"Eighty-five percent . . . of Rhode Island tax returns that were filed for the year 2010 . . . were from individuals who earned $30,000 or less."
Lisa Baldelli-Hunt on Thursday, November 17th, 2011 in a General Assembly debate on pension overhaul
R.I. Rep. Lisa Baldelli-Hunt says tax return data shows that 85 percent of Rhode Islanders earn less than $30,000 per year
One of the unsuccessful amendments proposed during the General Assembly's debate on changing the pension system for state workers called for calculating pension benefits using the average pay over the last 10 years of employment, not the last three or five years.
The sponsor, Rep. Lisa Baldelli-Hunt, a Woonsocket Democrat, said the measure would prevent last-minute raises from bumping up a person's pension benefits. Taxpayers, she said, can't afford such largess.
"I'm going to give you a little fact that I was given by the general treasurer, which was pretty astonishing, and that is that 85 percent . . . of Rhode Island tax returns that were filed for the year 2010 . . . were from individuals who earned $30,000 or less. Only 15 percent of Rhode Islanders filed tax returns and earned more than $30,000," she said during the debate on the House floor.
That's a lot of people making a very modest income -- in fact, in Baldelli-Hunt’s words, it's a "pretty astonishing" number.
It was astonishing -- and worthy of more careful checking than Baldelli-Hunt undertook.
It turns out Baldelli-Hunt was never directly told that 85 percent of Rhode Islanders make $30,000 or less. She said she calculated that percentage based on what she was told during an Oct. 31 meeting with General Treasurer Gina Raimondo and two members of her staff.
As Baldelli-Hunt recalled the meeting, Raimondo said well over 400,000 tax returns filed for the 2010 tax year reported incomes of $30,000 or less. The state representative said Raimondo's number was either 468,000 or 486,000. (She would use the lower, more conservative, number in her calculation.)
Baldelli-Hunt said a financial consultant who was with her at the meeting also recalls a number of over 400,000 and "we nearly fell off our seats when we heard that, and that put in perspective how Rhode Islanders are struggling."
On Nov. 17, when the pension proposal was being debated, Baldelli-Hunt took that number and divided it by 554,870, a number her financial consultant pulled off the Internet that was supposed to represent the number of 2010 tax returns filed with the state.
The calculation gives you 84.3 percent.
That’s how she arrived at her 85-percent figure.
First of all, 554,870 is not the number of 2010 tax returns. It’s actually the number of 2009 returns filed by early June of 2010. Also, it includes the returns of people who don’t live in Rhode Island.
When we called Raimondo's office and also Paul Dion, chief of the state's Office of Revenue Analysis, they referred us to the final report on resident income tax returns for the tax year 2009. Both said it was the most recent data that breaks down the returns by income category.
That report paints a very different picture.
It says the state received 483,392 returns from Rhode Island residents that year, with 230,289 reporting incomes of less than $30,000.
That's 48 percent, not 85 percent.
We were curious whether it made a difference to include the tax returns of non-residents, including people who live out of the state but who file here because they work here. Of the 91,231 non-residents who filed in 2009, 27,818 earned under $30,000. Folding those number into the mix brought the percentage down to 45 percent.
Baldelli-Hunt said she is sure of what she heard from the treasurer. Perhaps, she speculated, when Raimondo was looking at the number of returns reporting income of less than $30,000, her eye mistakenly jumped one column to the left, to the 483,392 number, which is the total number of returns.
The correct percentage -- 48 percent -- still means that "half of working people in the state make $30,000 or less," she said. "It's almost shocking."
Raimondo spokesman Joy Fox, who was not at the meeting, said the treasurer always uses the 2009 statistics and no one can recall giving Baldelli-Hunt different information.
We can't say whether Baldelli-Hunt is accurately recalling something she heard from Raimondo. There is no audio recording of the meeting.
We can only rule on the accuracy of Baldelli-Hunt's statement when she said that 85 percent of Rhode Island tax returns, filed for the 2010 tax year, reported income of $30,000 or less.
The most-recent income data, from 2009, show that the ratio is 48 percent, far less than what she stated. (The state isn't scheduled to release an income breakdown of its 2010 returns until sometime around March 2012.)
That 48 percent turns out to be fairly typical.
State reports from 2005-2008 show that the percentage doesn't change much year to year, so it seems extraordinarily unlikely that even when the 2010 tax return numbers come out, the percentage will jump to anything close to 85 percent.
Carl Sagan, the late astronomer, liked to say that extraordinary claims require extraordinary evidence. We agree.
Baldelli-Hunt described the statistic was "pretty astonishing." It would have served her well to double-check it before using it during debate on the biggest issue to come before the General Assembly this year.
Her assertion that 85 percent of tax returns report income of $30,000 or less -- based on a hasty calculation -- is not only false but ridiculous, we rule her statement Pants on Fire.
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Published: Thursday, December 1st, 2011 at 12:01 a.m.
Interviews, State Rep. Lisa Baldelli-Hunt, Nov. 23, 25 and 28, 2011
Tax.RI.gov, "Rhode Island Tax News," July / August / September 2011, accessed Nov. 23, 2011
Interviews and email, Joy Fox, spokeswoman, Rhode Island General Treasurer Gina Raimondo, Nov. 23 and 29, 2011
Interviews and email, Paul Dion, chief, Rhode Island Office of Revenue Analysis, Nov. 22 and 28, 2011
Tax.RI.gov, "Resident Income Tax Return; Summary - Tax Year 2009 Final Report," March 14, 2011, accessed Nov. 23, 2011
Tax.RI.gov, "Non-Resident Income Tax Return; Summary - Tax Year 2009 Final Report," March 14, 2011, accessed Nov. 23, 2011
Tax,RI.gov, "Reports: Statistics of Income," accessed Nov. 25, 2011
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