Rhode Island Fiscal Crisis -- When the chickens come home to roost

There has been quite a lot of shouting, finger pointing, denial and general childishness lately in Rhode Island by special interest groups complaining about the troubles in the Rhode Island economy and state government finances. While deeply felt, I assume, it is very selfish, self centered and wasteful. In today's Providence Journal there is a story about recent meetings (hearings??? or shoutings???) at the Rhode Island State House to discuss Governor Chafee's sale tax reform program. One of our readers has commented on what he/she sees as the real problem.

Here is a guest comment by Ethnographer in response to a story, Lawmakers seek sales-tax alternatives, in the Providence Journal  

With the Fox in the hen house, what do you think we can expect? Maybe the same old, same old stop gap squandering of state assets -- the one time sale of the state's gambling license maybe? This is the caged thinking of chickens laying eggs to get fed and denying that they are really McNuggets in waiting.

The problem is systemic and long term. What we need is leadership and strategic thinking. We need leadership with vision. We need a system-wide review and change in the tax structure. We need a long term plan to get us down to a sustainable debt level. One area that can be corrected is the sales tax which the Governor has proposed. But that is just the beginning.

Unfunded mandates need to be addressed. The chickens in the GA are happy to pay their owners with promises in the form of mandates (eggs) but lack the will to pay for (hatch) them, preferring to pass that responsibility on to the local governments. Maybe that's what we are smelling.

Let's do a complete review of these mandates -- Why do we have them? Who benefits? Do we really need them? and Can we really afford them?

The income tax structure needs to be reviewed. If RI is to be the low wage, low cost state in New England, then the wealthy who benefit from that will have to pay more of their share of costs to government for supporting this low wage environment. You can't have low wages and expect the income tax breaks to the wealthy to make up the difference, can you?

Public worker compensation definitely needs to be reviewed and reformed. But cutting for the sake of cutting is STUPID. What we need is a system that recruits talent and rewards productivity and quality. Instead, we have seniority, cronyism, and the kind of influence we are witnessing in the GA staff raises.

User fees and registration fees should at least recover the full cost of administering the services that the fee is designed to provide. For example, how much does it really cost to register and maintain a real estate deed, or to record and maintain the record of ownership title for a new or used car? Who should pay for these?

The relationships between state and federal matching funds should be looked at more closely. Are we running after short term federal funds but committing local tax payers to long term maintenance and carrying costs?

 

It is time for the chickens in the hen house to stick their heads out of their cages, and take a look at the real world in which the rest of us live. They need to start thinking outside of the cage, start thinking outside of the box.