About those layoffs:

Layoff Notice There are a couple of points that I think are deserving of more prominent mention in the debate about the Governor’s proposal to layoff 500-plus state workers.

1) In spite of rampant assertions that Rhode Island’s government is especially bloated, we already have very few state employees per capita:

Yet when viewed in proportion to our population, the number of state workers in Rhode Island is the smallest among the six New England states and just the 40th-largest in the country, according to US Bureau of Labor statistics used in an analysis compiled by Governing magazine.

In contrast to regional leader Vermont, which has 301 state employees per 10,000 residents, the magazine’s sourcebook found, Rhode Island has 164 state workers per 10,000 residents. The comparable numbers for the other states: Maine (221); Connecticut (196); New Hampshire (188); and Massachusetts (187).

2) When we cut hundreds of jobs, we not only hurt the workers in question and make it harder for the state to perform vital tasks. We also reduce income and sales and other taxes paid by those employees — to the tune of millions of dollars. About 12% of income gets paid back into state and local budgets in the form of taxes. And more yet, as fees.

(Also worth noting here that when we aggregate fees and taxes — the sensible thing to do, if we’re worried that people are paying for too much local government — Rhode Island is precisely AVERAGE among the states.)

Poorer and middle-income people spend their incomes at a much higher rate than wealthier people, so reducing the incomes of hundreds of middle class folks (rather than considering raising income and cap gains taxes back towards historic levels) also means less money flowing through our economy, less economic “spin-off”, fewer jobs, and lower tax receipts yet.

The wealthy simply will not invest their retained money back into Rhode Island’s economy at nearly the rate of those who are seeing their jobs cut.

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