By Samuel Bell in RIfuture.org
What is so sad about
the mess Rhode Island has fallen
into is that it was
completely avoidable.
Governor Carcieri did
not have to launch a jihad against public
sector employment.
Nor was it necessary to hand massive tax breaks to the
wealthy.
Had we avoided those
tax breaks, we wouldn’t have had to slash municipal aid and send property taxes through the roof. Had we not raised property taxes, we would
have a stronger housing market, and had we not engaged in massive austerity,
the rest of our economy would be doing better as well. If our unemployment insurance
tax rate were less punitive, then fewer businesses would have gone under. None of this had
to happen.
It seems that things
are finally looking up for the Rhode Island economy. Unemployment is falling,
despite a regional recession, and numerous other economic indicators are
showing positive signs.
There remain many road
blocks ahead for our economy, as we deal with the aftermath of 38 Studios,
municipal budget disasters, and other legacies of the Carcieri era, so it is by
no means clear that these positive trends will continue, but there is certainly
more cause for optimism now than we have had for quite some time.
As Leonard Lardaro, an economist
at URI, puts it,
we’re “in a recovery the magnitude of which almost nobody in this state seems
to fully comprehend.” But we should not take this as evidence that the economy
of the Ocean State is suddenly being managed well. Rhode Island is a severely
depressed economy with relatively strong fundamentals. If you don’t keep
kicking it, it will recover, even if the transition is only from terrible to
mediocre leadership.
Carcieri is gone, it
is true. But the very conservative General Assembly was fully complicit in
Carcieri’s blunders, earning them effusive praise
from the Wall St. Journal. As Dan Lawlor puts it, “it is remarkable how much of his vision was
enacted, sometimes excitedly, by the Democratic General Assembly and its
leaders, specifically Gordon Fox and Theresa Paiva Weed.”
There is much truth to
this. Although it is hard to argue that pro-choice, pro-marriage Fox
isn’t at least a moderate improvement over his predecessors, as House Majority
Leader, he was a major proponent of the
income tax cuts at the heart of Rhode Island’s problems.
After a bruising
reelection battle, Fox made mild noises about
potentially being more open to sensible tax reform, but given his past record, it is unclear
whether anything will come of this.
Nominally a Democrat, Paiva Weed
shares Fox’s rather extreme economic conservatism, but she does not share Fox’s
more moderate social views. Indeed, she is probably the primary
obstacle to marriage equality passing in 2013.
Although Chafee is
pushing for some distinctly insufficient reforms, they will probably mostly
fail, and it is hard to imagine the General Assembly putting together anything
remotely up to the task.
What must be done is
actually quite straightforward. We need a jobs bill and tax reform: We
need to reverse Carcieri’s austerity by rehiring the teachers, firefighters,
and policemen whose jobs he cut.
We should also make new investments in
critical areas, restoring our crumbling roads and bridges, creating bicycle
infrastructure and commuter rail lines, expanding and improving URI, and
building tons of medical schools to take advantage of the extreme demand for
new doctors.
We should begin paring back property taxes and fixing budgets by
restoring aid to cities and towns and allowing them to levy local income taxes
to offset property taxes.
To pay for all this,
we should restore the pre-2006 income tax rates and create new brackets for the
wealthy, with a top marginal rate of at least 13%. We also need to restructure
the hugely regressive unemployment insurance tax as a simple and constant flat,
low rate, a reform that could easily raise revenue while making the tax code
much less regressive and much more business-friendly.
With the current
conservatives in office, almost none of this will happen. But it is definitely
worth fighting for.
Related posts:
- RI –
What Went Wrong: Tax Cuts for the Affluent
- RI – What Went Wrong: Austerity’s Effects
- RI –
What Went Wrong: Unemployment Insurance Taxes
- RI – What Went Wrong: The Carcieri Effect
- RI – What Went Wrong: Property Tax Hikes
Samuel Bell is the Rhode Island State Coordinator for the Progressive Democrats
of America.