Moore: Let’s Reject All Bond Questions

Monday, October 31, 2016

 

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Maybe we should just keep more of our money in our own pockets?

With every new election cycle in Rhode Island comes a crop of new questions placed before voters asking us to fund new, supposedly, crucial new spending projects.

And every single year, the questions seem to easily pass voter muster. That puts us taxpayers on the hook for hundreds of millions of dollars in new spending, and indebts our state government even further than it was previously.

Yet for all this supposedly wonderful government spending we approach with each passing election, life doesn’t seem to improve by leaps and bounds. We tend to have the same problems--lack of affordable housing, sub par programs for veterans, a lackluster economy, and a higher education system that always needs more money for new buildings and programs.

Spending Lots of Money

This year is no different. This year there are questions asking voters to agree to spend money on higher education projects, port infrastructure projects, environmental and recreation projects, and affordable housing projects.

My friend Pat Ford, who heads up the state’s fledgling Libertarian Party, recently made an excellent point about the bonds and their real costs to Rhode Island taxpayers in a GoLocalProv.com article. Namely, that it’s not just the cost of the projects that will be kicked out by Rhode Island taxpayers if all these questions are approved, it’s also the cost of the interest on the borrowing that will eventually have to be paid off.

"Voters will have to decide whether to authorize the government to spend another $364 million. The total face value of the bond questions is $225 million, but interest over the life of the bonds – which create a general obligation to repay, like any loan or mortgage - adds another $139 million - almost 62% more debt to be paid,"  said Ford.

That’s a lot of money where I’m from.

The $364 Million Question

According to Governing Magazine, the state of Rhode Island has the seventh highest debt per capita in the country. That’s quite a bit of debt. In my opinion, that means the state shouldn’t be spending any money unless the projects are absolutely necessary.

I, for one, have some serious questions as to whether any of the bond questions are absolutely essential. I’m not inclined to believe that should voters decide against spending additional money, that the sky will fall. In fact, it’s my belief that, for the vast majority of Rhode Islanders, their lives won’t be affected one bit regardless of the outcome of the bond questions. (Special interest groups, however, do stand to benefit greatly from the issuance of new, collective spending.)

Yet even if the special interest groups who believe this spending is in everyone’s best interest could possibly convince us so, it’s still not enough to get me to support these questions.

Here’s why: the state government’s budget is slightly less than $9 billion. That’s a whopping 9 thousand million. It can be hard to understand just how much money just a single billion dollars represents due to its sheer enormity.

Priorities?

How can state government leaders possibly tell state taxpayers, with a straight face, that there wasn’t a way for them to fund this supposedly crucial projects within the state budget, when the budget is that large? Make no mistake: $364 million is a lot of money. But it only represents about 4 percent of the state budget in any given year.

A much more prudent fiscal move by state leaders, would be to set aside a certain amount, let’s say, $60 million per year (about 1 half of 1 percent of the state budget), over four years. After that four years, the state would have $15 million more than the $240 million it needs to fund all of these supposedly important projects. It would save taxpayers $139 million since we wouldn't’t have to pay any interest.

Sound financial practices like that, if implemented over the long term, would make certain that the state would have the lowest debt per capita over the long term.

For these reasons, I recommend voters just say no borrowing more money and increasing our debt. It’s in our best interest.

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Russell J. Moore has worked on both sides of the desk in Rhode Island media, both for newspapers and on political campaigns. Send him email at russmoore713@gmail.com. Follow him on twitter @russmoore713.

 

Related Slideshow: Pros and Cons for the Tiverton Casino - 2016

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Jobs

No Tiverton Casino Claims:

FEWER JOBS Most of the 600 “well-paying” jobs Twin River promises are low-paying, part-time or temporary. The average income touted is for certain positions only, with benefits and tips (not predictable) representing well over 30% of it. In addition, existing Newport Grand employees will move into those jobs, and Twin River is now off the hook for paying Sunday overtime, meaning even lower earnings.

Twin River's Response:

The average salary at Twin River is $56,000 inclusive of tips and benefits. We have learned that some of our colleagues prefer to work part time which is why we offer a mix of full and part time.
The decision not to offer time and half on Sundays was brought to us by the unions on behalf of their employees which we supported.

 

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Taxes

No Tiverton Casino Claims:

NO TAX RELIEF Despite promises, Lincoln has seen virtually no tax relief since it voted for a new Twin River facility in 2012. In fact, Lincoln’s $21.60 tax rate is 12.9% higher than Tiverton's $19.14, and Lincoln's commercial tax rate is a whopping 38% higher! Furthermore, Twin River’s revenue projections for Tiverton already fall short by $1 million. The State of Rhode Island pledges to cover the difference – with YOUR TAX DOLLARS! 

Twin River's Response:

Twin River pays for police and fire detail officers during all hours of operation to supplement security within the facility and respond to calls for service.  According to Joseph Almond, town administrator, the town of Lincoln has not had the need to hire any additional police officers or fire/medics in conjunction with the Twin River operation.  Further, the Administrator confirmed that there has been no corresponding impact on the crime rate or calls for service within the community. 
In 2015, Twin River paid to the town of Lincoln $3.8 million in property and other taxes and an additional $7.8 million from gaming revenues, making it the second largest taxpayer in Lincoln. Of Twin River's $11.6 million total contribution, $9 million supports the municipal and school department operating budgets.  This represents about 10 percent of the town's annual budget.
The Town's tax Assessment records support the finding that there has been no negative impact on residential property values in the vicinity of the twin River Casino.  Further, the town's remaining business community has shown no evidence of cannibalization of revenues and the town is experiencing an increasingly vibrant business climate.

 

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Crime

No Tiverton Casino Claims:

MORE CRIME Countless newspaper, television and government reports reveal excessive criminal activity directly related to casinos. Larceny, muggings, vandalism, petty theft, embezzlement, shootings, property crime and aggravated assaults are just a few of the highlights. Twin River’s recent crime spree has included most of these. Do you know what community crime does to your insurance rates? 

Twin River's Response:

Last year, there were 1,431 incident calls, not 1,431 emergency calls. If we break down the 4 calls on average per day, approximately 2.5 - 3 of them are general reporting or daily log-incalls that might include such activity as dress code violations, self-exclude violations, touching the chips on the table and/or a guest becoming a bit too boisterous.

Those calls - the vast majority - are handled by Twin River security personnel and the on - site Lincoln Police Department personnel which Twin River pays for.

The remaining on average 1 to 1.5 calls per day may produce an incident report and a request for off- site Lincoln Police to come to the property and those incidents might include a fender bender in the parking lot, petty theft and medical emergencies.

Since 2007, when Twin River underwent an extensive renovation and increased its footprint, not a single police officer has been added to the Lincoln Police Department.

It bears underscoring that Twin River is four times the size of the proposed Tiverton Casino.

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Town Resources

No Tiverton Casino Claims:

RESOURCE BURDENS In 2015 alone, Lincoln’s protection services departments received over 1600 calls directly related to incidents at Twin River -- 1,431 emergency police department calls and 222 emergency fire department calls. The Tiverton Police Department, with current staff, will be overburdened with even a small percentage of this activity. 

Twin River's Response:​

Since 2007, when Twin River underwent an extensive renovation and increased its footprint, not a single police officer has been added to the Lincoln Police Department.

It bears underscoring that Twin River is four times the size of the proposed Tiverton Casino.

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Traffic

No Tiverton Casino Claims:

HEAVY TRAFFIC The round-about will not mitigate traffic because it was designed over a decade ago for existing traffic. Twin River’s own 4,000-vehicles-per-day estimate was not considered, and the round-about does not address current congestion on the single-lane road approaching the Tiverton border from Route 24 and William S. Canning Boulevard. For years, the state and RIDOT were not particularly interested in addressing the situation; however, the Twin River proposal has suddenly moved them to fast-track construction. BAD FOR BUSINESS Casinos hurt local non-gaming businesses because casino visitors generally do not leave the premises. Casinos are actually designed to encourage such behavior, and they offer food, entertainment, shopping, etc. to keep patrons on the premises until they run out of money.

Twin River's Response:​​

Twin River has complete 90 percent of the design of the roundabout. It envisions entirely new traffic patterns as a result of casino operations. If the measure passes,then we have made considerable progress.  If it fails, the town of Tiverton will benefit from our engineering and design.  We have publicly stated that the casino will not open until and unless the roundabout is in place, in fact, it's included in the legislation, now law. 
 

 
 

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