Tom Sgouros pans the Prov. Tea Party because….
Tom Sgouros, author of the RI Policy Reporter emails, has this to say to the organizers of the RI Tax Day Tea Party: “The real issue is this: Taxes are simple. Government is complicated. If you don’t have an answer to the question of what is to be cut, perhaps you’d do us all a favor by spending some quality time with the state budget to figure something out *before* complaining about taxes.” Mr. Sgouros wants to know what should be cut in RI’s budget. Hint, check the RI Public Expenditure Council (RIPEC) reports on state spending for the last few years. See http://www.ripec.com/matriarch/default.asp. The spending reports in these RIPEC studies examine RI expenditures as a function of state spending per capita (person) and also as a function of dollars per $1,000.00 of personal income.
The one area where RI leads the nation in spending is in firefighting services on either a per capita or per $1,000 of income basis. Why? Does RI have more fires than the other 49 states in the nation? I doubt it. Ok, how about our spending on welfare, RI spending in this category ranks 7th highest in the country on a per capita basis. I really don’t want to debate why the state spends so much on cash assistance benefits. I just think this spending category could be reduced to maybe 25th instead of 7th. I know RI’s welfare system has been criticized in the past because unlike many states where the welfare recipient must be working at least part-time to collect welfare, here you can collect as long as you are just looking for work. A 2004 CATO Institute study ranks RI’s welfare program in the botton 10 states for caseload reduction, decline in the birthrate for minors and percentage of births to minors, and reported work participation. Ok, here’s another area where RI might just spend a bit too much–elementary and secondary education. According to RIPEC, RI’s per pupil education cost is 9th highest in the country at $11,503 per pupil. I wonder if RI students are the 9th best educated in the country. In summary, RI’s state and local (city and town) government expenditures of $7,725 per person are the 10th highest in the country. Based on this one statistic alone, I would think Rhode Islanders have good reason to protest state spending and taxation.
Here is another telling statistic from the book, RICH STATES, POOR STATES, that Mr. Sgouros mentions in his email critique of the Providence Tea Party–”Rhode Island ranks 4th in average pay for public sector employees, but 23rd in average private-sector wages.” “Coincidentally, R.I. has one of the highest rates of public-employee unionization–62%, compared to the national average of 37%.” The next time you wait for fours to renew your driver’s license or car registration, just remember how well paid the RI DMV workers are compared to their peers in the rest of the country!
Oh, you say we get government services at the state and local level that are above average thus justifying above average spending. If things are so rosy in RI, how do you explain these economic warning signs:
– The Tax Foundation rated R.I.’s Business climate the worst in the country for the third year in a row in October 2007.
– The Providence Journal recently reported that one in ten businesses in RI either shutdown or moved away in 2008.
– RI has lost 2% of its population since July 2003 while 47 other states had increases.
–RI has the countries 5th highest unemployment rate at 10.5%.
–The state’s two largest pension plans for teachers and state workers have an unfunded liability of seven ($7,000,000,000) BILLION dollars.
–RI taxpayer contributions to these two pension plans for teachers and state workers will grow from the current $371 MILLION per year to $836 MILLION a year by 2017 unless these plans are reformed.
But Mr. Sgouros says we should not protest unless we know where the state and municipal budgets should be cut. I think Mr. Sgouros is preaching to the wrong crowd. Rhode Islanders know spending and taxes in this state are out of control. He should be directing his message to the members of the RI General Assembly. Our lawmakers, not the Governor, have enacted inflated state budgets year after year. These lawmakers have enacted laws that favor unionized government workers at the expense of the state’s taxpayers and businesses. These are the same lawmakers who wanted to enact a law to “unionize” daycare workers by making them state workers. These lawmakers do not want to change their spendthrift ways even as the state and its cities find it harder and harder to balance their annual budgets. Mr. Sgouros, why don’t you tell the RI lawmakers they are spending and taxing too much unless you don’t think it is true. Al b.
Statistics about overspending are not the same as suggestions about where to cut. In just the same way, knowing that you’re overweight isn’t the same as a plan to diet. Calls to cut taxes are nothing but empty words without a plan to back them up. Go ahead and make a plan and lobby for it. You will find nothing but receptive ears at the statehouse. Legislators are desperate for good ideas this year.
Incidentally, I’ve written about several of these statistics in the past. Some are valid and some are not. For example, the Rich States, Poor States report contains an obvious error, which I point out in the column you are complaining about here. (Find the column at http://whatcheer.net) I have also written about the private-sector wage disparity before and it’s not what you think. See RIPR 11, available at the same web site.
I can’t tell if you are purposely misconstruing what I have to say, but in fact I agree with you that government here is not a good bargain. However, I also think that simple complaints about “taxes” are not enough to do the job of making things better. For example, a large part of the reason we’re in the position we’re in is that we’ve gone and cut programs whose purpose is to save money in the long run. Maintenance, for example. Furthermore, despite what you say, we have cut taxes repeatedly over the past seven years. If you count yourself among the elect who benefited from those cuts, good for you. If you, like me and 99% of the state, have only seen your taxes rise, you feel my pain, too.
I can’t afford the time to monitor multiple forums, so cannot reply further here. I do post quite a bit of my writing at rifuture.org, and monitor those comments if you’d like to engage in further discussion.
Tom, thanks for the comment. I’ll check RIPR # 11. I’m no expert, but i have a gut feeling RI’s overspending is driven by spending too much of our tax dollars in certain areas like unionized government workers with overly-generous benefits and pensions and overly-generous welfare programs, and not spending enough in other areas like bridge and road maintenance. I could be wrong, but certainly RI residents are spending too much for municipal government services like K-12 eduction, firefighting, and police protection. Don’t you agree? Just one case in point. The Federal Gov’t switched to a hybrid pension system for US civil servants in 1984, yet the RI Gen Assy refuses to reform RI’s defined benefit pension plans for teachers and state workers, and this is slowly bankrupting the state.
Tom,
I read RIPR No. 11. Interesting material. However, when considering why RI teacher salaries are so high, one factor needs further discussion–the laws of supply and demand do not apply. If a school principal in RI were free to set the salary for a teacher, he might be willing to pay a new applicant a salary that he thought the applicant deserved based on the applicant’s experience, education or even how well the applicant’s students have performed. But the principal is constrained in RI by the teachers union as to what a teacher makes. The principal is really not free to make these personnel decisions. They are all dictated by the teacher union contracts. These contracts do not take into account anything other than seniority, advanced degrees and years of service. Elementary and secondary services in RI are not supplied nor funded on a competitive basis. One teacher union will never compete with another teacher union to supply education services to a particular school. Likewise, once a school’s teachers are unionized, the principal might be able to dismiss a teacher for a crime, but most other decisions like pay, benefits and pensions are all driven by the teacher’s union contract. And remember, RI is not a Right To Work state. So if a teacher is hired and refuses to join the teachers union, they will still have to pay union dues. So this non-union teacher is forced to pay union dues, hence he/she might as well join the union.
Unions are appropriate for blue collar workers. Unions are less appropriate for professionals. Teachers claim to be professionals, therefore they should be willing to be paid in proportion to how successful their students are educated. Principals should be free to place a teacher where he/she thinks the students and teacher will best perform. You seem to equate high teacher salaries with the fact that teachers are not blue-collar workers, that they are professionals. Yet teacher pay, benefits and pensions are a function of blue-collar union contracts and state laws enacted at the behest of union bosses. Teacher compensation has nothing to do with private-sector laws of supply and demand.
My wife is a teacher, when she tried to get a teaching certificate in RI in the 1980’s she had to pass the National Teachers Examination. Shortly after she started teaching in RI, the General assembly changed the teacher certification criteria such that teacher applicants had to take the NTE exam to be certified, but they did not have to achieve a passing grade to be certified. If teachers want to be considered professionals, they should be willing to pass an entrance exam and they should be willing to be paid according to how successful their students are in school. They should be willing to have their performance evaluated annually and their pay should be solely dependent on their performance, not their years of service or senority.