So You Don't Like Change?

I've been advocating a change in the Rhode Island Property Tax laws for ten years. (see righttax.org) One aspect of that change deals with tax exempt property. We propose a method that would have helped Providence and other towns with a significant proportion of tax exempt property.

Using the numbers printed in "A FISCAL CRISIS" on Page 1 of the Journal, February 3, 2012, with the proposal of R.I.G.H.T., the city of Providence would receive $40 million from tax "exempt" properties. Would that help?

If state legislators had at least discussed some of the proposals of R.I.G.H.T. we might never have reached this awful situation in which we find ourselves. But, as a town official once said to me after I presented our plan, "I don't like change". See where that has gotten us.

Aren't You Tired of This Yet?

On Sunday, January 8, 2012, on page A14 of the Providence Journal there was a report by staff reporter Jennifer Jordan ("Is Achievement First a better model?").  In it was a statement that makes one gasp. According to the article, opponents of charter schools apparently said "Give the local schools decent financing, and they'll improve." Really?

According to the National Education Association, in 2009 Rhode Island spent $18,729 per pupil, highest in the country. But state performance rankings from the National Center for Educational Statistics for 8th grade reading revealed that we were only in 36th place nationally.  In 2010 the spending dropped to $15,803, fifth highest, but our students were still low, in 29th place.  Clearly Rhode Island local schools do receive decent funding - and if student performance were first or fifth it would be money well spent.

Decent financing is apparently not the problem given the above numbers. But neither is high stakes testing the answer, nor being able to fire poor teachers nor giving money to poor people.  There is no single answer and anyone who suggests otherwise is doing a disservice to the students and the people of Rhode Island.

We need a comprehensive approach involving first and foremost, the mothers and fathers of low performing students such that they improve their attitudes and expectations. NOTHING will work without that. We need to listen more to our many good teachers and enlist them in this crucial battle. We need to stop the partisan bickering about whether Democrats or Republicans, conservatives or liberals, union officials or school committees, public or private schools have the answer.

While we sling mud and point fingers our children suffer.  If we don't work together and restore the backbone of our great nation, an educated public, shame on us all.

A New Political Tactic?

The current rhetoric in the debates and in Congress sounds more and more like:

"Support whatever Obama opposes 
and oppose whatever Obama supports".

Now listen to Mao Tsetung: "Interview with Three Correspondents from the Central News Agency, 

the Sao Tang Pao and the Hsin Min Pao" (September 16, 1939), Selected Works, Vol. II, p. 272.

"We should support whatever the enemy opposes 
and oppose whatever the enemy supports."


Is this really the best we can do? 

Rethinking the Property Tax

It used to be a great idea; fund local government by taxing property. Before the industrial revolution the only significant source of income was land.  The owners of land, essentially royalty or the church, received income from lands in the form of rent or directly from the production of that land whose value was considered to be 20 years of derived income.

Thus it was sensible and fair to tax the value of that land as a source of local revenue. During that period, land values were quite stable.  If one's land were worth twice another's land it remained twice the value year after year and he paid twice the tax.

The result was a system of property taxes that was transparent, related fairly to one's ability to pay and was easy to assess.

Here's an Idea

We in North Kingstown have recently had some modest public works projects completed or nearly completed.  The parking area in front of the Town Hall was changed, traffic pattern was changed etc.  Also the town beach area was modified including construction of a new bandstand.

As I view these projects I find that I have some questions and comments about their design.  While I am not an expert and would not want such projects to require voter approval, I do believe that the public would benefit greatly if the projects were posted for voter review and comments before they are begun. Certain issues might have been overlooked and citizen comments prior to construction might make a significant contribution to the final results. The town would be under no obligation to accept or even consider the suggestions but they would have to be posted along with the images, schedules etc.

Perhaps someone might introduce legislation requiring (non binding) posting such municipal projects (and possibly state projects) with visuals of intended outcomes so the public might have input beforehand and avoid some of the complaints after the fact.

Using the internet the costs would be minimal but the benefits could be very great.

But Maybe It's Just Me

Should we bail out underwater mortgages?

It's somewhat difficult to understand the efforts to address the plight of homeowners who are declared "underwater", that is who owe more than their homes are worth. Neither walking away from one's mortgage obligation nor foreclosing on a property is the best answer.

The value of one's home has nothing to do with one's ability to make mortgage payments. A mortgage is a loan, an obligation that must be paid back. Whether the value of the mortgaged property tumbles or rises has nothing to do with one's ability or obligation to repay the borrowed money.

No one would tolerate a bank, or any lender writing the following note:   

Dear Mr. Homeowner, 

We notice that the value of your asset (house) has increased in the past two years and the Federal Government has given us permission to increase your monthly payments. 

We will let you know the new terms of the loan and your new payments soon. 

Sincerely,
Your Friendly Bank. 

A homeowner can have trouble making mortgage payments due to illness, job loss or some other legitimate reason and compassion dictates that banks and borrowers try to work out terms to their mutual satisfaction. If the original sale or mortgage were based on deception and/or misrepresentation then that too would be a proper basis for voiding or at least re-negotiating a contract. 

But it's wrong to force wholesale rewriting of contracts because of falling market prices. Otherwise we could require the corporate issuers of stocks and bonds to buy them back at their original value when the market goes down and our retirement plans drop in value as a result. 

Those who hate government regulation of financial institutions and other business would be more correct to blame their successful deregulation efforts, (repeal of Glass - Steagall), for the disaster that engulfs Americans today.

We need more regulations but they must be more intelligently crafted and properly enforced if our goal is to prevent another disaster driven by corporate greed. And people need to understand that if they consider their homes solely as investments, well, investments aren't guaranteed. That's just the way it is.

Maybe It's Just Me     

  

An Easy Question

With all the tax talk, arguments, posturing, I'm loath to pose this question; Would you be satisfied if your town were able to avoid any property tax increases for the foreseeable future? Dare I say that most of us would be ecstatic. Legislators, town councils, mayors, school committees, union leaders, would pat themselves on their backs and bask in the glory of a "job well done" especially at Thanksgiving season.

Now that everyone is smiling and content, another question. What would be your reaction when your town is revalued and from one half to three quarters of you receive rather impressive tax increases? If your town receives no more revenue, where do those increases go? The answer is that other property owners will pay lower taxes. Such is the reality of even a 'perfect' revaluation. Properties change in value differently and since we tax those values, some people will pay more, some people will pay less, regardless of what happens to local spending, municipal union contracts, towns' expenses, towns' outside incomes.

With each revaluation, millions of dollars change hands, money flowing from one group of owners to another group of owners, completely unrelated to incomes, ability to pay, or any rational measure. And that's with normal revaluations. What happens with irrational ones? Anyone remember the recent financial meltdown?

The system must be changed to realize the true goal of any municipal tax; that everyone pay their fair share in direct relation to a community's needs. You can learn more at http://righttax.org

It's not a game.

Pension reform can create serious hardships for the thousands of public employees who worked hard and played by the rules. Union employees believe they are entitled to their negotiated pensions as promised.

There is some real merit to that position, as stated by union leaders and public employees who resent trying to fix the budget crisis "on the backs of hard working union workers".

There are even more taxpayers, retired and not retired, both unemployed and employed, struggling to make ends meet, who also resent having to pay those benefits to union employees; taxpayers who also play by the rules (has anyone seen the rules?) and who also resent those very generous benefit payouts levied on their hard working backs.

So what we have here is a contest, like a baseball game, where there can be only a winner and a loser.  In fact a recent quote by a union leader, when asked about his strategy in dealing with the upcoming pension solution to be laid out by Treasury Secretary Raimondo, responded that he wouldn't reveal his strategy just as any team manager wouldn't reveal strategy before a game.

A game. It's what our public policy battles have been reduce to - a game, a battle between powers where, if there's a winner there must be a loser.  Is this really what produces the best result for our citizens?

Truth is that most legislators act like they're playing only for their "team", Republicans v Democrats,  liberals v conservatives,  Progressives v Tea Party when instead they should be "playing" for the fans, all of them.

Sure there are greedy, dishonest, obscenely wealthy business men and women, but there are also wealthy people who are incredibly generous with their wealth, who support charitable organizations, who have helped grow and guide huge companies that provide employment and security for millions.

In the same vein there are dishonest police and lazy teachers who care nothing for their students, and welfare recipients who would simply refuse an honest job if it were offered. But there are also police who would give their lives to protect you, teachers who pay for student supplies themselves, and people truly deserving of unemployment benefits who would do anything to have a job to support their family.

Our politicians, and we too, are squandering the wonders of this great nation.

Maybe it's just me.

Create Jobs? Really?

In reading a Providence Journal Commentary, "Could Occupiers become next generation of entrepreneurs?", by John Robitaille, Friday, Oct. 21, Mr. Robitaille suggests that government should 'stop treating business owners as "revenue generators" and begin treating them as job creators'. Well, firstly, no companies, large or small, create jobs.  Jobs follow an increased need or want of either a company's products or services.  Jobs aren't widgets to be created.  

Before we can see real change, businesses must stop thinking of themselves as "revenue generators" and start thinking of themselves, first and foremost, as providers of services or products that are of value to the public or other businesses.  I'm afraid some businesses act as if the public exists for their benefit, to provide them with revenue.

As I occasionally had to remind myself and my staff, we must never forget that our patients do us a favor by seeking our help, not the other way around; we exist for their benefit, not they for ours.

Maybe it's just me.

Written in 2007. I still believe it.

Government is supposed to provide the services we can't provide for ourselves, like defending the country, maintaining roads, public education, public health etc.

How's it working?

We know for instance, that health care costs are skyrocketing. We in the U.S. spend more per capita than any other country in the world.

Unfortunately we also have millions of people with inadequate or no health coverage at all.