Wednesday, April 6, 2011

What one person and a dog can do for their neighbors

  From the South County Patch

Maggie's Pet Pantry - A Food Bank For Pets

Since January Maggie's Pet Pantry has welcomed dozens of South County residents who need assistance feeding their cats, dogs, and other companion animals.

The list keeps growing and growing….

 From WPRI:  News about the major Internet hack of online costumer databases at major US retailers and warning messages from these companies being sent to their customers.

The list keeps growing and growing….

Now is the time for the press to check out why we have exemptions in the sales tax


Governor Chafee has proposed a "tax increase" in the way the sales tax is applied to attack the growing budget crisis facing Rhode Island and its 39 cities and towns. This has, as we might expect, drawn out all of the special interests in the State, as well as many of their Zoombies. These special interests are attacking the plan in order to defend their own special tax status and privileges they enjoy under the status quo. Of course that privilege, their exemption, is part of the problem. But they and the press won't admit it. It allows them to NOT pay for their fair share of the cost of government overhead services that they now enjoy for free.

A Typical Example??


In a lead article of the Providence Journal, "Chafee's proposed tax hikes add up for this Cranston family"  for example, we are given a list of added costs that a "typical" (whatever that means) middle class family these tax might mean. It assumes that they family did not have, and will not make choices about how they spend their money after the tax become applicable.

For example: Newspaper Subscriptions  $312  taxes $18.72.  The costs of the papers have been going up while the quality has been going down for quite some time. The outlets for public information have expanded significantly since the days when the newspaper was the only source of public information. So why do we still have an exemption for them today?

The imbalance of reporting in all media or "Why are newspapers excluded from the sales tax today anyway"

The article does not explain why these items were excluded in the first place. If we were to research each of these we might find that special interests lobbied the General Assembly at one time or another to get this special privilege. Once these privileges became law, everyone assumed it was a RIGHT. Nobody is going to question the right and the conditions that may have made it reasonable at the time it was passed into law.

 Those hidden exemption are subsidies

The general public is paying a hidden exemption to the sellers of those products and services  and to the buyers of those products and services .

The sales tax is called regressive by Liberals because it taxes the poor on the goods they buy while excluding the wealth for the services they buy. It is also made even more regressive by the special exemptions which, while intended to relieve some of the pain on the poor actually provide a higher dollar value relief to the wealth who purchase higher priced good in the same class. Take food for example:
A sales tax on a pound of bologna for example on sale for $1.50/lb would yield at a 2% sales tax an addition cost of $.03 cents for a pound that a poorer family might buy, while a pound of roast beef on sale at $5.00/lb would yield $.10 pound that a wealthier family might buy.   
The sales tax is called unfair by those small business sellers who have to charge a sales tax on the products and services they sell and by the buyers who buy those products. It imposes an administrative burden on the seller and gives an unfair advantage to their larger competitors who can spread the overhead cost over their  pricing of  larger volume and breath of their products. It also encourages those who can afford to drive to shop out of state for goods that are taxed at lower rate. This is seen every summer in the business from RI that goes to Massachusetts during Massachusetts' tax holiday sales.

Leveling the Playing Field

If all goods and services are taxed at a rate arrived at fairly AND removes the waste in the current tax system, then the tax payers would be better served.

First, because the tax cheats would be prosecuted or sued for their waste to the system ( lost revenue from the under the table deals), and  the tax avoiders would have a more difficult time finding true advantages in going out of state for minimal savings (price competition).

Second, removing the incentive to seek special exemption would  remove it as a political strategy (anti-competitive business practices) and the politicians in the General Assemble would have to publicly explain and justify why they are seeking such legislation and supporting such exemption (waste of public corruption).

Third, and Most important, is that spreading the total state debt and tax burden over the whole retail economy should result in a higher dollar return to the government for its services (distributing of government costs more fairly) and a lower competitive tax position for the state's tax payers relative to the two major competitors, Massachusetts and Connecticut (improving RI's competitive position in the region).

The Yes/BUT Media favors the Status-quo

While the newspapers are supposed to be balanced in their reporting, we can see in the discussion in the editorial pages and in the stories on the front pages that they are not. The full story is not being total, nor analyzed. Since the local TV media basically follows the newspaper story lines "how it is all unfair". This  makes the story line more believable to the public, even though its is incomplete and biased. Meanwhile, the other story line that the alleged cause for crisis blames the public worker and teacher unions and puts forth attacking these special interests is the solution to the problem.

Highlighting the Problem Does work


Don't get me wrong, the public workers and teachers union deserve the heat they are getting. They are being unfair to defend contracts that are unsustainable and unrealistic in the 21st century global economy. They are .being unfair to their members and the public who support them. Today's Projo also carried this story
 Providence union agrees to concessions. This shows that some  union leaders are beginning to see their responsibilities for the problem and are willing to take responsibility to become part of the solution.

But they are only one part of the special interests in the the General Assembly. The politician in the General Assemble are catering to many others as well. The Press should be looking at these special interests as well
 The press should  look into these special interests today as well as into the broader context of public tax policy.

As it is the Press is cutting the amount of hard news, rather than promoting their Yes/BUT PR propaganda.on limited space of the editorial pages and in the news sections. Instead, lets see some hard news about how these special interest tax exemption can about and why they should be continued.

The Yes/BUT have begun to raise their heads from their little tax shelters warrens. Now is the time for the press to check out these tax rabbit warrens and see what they are hiding in there.






Monday, March 21, 2011

The Year of 1905 --- Congratulations RI Philharmonic Orchestra

    On Saturday night, March 19th, the night of the Great Moon, the halls of Veterans Memorial Auditorium

were blessed with a spectacular production of Shostakovich's Symphony No 11 in G minor, Opus 103 by the Rhode Island Philharmonic Orchestra.. Conductor Larry Rachleff and the entire orchestra put the near capacity audience into a trance taking us on a journey back to the turmoil bumbling up in Russia in that year of 1905. As Rachleff pointed out in his introduction to the piece, there is some prescience, a sort of deja vu, that we are now watching events take place in our time that have happened before. Hopeful dreams of freedom run up against the violent reaction of the status quo.

    For almost an hour, Rachleff and the orchestra lead us through Shostakovich's sound portrait of the moods and emotions of the time. Ranging from the sublime to the chaotic, the seductive to the triumphant, the musician were tested and proved worthy of this long and complex piece. Movement to movement without a pause, the audience sat spell bound lulled by the soft tapping of the drum rolls of a procession then were knocked out of their seats by the crashing percussion of the blasts of cannons played by bass and kettle drums.


     The brass and woodwinds combined to create a "visual" picture of the moment giving the performance a cinematographic feel. The brass moved from the loud blare of a triumphal entry to a sad lament. The woodwinds added their mellow colors to the phonic palette.

     Most of all, the strings demonstrated the pure physicality of Schostakovich's work. The musicians were put to the test as they moved from the slow passages so typical of Russian folk music to a frenetically loud, at times almost discordant,  series of passages. The audience could almost see their sweat, and certainly felt, the physical challenge each artist faced.


     Afterward, the audience exploded with an enthusiastic standing ovation. But more than that, the conversation in the lobby and on the street the next day was one of exhilaration and marvel. The Projo headline on Sunday read, Conductor Rachleff shines in Shostakovich. There was an air among those leaving the auditorium that they had witnessed something very special. Rhode Islanders should be proud to have such a fine professional civic orchestra. It is a true symbol of what Rhode Island can be when people marching to a different tune can suddenly and so brilliantly get it together.

      The concert began with the overture from Mozart's Cosi fan tutti, a pleasant way to warm the audience up on a cold night. This was followed by an other Mozart piece, Violin Concerto No. 3 in G major. Featured was Karen Gomyo, violinist who performed brilliantly on the solo parts. Ms. Gomyo displayed a poise and mastery of her instrument and the music that captured the audience. Her performance was strengthen by her complete physical involvement in her performance.

      As if the program itself was not enough, this was the evening of the Great Moon. Walking to the Veterans Memorial  Auditorium from the parking lot behind the Department of Administration Building, we watched as the Great Moon rose above the ridge that marks the East Side. A crowd with their cameras were gathered by the RI Credit Union lot taking pictures of this once in 18 year event.



       Later we saw the moon hanging over the Independent Man on top of the State House.



Support the Philharmonic and Music School

      Before the concert began, Marie Langlois from the Philharmonic Board welcomed the audience and made an appeal for support. The current economic conditions, the cut back in federal and local government funds, and the decline in the stock market have drastically impacted the Orchestra and its Music School. Currently they are expected to close out their fiscal year in the end of May with a $220,000 deficit. We were asked to help by contributing to cover this deficit. "If each person here tonight could just contribute an additional $100.00 to the Philharmonic ..." then the deficit could be covered.  Certainly the performance last Saturday night was worth a $100.00.

 

      Compare what you will get for that $100 and what it will do for the community. Compare that to what a $500.00 ticket  to see Charlie Sheen's "Violent Torpedo of Truth," will do for Charlie Sheen.
     
Supporting the RI Philharmonic Orchestra and The Music School is an investment in Rhode Island. Definitely deserving of public support.


It is the Debt Stupid!

 In a recent oped piece entitled,  No compassion for you if you’re in R.I.’s private sector,  Projo columnist Edward Achorn bemoans the fact that Governor Chafee has asked the General Assembly to enact new taxes on a range of products, and some services, previously exempt. As has been the case in the past Mr. Achorn argues a popular point based on a flawed analysis of the problem.


The problem is not the budget or the taxes -- it is the State's debt.
 
We have had a party. We have borrowed big time from the future. We have borrowed to pay for the present without regard for the future. As a result, until we repay the future, there will be no future for Rhode Island.

 Government's job is to serve the public interest by providing the goods and services that the voters and public determine they need. It does this by generating income from taxes and related fees.

Cutting expenses diminishes the goods and services you can consume. Some of that  is waste; some luxuries that we can do without; and some is real belt tightening by forgoing things that are needed such as roads and bridges


and public health and safety.


 
How are Government finances any different from your finances?

Can you get rid of your debt by lowering your personal income? What happens if you lose your job?

Look at your own credit card behavior, for example. Waste would be buying your Big Mac with your credit card rather with the cash in your pocket or balance in checking/debit card account. A luxury would be to buy that sales item using your credit card rather than cash or debit card just because it was on sale, even through you did not need it. Belt tightening is like paying your mortgage with your credit card, borrowing more at a higher interest rate, to make a payment on a debt at a lower interest rate. In each case, your are increasing your borrowing simple to buy time and hoping to put off your eventual default.

Do tax cuts and budget cutting reduce debt?

Spending cuts do not effect the interest cost on the public debt. What cuts the interest cost is paying down the principle. And this can only be done by shifting the savings from cost cutting to principle payments. That means either no tax cuts, or raising additional income through tax increases (i.e. taking a second job). In either case, the proceeds from savings and/or the new job should be dedicated to pay down the debt.


Those, like Mr. Achorn, who complain about their taxes being too high, or the waste in government, should look to their own credit card debt. How good a job are you doing to manage your debt?

Who pays for drinks?


Rhode Islanders have been having a party. They have become drunk on quick fixes. It seems that those who would have us ignore the debt and focus only on taxes, really want us to look the other way. They want us to pay for the drinks while they can skip out of the state. They would leave the tab for the rest of us and our children to pay, or default on the debt.


Maybe it is time to stopping drinking single malt scotch and switch to beer

 Sharing the wealth also means sharing the risk and burden.


Everyone in the state has benefited in some way from the debt. Each of us shares responsibility for letting it happen. This includes the tax payers, the unions, and politicians who have created the debt arising from the unofficial borrowing caused by underfunding or postponing payments into the pension funds.


Everyone in the state should share in the cost of retiring this debt. Tax cuts for the wealthiest without demanding they pay their fair share on the principle first, is like letting them take you to lunch and then allowing them to leave you with the tab. In my experience they often will do this, if you let them.

The Hidden Cost of Debt

The same is true for politicians. Letting politicians postpone paying for current earned pension obligations and deferring them for the future, is like being treated to lunch and then be told that they left their wallet at home. They will promise,
"We can use your credit card to pay the bill. I promise to repay you when we get back to the office." Of course, when you get back to the office, they have disappeared.


What about all those businesses and union members who cash in their chips before paying their share of the debt, and then move to Florida? Aren't they doing the same thing?  

After all, aren't they feeding off of us, just to leave the rest of us with their share of the tab!

Friday, March 18, 2011

Economic Development on the cheap

Rhode Island EDC has committed $75 million of RI Tax payer money to bring 38 Studio, a video game developer, to Rhode Island. In return 38 Studios is supposed to create 400 jobs for RI. The rationale is that the video game industry  is the next growth industry.  RI  needs the jobs and taxes these will generate. The video game industry needs a well educated, highly trained and skilled workforce made up of artists, musicians, artistically oriented engineers and technicians.

Yet, the educational resources we will need to train these worker are being cut back. Congress is cutting federal support for arts education, while Providence, the home of RISD and soon to be 38 Studios, is cutting its arts programs in the school system. So once again our big economic development ideas are in conflict. We are attracting an arts based business with a tax payer investment to a private enterprise while under-investing in the children of the same tax payers and underfunding the education system that is supposed to train a generation of students to staff the graphic arts,  musicians positions these companies will need. . Makes sense -- Rhode Island sense that is.

Meanwhile Borders books has filed for Chapter 11 bankruptcy, Borders has 3 stores in Rhode Island in Garden City, Providence Place mall and T.F. Green Airport –– were on the list to close. Today, it was announced that the Cranston (Garden City) store will not be closing. The jobs will be saved, the customers will still have access to their bookstore. A small gain in a sea of closures, bankruptcies and job losses. How did this happen? Did EDC jump in? Did Governor Chafee or Speaker Fox intervene?

No, it was done because the owners of Garden City, the Los Angeles County Employees Retirement Association, was willing to make a deal that satisfied everyone. These seems like a win, win situation. RI keeps the jobs and collects the taxes, Garden City keeps earning money with an occupied building and the L A County Employees Retirement Fund continues to get a return for its members. And Borders gets a break on its lease while continuing to earn money from the store..

Maybe more business to business cooperation is what we need. Note that with all the anti-public union talk from the Tea Party and its allies, it was a county employee retirement fund that help save the day, not a too big to fail Bank.. Maybe when cooler minds get together to solve a problem, small changes are possible. .

Maybe enough small steps can save enough jobs and businesses to compensate for one big gamble. Maybe by sharing the pain, these individual efforts will rebuild a sense of community to solve the problems. Economic development on the cheap -- just maybe it will trump the grand plans, big bets and the "if it wasn't my idea, it ain't worth doing" mentality that seems to dominate economic development thinking in Rhode Island.


Wednesday, March 9, 2011

One more desparate attempt to sell off RI Assets


PROVIDENCE, R.I. -- Rep. Charlene Lima, D-Cranston, is proposing a Nov. 6, 2012, statewide vote on a suggested change to the state Constitution to allow a privately owned and run casino in Rhode Island in exchange for a $100 million one-time licensing fee. Similar to a bill introduced at least once in the past, the bill envisions a competitive bidding process. But it also suggests possible locations for the state's first full-scale casino.
 In my opinion:
     
     The gambling tradition and short sight legislature once again is asking us to sell off a state assets at a bargain rate price. If a casino is a major source of state revenue, why is  it being offered as one time license and a fixed price? The license should, if we go in this direction, be subject a periodic renewal date and be awarded on the basis of an open competitive bidding process.

     The licensing authority belongs to the tax payers of RI, and the legislature should be acting as the fiduciary agent of the tax payer. Such a duty requires stewardship and acting in our interests, not some backroom deal.

     And Should the State's Constitution be used as the vehicle for such a decision? 
     Is our Constitution that petty that we seal business deals in constitution amendments?

What do you think about it?