Chamber News

This is your RISC-Y Business email for July 8, 2010

Insurers have obtained approval to hike premium rates an average of 8.4 percent to 12.3 percent for the health plans they offer to Rhode Island companies to cover employees.

“You’re talking about a basically 10-percent increase,” said J. Michael Vittoria, president of the Rhode Island Business Group on Health and vice president of human resources at Sperian Protection, in Smithfield. “Given the economy we’re in, that’s going to put a lot of people in a lot of pain.”

...In the meantime, business people must choose between passing on the costs to employees, absorbing the increased costs, eliminating or paring health benefits or cutting other expenses, said David Buttery, owner of Minuteman Press of Johnston. To remain competitive, he said, he can’t simply raise prices to customers.

“I think it’s disgraceful,” said Buttery.

The Providence Journal, Insurers get OK to raise plan rates, July 8, 2010

Today's News!

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RBN pro-business, pro-jobs candidates to be announced

July 20th

THE RACES ARE ON!

SENATE AND HOUSE SEATS ARE SEEING CHALLENGES IN ALMOST EVERY DISTRICT! THIS IS AN HISTORIC MOMENT FOR RI, AND RBN 2010 IS AN HISTORIC IDEA WHOSE TIME HAS ARRIVED!!!

We've reached the $100,000 mark in funding and campaign pledges, but we need EVEN MORE PLEDGES to elect a slate of pro-business, pro-jobs candidates!

THIS IS AN AMAZING OPPORTUNITY TO CLEAN UP RI AND GET SOME FRESH BLOOD FLOWING IN THE STATE LEGISLATURE! ARE YOU IN?

WE MAY NOT HAVE SUCH AN OPPORTUNITY AGAIN!

TELL EVERYONE YOU KNOW:

RBN2010.COM IS GOING TO CHANGE THE R.I. GENERAL ASSEMBLY!!

FIND OUT MORE!

Vote on this week's poll: www.statewidecoalition.com:

Over 300 candidates-- an unusually high showing- -filed papers last week to run for the 113 House and Senate seats in the state Legislature. Do you believe the high number of candidates reflects the public’s dissatisfaction with the General Assembly and anger at many incumbents?

Insurers get OK to raise plan rates

Insurers have obtained approval to hike premium rates an average of 8.4 percent to 12.3 percent for the health plans they offer to Rhode Island companies to cover employees.

Health Insurance Commissioner Christopher F. Koller announced on Wednesday that he had approved rates for 2011 that were about one to three percentage points below the double-digit hikes requested by insurers.

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Pension system is just bad math

THE CASE OF THE WESTERLY DETECTIVE WHO RETIRED AND took a position with the Hopkinton police force served to illustrate perfectly well all of the editorials we’ve written about the local police pension system and the state system as well.

And what it illustrated was a math equation with economically devastating results: an employee pays into the pension system for 20 years and upon a mandated 20-year retirement date, begins drawing 50 percent of his regular salary immediately in the form of pension payments. Under that scenario, a 40year-old can easily collect payments for twice as long they contributed to the system. Where does that math work?

We hold no ill will toward the officer, Det. Sgt. Mark Carrier. And this is not about Carrier personally, but his case makes real all the discussions and theorizing about the system that we’ve heard for years. He wasn’t working the system, he was playing by the rules set by the system. So now, he takes 20 years of experience in Westerly — and police academy training paid for by Westerly taxpayers — to another town because of a labor contract that no longer is based in the real world.

You could feel the frustration in Westerly Town Manager Steven Hartford’s comments when he responded to a reporter’s questions about the situation.

Hartford, who is working to end the fantasyland that is the Westerly police pension system, said “Hopkinton will benefit from the 20 years of experience that he’s gained in Westerly, and Westerly will absolutely lose out to Detective Sgt. Carrier’s need to look after his own interests.”

Hartford has come up with a system to entice more experienced officers, the command staff, to stay on the job in an effort to begin to right this lopsided math equation in the future. There is cost involved, in the form of financial incentives, but it’s a start.

The average taxpayer, who long ago was forced to give up the old traditional defined benefit pension program, should be outraged that the Westerly police pension system has been allowed to survive this long. It’s a special case that we can’t afford. We’ve been forced to reduce staff because we can’t afford the pension payments. How ludicrous is that? We’ve actually compromised public safety to feed this unrealistic pension system.

We only hope that once a new system is put into place — and one needs to be put in place — that years down the road we won’t backtrack when the economy frees up some cash.

That’s how we got here in the first place, and it’s nothing short of criminal.

Bad posture on amnesty; Funny how feds lean on Ariz., not R.I.

WOONSOCKET – Despite its fragile cash position, the city managed to pay off a short-term loan of $9.3 million to Citizens Bank on Friday, but it's hardly out of the woods yet. In the next couple of weeks, officials will be wrestling with “the worst cash crunch the city has seen for a long time,” said Finance Director Thomas M. Bruce.
To cover operations, Bruce said, the city has about $3.1 million in reserve – funds that will be largely spoken for by the salaries of teachers and city employees – before new revenues start rolling in from other sources when another fiscal cycle kicks in July 1.

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Woonsocket Middle School principal forced out through consolidation efforts

WOONSOCKET - Woonsocket Middle School Principal Patrick McGee will not be returning for another school year.

In efforts to tighten its belt and consolidate, the Education Department did not renew the contract for the principal, known for, among many things, keeping his promise to kiss a Vietnamese potbellied pig last year if students improved their state test scores.

With a performance audit still hovering above their heads, school administrators have been looking at different areas to save money.

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Tom Ward: Will there be change, or more of the same?

And they're off!

With next week's special Town Council primary elections setting a fast pace in North Providence, more than 3,300 residents have come out across the state to face voters for seats ranging from water commissioners to governor. According to the Secretary of State's office, that's an increase of 18 percent from 2008. Considering what elected officials face in the next few years, I have to give a hat tip to them. I know, public office for some is just an ego trip. For others, it's the greased road to paid family health care or a taxpayer-funded job of some type. The real dreamers might hope to attain today's level of pension paradise some day, but that's all going to gradually fall apart soon anyway. Some poor slobs might even be running on order of their union or party bosses. Pity them... For many newcomers, though, it's their fresh-faced optimism and idealism that I trust will make for an interesting debate in the coming weeks and months.

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Arlene Violet: Lardaro writes: Too much government

Recently, I received a copy of a thoughtful analysis written by U.R.I. Professor Len Lardaro. He argues that for a state of our size with so many towns, school districts, so large a bicameral legislature and an abundance of structural economic impediments, our state should be just renamed to Redundancy Island and call it a day. He was particularly unimpressed with the legislature's "Come to Jesus" moment with the passage of an income tax reduction and other election gimmicks. He correctly noted that the legislature rejected virtually all of the changes, most more far-reaching, proposed by the governor's tax commission years back thereby creating a lag for recovery and further damaging the image of the state.

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While Illinois goes broke, state union employees get 14% raises

It is no secret that Illinois is going broke with over $6 BILLION in unpaid bills to social service providers, Medicaid doctors, mental health providers and schools. It is also no secret that the state has a $13 BILLION budget deficit that the Chicago Democrats who control the entire state failed to address. Next year’s budget deficit will be around $15 – $16 BILLION assuming the economy doesn’t do a double dip recession.

Just last week, Illinois overtook California as the riskiest state to insure against default on bond obligations. You would think cause a sense of urgency among the elected Democrats who control the state. You would be wrong.

Yesterday, we learned from the Associated Press that the Governor was busy doling out 20% raises to his top staff. While the rest of us worry about having jobs, see our hours cut and our pay stagnates, political cronies in the Quinn administration get fat raises.

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Slow start to rentals this summer, say agents

If you’ve been waiting until the last minute to rent a house near the beach this summer, you’re not alone.

Rental agents in Rhode Island’s most popular summer destinations report that many people waited as late as June, and even late June, to book their July and August rentals.

And while agents say there isn’t much left in the prime-time vacation season — the last two weeks of July and the first two weeks of August — openings do exist, and even more rentals are available in late August and September, when many families must have children home for the beginning of school.

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Lynch, Caprio urge lawmakers to rework casino bill

PROVIDENCE — In recent years, the major players in the state’s gambling industry have funneled thousands of dollars into the campaign war chests of the two Democrats running for governor — Attorney General Patrick C. Lynch and General Treasurer Frank T. Caprio — with Lynch netting more than $39,000 from this sector over the last six years, and Caprio, at least $12,000.

For Caprio, that included the harvest from a fundraiser that GTECH president and CEO Jaymin Patel hosted for him, at his Providence home, last December.

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Glenn Peterson: Hard currency for R.I.

Rhode Island uses many of the same smoke and mirrors as the Greek government to mask its deficits. I suggest we prepare for the inevitable. Yes, Rhode Island must be prepared to exit the dollar.

I suggest that Rhode Island’s new monetary unit be called the quahog, backed by actual quahogs. As a hard (at least on the outside) currency, the state will not be able to simply print quahogs: They must be backed by real quahogs.(This will be a boon to quahoggers in the state.)

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Arthur B. Laffer: Unemployment Benefits Aren't Stimulus

The current debate over extending and increasing federal unemployment benefits encapsulates the disagreement between the Democrats in power in Washington and their Republican opponents. What the consequences will be of raising unemployment benefits in today's depressed economy is at issue.

The most obvious argument against extending or raising unemployment benefits is that it will make being unemployed either more attractive or less unattractive, and thereby lead to higher unemployment. Empirical research supports this view.

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Warwick: Council eyes 20% health co-pay

The City Council is slated to consider an ordinance that would impose a minimum co-share payment of 20 percent for health insurance.

“This will alleviate the cost of health insurance,” said city councilman Joseph Solomon (Ward-4).

“This is a time where compromise is needed from everyone if we are to get through this especially difficult economic situation.”

Solomon stressed that it’s a better situation if every city employee shares a portion of the city’s cost cutting in the form of benefit reductions, as opposed to layoffs. Layoffs, he said, result in a decrease to city services, and disproportionately affect more employees with less experience.

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