01:00 AM EDT on Tuesday, April 18, 2006

IT IS ENCOURAGING that Rhode Island politicians -- in an election year, anyway -- are awakening to the public's agonized cries over sky-high property taxes.

Senate President Joseph Montalbano (D.-North Providence), Majority Leader Teresa Paiva-Weed (D.-Newport), and Minority Leader Dennis Algiere (R.-Westerly) last week rolled out their proposal to lower the current ceiling on city and town spending increases to 4 percent, from 5.5 percent, of the tax levy, starting in fiscal 2008. Exceeding the new cap would require the majority of voters in a special election, instead of an act of the General Assembly.

"Rhode Islanders will feel the difference in their pocketbooks," said Mr. Montalbano.

That would be nice! But if a 5.5-percent cap served as the backdrop for today's rampaging property taxes, it's fair to wonder how much good a 4-percent cap would do.

And even if a cap worked in slowing some government spending -- probably in such "discretionary" areas as paving roads and providing students with new textbooks -- would that really solve Rhode Island's problems?

Because, as Mr. Montalbano and his colleagues surely know, simply capping spending and calling that a break for taxpayers is not responsible government or courageous leadership. The question is how the money is being spent. Special interests could still be quite happy with spending that grows by 4 percent a year, which is over the general rate of inflation. And what they are already doing to taxpayers threatens to blow any artificial cap to smithereens in the years ahead.

It's no mystery. Statistics are readily available. Rhode Islanders pay an enormous amount in taxes and get generally poor services. Part of that is because the state's politicians have long put politically powerful interests first, and the needs of citizens and most taxpayers second.

Leaders who were serious about restraining property taxes would act quickly to:

Limit inordinately generous pensions, early retirements and health-care benefits for public employees, which threaten to bankrupt local communities. Those benefits must be brought more in line with those in other states and the private sector, and reflect the taxpayers' actual ability to afford them.

Restore management rights to local communities, so that they may spend money more carefully and demand accountability from employees.

Encourage the creation of a more robust economy, by drawing in wealthy taxpayers who could help pay for government, give to charity and create the jobs that generate tax revenues. Rhode Island per capita has far fewer wealthy people than do neighboring Massachusetts and Connecticut, and the disparity seems to be growing. Though soak-the-rich demagogues think that's wonderful, such a trend should alarm any thoughtful policymaker.

House Speaker William Murphy and his leadership team have done the risky work of addressing part of the problem, by proposing to bring Rhode Island's income taxes in line with those in Massachusetts. That is the only real hope of drawing in well-to-do enterpreneurs to boost the economy.

But the Senate's leaders, sadly, lack such courage.

None of this is theoretical anymore. West Warwick, for example, is clearly spiraling down toward financial trouble. Town Manager Wolfgang Bauer last week proposed a 5.5-percent property-tax increase -- the largest in more than a decade. But even that would not be enough to cover what has been given away to public-employee unions. To make ends meet, Mr. Bauer proposed contributing $1.5 million less than the town's actuary said is needed in the pension fund.

"You need to decide whether the priority is the tax rate or the pension," Mr. Bauer explained. "We're spending more than we're taking in."

And West Warwick is far from alone. Residents of other communities face enormous tax hikes to cover pension and health benefits, many of them going to retirees who have moved away to enjoy them in lower-tax locales.

As long as Rhode Island's political leaders ignore these well-documented trends -- and the voters let them do so -- the taxpayers will get pounded.

If towns and cities were simply forced to live with a lower cap, what would be squeezed? Road repairs, no doubt. Textbooks and school sports. Parks, libraries and other services that make communities pleasant. Communities would, essentially, be further hollowed out. Meanwhile, obligations to public employees, postponed year after year, would build up toward their inevitable explosion.

Unfortunately, there is no politically painless way out of this mess, which is why Ocean State property taxes continue to soar, despite politicians' bi-annual expressions of sympathy and concern. Making serious changes in Rhode Island would pit lawmakers against some very powerful and well-vested interests.

If they truly wanted to serve the public, politicians would have to say no to their "friends." They might find themselves, as a result, starved of campaign contributions, threatened with primary foes, called nasty names, and confronted with the loss of power.

It's certainly much easier to set a spending cap and tell voters: Hey, we've put money in your pocket!

Edward Achorn is The Journal's deputy editorial-pages editor. His e-mail address is eachorn@projo.com.