Thursday, April 07, 2016

The Rhode Island Way


Rhode Island has come out of the briar patch in good order, and the Providence Journal has a piece of advice for Connecticut:

“Rhode Island's landmark pension reforms were painful for many — the retirement age for state workers had to be raised, and they were forced to contribute more toward their retirement, for example. But the changes were wholly necessary. For a picture of the path not taken, look no further than Connecticut...
 “Barring serious pension reform, Rhode Island-style, Connecticut faces a grim future. The state could end up raising taxes — already among the nation’s highest — to cover the pension costs, thereby harming economic activity and encouraging businesses and families to settle elsewhere. The departure of industrial giant General Electric for Boston does not portend well. Or, the state could end up eating its seed-corn, starving important functions such as schools and roads to pay state workers who in many cases retired decades ago. Neither is a happy path forward.” 
For a quarter century, Connecticut has taken the road more traveled. Because salaries for state workers were low, Connecticut offered gold plated benefits to attract talent and satisfy union demands. In time, state worker salaries outpaced comparable salaries in the private sector. An income tax, established during the first year of the Weicker administration in 1991, relieved the General Assembly of spending restraints, and government spending predictably followed the path of least resistance. Spending has increased 7% per year since then, the bottom line of the state budget tripling during the administrations of four governors. Taxing and borrowing have increased proportionally. Connecticut presently levies the second highest taxes in the nation, falling slightly behind New York. The tax burden in Connecticut is 12.6% and total taxes paid per capita are $7,869.38. High spending, high taxes and unsupportable pension obligations, the highest per capita in the nation, are crowding Connecticut out of a very competitive business market.

Fewer businesses reduce jobs, the quality of life and state revenue – which is why Connecticut repeatedly grapples with budget deficits. We may be the only state in the nation that has not yet emerged from a crippling national recession that ended several years ago. This year the Democrat dominated General Assembly returned a budget to Governor Dannel Malloy that liquidates only a part of Connecticut’s ever expanding deficit. The budget recently approved by the Democrat-controlled Appropriations Committee cuts only $570 million of the $900 million in cuts necessary to balance Connecticut’s budget. The difference represents a massive failure of courage. In its anxiety to satisfy the demands of unions and other special interests, progressives in the Democrat dominated General Assembly – may we call them feral liberals? -- have failed to execute their prime directive, an inescapable duty to advance the general good of the state.   

The feral liberals in the General Assembly want to get on the other side of upcoming elections before they once again bring down a tax hammer on the heads of constituents stunned by the largest and the second largest tax increases in state history. And the firewall preventing more destructive behavior by a union-controlled progressive clique in the General Assembly is -- irony of ironies -- Governor Dannel Malloy, the author of the two largest tax increases in state history.   

Rhode Island has met the challenge of shrinking revenue by a) boosting the retirement age of state workers, and b) forcing state workers to contribute more for their retirements. The way out of an enchanted, nightmarish forest is the way in – reversed. It should be obvious by now that the Democratic controlled General Assembly lacks both the courage and the will to do the right thing, which always involves, both in fairy tales and in life, titanic struggles with destructive forces.

The Republican Party, put in Coventry by Mr. Malloy during his entire administration, has valiantly offered some solutions comparable to those adopted in Rhode Island. If you are a minority party and you ask for half a loaf of bread from feral liberals in the General Assembly, eventually you must content yourself with feasting on crumbs from under the table. Some courageous Republicans know this from bitter experience, and they are in a rebellious mood just now; which is to say they are in a mood that correctly assesses acute problems and offers painful solutions that really solve them. But during election periods, courage is first out the door when the house has caught on fire.

In times past, citizens of Connecticut might have relied on chastened governors and moderate Democratic legislators to do the right thing, suffer temporary pains and make necessary adjustments for the good of the state, as Rhode Island has done.


That was then.  
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