01:00 AM EDT on Monday, May 10, 2004

MANY PEOPLE on the left side of the political spectrum have criticized Rhode Island Governor Carcieri's budget for being too radical. But there is an equally strong argument that it isn't radical enough. Consider the facts:

Rhode Island offers the most generous welfare benefits in the nation (source: Governor's fiscal-2005 budget). We also do the worst job of any state at getting people off welfare (source: U.S. Department of Health and Human Services).

As a result, in fiscal 2003 only two states spent a higher proportion of their budget than Rhode Island on Temporary Assistance to Needy Families Act (TANF) and other cash welfare payments (source: National Association of State Budget Officers).

Moreover, in 2000 Rhode Island had the second-highest percentage of households receiving TANF. In short, we have an expensive welfare system that attracts more poor people than do other states' systems, and more of the most difficult cases.

This might be justified if Rhode Island were one of the richest states, and believed that it should therefore care for a disproportionate share of the poor. Unfortunately, though, we are far from the richest state. Caring for a disproportionate share of the nation's poor thus represents a subsidy provided by Rhode Island's taxpayers to taxpayers in the 49 other states.

This is a subsidy we cannot afford.

According to the 2000 U.S. Census, Rhode Island has the nation's sixth-highest percentage of citizens 65 and older. Moreover, the ranking is set to quickly rise. According to the American Association of Retired Persons, in 2001 Rhode Island had America's highest percentage of women and second-highest percentage of men aged 50 and older. The rising percentage of senior citizens will make further demands on our budget in the years to come.

Rhode Island also has the nation's highest ratio of public-sector to private-sector pay (source: Bureau of Labor Statistics), and is one of only six states where most public-sector employees pay nothing for their health-insurance coverage.

That a substantial proportion of Blue Cross & Blue Shield of Rhode Island policyholders perceive health care as essentially free undoubtedly contributes to Rhode Island's high use rates, which in turn cause our health-insurance costs to be 41 percent above the national average.

Given these underlying drivers, we should not be surprised that Rhode Island's state and local tax burden is the nation's fifth highest (source: www.taxfoundation.org). Given our relatively high percentages of both poor and elderly households, this burden falls on a relatively smaller proportion of the population than it does in other states.

These high taxes (not to mention high health-insurance costs) cause private-sector workers and the businesses that employ them to leave Rhode Island, and others not to move here.

The result is a public sector with rising costs, declining revenues, and crisis on the horizon.

For too many years, Rhode Island's elected "leaders" have focused on the redistribution of income, rather than on its production by the private sector. The bill for this is now coming due. Unless more radical budget reforms are soon undertaken, the state's decline will accelerate, and all of us -- poor and rich, young and old, public and private, Democratic and Republican -- will suffer.

Tom Coyne lives in North Kingstown.