation willing to apply for the 90 or so opening created by the union leadership, reality struck. It seems that Central Falls is not the center of the universe. It is not isolated from the economic conditions facing the nation and the education profession. The local union can't control supply and demand on a national level.

Oh! Did I say, the union leadership caused the problem? The settlement reached between the teachers and the CF school administration is the same as the leaders refused to offer to their membership back in February. So where was the leadership then and why are they agreeing to it today?

It seems that threatening to sue, another union tactic, was not a viable option. So today, they are working behind closed doors to get their "FRIENDS" in the RI General Assembly to pass a law which

... seeks to prohibit the General Assembly from enacting changes to pensions that “diminish, impair or deprive” vested state employees of “presently existing rights or benefits.

Rhode Island State Senate Majority Whip, Dominick Ruggerio is the lead sponsor of S-2384, the Public Officers and Employees Retirement System Act. The bill will be taken up by the Senate Labor Committee this week ( week of May 16th). Like earlier efforts by these "FRIENDS" to impose binding arbitration on the cities, towns, and school committees, the unions are seeking a poison pill, golden parachute for themselves which is unsustainable.

If they succeed, they will be rewarding their older loyalists members at the expense of their younger members. This is a common union practice conducted every year through the bumping process which places seniority over competency in filling open positions. The future generation of teachers will have to pick up the future bill as tax payers and as dues paying union members.

But for the moment the school crisis seems to be under control. Out of the frying pan.

But according to the Providence Business News and the Providence Journal Central Falls has jumped into the cauldron of potential municipal bankruptcy. This is uncharted territory hundreds of communities and several states around the country are facing.

Receivership is a step away from bankruptcy. If Central Falls goes bankrupt, all contracts will be voided. The city may be required to unincorporate and to merge with a neighboring jurisdiction. These are the lessons we have learned from the failure of the banks, auto industry, among others in the recent national economic crisis.

It is no wonder that the Rhode Island Federation of Teachers and Health Professionals has reversed it position regarding Rhode Island's application for Race to the Top grants. This was a "no started" last week. Now it may be the only hope for some districts, such as Central Falls.

This afternoon the Providence Business News online published the following story, State law bars Central Falls bankruptcy. Because of state law, the GA will be called upon to help resolve the issue. This should be interesting to see how the politicians solve this one.

This is the legacy of years of greed and short term thinking that seems to be a characteristic of Rhode Islanders and the people they elect to public, union, and corporate offices.

Stay tuned while we keep track of the temperature

If you became Governor - what would you do?

A poll published online May 10, 2010 by The Providence Business News asks the question

What should be the new governor’s top priority upon taking office in January 2011?

Readers are asked to select from 5 options.

1. Balancing state and local budgets 12 votes (33%)

2. Economic development/job creation 15 votes (42%)

3. Improving elementary, secondary and post-secondary education 3 votes (8%)

4. Improving the state's tax environment 5 votes (14%)

5. Implementing a robust energy and environmental protection policy 1 vote (3%)


These are very early and preliminary votes but it does suggest what the mind of the public expect from a governor. and their ignorance of what a governor in Rhode Island can be expected to do.

1. Balancing the budget

Given the Rhode Island Constitution and despite the long overdue separations of powers act, balancing the state budget is a legislative function. The most the Governor can be expected to do is:

a. to recommend a balanced budget to the legislature,
b. to manage, after the fact, a budget that the legislature approves, and
c. to do so as effectively and efficiently as circumstances and the law allow.

As for the local budgets, these are up to the local legislative bodies (town councils, boards of education, etc.)to determine and beyond the Governor's control.

So while it might be desirable to have strong leadership in the Governor's office, institutionally there is little real power here to achieve this goal without a commitment of cooperation from the General Assembly.


2. Economic development/job creation

Rhode Island is a small state that tries to behave like a big state. Localities compete as aggressively with one another for new businesses and jobs as Rhode Island does with other states. The Governor can lead here by setting some clear priorities and goals for development and by promoting the state to out of state employers. But the governor can only sell what the state has to offer and what the General Assembly will fund. These two are not always in synch.

In "Meeting the Challenge of the New Economy", the 1997 Annual report from the Rhode Island Economic Development Council, the Council listed 8 myths about Rhode Island's economy. Myth # 5 is

"by creating jobs, state and local government employment helps the economy."

The report continues,

"The Reality: The right number of state and local employees allows government to accomplish the tasks it needs to ( e.g. maintain the roads, police protection). More than we need, however, eliminates even more jobs in the moderate term by removing purchasing power from consumers and raising taxes."

This is even truer today than back in 1997, yet little has changed in terms of the Governor's ability to change labor contracts and renegotiate the long term commitments to public employees. Management, the Governor's Office, requires the legal tools to enable it to make the management decisions that creates and maintains the right number of highly trained, skilled and experience government workers to do the tasks it needs to do.

The governor does not create jobs, nor should he/she. Instead, the Governor should help create a climate that fosters private sector employment opportunities. Here again, cooperation between the GA and the Governor will be required.

3. Improving elementary, secondary and post-post secondary education.

The Governor is the public's elected CEO. Here is where the Governor can have a real impact and where real change can be brought about. Education is the most critical step in an economic and social policy. Economic development does not occur overnight, anymore than educating a child to become a productive worker does. Both are long term processes. Changing the educational environment is a leadership and policy issue. Setting that policy, especially strategic policy, is the job of even a weak Governor.

a. The first step in building and supporting a viable and adaptable system to meet the needs of students, parents, communities and employers would be to set middle and long range goals and objectives for the state's educational system. These would be based on realistic assessments of the changing workforce needs, regional and global economic trends and local and state capacity to respond to these needs would be.

b. Next would be to create and carry through a realistic plan to achieve such goals. For the next Governor it would be follow through on the work done by Dr. Gist and those involved in planning and seeking federal support through the Race to the Top grant competition.

c. Next is to build on our strengths beginning with the best talent we have. The new Governor should avoid the temptation to replace the team now in place solely to reward friends and cronies. We have seen enough of this in recent years and even recent days in the state.

d. Support for individual teachers efforts to use and share their best practices even when these are contrary to arbitrary and/or out-modded contractual work rules or administrative policies is critical. By promoting and rewarding professionalism through public recognition and professional advancement for outstanding performance would demonstrate to all the state's commitment to quality education and a quality workforce.

e. Support for the state's post secondary institutions including the technical as well as professional post secondary education at a level competitive with the rest of the region and the world would put action behind the claim that we have the well trained workforce employers are seeking

f. The Governor should also push for full funding for the plan at all levels and through all available means and would re-enforce that commitment.

4. Improving the State's Tax environment.

I realize this may go against a lot of people's gut reaction but here goes. The State's tax environment is not, nor should it be, based simple on "pricing" considerations. By this I mean, it should be based on the true cost/benefit to me to live and work here, not on my tax bill. It should be based on the real or "true" value I receive for the taxes I pay.

For example, policies which focus on "lowering my tax bill" by not fixing the bridges and roads that support my business; or provide me with workers who can not read, write, do math or think critically; or impose inconsistent and onerous laws, regulations, processes that impede my ability to conduct my business competitively; or make it impossible for me respond to a new business opportunity in a timely and competitive manner, are the hidden taxes which really create a bad tax environment.

By the same token, the value of a reliable and efficient public works department, a dependable and accessible government permitting service, a clean and safe water supply, etc. should be considered when evaluating the value you receive from paying your tax bill. For example, what is the value of the state's response during the recent floods worth to you? Or, What is the value of the life that fireman saved? These are examples of the positive value we receive for the tax bills we pay. They would be sorely missed if they weren't there.

Here is where the Governor can have a impact. He should direct the administration's efforts to address the hidden taxes imposed by the General Assembly, especially when they fail to address these issues. One way to attack this problem is to change the dialogue from "government waste" to "government value." Former seeks only to cut costs without reference to quality. The latter exposes the "hidden taxes" of government uneffectiveness and inefficiency and shifts the focus to discovering the potential the value of government services deliver by those taxes.

A policy of greater transparency, i.e. "the good, the bad, and the ugly" should be the Governor's position. The new governor should use the bully pulpit of the office to expose the smoke and mirrors of backroom deals and magical thinking that we find in the GA.

The goal is to address Myth #4 from the 1997 report.

"If it is good for business (or labor) it has to be bad for labor (or business)."

The adversarial period of 20th century business/labor relations must end. If we are to improve the tax environment for everyone in the state and compete in a 21st century global economy, we need to change the way we think about who We and They are. Here the moral leadership of the Governor's Office must come into play.


5. Implementing a robust energy and environmental protection policy

In order to implement such policies, they must be sustainable and realistic in terms of overall needs and resources available to the State and localities. The Governor can provide guidance in balancing the state's economic, and social needs as reflected in the state's energy production and consumption practices weighed against the long term hidden tax of poor or inadequate environmental regulation and enforcement. Here the Governor can provide leadership to bring competing interests together for find solutions that serve the best interests of all and not the best interest of "favored" interests.

The job of the next Governor is to create a political climate where all parties feel that they have been dealt with in fairness. This will go a long way in creating a physical, economic, social and political environment that supports the public's and State's immediate and long terms interests.