RI policy wonks doubt 24/7 Wall St. findings on state spending

December 10th, 2011 at 6:00 am by under Nesi's Notes, On the Main Site

Does Rhode Island really lead the nation in its efforts to redistribute wealth, as 24/7 Wall St. suggested in a recent set of rankings splashed across MSNBC.com and The Huffington Post? Not necessarily, say two of the state’s leading policy wonks.

Kate Brewster, executive director of The Poverty Institute, dismissed the website’s study as half-baked and misleading. “State rankings, like this one, that combine a handful of random statistics to tell a story, often tell us nothing at all,” she told WPRI.com.

John Simmons, executive director of the Rhode Island Public Expenditure Council, offered a more measured response, noting many of 24/7 Wall St.’s points about state spending are similar to those raised by RIPEC in publications like its annual “How Rhode Island Compares” studies.

“At the same time, the 24/7 report does not consider the economic context of these decisions, nor does it consider the outside impact of these choices,” Simmons told WPRI.com.

Brewster pointed out that three of the “random metrics” used for the study – pension benefits, education spending and unemployment insurance – “are not based on need or income,” and that spending on Medicaid and education “does not bolster family income, but rather funds medical providers and schools.”

Two of the programs that boost incomes – unemployment insurance funded by employer taxes and cash welfare paid for with federal funds – only “provide temporary relief,” she said, with jobless benefits replacing less than half of a worker’s wages and welfare payments amounting to less than half the poverty level.

The 24/7 report “adds nothing to the serious conversation that our communities needs to have” about Rhode Island’s social safety net, Brewster said. “No reader of this report should be misled into thinking that Rhode Island is a leader in reducing income inequality,” she said.

Simmons added that some of the data used by 24/7 Wall St. are out of date and don’t reflect how the programs operate in 2011. The Medicaid numbers came from 2007-08, before the state began making major changes to the low-income health program, and unemployment benefits are set to shrink starting next year.

Details aside, Simmons said there may be a broader lesson in the report if it forces the state to ask the question of “whether Rhode Island can afford to be the first (best) in the nation for redistributing wealth.”

State spending decisions “potentially had an impact on how the state’s business climate is perceived,” Simmons said, noting Rhode Island’s high jobless rate and limited support for higher education. “Ultimately, this may negatively impact the long-term opportunities afford to the state’s most vulnerable residents.”

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2 Responses to “RI policy wonks doubt 24/7 Wall St. findings on state spending”

  1. RISailor says:

    Well, people like Brewster might discount these statistics, but they do show that in some areas, the state has expensive tastes. Regardless of whether you think these statistics measure wealth redistribution, you have to wonder why we rank so high in these categories when the states revenues relative to other states is so low?

  2. Bi says:

    Well, now we’re taking serious pension benefits from working class and middle class elderly workers and teachers who paid about 9% of their incomes year after year into a mandated pension fund that has now had it’s biggest benefit yanked out from under them. And people are celebrating. Holding parties, pumping fists, calling these state workers fat cats. Who’s kidding whom? Fat cats — these are administrative assistants, nurses, teachers, educators, engineers, accountants, social workers. I’ll tell you who the fat cats are. They’re the people behind Engage Rhode Island who hired an expensive PR firm to tell the public this was pension reform, not pension theft. Each one of those people has their hands out for multi-million dollar payoffs as well as that shadowy cabal behind them that hides their names. Look at Family Service of Rhode Island — they’re expected a contract of more than $30 million from the state and they are trying to push teachers out of special education classrooms — why because they can do it better? No, because there’s more money in it for them and for Mount Pleasant Academy which they own. Wake up and follow the money someone instead of being taken in by PR.