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Tue March 15, 2011
COMMENTARY: Robitaille: State has a spending, not revenue, problem
By JOHN ROBITAILLE
PROVIDENCE, R.I. – It's been a week since Governor Lincoln Chafee unveiled his first state budget. Chafee's republican challenger for governor, John Robitaille, went through the governor's budget and has come up with his own suggestions for tackling the state's finances. Bellow are his thoughts:
Last week Governor Chafee called his budget the "pathway to prosperity," but I believe it's the "road to ruin" for Rhode Island families and small businesses.
We have a spending problem not a revenue problem. It's time to cut spending and get Rhode Island back to work not add $150 million dollars in taxes to what is already an oppressive tax burden. This particular tax scheme of lowering the rate and broadening the list of taxable goods and services is far from revenue neutral, and it represents the largest tax increase for Rhode Island families in decades.
The governor's proposal also doesn't do enough on the spending side of the equation specifically personnel costs. The economic reality is that public employees must contribute more both for their healthcare insurance and retirement plans. Small incremental increases are not enough. All public employees should begin paying at least 25% for their healthcare insurance, and the pension plans must be completely redesigned.
This redesign must include an increase the minimum retirement age, the elimination of automatic COLA, and we must stop the pension spiking schemes immediately. Even with these changes, public employees will still be better off than most private sector employees who do not have defined benefit plans. In fact, according to the Bureau of Labor Statistics only 11% of private sector employers still offer defined benefit plans.
We also have no choice but to cut back on certain entitlement programs, regardless of the source of funds, and ensure only those who are legally eligible to receive these benefits get them. Eliminating welfare fraud and abuse should be a top priority. And, by reducing the case load, our cost of administering these programs can also be significantly reduced.
While aid to cities and towns has been decreased in the past few years, more dramatic savings can be realized if we eliminated all unfunded mandates, like minimum staffing, and give the municipalities the freedom and the tools to better manage their budgets. Over the past few years, RIPEC estimates have been as high as $120 million in total savings depending on what is included in this relief package.
Our total state budget is now approaching $8 billion dollars. Add the $2 billion dollars collected by our cities in towns through property taxes, and we end up spending approximately $10 billion dollars to run Rhode Island government. That's a lot of money for a little state like ours.
When Rhode Island families and small businesses have had to cut back and learn to do more with less, those who serve the public and those who receive from the public must realize that fairness also applies to those who pay the bill.
Rhode Island needs jobs not more taxes on job creators and families. Adding taxes now will certainly have an adverse impact on consumer confidence and will drive more small businesses, those now teetering on the brink of bankruptcy, out of business.
The general assembly has a choice to make. I hope they choose wisely and reject the governor's tax and spending plan. While it may be paved with good intentions it's full of very dangerous potholes.
John Robitaille was the Republican candidate for governor and a communications director for former Governor Don Carcieri.
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