Scott MacKay Commentary: The Myth Of Rhode Island's Generous Programs For The Poor

Apr 3, 2015

Rhode Island has long been engaged in a debate about government benefits for the poor. RIPR political analyst Scott MacKay says our state isn’t as generous as most other New England states on helping those with less.

State spending on programs for the poor is less than in most other state in New England.
Credit RIPR FILE

House Speaker Nick Mattiello, D-Cranston has heard the complaints for years from conservatives and some elements of the business community:  That Rhode Island’s overly generous social welfare programs handcuff taxpayers and harm the state’s business climate.

Now Mattiello is asking the House Finance Committee, which oversees the state budget, to compare Rhode Island’s social safety net with surrounding states. The speaker says he isn’t making ``any accusations or drawing any conclusions. ‘’ He says his decision ```will follow the evidence.’’

Well, let’s start with the basic welfare program that helps the poorest folks in the Ocean State. That’s a program called  Temporary Aid to Needy Families, known by the acronym TANF. The vast majority of these families are single-parent families headed by a single woman. A typical family is a woman with two children. The monthly welfare benefit for such a family is $554 a month, a figure that has not been increased since the 1970s.

In Connecticut, that same family would get $698 per month. In New Hampshire that figure is $675. Vermont pays $640 and Massachusetts $618. Maine is the lone New England state with a lower welfare payment than Rhode Island at $485 monthly, according to data from the Economic Progress  Institute, a liberal-leaning research group that is known for rigorous analysis.

Then there are supports for working families, people who toil at low-income jobs that don’t provide living wages. Those families receive an earned income tax credit, which gives them a break on state income taxes. Rhode Island’s rate is 10 percent, the lowest in New England except for Maine and New Hampshire, which has no state income levy. By contrast, Vermont’s EITC is 32 percent and Connecticut’s is nearly 28 percent. (Massachusetts set its rate at 15 percent).

There are also other programs that support working families, including help paying for child care while parents work. In New Hampshire, families with an income of nearly $50,000 are eligible for such support. By contrast, Rhode Island’s eligibility is the lowest among New England states at about  $35,600.

Health care assistance is also available to the working poor. Once again, Rhode Island is scraping the bottom among New England states in this program. A family of three can earn no more than roughly $52,700 a year to qualify for help. Connecticut and New Hampshire allow that same family to earn about $64,000, and Vermont sets the limit at about $63,000. Maine is the lone state in the region with a lower limit than Rhode Island at $42,100.

Poor families also get food stamps. But this is a federal program paid for 100 percent with federal taxes. The state pays a small administrative fee, but for the most part, no Rhode Island state tax money is used, says Linda Katz of the Economic Progress Insitute.

Elizabeth Roberts, state director of Health and Human Services, says that Rhode Island’s supports for the less well  off are not generous by New England standards. ``We’re not comparing Rhode Island to Alabama,’’ says Roberts.

One in five Rhode Island children are being raised in poverty, says Rhode Island Kids Count. Too many conservatives in our country yearn for the good old days, the post-World War II America that had a stronger middle class. It’s sad that some of these same people want to tear down institutions that forged that society, particularly Social Security and labor unions.
Contrast how the poor have treated in Rhode Island with how our lawmakers have dealt with business and the rich. In recent General Assembly sessions, lawmakers have cut taxes for high-income earners, reduced estate taxes paid only by the wealthiest millionaires among us and dropped the corporate income tax rate. In addition, big businesses, mostly prominently the CVS pharmacy chain, get millions in state tax benefits when they hire new employees.

Gov. Gina Raimondo’s budget proposal calls for cutting taxes businesses pay for on electricity use.  In fairness, she is also requesting that lawmakers give the working poor a slight uptick in the earned income tax credit.

Rhode Island needs to dial down faux rhetoric that demonizes the poor. The House Finance Committee should heed Speaker Mattiello’s call for a rigorous, honest, study of our state’s safety net. The least among us deserve empathy. They aren’t looking for a handout, but they do need a hand up. Even the ocean doesn’t compensate for being poor in the Ocean State.

Scott MacKay’s commentary can be heard every Monday at 6:40 and 8:40 on Morning Edition and at 5:44 on All Things Considered. You can also follow his political reporting and analysis at our `On Politics’ blog at RIPR.org