198 replies to this topic

[Jerry2]

gregw, on Jan 10 2006, 06:13 PM, said:

One thing's for sure:  the Report has a discernible pro-business and anti-labor slant.

One of the faults of RI, according to the Report, is that the minimum wage at $6.75 is "too high."

Another strike against Rhode Island is that personal incomes above $319,000 are taxed at 9.9 percent. According to PBN, in Massachusetts and Connecticut the personal income tax that level stands at 5.3 percent and 5 percent respectively.

I don't see how anyone in RI can survive on less than $6.75 an hour or why anyone earning over 319K can't cough up 9.9% on income in excess of this amount to pay for public services.

Rhode Island does need someone who can shake it up here and bring real tax and infrastructure reform. Carcieri is not as aggressive as I had hoped he would be....and the fact is that many people in that upper tax bracket scrutinize every penny that goes out. Many have accumulated their wealth, assets, and income from years of sacrifice. In a state 24 miles wide and 48 miles long, it is very easy for business executives to think of other places( Massachusetts)to set up shop. There are other options, esp. when 1/10 of the ENTIRE U.S. population live within 250 miles of Providence.. What really needs to be done here in order to change? I'm an independent as I don't believe in political parties, but I think there are a few ways that we could cut taxes to be more competitive with neighboring states and not feel a loss.

1.) End ESL and bilingual ed in R.I.
2.) Payment-in-lieu-of taxes for all non-profits(hospitals, colleges,etc.)
3.) True welfare abolishment
4.) Mortgage tax on all refinances and purchases like in N.Y. (curbs predatory lending, over-appreciated markets, equity flipping, and ultimately brings lower taxes...They pay up front,but are compensated w/ lower property taxes.)
5.) Terminate all state office leases on properties all over Prov. metro to combine them into 1 building. It would initially cost $$, but the funds would pay for themselves quickly.
6.) Cut state income tax to 4% ..
7.) End pension plans for all city employees. Plans still in existence could be rolled over to a 401K.

Any thoughts?

[brick]

Garris, on Jan 10 2006, 06:33 PM, said:

30K isn't a joke to anyone.

If my salary were going to jump into levels where I was paying significantly more in RI than I do in MA, I would move over the border in a flash.  

If I were starting a company and needed to attract high salaried people, they would look at that fact and I would have to pay them extra to compensate.  So then I may as well set up shop in Attleboro.

These are relevant facts to RI's competitiveness.

[Baines]

brick, on Jan 10 2006, 07:29 PM, said:

If my salary were going to jump into levels where I was paying significantly more in RI than I do in MA, I would move over the border in a flash.  

If I were starting a company and needed to attract high salaried people, they would look at that fact and I would have to pay them extra to compensate.  So then I may as well set up shop in Attleboro.

These are relevant facts to RI's competitiveness.

Those are very real triggers to employee recruitment and retention; and thus corporate re-location decisions.

The only "saving grace" Providence (and northern part of its metro) has is that employees can live in the MA part of the metro and commute. But that is a poor fall back position in the absence of the attitude change I have cited in the past.

Providence (and by extension and necessity, RI) is full of enormous potential being minimized by that RI mentality - is there a hope of political and cultural change?  

Imagine a tax structure that tips the scale - just enough to draw attention.

[gregw]

First of all, 30K is chump change for some people. And besides, someone in RI earning 319,000 doesn't pay 10% of their income in state taxes. The 10% marginal rate only kicks in on money earned above that amount.

Second, rich people got to where they are through hard work and sacrifice. Hmm. In some cases, but how about Paris Hilton? Man, is she sacrificing!

So some are saying that because RI has a higher marginal tax rate than MA, RI clearly needs to lower its rate because rich people will flee across the border and take their money with them.

I dunno. Driving around Jamestown, Newport, Bristol, Little Compton, Barrington, the East Side, it doesn't look as though this is exactly happening.

Why? Because people don't base their actions on purely economic terms. If so, no one--I mean no one-- would live in Providence with its high property and excise taxes. We'd all be leaving in droves for Alabama!

Now, should RI cut taxes on those people who earn >319,000?

If you say so, you must also accept the consequences of this. You are endorsing cutting money that might otherwise be earmarked for heating assistance to the poor, money to provide counseling for abused children in DCYF, money for RIPTA, money to pay for art and music for kindergarteners, money to enforce environmental laws, money for the state police to patrol the highways, etc.

Someone said it's not about fairness. I guess fairness is just one of those quaint ideas that has no place in the society that people like Grover Norquist are trying to create in America.

Edited by gregw, 10 January 2006 - 09:18 PM.

[Garris]

gregw, on Jan 10 2006, 09:38 PM, said:

So some are saying that because RI has a higher marginal tax rate than MA, RI clearly needs to lower its rate because rich people will flee across the border and take their money with them.

I dunno. Driving around Jamestown, Newport, Bristol, Little Compton, Barrington, the East Side, it doesn't look as though this is exactly happening.

Why? Because people don't base their actions on purely economic terms. If so, no one--I mean no one-- would live in Providence with its high property and excise taxes. We'd all be leaving in droves for Alabama!

You are right, people don't base actions on purely economic terms.  That's perhaps the primary thing keeping people in the RI towns you list, and often through gritted teeth.  I know one physician who lives on the East Side whose wife is driving him nuts wanting to move them to MA where they've have better schools and, with their calculations, some more disposable income.  I know someone else whose husband is driving her nuts wanting to move from Lincoln to Wrentham, MA for much the same reason.  I can think of at least a dozen people off the top of my head who have moved to MA from RI for tax and/or cost of living/quality of living reasons.  

When was the last time you heard someone saying something like, "I live in Taunton, but crunching the numbers, with the tax structure, business opportunities, and schools in RI, we're planning to move there soon."  I've never heard this personally...

That's the point of many on the board.  RI and Providence have fabulous beauty, architecture, institutions, higher ed, culture, restaurants, history, etc.  But it isn't manifest destiny...  This is a competition for dollars, and with corrections to our cost structure and education systems, this place could just explode with potential rather than just being merely "attractive."  

Oh, and people are flocking in droves to places like Alabama (a former co-worker of mine just moved there from NY...  It cut her costs of living by 60% with a 20% higher salary), Texas, Nevada, Arizona, Georgia, etc for purely economic reasons.  We're loosing companies, tax dollars, and perhaps most importantly, House seats to those states.  With those lower cost structures they have, I don't think with this influx that they're having trouble funding the poor, counseling for abused children, mass transit, the arts, the state police, etc.  You need flourishing and growing companies and communities to fill those coffers, not static populations of small affluent ghettos.  

gregw, on Jan 10 2006, 09:38 PM, said:

Now, should RI cut taxes on those people who earn >319,000?

If you say so, you must also accept the consequences of this.

Someone said it's not about fairness. I guess fairness is just one of those quaint ideas that has no place in the society that people like Grover Norquist are trying to create in America.

If surrounding states are killing us on this issue, than absolutely cut that tax rate, and I accept in full the consequences (in part because if the state grows as a result, I don't think they'll be many).  Listen, I'm as progressive and Left as they come, but I have a rudimentary understanding of economics and realize we have to compete.  I love fairness, but we do the nation as a whole no favors (and certainly not ourselves) if we hold out on principle and get clobbered in the marketplace.  

My father used to be a human resources exec for a Fortune 500 company in the 80's and later for high tech concerns in the 90's and I watched him ache to try to recruit talent to the high cost NYC metro area while companies in North Carolina, Kansas, Florida, Dallas, etc were able to offer people more money and 40-70% lower costs of living (and without sacrificing "sophistication" either, in places like Chapel Hill, Atlanta, Dallas, Miami, Tampa, etc).  It used to kill him, and he used to rail against NY state economic policy regarding taxes, energy costs, school costs, credentialing (for professionals) hurtles, etc...  Those other states, regions, etc could just easily offer better packages and were far more nimble and aggressive in recruiting companies, talent, and capitol.  

Listen, we collectively decide our fate in a democracy and we the people have allowed "the wealthy" to run to the bank while allowing ourselves to be distracted by conservative hot button issues like abortion and family values.  I think it was Nicholas Kristoff of the NYT who said that history will see as sheer genious the Republican strategy of convincing the vast majority of Americans to vote for politicians who represent principles diametrically opposed to their own economic self interest.  The answer to this is always the answer in a democracy.  But until CT, MA, and NH vote out their own, we're stuck...

- Garris

[brick]

Garris, on Jan 10 2006, 10:18 PM, said:

Listen, we collectively decide our fate in a democracy and we the people have allowed "the wealthy" to run to the bank while allowing ourselves to be distracted by conservative hot button issues like abortion and family values.

Being socially progressive and being econmically socialist are two different things.  I think it is a fallacy to associate free market economics with conservative social policies.  There are plenty of libertarians who would like to pay a lot less taxes and also not have the government telling them what they can and can't do all the time.

I find it funny, no offense, that most doctors and lawyers end up liberal, even though they take just about the most advantage of free market systems.  (I know there are entertainers and the like)  I mean, imagine if someone came out with a system and said, if we cap doctor pay at $100K and apply all of tha tsavings to the working poor, they won't have to pay health insurance.  That would be an amazingly great social program...and noone would go to med school.

Edited by brick, 10 January 2006 - 10:28 PM.

[runawayjim]

saw a report on abc6 tonight...

top 3 worst cities for children or children in poverty or something.  i know it was related to poverty.

1. hartford
2. brownsville, texas
3. providence tied with new orleans

[gregw]

You're right, Garris, that RI must not rest on its laurels and that it needs to be competitive.

There are things that RI can do to be competitive (which I mention below) and some things that it cannot do.

It cannot compete with Alabama in terms of cost of living/housing.

Paul Krugman in the NY Times differentiates between zoned land and flat land. In flat land, where Alabama is or for that matter Las Vegas, the cost of buying a house pretty much parallels the cost of construction. RI, like MA, CT, NY or much of CA, is zoned land: it's built out; what isn't built out is in short supply because of zoning and so the housing market reflects low supply/high demand. That's not going to change any time soon. Anyone who looks at things on a purely economic level, whether a person or Honda Motors, is going to set up in cheap flatland. Zoned land has quality of life and other less tangible benefits.  

Back to RI's poor competitiveness relative to its peers in zoned land: I don't buy that it is in any significant way tied to too-high top-rate marginal income tax rates, which are fair and considerably lower than they were a decade ago. Statistically speaking, few taxpayers in RI or even in MA fall into this category.

Instead, I see RI's problems being more tied to other and more burdensome forms of taxation, a state government dominated by special interests, and underperforming public education.

If you want to introduce effective tax relief to RI, you have to do it through property tax, sales tax, and excise tax reductions.

These forms of revenue are either less progressive (real estate/excise) or outright regressive (sales) compared to income tax. They impact the average (and even affluent) taxpayer much more than the 10% hit on incomes over 319K.

Lowering these taxes stands the potential of putting more money back into the economy as opposed to giving tax breaks to the wealthiest who are inclined to put it in assets.

In addition to lowering these more regressive taxes, the state could find some ways to save money:

The state could be far more proactive in encouraging municipalities to pool resources in order to cut costs and avoid duplicating services. There is in my mind no reason for RI to have 38 different school districts when the state has a smaller population than many large cities.

The state ought to renegotiate employee pension and healthcare packages and to use its leverage to force municipalities to do likewise (such as holding back state dollars if local contracts are not tied to a state formula that defines acceptable copays, colas, etc.)

Although some complaints of gross govt inefficiency are overstated, the state could make a greater short-term investment in IT (such as migrating more DMV services to the web) while reaping a long-term reduction in HR costs. In Michigan, you can go to a kiosk at almost any mall and get all your DMV paperwork done.

As far as improving competitiveness on the education front, a few useful steps:

The state needs to establish an equivalent of the MCAS, which will hold students to a standard in order to graduate. This will undoubtedly cost more in the short run as the state will have to commit more money to education but the state will benefit from a long term increase in the education of its workforce.

Also the state should truly revitalize vocational education. Not everyone has to go to college. Train kids in careers that are technical/blue-collar but unlikely to be outsourced.

Part of the problem with low performance and high drop-out rates is that a lot of kids are not that interested in learning for its own sake. Do we let them drop out and work at Wendy's or become street pharmacists or do we appeal to their practical senses by offering them training to be mechanics, beauticians. etc?

A lot of them might then own their own business some day and contribute to the state by being taxpayers as opposed to costing the state by filling up cells at the ACI. They'll be complaining about taxes rather than costing taxpayers money!

There should be no quota on the number of charter schools in the state. While there is truth in the concern that charters skim off a lot of the cream of the public system, they also provide affordable competition which gives parents and kids more options and a greater chance of getting a decent education.

Obviously much of this is easier said than done.

The General Assembly is beholden to special interests. Towns will jealously guard their control over their own school districts. State workers will complain about any modest hit to their benefit packages/working conditions. Teacher unions will resist any change or reforms. The Governor still acts like he's running for office rather than actually governing. I think a lot of the solutions to RI's poor performance are pretty straightforward on paper. But putting them into effect is very, very difficult.

[Recchia]

RI adds 3,800 jobs in 2005, mostly in education and health services

[CtownMikey]

Did anyone read the governor's 2 speeches on Projo.com?

They seemed very encouraging

[Cotuit]

CtownMikey, on Jan 26 2006, 12:07 AM, said:

Did anyone read the governor's 2 speeches on Projo.com?

They seemed very encouraging

State of the State thread

[gregw]

Interesting letter in the ProJo by a CPA that shows that RI's taxes are not higher than MA when you factor in deductions.

http://www.projo.com...i.21cfbf85.html

[Cotuit]

gregw, on Jan 28 2006, 09:01 PM, said:

Interesting letter in the ProJo by a CPA that shows that RI's taxes are not higher than MA when you factor in deductions.

I just did my taxes, I owed the state 13 bucks.   Wish I had some of those deductions.

[brick]

If you want a nice collection of papers on RI taxation, you can find them here:

Death and Taxes

Edited by brick, 28 January 2006 - 10:27 PM.

[KRC]

brick, on Jan 29 2006, 12:27 AM, said:

If you want a nice collection of papers on RI taxation, you can find them here:

Death and Taxes

Rhode Island is not that bad no matter what you say.

[brick]

KRC, on Jan 29 2006, 08:56 AM, said:

Rhode Island is not that bad no matter what you say.

What kind of comment is this?

did you even check the articles?

Sheesh.  What's next, calling me a poopyhead because of my opinions?

[KRC]

brick, on Jan 29 2006, 10:24 AM, said:

What kind of comment is this?

did you even check the articles?

Sheesh.  What's next, calling me a poopyhead because of my opinions?

It's my reaction to your view on Rhode Island on this topic.  It just happens to be the opposite of yours.  That's all, nothing more.  I'm not disrespecting you.  I'm just not agreeing with you.  

I did read the articles and I'm sorry, but most are very biased in many respects and conveniently leave out many things to make only their opinionated point.  I agree there is certainly room for imporvement, but Rhode Island is not that bad.

Many people seem to hold up the south and west as some great economic power.  Sure, if you want to work for minumum wage at Walmart without benefits or in a call center, go for it.  Otherwise, I still say Rhode Island is not that bad.  That's why I live here.

[brick]

KRC, on Jan 29 2006, 10:16 AM, said:

It's my reaction to your view on Rhode Island on this topic.  It just happens to be the opposite of yours.  That's all, nothing more.  I'm not disrespecting you.  I'm just not agreeing with you.  

I did read the articles and I'm sorry, but most are very biased in many respects and conveniently leave out many things to make only their opinionated point.  I agree there is certainly room for imporvement, but Rhode Island is not that bad.

Many people seem to hold up the south and west as some great economic power.  Sure, if you want to work for minumum wage at Walmart without benefits or in a call center, go for it.  Otherwise, I still say Rhode Island is not that bad.  That's why I live here.

Then make that point.  "RI isn't that bad no matter what you say" doesn't really make a compelling argument.

I'd like to know what you really think are biases.  It's just a watchdog group.  It's not a southern power group or anything like that.  Some of the facts are actually in Rhode Islands favor.  But it would be nice if instead of just posting "you're wrong" you actually took the time to say why I (or they, in this case, since all I did was post a link) are wrong.  Basically so far what I've got is "I disagree with what they are saying, so they must be biased."

Do you disagree with their data collection?  Do you disagree with their presentation?  I don't know.  I think you just disagree with saying anything bad about RI.  Of course, the articles don't even do that, they just rank the states without drawing conclusions.

[KRC]

brick, on Jan 29 2006, 11:30 AM, said:

Then make that point.  "RI isn't that bad no matter what you say" doesn't really make a compelling argument.

I'd like to know what you really think are biases.  It's just a watchdog group.  It's not a southern power group or anything like that.  Some of the facts are actually in Rhode Islands favor.  But it would be nice if instead of just posting "you're wrong" you actually took the time to say why I (or they, in this case, since all I did was post a link) are wrong.  Basically so far what I've got is "I disagree with what they are saying, so they must be biased."

Do you disagree with their data collection?  Do you disagree with their presentation?  I don't know.  I think you just disagree with saying anything bad about RI.  Of course, the articles don't even do that, they just rank the states without drawing conclusions.

I didn't once say you were wrong.  I just said I don't agree with you.  I said it wasn't that bad, I didn't say I had a problem with saying anything bad about RI.  I'm not an idiot, thank you.  That would be you projecting something about me when you don't even know me.  

There is no reason to have a "compelling argument" with you or these reports you posted.  You presented a group of reports I found to be somewhat biased and don't fully agree regardless of how they are presented.  I certainly hope you are not taking offense to this.  I don't mean it in that fashion.  I just don't subscribe to the "Rhode Island is all bad" clan.  Again, that's why I live here.

[Cotuit]

Internet communication often leaves much to be desired. I don't think anyone here thinks anyone else is an idiot. Please don't let tempers flare due to miscommunication.