Public needs bigger role in crafting policy

MIKE STENHOUSE, founder and CEO of the Rhode Island Center for Freedom and Prosperity, calls for approval of a 3 percent retail sales tax. /PBN PHOTO/ FILE RUPERT WHITELEY
MIKE STENHOUSE, founder and CEO of the Rhode Island Center for Freedom and Prosperity, calls for approval of a 3 percent retail sales tax. /PBN PHOTO/ FILE RUPERT WHITELEY

Mike Stenhouse is founder and CEO of the Rhode Island Center for Freedom and Prosperity, a free-enterprise, public-policy think tank. The Cranston native is a former small-business owner with a dot-com company, a marketing professional with a Fortune 500 company and a former professional baseball player, having stints with the Boston Red Sox, Minnesota Twins and Montreal Expos.

What is your view of 2015 in Rhode Island in terms of the state’s economic health?

Our center does two reports every year, measuring where we are headed. We have a freedom index, with ranks the General Assembly’s bills and their votes on them, and for the fourth year, we saw the state heading in a negative direction as far as helping the economy. We don’t do this subjectively; we also have a report card every year that an economist developed for us, looking at 52 subcategories and 10 major ones. We put all that together and created a scoring system, which led to primarily Ds and Fs.

We don’t see, despite all the talk, the public policy doing anything to improve the economic situation. We are improving our economy and jobs only because of national forces, but we’re not doing anything on our own.

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What do you see for 2016 in terms of Rhode Island’s economic health?

It’s getting worse. The governor and her friends commissioned the Brookings Institution and got a good idea what plan is going to stay. It’s the implementation plan for the RhodeMap RI agenda, with smart growth and a sustainable development philosophy. It is not a good study, just a lot of fanfare, and we believe it’s a very poor direction to take. As I wrote on our website, the sticks and carrots that RhodeMap RI contemplates would manifest via manipulation of local property taxes so that they become a weapon against those who do not live in preferred communities and as a reward to those who obey the plan. Annual property tax caps in municipalities would be wiped away, leading to unchecked residential and commercial property tax hikes, as one means to fund the “growth centers” the plan envisions.

We need broad-base reform for everyone and not the targeted few. Too many believe targeted tax breaks and a centrally planned economy is a positive way to go. We don’t think so.

If you could, what one thing would you like to see happen here in 2016?

What we need is a cultural change in the way we approach public policy. Instead of the governor getting involved to remedy every situation, look at the inefficiency of government, the Department of Transportation, the Department of Motor Vehicles, the Department of Children, Youth & Families, across the board, the bloated spending on health care, the infrastructure. Everywhere you turn is government inefficiency, yet we look to government for solutions.

What is the Rhode Island Center for Freedom & Prosperity doing to improve the state’s economic health?

We’re not saying one thing would do it, but we’ve put out a prosperity agenda with major points. On the economic front, we bought an economics modeling tool and determined that eliminating or reducing the sales tax is the biggest boost that any single tax reform could provide. But because it might mean budget cuts, it’s unthinkable to politicians. It’s restricting the state’s chance to grow. But as we say at our site where we talk about a 3 percent sales tax as a complete solution, up to 90 percent of projected static sales tax revenue losses are recovered via dynamic increases in other revenue.

In education, we believe families should choose the best path. We have school-choice legislation that will hopefully see action in 2016 addressing the desperate need to better educate low-income children; too many are stuck in failed schools.

The easiest and freest thing is right-to-work laws, which in many states allows workers to decide whether or not to pay union dues. Here, that would immediately open up Rhode Island as a place a large business could go and not deal with daunting labor costs. We have significant cost-of-labor issues, and the right to work is totally free. It empowers employees and is not a union-busting idea. When Indiana did it, they saw more union jobs result because the economy grew that much.

And we need to open up the public-policy process. We see a small group of government insiders meeting behind closed doors crafting policy and forcing it on the public. Our center and many others have a lot to contribute to those discussions, but we’ve been told repeatedly, “You’re not one of us, so we don’t want to hear from you.” We provide alternative perspectives, we’re trying to be helpful, but nobody wants to listen. •

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