Editor’s Note: As we face huge deficits and proposals to restructure government, understanding how Rhode Island arrived at its current government organization, financing and services is important. This is the last part of a five-part series by Kenneth Payne on how we got to where we are.

We are now eight years into the 21st century, and we have some perspective on the 20th. We can look back at the year 2000 and ask: What was the structure of government in Rhode Island then? Was it highly functional or not?

The 20th century gave the 21st a structure of government that is simple, fragmented, ossified, and low performing. This assessment merits examination.

Simple

Rhode Island government has only two levels: state and local. There is no county or regional government. Rhode Island is so small that functions are ordinarily performed at the county level are done by the state, and the division of the state into regions for service delivery purposes is minimal. Rhode Island comes close to being a city-state. At the local level, government is not a patchwork of authorities and districts with taxing power — in Rhode Island even school systems are, with the exception of four regional districts, departments of city and town government.

Rhode Island’s Constitution, which was comprehensively revised in 1986, provides for three branches of state government, the legislative, executive and judicial; five general officers; the Supreme Court; an independent ethics commission; and home rule for cities and towns.

THE EXECUTIVE BRANCH: The State has five elected general officers, the governor, the lieutenant governor, the general treasurer, the attorney general, and the secretary of state. These offices were in place during the Colonial era and were recognized in the Constitution of 1843. All but the lieutenant governor were placed in charge of a department of state government by the Administrative Code Act of 1935.

The governor heads the administration of state government and is far more than a ceremonial figure charged with the faithful execution of the law. Making the governor a chief executive in the modern sense was accomplished between 1935 and 1950.

The lieutenant governor has a small staff, functions as an ombudsman and innovator in responding to emerging issues, and remains the presiding officer of the Senate — this will change with the implementation in 2003 of the constitutional amendment establishing the office of president of the Senate.

The general treasurer is the custodian and disburser of state funds, overseer of state investments and chairperson of the retirement system.

The secretary of state keeps the official records of the state, including those pertaining to corporations, state agency rules and regulations, lobbyist registration, and campaign financial reports, and preparation of ballots and explanatory materials for elections.

The attorney general is the state’s chief legal officer and prosecutor.

There are 12 cabinet departments reporting to the governor. These departments are the most prominent feature of state government; it is through them that most people interact with state government.

The departmental structure of state government was established by the Administrative Code Act of 1935. Prior to 1935, state government was modest in size and managed by commissions and commissioners. Two of the state’s premier political scientists, Maureen Moakley, of the University of Rhode Island, and Elmer Cornwell, of Brown University, have noted that the structure put in place in 1935 has “proved remarkably durable.”

The basic departmental structure of the executive branch is 50 years old and is the embodiment of thinking following the Second World War. The Department of Administration has staff functions, including budget, taxation, personnel, purchasing, and planning. Eleven departments have line responsibilities for governmental functions, such as business regulation, corrections, education, environmental management, health, human services and transportation.

Most departments have two major sources of funding: state general funds and federal funds. Some programs are entirely supported by federal funds.

Federal-state relations are a major feature of Rhode Island government. In 1999, the state’s own source revenues amounted to $2 billion, while federal funding coming to state government was $1.3 billion.

The greatest areas of state expenditure were Medicaid-match, which supported health care coverage for low-income individuals, families with children, and children, and state aid for elementary and secondary education.

The budget also listed 17 quasi-public corporations, with expenditures of over a million dollars each. Quasi-public corporations have their own legal existence and sources of revenue. The total indicated in the budget for quasi-public corporation expenditures was $1.2 billion, an amount equal to 60 percent of the state’s general revenue expenditures. The two largest quasi-public entities were the board of governors for higher education and the lottery commission.

Federal government spending through state agencies and quasi-public corporation spending were 25 percent greater than the state government spending from its own source revenues.

LEGISLATIVE BRANCH: The General Assembly is the basic institution of Rhode Island government, with law making powers that go back to the Royal Charter of 1663. It is part-time and bicameral. The House of Representatives had100 members (downsized to 75 members in 2003), and the Senate had 50 members (downsized to thirty-eight members in 2003). The General Assembly’s powers are plenary and unlimited, except as those powers are restricted by the U.S. and the Rhode Island constitutions. As the historian and lawyer Patrick T. Conley put it in 1999, the executive and legislative branches are “neither separate nor equal.”

In the second half of the 20th century the power of the General Assembly increased. Reapportionment and the movement of people from the older cities to suburban towns resulted in the Democrats routinely having super-majorities in both the House and the Senate. The number of committees was reduced, making the Assembly’s operations more efficient. Professional staff support was expanded, increasing the General Assembly’s capacity to function independently and effectively.

THE JUDICIAL BRANCH: Courts were established in Rhode Island in the 18th century, first consisting of the governor, deputy governor, and assistants, and then as of 1746-1747 with elected justices. The Constitution of 1843 provided that the judicial power of the state was vested in the Supreme Court and such other courts as the General Assembly might establish. A Rhode Island Supreme Court decision of 1854 made the courts a distinct branch of government by finding that the constitution precluded the General Assembly performing court functions. The system of district courts dates from the late 19th century, and Superior Court from the early 20th century.

At the end of the 20th century, the judicial branch comprised six courts: the Supreme Court, Superior Court, District Courts, Family Court, Workers Compensation Court, and the Traffic Tribunal. In Rhode Island judges are selected on the basis of merit and appointed by the governor, with the advice and consent of the Senate, and for Supreme Court justices the advice and consent of the Senate and the House separately.

LOCAL GOVERNMENT: Rhode Island has 39 cities and towns. Twenty-nine of them predate 1800; 9 were established in the 19th century, and only 1 — West Warwick — was wholly created in the 20th century.

At the beginning of the 19th century all of the state’s local governments were towns; Providence, Newport, Pawtucket, Woonsocket, and Central Falls became cities in that century. Three more towns became cities in the 20th: Cranston, 1910; Warwick, 1931, and East Providence, 1957.

Rhode Island local governments have these functions: education; public safety; public works; planning, zoning, and building inspection; parks and recreation; libraries; voter registration and holding elections; vital and land evidence records; local financial administration, including tax assessment and tax collection; and probate and municipal courts.

Rhode Island local governments have only one significant revenue source of their own: the property tax.

Fragmented

In the theory of the administrative state, the chief executive is the focal point, the pinnacle of the chain of command, and the exercise of authority is rational and in the public interest. In Rhode Island at the end of 20th century, the powers dispersed in many ways.

The governor’s powers are limited. The General Assembly’s powers are plenary. Quasi-public corporations are independent realms.

More than half of the department of state governments report to two masters: the state administration and their federal funders. As the federalism scholar David Walker observed in 1995 states in a number of areas are effectively “middle-level planners, administrators, and partial funders of national domestic programs.”

Advocacy functions, such as the mental health advocate and the human rights commission, are in place to contest if necessary the probity of administrative agency actions.

Local governments operate within boundaries, which were set in the 18th and 19th centuries, long before the automobile age and suburbanization. Institutions for multi-municipal activity are minimal in Rhode Island.

Ossified

The theorem, “a government of laws, not of men,” has profound implications. It means that government can do only what is provided for by constitution or law. This is a necessary protection, but it makes rigidity an endemic condition. The General Assembly, which has the most freedom of action, is the branch that often causes the greatest public worry that it is beyond control. The executive branch, which in theory has the least discretionary power, is often felt to be a frustrating bureaucracy, a place where seemingly simple actions take a maddeningly long time.

Together the legislative and the judicial branches have about 6 percent of state employment; the behemoth is the executive branch.

In the theory of administrative state departments are hierarchical, rational, and act objectively according to rules. In application these qualities become hardened and bureaucratic. Uncertainty and mitigation of possible error are dealt with by rules designed to reduce risk or prevent an undesirable outcome. These rules layer up to the extent that it often requires multiple approvals and signatures to do something simple.

Within the executive branch, the Department of Administration is dominant. The department is less a support to line departments and agencies of state government and more a control on them. If another state agency needs to change the status and duties of personnel, to buy equipment or contract for services, the agency must go through the department of administration, and the process is often protracted. The director of administration is typically considered the second most powerful person in the executive branch after the governor.

Federal funding, on which many departments are dependent, comes with strings attached. The federal government quite reasonably wants to assure that the money is used for the intended purposes. Federal requirements and regulation restrict state discretion and flexibility in program administration.

Local governments in Rhode Island have specified powers and little autonomy. Their boundaries are fixed and not flexible as they are in other states where annexation is a commonplace.

Low performing

In 1999 Governing Magazine issued a report card on state government performance in the United States.

Rhode Island got a grade below the national average in every category. It received passing grades in financial management, in capital management, and in managing for results. Less than passing grades in information technology and in human resources. The grade in human resources was an “F”.

Governing Magazine characterized the state personnel system in Rhode Island as a cause for laughing “out loud.” A key issue was embedded rigidity.

One can discern four different forms of personnel administration layered in sequence one on top of the other, with each additional layer intended to correct defects in the layers below. At the beginning of the 20th century government employment was based on political affiliation and personal allegiance. Civil service was enacted in 1939 and based on the premises that merit could be tested objectively and that positions could be organized into standard classification and pay plans. Public sector collective bargaining came in the 1960s and was designed to assure fair treatment of employees by management and to improve wages and working conditions. A system of contract employees evolved over the last couple of decades of the 20th century to provide some flexibility in the system.

A second area of unsatisfactory performance is government revenues. Rhode Island’s revenues are constrained and do not have desired characteristics. In May 2000, the Rhode Island Public Expenditure Council called state and local taxation system “a system out of balance.” RIPEC pointed first, to “a significant over-reliance on the property tax,” second, to people with similar economic positions bearing different combined state and local tax burdens depending on where they lived, and third, to a high overall tax burden.

The income tax was lower in Rhode Island than in Massachusetts for the broad range of mid-income households, but higher than Massachusetts for upper-income households, and the latter are perceived to be the decision makers regarding business investment and growth. The Rhode Island tax on capital gains was also seen as a disincentive to business investment.

Rhode Island’s sales tax rate is high, but the base of goods and services to which the tax is applied is narrow.

In the economically robust years at the end of the 20th century and the beginning of the 21st, Rhode Island was faced with a challenge. Its two neighbors, Connecticut and Massachusetts, ranked number one and number two among the 50 states in revenue capacity. And Rhode Island had budget problems that were structural and regularly drove up spending at a rate faster than revenue growth.

Rhode Island government at the end of the 20th century was simple, fragmented, ossified, and low-performing in critical areas. It is little wonder then that the state perennially seems stuck, with its wheels spinning and little movement in a positive direction.

Decline, then build

The long story of the 20th century for Rhode Island has been managing decline. In the first decade of the century, the textile industry began its exodus. Manufacturing was given a lift by defense spending during the First World War, but then the out-migration increased. The Great Depression brought sharp declines, while World War II occasioned a resurgence. Then in the 1950s employment in textiles hemorrhaged, never to recover. As the United States de-industrialized in the 1970s, Rhode Island lost ground.

Rhode Island has sought to manage decline and the attendant fiscal stress in three ways: to pursue efficiencies, to increase revenues, and to reduce programs, especially those that rely on state funding. The McGrath and the Pastore administrations avidly pursued efficiency in making the administrative state operational and sought a sales tax, which was enacted in 1947. A baby Hoover Commission was at work in the early 1960s, and it pointed to the personnel administration as needing major overhaul. The Licht administration was given a General Assembly mandate to make state government more efficient; it reorganized social welfare functions, and it obtained approval of a state income tax.

With the Reagan Revolution, anti-tax positions gained political ascendancy. When times were good taxes were cut, and when times were harder, taxes were difficult to raise. The exception in Rhode Island was the credit union collapse, which directly affected a third of the state’s population. But overall, tax increases have ceased to be viewed as a viable option.

Efficiency too had its limitation. Calls for greater government efficiency, to make government more business-like, have been routine since the Progressive era. Efficiency is a concept from the age of mechanization; generally the idea is to increase the level of output with a lower level of input. The problem in government is that out-puts are difficult to define and make unitary because government activities frequently serve, as Nobel laureate Herbert Simon noted in the 1950s, multiple incompatible principles.

Reducing programs requires “tough choices” and stimulates divisiveness, defensiveness, and protectionism to degrees that can vitiate government productivity. Furthermore, if reductions are not across the board and apply more heavily to areas supported by state revenues than to those that are federally funded, the result is a cutback in state priorities, a preservation of federal priorities, and an increase federal dependency during a time when the federal government has been a less reliable fiscal partner.

Managing decline and building a strong system for the future are different tasks. The late 20th century produced a body of literature on ways to improve government vitality and effectiveness.

•Government should be “reinvented,” making it less bureaucratic and more entrepreneurial in its service delivery.

•Government activity should involve cross-boundary networking and collaboration.

•Government should ‘Think and Act as a System” — a Rhode Island Public Expenditure Council guideline.

•Government should devolve and decentralize, with decision making capacities being developed at the level where actions are to be taken and services are to be performed.

•Government should embrace diversity and pluralism as a vital reality.

•Government should engage in adaptive management, using monitoring, bench marketing, and performance measurement.

•Government should treat employees as partners in providing public services rather than as units of production, recognizing that the capacity of government is a function of the expertise of its workforce.

•Government in the information economy should be a “learning organization.”

As Rhode Island has sought to use its size to be a place where business innovation can develop, there is no theoretical barrier preventing it from doing the same with public sector innovation.

Looking back, two figures, General Charles R. Brayton and Governor Dennis J. Roberts, tower over Rhode Island government in the 20th century. In key respects they were similar, both had a mastery of the systems of government and both were politically adept and dominant. The former’s power was illegitimate, the latter’s legitimate. One was closely aligned with business, the other was responsive to labor.

Brayton controlled a system that was malapportioned and politically suppressed urban residents, especially Catholic immigrants. Roberts managed a system that was built on support of urban residents, and was himself was a Roman Catholic. Brayton was a lobbyist. Roberts was an elected official.

Both made the government of their time work.

Governor Green and the team he led accomplished a transformation in Rhode Island that began with a paradigm shift on Jan. 1, 1935. What the examination of the evolution of government structure in the 20th century shows is that inherited systems do not necessarily function well forever and that new systems can be built and made operational.

Kenneth F. Payne is principal of Systems Aesthetics LLC and adjunct professor of marine affairs and senior policy adviser to the College of Environment and Life Sciences at the University of Rhode Island. He has held policy positions in state, federal and local government.