The Rhode Island Public Expenditure Council’s latest study, “Rhode Island 2010 – Charting a New Course,” is a must read for policy-makers, elected officials, business leaders and anyone else with a stake in the health of the Rhode Island economy.
The RIPEC study paints an alarming picture of the state’s economy, pointing out that it is at a “critical crossroads” because of the rising costs of Medicaid, housing and the fact that our overall pool of workers is dwindling.
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The RIPEC study concludes that in the face of high taxes and rising budget deficits, the state needs to enact spending limits – written into the state constitution – on government tax policies and spending at both the state and local levels.
RIPEC has sounded such alarms in the past, but never have they been delivered with such a sense of urgency. We strongly suggest that state officials and lawmakers heed this warning.
Consider the following economically damaging inevitabilities on our horizon, as reported in the RIPEC study:
*The state’s political and business leadership must “demonstrate the political will to begin to address the fastest-growing component of the state budget – Medicaid.” In short, the Medicaid numbers are staggering and the projections for future costs are bleaker, not better.
*A “disconcerting trend” that exists of a declining pool of workers ages 35 through 49. This trend, suggests RIPEC, raises questions about the state’s overall work force and could become “a barrier for future investment.”
*A housing market that has seen soaring real estate prices making it difficult for middle-income earners to find adequate housing.
*High taxes could continue to drive more affluent residents away as they retire, chipping away at an important source of revenue.
RIPEC has long been a voice of reason on matters of fiscal policy. Its call for “transformational change” should not be taken lightly. While its report stops short of offering specific details on the changes it would like to see, this RIPEC study clearly calls for constitutional amendments that would mandate tax and spending limits at the state and local levels.
If this RIPEC study feels like a sharp slap in the face – it should.
What don’t we get?
Our young professionals can’t find a house that they can afford so they are looking to take their talents elsewhere. Our wealthy retirees are being taxed to the hilt, so they too are looking to move out of state. And Medicaid costs are draining our economic resources.
We hope this RIPEC study will be taken seriously. To ignore it would be a disservice to taxpayers – and our economy.
