Nesi’s Notes: June 17

The Saturday Morning Post | Quick hits on politics and more in RI

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Happy Saturday! Here’s another edition of my weekend column for WPRI.com – as always, send your takes, tips and trial balloons to tnesi@wpri.com and follow @tednesi on Twitter.

1. First this week, a programming note – yours truly is out of town, so this column was written earlier than usual. Check back next Saturday for more on the rest of this week’s big news, including the state budget.

2. The car tax has been bedeviling Rhode Island lawmakers for a long, long time. They were already hearing complaints in the early 1980s, when the General Assembly created a Commission to Study Improved Methods of Property Valuation. A 1984 Journal story quoted one taxpayer who testified: “If a ’68 car is only worth $50, that’s all an insurance company will give you if it’s destroyed. But if you get a tax bill of $50 on that car from City Hall and you go down there and tell them it’s only worth $50, they’ll tell you that that’s your problem, not theirs.” Sound familiar? The issue’s salience has grown steadily, if mentions in the statewide daily are any indication – the words “car tax” were mentioned in only 48 Journal articles in the 1980s, but 106 in the 1990s, 193 in the 2000s, and a whopping 370 so far in the 2010s. John Simmons, executive director of RIPEC, thinks Speaker Mattiello’s plan to eliminate the tax once and for all is the right move. “You look at the car tax and we are the worst in the nation on the car tax,” he said on this week’s Newsmakers. “We believe the tax burden should be reduced.” Doug Hall, economist at the Economic Progress Institute, thinks full repeal is a mistake. “We’re very concerned that if fully implemented, we would be blowing a $221-million hole in the Rhode Island state budget, and in doing that we would significantly undermine our capacity to make the investments we need for ongoing shared prosperity,” he said. Simmons’ rebuttal: lawmakers didn’t have a plan to pay for increased spending on the K-12 funding formula or Medicaid expansion, either, but went ahead anyway. “It’s a policy choice,” he said. The pair did agree on one point, though few lawmakers will probably want to voice it – the Assembly could pause or even reverse the phaseout anytime they want.

3. The eventual undoing of former Rep. Tony Pires’s 1998 car tax phaseout plan has led to some understandable cynicism about whether any tax can actually be eliminated. Worth recalling, then, that the Pires plan also included a 10-year phaseout of a second tax – the municipal retail inventory tax – and that one has stuck. “It actually did go away,” Pires, the former House Finance chairman, told me. The impetus for the inventory tax phaseout, he said, was to reduce the tax burden on car dealerships in Rhode Island so they wouldn’t set up shop in Massachusetts border towns. And one reason the inventory tax was easier to kill: it brought in much less revenue than the car tax. “There just weren’t a lot of dollars involved,” Pires said. He also thinks the businesses that would paid the inventory tax might have put more fear into state leaders. “Those folks would have been speaking with very strong voices, and when you start threatening to close a dealership or move it somewhere else or whatever the case may be, they have a voice, whereas the car owner doesn’t really have much of a voice,” he said.

4. The controversy over Frank Montanaro’s free tuition has triggered an unusually high volume of emails to Tim White and me, and so far they’ve all expressed a strong distaste for the arrangement. This message from a South County woman is representative of what we’re hearing: “I do realize there are more important issues for our state to work on than this free tuition story but I just cannot seem to let go of my resentment of Mr. Montanaro and his arrogant response to your investigation. It IS our business. WE paid for this man’s children to attend college. I worked three jobs to be able to afford URI in the 1970’s then sacrificed to help my children and stepchildren attend college …. Perhaps this $50,000 tax-free tuition benefit could have eased the way for an inner city child or foster child [to] attend college. He should be ashamed of himself. Thank you for shining the light on these types of abuses. They do add up, don’t they?” In fairness, Montanaro disputes that it was an abuse to seek tuition waivers while on unpaid leave, and few state lawmakers have criticized him directly for his actions.

5. Also on the Frank Montanaro beat, it came to our attention Tuesday that he failed to file his annual financial disclosure with the R.I. Ethics Commission by the April 28 deadline, despite it being required because of his positions as both JCLS director and a Building Code Standards Committee member. Montanaro said it was “an oversight” and he “addressed the issue immediately after receiving the reminder,” filing on May 31. Asked about the reminder, Ethics Commission lawyer Jason Gramitt said, “One of the benefits of electronic filing is that we get filers’ email addresses. We started using them two years ago to help with compliance. This year, on May 31, 2017, we sent an email to people who were late reminding them of the passage of the filing deadline and instructing them to file immediately. This has proven to be a very effective and efficient way to increase compliance.”

6. Former state Sen. Christopher Maselli, whose law license has been reinstated now that he’s finished serving his prison sentence for bank fraud, has reappeared at the State House. Maselli testified before the House Corporations Committee on May 23 in support of a bill sponsored by Rep. Stephen Ucci that could increase what insurers have to pay on rental cars. (Governor Raimondo vetoed similar legislation last year.) Maselli told the committee he was appearing on behalf of his new employer, Richmond Motor Sales and Rental, whose president is listed as Angela Badway. “I don’t normally come up here to testify and lobby, but I was asked to come up on this certain legislation,” Maselli said at the hearing.

7. When Senate President Dominick Ruggerio took over from Teresa Paiva Weed, he inherited more than her gavel – he also got the power to decide on senators’ requests for legislative grants, the small checks issued to community groups like little leagues. As of April 1 – just after Ruggerio took over – senators had requested $1.15 million in grants but only been awarded $538,000, leaving Ruggerio to decide on more than half the money. On the House side, Speaker Mattiello had approved $267,000 in representatives’ grant requests as of April 1.

8. Our weekly dispatch from WPRI.com’s Dan McGowan: “It has been nearly 14 months since Mayor Elorza released a study that outlined a bunch of different ways to generate new revenue or cut costs as part of an effort to stabilize the city’s finances over the long term, but we’ve seen very little action kn any of the significant proposals. In fact, of the 12 possibilities I highlighted from the report last year – which included selling or leasing the water supply, convincing the hospitals and colleges to pony up more money, a new tax on parking and admission to events and more changes to the pension system – it doesn’t look like the administration has made much progress at all. One challenge, of course, is the city isn’t getting the level of support it probably needs from state lawmakers. Part of that is on the mayor’s inability to build better relationships at the State House and another part is the state’s lack of confidence in a City Council that has seen its president and majority leader indicted in recent years. But it has to be concerning to state leaders that in a year where the city had plenty of wiggle room for pet projects in its budget – municipal IDs, more funds for the council’s neighborhood program, a line item for PVDFest – there was very little discussion about addressing a pension system that has paid out $249 million more than the city has contributed since 2005. To be sure, the city still has time to right the ship. And Elorza deserves credit for harping on long-term planning, especially when it comes to infrastructure needs. But if he’s able to win re-election next year, he’s going to have some difficult decisions to make in his second term.”

9. Robert Flanders continues inching closer to a U.S. Senate run against Sheldon Whitehouse (as well as fellow Republican Bobby Nardolillo). John DePetro obtained an invitation to a June 24 fundraiser to benefit Flanders’ exploratory committee, co-hosted by Gary Sasse, Edward Field, Al Verrecchia and Sue Cienki. The invite shows Flanders is using Red Curve Solutions, a Massachusetts fundraising company that also did work for the Trump and Romney campaigns. The former justice has limited his comments to reporters since expressing interest in a run, but he gave an interview this week to Bob Plain of RIFuture, discussing the travel ban, the GOP Obamacare replacement bill, and his ideological orientation.

10. Speaking of the GOP health care bill, a New York Times analysis estimates the bill is opposed by about 54% of voters in Rhode Island and 59% in Massachusetts. How’d they get those numbers? The paper says the estimate uses national poll results, then “combines respondents’ demographic characteristics, their state and their views of the A.H.C.A. to estimate the probability that a voter of a certain age, race and gender, and in a state with certain characteristics, would support the proposal.”

11. Mike Stenhouse, who leads the Rhode Island Center for Freedom & Prosperity, visited the White House last Friday for private briefings on President Trump’s evolving tax and regulatory plans. “Rhode Islanders should take comfort in knowing that, while the media and the left are consumed with presidential conspiracy theories, the administration is aggressively moving forward with pro-taxpayer and pro-business reforms that will undo large parts of the Obama regulatory regime; reforms that will keep more money in our families’ pockets and free businesses to compete on a level and fair playing field,” Stenhouse reports. Asked about the fate of Paul Ryan’s proposed border-adjustment tax, which has divided Republican leaders in Washington, Stenhouse says he was told “there was no solid consensus either way,” and therefore “its future appears uncertain to me.”

12. Rhode Islanders doing big things: Cranston West grad Ed Busby is now senior VP of strategy at TEGNA, the TV-station owner formerly known as Gannett.

13. Former Sheldon Whitehouse spokesman Seth Larson has a new Twitter feed called @BrightSide_RI that aims to highlight the Ocean State’s best attributes.

14. What does the Brayton Point power plant’s closure mean for Somerset?

15. Tom Edsall says the Democratic Party is in worse shape than you think.

16. How conspicuous consumption is changing.

17. Forget self-esteem. Try self-compassion.

18. Set your DVRs: This week on Newsmakers – RIPEC’s John Simmons and the Economic Progress Institute’s Douglas Hall debate the car tax; Dan McGowan breaks down Providence politics. This week on Executive SuiteFrank Galleshaw III, owner and president, Wright’s Farm Restaurant; Dr. John Luo, founder and president, Doctor’s Choice. Watch Saturday at 10:30 p.m. or Sunday at 8 p.m. on myRITV (or Sunday at 6 a.m. on Fox). Catch both shows back-to-back on your radio Sundays at 6 p.m. on WPRO-AM 630 and WEAN-FM 99.7. And you can subscribe to both shows as iTunes podcasts – click here for Executive Suite and click here for Newsmakers. See you back here next Saturday morning.

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He writes Nesi’s Notes on Saturdays and hosts Executive Suite. Follow him on Twitter, Facebook and Instagram

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