Tom Sgouros: Tom's Tidbits

Tom Sgouros: Tom's Tidbits

Day of service in September

Ten years ago this fall, Jonathan Randall, a college friend of mine -- a fabulous dancer, a great cook (taught me about curry), and all-around sweet guy -- perished in the World Trade Center attacks. Earlier this year, a mutual friend of ours suggested that a bunch of his friends, now scattered around the country, should put in a day of service this September to honor his memory, and she's been coordinating a Facebook effort to do exactly that. 

Apparently a lot of other people have had the same idea, and Service Rhode Island is organizing volunteer opportunities for this September 11 for those who feel that doing something constructive is the best answer to the destructive rage behind the 9/11 attacks. They are interested in hearing both from people who want to work and from groups who have a project that could use people. See ServeRhodeIsland.org for more information.

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Wages up, probably bad news

The Department of Labor and Training reports that the average wages for Rhode Islanders was up 2.8% in 2010 compared to the previous year. (Local government employees saw a slightly lower wage increase of 2.7% and state employees saw a decrease of 0.2%.) This sounds promising, but it's actually lousy news. Combined with our high unemployment rate, what it likely means is that there are fewer entry-level jobs around, and without those low-paid positions to hold down the average, or to soak up the cash that might go to raises, the average goes up. Businesses -- here and nationally -- continue to sit on cash rather than invest it in expanding their businesses. (Just as they did in the 1930s.)

That kind of investment is where entry-level positions come from and less of the one means less of the other. That's why anyone you hear talking about how we should make it easier for companies to invest is someone who isn't thinking hard about our economy. For the most part, companies have lots of resources to invest today. What they need is an excuse to do so. In still less technical terms: they need more customers.

Under the current economic conditions, investment credits and other ways to encourage investment are simply a colossal waste of money. They might work under other economic conditions, but as of today, direct spending on goods and services is what we need. But our state government -- like our federal government -- insists that retrenchment and cuts are the way to get through the slow times, so stimulus won't come from them, and our recovery will be long, slow, and discouraging.

Tax cap discourages business, but that's apparently ok

One of the pieces of legislation that failed this year (H5496) would have gotten around the property tax cap for commercial development in specific high-density districts in a city or town, like village centers, or downtown. One thing you may not realize about the cap on your town's property taxes is that the cap applies to the amount collected, not the rate. What the state has said to your town is that no matter how many people or businesses move to your town, no matter what happens to fuel prices, electricity costs, health care costs, or anything else your town pays for, the tax portion of its budget can grow no faster than the cap (4.25% this year, going down to 4% next year).

Maybe you don't mind that, but what this also means is that new building in your town does not mean new income for a town at or near the cap (which is most of them). But a new building will mean new expenses, for utility hookups, fire protection, road improvements, whatever. Why should any official roll out the red carpet for a large new investment under these circumstances? From the perspective of the town, a new business is only an expense, and will make meeting their budget more difficult. Even anti-tax activists who cheer on tax caps should be worried about this kind of loss of local control and reversal of incentives. But your legislative leaders see protecting the tax cap as more important than common sense exceptions, so it remains untouched.

RIPTA remains the red-headed stepchild

Another casualty of the budget was any kind of funding solution for RIPTA. RIPTA has been hit hard recently, because it relies on gas tax income for part of its budget. Rising gas prices have meant more riders, but also less gas sold, and so less income for RIPTA. Most of the buses I ride these days are full, and many are standing-room only. I'm writing this on the number 14 at an off-peak time, and it's almost two-thirds full.

Bus fares are already about as high as they can go -- about as high as any in the country -- and the legislature has made it clear that they won't provide any more money, though they were willing to put money into highways. It now seems that deep service cuts are inevitable, which will reduce ridership, and in turn reduce RIPTA's revenue still further, which will ultimately cause more service cuts. Apparently that's ok with the people who make these decisions, because after all, none of them ride the bus. RIPTA will have hearings this summer in preparation for slashing service. Watch for the ones near you.

Tom Sgouros is the editor of the Rhode Island Policy Reporter, at whatcheer.net, and the author of "Ten Things You Don't Know About Rhode Island." Contact him at [email protected].