What’s Wrong with RI

10Feb10

We often hear that RI doesn’t have an income problem, we have a spending problem.  This is true.  But when it comes time to cut, everywhere we look is social program this, pension fund that, employees here and there.  So what happened?  Why can’t we pay for all this?

Look at it this way, imagine you’re a salesman working on commission and you’re doing really well.  You’re selling left and right, making all your quotas, getting bonus after bonus because you’re selling so well.  So you go out and buy the BMW on a 6 year loan, a condo in the Caribbean, you sign up for a couple gym memberships, a golf club membership and lock yourself into some pretty friendly 10 year contracts for these items.  Life is good, the money is rolling in.

But you can guess what happens next.  The economy turns sour, no one wants to buy anything any more.   Your sales plummet, you miss quotas, you don’t get the bonus any more.  But all those lavish things you signed up for, with the long term contracts?  That money is still due every month.   Payments still need to be made.  Now it’s time for cuts.  Hmm, we’ll get rid of that Netflix account, we don’t need that any more.  $5 a month saved there.  Don’t need to go out to dinner *every* night.  $100 a month saved there.  Hmm, still running a huge deficit.  Could it be that during the good times, we locked ourselves in to some deals that were nice and fun while the money was coming in, but can’t be sustained when the money’s gone?  Yep.  We have a spending problem.

It’s the same deal in RI.  When the money was rolling in, the politicians thought it a good idea to start up all these social programs and generous contracts.  Makes sense, right, we have the money, so let’s be fair.  But what happens when the money isn’t rolling in any more?  Do we really expect to cut those social programs?  Do we expect the public unions to say “that’s ok, cut us back to a level appropriate to the economy”?  Of course not.

And therein lies the problem.

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One Response to “What’s Wrong with RI”

  1. 1 mangeek

    The legislature has been pretty handy at locking us into all sorts of mandates related to funding, too.

    Instead of bickering over how many Apprentices-to-journeymen are permitted at construction jobs, we should be asking why we’re regulating things like that at all.

    Same goes for steps. The state law says there need to be ‘at least ten annual steps’ for teachers in cities and towns. That sounds good, but it ramps-up teacher pay automatically for the whole first third of their career, no questions asked. Ideally, the steps would be ‘no closer than three years apart’, it would dramatically lower costs and continue to offer a carrot for teachers to invest their effort in their trade. Is a five-year teacher really $3,000 more experienced than a four-year teacher? I would start with the first two steps (six years) pretty low, to filter-out the non-dedicated folks from the mix.

    Anyway, back to the point… Rhode Island is definitely in the situation you describe. The only two solutions I see if things get worse (or don’t get better) are to either give up and try to roll into bankruptcy, or to put some -really- good folks into office and ‘regionalize’ under them. In both scenarios, we nuke town charters and the contracts that go along with them on the way and institute new ones for larger swaths.


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