“Collecting more taxes than is absolutely necessary is legalized robbery.” – Calvin Coolidge
While many people debate which taxes are absolutely necessary, few can argue that government waste, fraud, and incompetence when spending taxpayers’ money is indeed theft.
Unfortunately, in the aftermath of the government-imposed economic shutdown, waste, fraud, and incompetence have suddenly become our new “normal”. Even as our state faces unprecedented revenue shortfalls – a direct result of our state leader’s policy decisions – we are also steadily increasing our state spending.
This structural problem is unsustainable. When the federal stimulus money eventually dries up, can anyone honestly say our state leaders will cut their spending to pre-pandemic levels? And after the economic fallout, with fewer businesses employing fewer people spending fewer dollars, how do you expect your elected officials are going to make up that budget deficit?
Less revenue means less state aid will be available for cities and towns. This translates into higher property taxes – including the sempiternal car tax. Higher sales taxes, higher gas taxes, more sin taxes, increased fees at the DMV, budget scoops, new administration fees; all and more will likely be discussed as additional revenue sources. The most probable revenue source however is exactly what I first campaigned and warned against in 2016: switching the state’s newly installed “truck toll” gantries over to start collecting tolls on passenger cars.
Now is not the time to be increasing our taxes to support our bloated $11.8 Billion budget, a budget the GA increased by nearly 20% in the last few days of the 2019-20 fiscal year. Doing so will only increase the cost of living for every Rhode Islander – specifically our low-income and our senior population who can afford any increases to their fixed budgets. Further increasing the corporate tax burden to make up this budget deficit will also be the end for many for local employers and small business owners. Restricting choice restricts Rhode Islander’s options to care for our families or even find competitive employment options for members of all income levels.
The answer to a failing government is not to give it more revenue. Instead, we need to Audit the State Budget and implement Zero-Based Budgeting (see below) to cut wasteful spending, lower all our tax rates and eliminate burdensome fees to make Rhode Island the most attractive place to start a business on the East Coast.
Some of our country’s biggest companies were started during a recession. Do we want Rhode Island to be the state that uses Corporate Welfare (see below) to subsidize established companies looking for a tax handout from the Governor and RI Commerce Corp.? Or do we want to create the friendly business environment that will nurture and grow the next generation of local small business entrepreneurs? Lower barriers to entry mean equal opportunity for everyone, it is time we leveled the playing field by lowering the taxes for everyone.
Fight for Small Business
“Entrepreneurs and their small enterprises are responsible for almost all the economic growth in the United States.” – Ronald Regan
Most businesses in Rhode Island have fewer than 100 employees. Over half of Rhode Island employees work for these small businesses which collectively makes small businesses the largest employer in our state.
But many of those businesses are on their way out. Many small business owners have decided they will close permanently as a result of the economic downturn caused by the government-imposed shutdown. This is undoubtedly tragic in many ways, but it also creates a significant opportunity for the next generation of entrepreneurs to fill the economic void. If we don’t encourage this equitable and diversified growth, large corporations will continue to profit at the expense of taxpayers and small business owners.
Due to years of unchecked single-party governance, Rhode Island has earned the reputation of being the least small business-friendly state in the country. According to CNBC’s 2019 Top States for Business rankings: Rhode Island is the least business-friendly state overall, last for infrastructure, 48th for the Economy, and 44th for Cost of Doing Business.
In a state where the state itself is the largest employer, Rhode Island even makes it difficult for small businesses to do business with the state. First implemented as part of the 2018-19 FY budget, the state has added a 1% Contract Administration Fee for all state contractors – paid for by the vendors. This tax increase disguised as a “technology improvement fund” increases the overall budget of the Department of Administration exponentially at the expense of the margins of the small business owners who contract with the state. Even worse, it discourages small businesses from responding to state RFPs which reduces competition and prevents all levels of state government from getting truly competitive bids on any state contracts.
This is just one example of bad legislation that gets rubber-stamped by our complacent legislature. I commit to fighting for small businesses at all levels of the government to reduce the red tape and regulations preventing entrepreneurs from starting or growing businesses in our state. As businesses grow our entire state will prosper as demand for labor will increase wages organically. Growing businesses invest in their communities and infrastructure to support their own growth. New ancillary businesses are attracted and grow as well to support established businesses that work to compound the success.
We cannot tax our economy back to life. The only way our state is going to have the revenue to support even the most basic government functions is if we jump-start our small businesses. We cannot expect entrepreneurs to start new businesses in our state unless we eliminate all the burdensome and unnecessary barriers to entry.
End Corporate Welfare
“I will cut every penny of corporate welfare before I touch one penny of the social safety net.” – Rand Paul
Millions of dollars are given away every year to businesses in Rhode Island: opportunity zones, qualified jobs incentive tax credits, rebuild RI tax credits, tax increment financing, historic tax credits, sales/use tax credits, moral obligation bonds, revenue bonds – if you don’t understand how many of these programs operate don’t feel too bad. Just visit the RI Commerce Corp. and an entire bureaucracy of highly-compensated state employees will tell you how your business can get your hands on our taxpayer dollars to subsidize your commercially UN-viable boondoggle.
The RI Commerce Corporation will tell you that they are promoting economic growth that would not otherwise happen without their intervention. In reality, they are merely treating the symptoms of Rhode Island’s terrible business climate instead of focusing on the root causes. At best, local businesses will start and remain viable until the benefits run out. More commonly, out-of-state businesses move a small office and transferable personal to Rhode Island and bleed us dry. At worst, political insiders and special interests receive special dispensation as a reward for campaign contributions and political favors.
Each year, millions of dollars are given away to corporations who siphon resources away from education funding and social services for individuals who are actually in need. Organic small business growth, incentivized by a business-friendly environment, have the opposite impact by creating more jobs and helping struggling Rhode Islanders than the one-off economic development programs sponsored by the state. What better way is there to lift people out of this recession, out of poverty, and away from government dependence, then to give them the opportunity to start your own, or to start working for small business growth in our state?
Unbelievably, during the unprecedented government shutdown, when small businesses from all industries justifiably needed federal assistance, our governor actively held back funds specifically designated for small business relief in hopes of diverting it to cover our state’s growing budget deficit. Also during this time, our legislators refused to meet to advocate for these small businesses when they needed help the most. Our elected officials failed us when we needed them the most.
Months later, and only after the pressure of a growing public petition, did the governor agree to release the funds. How many businesses were forced to close waiting for that relief? It is clear that when push comes to shove, government spending is more important to our state leaders than looking out for our small businesses.
Audit the State Budget
“Accountability breeds response-ability” Stephen Covey
Rhode Island’s budget is out of control. It has ballooned over 51% in the last decade – growing from $7.8 billion in 2010 to a revised budget of $11.8 billion for the close of the 2019-20 FY. That is over $11,000 for every resident in this state. 17-18 we had the 10th highest budget per capita in the country – the 2nd highest in New England.
For comparison, Delaware’s budget is only $4.5 billion and they are roughly the same size and have a similar population. Their per capita budget is only $4,600 – almost 2.4 times less than for each resident.
How can our state leaders justify this? The truth is they don’t really have to: one of the many pitfalls of having one-party dominance in our state is lack of transparency and accountability – there are no checks and no balances. What has resulted is an inefficient budget full of waste.
Based on the state leadership’s reaction to a potential audit of the state-funded convention center, I believe it is essential to perform a complete audit of the state budget and every state agency to restore the public’s trust in their government. The purpose of this audit will be to identify exactly where taxpayers’ dollars are being spent, identify how and why department budgets have grown over time, and to identify opportunities for consolidation and greater efficiencies.
Further, I will advocate for a Zero-Based Budgeting (ZBB) approach for every state agency. ZBB requires all expenses to be justified for each new budget period (i.e. every year). Budgets should be built around actual needs and sound future projections, not inconsequential historical allocations.
Without ZBB, budgets have a ratcheting effect and will only grow year after year. Each department has an incentive to match their expenses to their budgets no matter what. Failure to spend last year’s allocated funds might mean fewer funds will be allocated to that department next fiscal year. If a budget is $100 million this year and a municipal department only needs $80 million, it will find another way to spend the additional $20 million fear of losing it next year. Instead, that department will spend $100 million and ask for $110 million next year – hoping they end up with $105 million, but happy when they are level-funded.
Rhode Island has a spending problem and it is time to stop the waste and fraud.
Support Line Item Veto
Regarding the governor’s current veto power: “[it’s] something of a sledgehammer and not a scalpel.” – James Sheehan
Imagine a surgeon trying to remove a tumor with a sledgehammer. Without the proper tools, that surgeon is forced to do nothing or risk possibly causing more harm to the patient than good. The same is true for the governor and the rank-and-file legislators when passing the RI state budget.
When the final budget is put up for a vote in the general assembly, few legislators have an opportunity to make any meaningful impact on individual line items, it is a take-it-or-leave-it proposition. The same is true when the final budget is sent to be ratified by the governor – they are forced to accept the good with the bad to keep the whole show going.
After spending 90 days hiding from their responsibilities, legislators needed less than a week to rubber-stamp the supplemental budget passed at the end of June – increasing our spending by nearly 20%. No matter what is included in that budget, no matter how much wasteful spending, once the final budget is proposed there is little anyone can do to stop its momentum without scraping the entire budget and shutting down the entire state government.
By providing Rhode Island’s governor with the same power 44 other governors enjoy, our governor could use the line-item veto to remove specific questionable line items from the final budget presented by the legislator. This small change provides a much-needed check and balance to control wasteful spending while reserving power to the legislature to override the governor’s line-item veto by majority vote.
The end result is increased transparency as our elected officials must take hard stances on wasteful spending and can be held responsible by fair and honest elections every two years. The governor would also have a stake in calling-out questionable spending in the final budget or risk being complicit by not acting.
The devil is in the details when it comes to the complexities of our state budget. However, unless the budget can be scrutinized by fair and honest debate and consideration, the details become moot. Our complicit legislature and powerless governor have no choice but to rubber-stamp our ever-growing state budget each year.
Promote and Preserve Our Coastal Resources
“We are tied to the ocean. And when we go back to the sea, whether it is to sail or to watch – we are going back from whence we came.” – John F. Kennedy
Rhode Island’s state constitution promises that: “the people shall continue to enjoy and freely exercise all the rights of fishery, and the privileges of the shore, to which they have been heretofore entitled under the charter and usages of this state.”
Rhode Island’s founding fathers understood the importance of our coastlines and waterways and enshrined the people’s rights to access this important resource in our constitution. Today, many Rhode Islanders take their constitutional rights for granted. We have become accustomed to having access to our waterways limited by our legislature – all in the name of increasing revenue. Parking and beach access fees make enjoying our privilege unaffordable. Recreational saltwater fishing licenses limit our rights to our fishery. Overdevelopment of our coastlines further restricts our access and places public lands in private hands.
During this recent pandemic, beach access was unconstitutionally limited and priority was given to out-of-staters over Rhode Island residents due to our state’s reliance on conditional federal funding. So the south county’s primary economic engine and thus its local economy lives and dies at the wish and the demand of the governor and/or our federal government.
Every restriction, every fee, every barrier that has been put in place to separate us from our shorelines does nothing to improve the consumer (taxpayer) experience – or even to preserve our state’s greatest resource. All of the money collected goes straight to the general fund and we can’t even figure out how to collect beachgoers garbage. Let’s do a better job for our residents and provide a better product for our tourists.
It is time for Rhode Islanders to take our shorelines, beaches, and oceans back! I promise to work to eliminate the need for recreational saltwater fishing licenses so kids and families can enjoy their rights without having to pay a fee. I will work to remove all state-imposed beach access and parking fees so people can enjoy unfettered access to the shore. I promise to promote our state as a destination welcoming to the tourists that stay in our hotels, spend money in our restaurants and shops, and help to grow our economy.