State budget ‘good first step’ in controlling spending

RIPEC HEAD SIMMONS commends Gov. Donald L. Carcieri for constructing a task force to review the state’s tax structure. /
RIPEC HEAD SIMMONS commends Gov. Donald L. Carcieri for constructing a task force to review the state’s tax structure. /

John C. Simmons joined the Rhode Island Public Expenditure Council (RIPEC) in January. He quickly jumped into the months-long debate over ways to fix state budget woes that led to what was then projected as a deficit of more than $450 million for the current fiscal year.
Almost 70 years old, RIPEC is an independent, nonprofit and nonpartisan public policy research and education organization which, according to its mission statement, is dedicated to the advancement of effective, efficient and equitable government. Simmons recently spoke with Providence Business News about RIPEC, the state budget and taxes in Rhode Island.

PBN: What are RIPEC’s goals for the coming year?
SIMMONS: In education, we are doing what is referred to as a “results report.” That report will take all of the reports on how students have performed in Rhode Island on all of the national and state tests – all of them will be combined in one report. Included in that information will be expenditure levels, comparing ourselves to other states. We will compare ourselves to other states in a variety of issues in the educational arena. The last one we did was in 2004.
Another area we think is a key state issue is the social services safety net. One of the items RIPEC has sought an exploration of is … our current safety net. What types of programs do the state, the cities and towns, the nonprofit agencies offer as far as a safety net is concerned? We feel that’s an important issue, especially with the budget process of the last four or five months as far as the Medicaid changes and other changes.
Another area would be a pension and health care cost analysis. With all of the changes that have occurred over the last two years on pensions and health care, we’re going to take a look and compare the state health care system and pension system with other states.
We are also going to look at [the] municipal fiscal condition, something we did about two or three years ago, where we will go through with a common set of measurements and review all 39 cities and towns on their current fiscal conditions. We’ll also be looking at a property tax analysis.

PBN: Would you provide a capsule analysis of the state budget that was just enacted?
SIMMONS: We issued a report a little while ago called “Comments on Your Government: Summary of the Governor’s 2009 Budget Request” and we are about to publish one based upon the enacted budget. Our feeling very strongly is that this is a very good first step in the budgetary process. Due to the increasing expenditure side of the Rhode Island budget over the last 10 years or so, where it’s outstripped both personal income growth as well as consumer price index growth, we felt that the first thing, the first step, would be spending control. That was accomplished by the governor’s submission and the General Assembly enacting the budget. For the first time since 1992-93, where there was actually a reduction in the year-over-year expenditures by just a little bit less than 3 percent, here we have a reduction in expenditures from the previous fiscal year, from 2008 to 2009, a little less than a 3-percent decline in the budget. There were some changes in the revenue structure of the state but in the sense of a $3.3 billion budget, the revenue increases were small in comparison.

PBN: Does RIPEC see the property tax as a problem in Rhode Island?
SIMMONS: We feel that property taxes are too high in Rhode Island. As a matter of fact, the property tax as we understand it is probably one of the top four or five taxes within our mixture of taxes on a national basis. I think the last time we looked at it, it was about the fifth or sixth highest in the country, depending upon which analysis you use. We’re doing an analysis on the property tax now with the new tax information. We have a very high property tax, we rely on the property tax for support of local government. One of the things that RIPEC has endorsed is an educational funding formula that’s fair and equitable. We feel there is a need for a fair and equitable funding formula that takes into consideration both the needs of the student as well as the fiscal capacity of the municipality to support education.

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PBN: Any thoughts on an income tax to support local government and local school systems?
SIMMONS: One of the things that the governor is doing – and we commend the governor for it – is constructing a task force to review the entire tax structure. We don’t believe that the tax structure should be looked at in pieces, but rather in its holistic relationship to the taxpayers. Currently, Rhode Island is the 10th highest in the country on taxes, and a little over 12 percent of our personal income goes to pay state and local taxes. We’re above the national average, we’re above Connecticut and above Massachusetts. So we believe that the overall tax structure should be examined. &#8226
interview: John C. Simmons
POSITION: Executive director of the Rhode Island Public Expenditure Council.
BACKGROUND: Simmons took over as director of RIPEC in January 2008, after serving as chief of administration for the City of Providence. He previously served as chief finance officer for the City of Boston, executive vice president and chief operating officer for the Associated Industries of Massachusetts and as deputy general treasurer for the State of Rhode Island.
FIRST JOB: Would not disclose.
EDUCATION: B.A. in political science in 1973 from Central Connecticut State University and a master’s in public administration in 1974 from the University of Hartford.
RESIDENCE: Providence
AGE: 62

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