Economic Competitiveness

[gregw]

Another article that debunks the idea of RI as a state income tax hell.

The 9.9 top income tax rate is meaningless because when deductions are factored in, the effective rate drops to about 5.5, in line with other states.

http://www.projo.com/opinion/contributors/...z.1ca6098e.html

[urbie]

Another article that debunks the idea of RI as a state income tax hell.

The 9.9 top income tax rate is meaningless because when deductions are factored in, the effective rate drops to about 5.5, in line with other states.

http://www.projo.com/opinion/contributors/...z.1ca6098e.html

I'm assuming the Poverty Institute advocates greater spending on entitlements?

(Edited to add: I looked at their Web site and sure enough, they're tax-and-spenders. Why am I not surprised?)

What's not clear from this article is the total tax burden. The income tax may not be too bad, but property taxes (which may be deductible, but all that saves you is your marginal tax rate) and that 7.6% car tax you guys were talking about take a big bite.

Here in AZ, the state income tax is around 8%, but property taxes are much lower (the piece of land we own, we pay about .7% of the market value per year -- I don't know what the bogus "tax rate" is, but the actual amount we pay is about .7% of what it's worth), and there's no car tax (which, of course, also leads to the subject of auto insurance rates, which aren't too bad out here).

Urb

[gregw]

Sounds like Arizona is your kind of place.

If you haven't been following the thread, there has been discussion as to whether RI's taxes are uncompetitive compared to neighboring states--specifically MA. A letter by a CPA a few weeks ago in the Projo reached the same conclusion as the Poverty Institute letter.

I'm assuming the Poverty Institute advocates greater spending on entitlements?

(Edited to add: I looked at their Web site and sure enough, they're tax-and-spenders. Why am I not surprised?)

What's not clear from this article is the total tax burden. The income tax may not be too bad, but property taxes (which may be deductible, but all that saves you is your marginal tax rate) and that 7.6% car tax you guys were talking about take a big bite.

Here in AZ, the state income tax is around 8%, but property taxes are much lower (the piece of land we own, we pay about .7% of the market value per year -- I don't know what the bogus "tax rate" is, but the actual amount we pay is about .7% of what it's worth), and there's no car tax (which, of course, also leads to the subject of auto insurance rates, which aren't too bad out here).

Urb

[urbie]

Sounds like Arizona is your kind of place.

Heh... actually, no. I grew up in Boston (editing to say, "No, I actually grew up in Wayland, MA -- out here, I tell people I grew up in Boston, but in this context, I should be more specific"), and we're thinking about moving to RI, for several reasons... but the tax situation is not one of them!

(another edit) As for the politics, well, I read most of this thread. And the article does note that you can spin the numbers to support whatever political position you hold -- you can say, "taxes are much higher than most states," or you can say, "as a percentage of income, they're not too bad." But there is no way to separate taxes from politics -- after all, who is it that enacts the tax laws?

Urb

[CtownMikey]

http://www.nytimes.com/2006/03/01/business...agewanted=print

"Tax breaks on trial

The U.S. Supreme Court has taken up a case that could decide whether it's legal for states and cities to woo corporations with massive tax breaks. A group of citizens and small business owners say Ohio discriminated against other companies when it gave DaimlerChrysler $280 million in state and local tax breaks to expand a Toledo Jeep factory in 1998. The city and state say they were merely offering a "welcome mat" to encourage companies to provide local jobs. The tax credits are fair, they say, because they are "freely available to all who invest in Ohio." (The New York Times, free registration required)"

[runawayjim]

http://www.nytimes.com/2006/03/01/business...agewanted=print

"Tax breaks on trial

The U.S. Supreme Court has taken up a case that could decide whether it's legal for states and cities to woo corporations with massive tax breaks. A group of citizens and small business owners say Ohio discriminated against other companies when it gave DaimlerChrysler $280 million in state and local tax breaks to expand a Toledo Jeep factory in 1998. The city and state say they were merely offering a "welcome mat" to encourage companies to provide local jobs. The tax credits are fair, they say, because they are "freely available to all who invest in Ohio." (The New York Times, free registration required)"

funny... how does one invest in a state? if it means doing business in the state and keeping money here, i invest in RI. i don't get a tax break...

[Frankie811]

http://www.projo.com/business/content/proj...x.1ca70229.html

[gregw]

Taxes aside, it's astounding how poor Providence is.

In New England (2000 census), the only city over 100K with a lower median household income is Hartford. Fall River, New Bedford, and Springfield are actually wealthier than Providence!

Central Falls is the poorest city in New England.

http://www.boston.com/census/longform/mass...gs/INTONE2.html

[damus]

Taxes aside, it's astounding how poor Providence is.

In New England (2000 census), the only city over 100K with a lower median household income is Hartford. Fall River, New Bedford, and Springfield are actually wealthier than Providence!

Central Falls is the poorest city in New England.

http://www.boston.com/census/longform/mass...gs/INTONE2.html

I'm no expert, so I don't know how they count college students. But, couldn't the students who live off campus and make little or no money, paying rent with loans or parent's money, sway the numbers a little?

[Jerry2]

I'm no expert, so I don't know how they count college students. But, couldn't the students who live off campus and make little or no money, paying rent with loans or parent's money, sway the numbers a little?

All cities over 100K have college kids. Providence and Hartford have the highest percentage of minorities( specifically Hispanics) in all of New England. They far surpass Boston. this is the main reason we are on the bottom of the list.

[gregw]

I'm no expert, so I don't know how they count college students. But, couldn't the students who live off campus and make little or no money, paying rent with loans or parent's money, sway the numbers a little?

Good question. The median household income includes students (as well as families, roommates, and single householders).

On the other hand, Median family income counts only households in which two or more people are related and thus largely excludes students (Providence figure: about $34K). Providence still ranks low compared to other cities here as well--although I haven't found a table comparable to the MHI one I linked to before.

So, in sum, I don't think Providence's student population has any major distorting effect on its economic profile relative to other New England cities, many of which also have large student populations, btw.

[Carter711]

Rhode Island has a history of trying to lure companies and big projects with short-term tax giveaways. But what kind of message does that send. To new businesses it signals that only special tax bonuses can make Rhode Island's flawed tax structure attractive. To existing businesses it's the equivalent of an economic face-slap, treating the state's economic base as dupes who will pick up the tab for the next big flashy project.

Recently Rhode Island was prepared to throw $20 million at a developer to transform the Fogarty Building into a hotel. How many hotels does Providence need? Wouldn't that $20 million be better spent on schools, roads, or parks? If I were a R.I. taxpayer I'd be furious. If the 110 Westminster developers can build their 40 story building without gov't subsidies, then virtually any other Providence project is viable without them.

You don't need to go crazy with special tax giveaways to remain competitive. I know that in NH they're unconstitutional, and that state has a very healthy economy with a very low overall tax rate.

Rhode Island needs a stable tax structure that keeps every company on the same level playing field. The first step to accomplishing this is to eliminate gov't grants and tax giveaways for new businesses.

[gregw]

The 2005 RI high school performance data is in.

For Providence, the good news is that Classical still performs on a par with Barrington, East Greenwich, and North Kingstown.

The bad news is that the other high schools continue to have dismal scores--sometimes in the single digits as a percent of proficiency.

http://www.ridoe.net/assessment/SchoolPerf...sifications.pdf

[CtownMikey]

is it true though that barrington and east greenwich are still low performing compared to other public schools around our country? and if so, are they trying to become better? or are thay happy being the best schools in R.I.?

[gregw]

is it true though that barrington and east greenwich are still low performing compared to other public schools around our country? and if so, are they trying to become better? or are thay happy being the best schools in R.I.?

RI's best high schools are good schools, but there are clearly better ones out there in other states. Barrington, Classical, EG, NK would fare well in MA. They definitely wouldn't top the list, however.

[CtownMikey]

any idea if our top high school like to strive and compete with nationaly schools though? Or do they just worry about being the best in RI?

[runawayjim]

is it true though that barrington and east greenwich are still low performing compared to other public schools around our country? and if so, are they trying to become better? or are thay happy being the best schools in R.I.?

i don't nkow how the high school ranks in the country or even the northeast, but barrington has been in the top 10 best places to live.

[Garris]

RI's best high schools are good schools, but there are clearly better ones out there in other states. Barrington, Classical, EG, NK would fare well in MA. They definitely wouldn't top the list, however.

I think it was the recent US News or Newsweek High School rankings that had EG as something like #625 of the top 750 in the nation (the only RI district so listed). I think that as good as Barrington, EG, etc are, they're considered to underperform a bit compared to districts from similar socioeconomic groups from states like NY, MA, NJ, etc.

- Garris

[MikeR]

The 2005 RI high school performance data is in.

For Providence, the good news is that Classical still performs on a par with Barrington, East Greenwich, and North Kingstown.

The bad news is that the other high schools continue to have dismal scores--sometimes in the single digits as a percent of proficiency.

http://www.ridoe.net/assessment/SchoolPerf...sifications.pdf

This is my rant. I'm amazed how some people (not you, gregw, but some in general) actually accept this rag of a report. I mean, look at some of the proficency scores in ELA (English & Language Arts) and Math for some of these schools rated "High Performing". Some of these "high performing" high schools show only 66% of students proficent in ELA, and yet this is a high-performing school? Absurd!

[gregw]

This is my rant. I'm amazed how some people (not you, gregw, but some in general) actually accept this rag of a report. I mean, look at some of the proficency scores in ELA (English & Language Arts) and Math for some of these schools rated "High Performing". Some of these "high performing" high schools show only 66% of students proficent in ELA, and yet this is a high-performing school? Absurd!

True enough, MikeR. My only point in posting this was to show that Classical has not yet completely fallen apart. But, yes, school performance in the state is WAY below where it should be and I don't see any politician trying to take even modest steps to correct this.

[brick]

True enough, MikeR. My only point in posting this was to show that Classical has not yet completely fallen apart. But, yes, school performance in the state is WAY below where it should be and I don't see any politician trying to take even modest steps to correct this.

I am surprised that this isn't a bigger issue. The Providence scores don't really represent the full sample of Providence kids because a lot of folks send their kids to private schools. Can you imagine paying Providence's high real estate tax rates and throwing in private schooling on top of it? Maybe if the neighborhood groups cared more about schooling than NIMBY-ism the politicians would pay more attention.

Poor schools are a major reason that people move to the burbs. So YIMBY's need to focus on them, too, at least as much as worrying about parking.

[gregw]

http://www.projo.com/opinion/contributors/...ma.942b9bd.html

A rebuttal to the Poverty Institute op-ed. As they both show, you can make statistics prove anything you want.

Maybe we should copy MA's tax structure and see what happens.

[ruchele]

Hey, did you all read this in yesterday's Projo?

Housing costs hampering economic development

What do you think?

[Garris]

Hey, did you all read this in yesterday's Projo?

Housing costs hampering economic development

What do you think?

It certainly makes sense, and is almost certainly correct, but it's highly simplistic (as it needs to be for a newspaper article) and more complex than he leads on (which he certainly knows). To a large degree, this is a regional issue and to an ever larger degree a Northeastern issue. While RI government could and should do more to help, there are much larger forces here in which we're only a bit player.

A lot of our runup wouldn't have happened without Boston's more amazing runup, and we've almost certainly benefited economically from individuals and companies being priced out of that market.

Think Boston is rediculous, try the New York Metro... The median home price in Westchester County, NY is 850,000 dollars, and that's including the traditionally depressed areas of Yonkers and New Rochelle. To afford the cheapest home in Westchester, a household income would have to be about $160,000... The average apartment price in Manhattan is well over a million dollars. Amazing stuff...

The Northeast in general has to do something about its costs. Forget RI... This entire region of the nation is being killed by legacy costs (infrastructure, schools, energy, bloated and inefficient governments). Some of it we can't do anything about. If the Midwest needs more housing, they just sprawl it over cheaper land. We're built out and have far greater environmental regulation (as we should), but that carries some costs with it. And there's no incentive for those sprawling communities to put the brakes on it and kill their competitive advantage (and trust me, they know its a huge advantage...).

For example, I'm in medicine. In medicine, actually, the Northeast actually has some of the lowest salaries in the nation and often some of the highest malpractice costs and rates (RI is #2, I believe, in the US). I've watched for years as physicians have left the Northeast, where their income buys them a nice 3-4 bedroom home in Barrington, Newton, or Fairfield County, CT, and go to the South, Midwest, or Southwest, where their salaries can be 30%-100% greater at a minimum and their same Northeast income can buy them a 10 acre compound plus a summer home elsewhere.

Where I trained in Minnesota, it wasn't unusual for a two income family making $80,000 to have a new 4 bedroom colonial with 3 car garage, a boat, and a cabin "up North on a lake" for the weekends. That'd be unheard of here.

As Cotuit is fond of saying, this is one of those issues that the representatives from Pennsylvania to Maine need to sit down together and work through together, because its killing us.

- Garris

[CtownMikey]

It doesnt help when Citizens and CVS are both under the spotlight for un-ethical behavior

http://www.projo.com/business/moneyline/pr...ey.31e09e9.html