Last week I explained the seriousness of choosing where you live during retirement. The political decisions in the state you call home could have a major effect on your standard of living. Choose the wrong state, and you can wind up paying high taxes, receiving sub-par service, and suffering a lack of freedom through what should be your most enjoyable years.
Rhode Island is proving itself to be a picture perfect state to avoid. After current governor, Gina Raimondo, won on a pledge for moderate, business-friendly leadership for the state, she has found herself slipping ever leftward to appease the Ocean State’s growing progressive faction. The Wall Street Journal’s Allysia Finley reports:
During her first two years, she resisted calls to raise taxes and wooed businesses to Rhode Island with government handouts and a promise of fiscal stability. But as her party lurched left, she began to tiptoe that way too.
In 2017 she signed bills raising the state minimum wage to $10.50 an hour from $9.60 and requiring businesses to give workers four paid sick days each year. She also championed two years of free community college. These gestures helped her beat back former Secretary of State Matt Brown in last year’s primary despite irking public unions again by vetoing a bill to allow “perpetual” collective-bargaining agreements.
Unions hoped to gain more bargaining power by enshrining the terms of labor agreements even after they expire. This would ensure that unions never have to make concessions. “Current Rhode Island law protects the taxpayers from being obligated indefinitely for contract provisions that, in the future, may not be affordable,” she wrote in her veto message. “The proposed legislation before me extinguishes this existing protection.”
But since winning re-election, she has marched left. Staring down a $200 million deficit, Ms. Raimondo has proposed extending the state’s 7% sales tax to Netflix subscriptions, iTunes purchases, interior decorating, shooting ranges and other services. She also wants to impose a 10% payroll tax on businesses whose workers enroll in Medicaid even if they offer comprehensive health coverage.
Many low-income employees sign up for free Medicaid rather than pay a fraction of the premium for plans offered by their employers. Ms. Raimondo’s tax would punish businesses that hire less skilled workers, like fast-food restaurants and retailers. These businesses operate on slim margins and have been struggling under the state’s increased minimum wage and paid sick-leave requirement. Rhode Island lost 1,500 jobs in leisure and hospitality over the last year.
The Medicaid employer tax would raise about $20 million annually, which would pay for Ms. Raimondo’s proposed expansion of free tuition to the state’s four-year Rhode Island College. Only about one in five of free-tuition recipients are on track to earn associate’s degrees in two years, but the program has drawn more federal dollars to community colleges by increasing enrollment of students who receive Pell Grants. The state pays tuition costs that aren’t covered by Pell Grants.
The Democrats who control the Legislature have other priorities. This week the Senate passed a package of bills backed by public unions, including a new version of the legislation Ms. Raimondo vetoed in 2017 mandating that the pay and benefit provisions of expired labor contracts remain in effect indefinitely. Rhode Island’s 39 cities and towns have implored Ms. Raimondo to exercise her veto again because the bill would tie their hands in collective bargaining. “Contract continuation essentially walls off 40% of a municipal budget from reductions, which will inevitably lead to property tax increases and cuts in other public services,” the Rhode Island League of Cities and Towns executive director Brian Daniels told the legislature.
Read more here.
Read the entire series here.
E.J. Smith - Your Survival Guy
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