Guest MINDSETTERS™: Legislation Offers Incentives for Hiring
Thursday, April 17, 2014
James C. Sheehan and K. Joseph Shekarchi, Guest MINDSETTERS™
In keeping with the initiatives of the past two years in the Rhode Island legislature – to make Rhode Island a better place to do business, to eliminate redundant red tape, to focus educational efforts on workforce development – we think it is incumbent on us to find ways to help all kinds and sizes of business. We need to be creative and bold in bringing new and large firms to our state, certainly, but we need to be equally creative and bold in encouraging and nurturing the businesses that are here, so they can grow and prosper. Small and mid-size businesses are the backbone of our state job economy and helping them is imperative for the state’s economic health.
Having the highest unemployment rates in the nation is not a mark of distinction, it is shame and a challenge we must address and resolve. Being ranked as one of the least business-friendly states in the nation is another black eye that needs to be treated and cured.
Tax incentives as an inducement to businesses to locate or expand here can be an effective tool as we try to fix our business image and put people back to work. One only needs to look to nearby New York State, which has established 10-year tax free zones to try to draw businesses to the Empire State.
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State Senator James C. Sheehan
To encourage business growth, and to try to reduce our unemployment rate, we have introduced legislation in the Senate that could be an enormous job creator in Rhode Island. The “Rhode Island New Qualified Jobs Incentive Act” would make tax incentives available to companies that hire new “qualified” full-time employees who work a minimum of 30 hours per week, with a salary that is at least 250 percent of the state’s hourly minimum wage.
Under the legislation, large companies would be eligible for a .25 percent tax incentive off their net income tax for every 50 new hires while smaller companies, which are typically partnerships or family businesses, would receive a .25 percent incentive off their personal income tax for every 10 new hires, provided that the rate reduction is no larger than 6 percent for the applicable business income tax rate and no larger than 3 percent for the applicable personal income tax rate. Those are savings that these companies can re-invest in themselves to help them grow even more.
And because accountability and transparency are important in relation to any tax incentives provided by the state, the legislation includes requirements for companies to provide annual employment reports to the Division of Taxation and for the Division of Taxation to provide annual reports to the General Assembly.
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Representative K. Joseph Shekarchi
An important aspect of the legislation is that it ties the incentive to “qualified” jobs. This will help guarantee that Rhode Island businesses that benefit from hiring are putting Rhode Islanders to work in good-paying, sustainable jobs, not just minimum wage positions. The intent of offering an incentive is to see the creation of the kinds of jobs that are good for the worker but that also will enhance the companies and help them continue to grow and be productive.
We realize that proposing a tax reduction of any kind results in less revenue coming into the state, but we think we need to weigh the potential good that would come from an action such as this. We remember an old saying about business – sometimes you have to spend money to make money. Finding a way to provide a boost for businesses through a tax incentive will be good for those companies, good for Rhode Islanders seeking jobs and will have long-term benefits for the state.
James C. Sheehan is the Democratic State Senator from District 36, Narragansett and North Kingstown, and the Chair of the Senate Committee on Government Oversight. K. Joseph Shekarchi is the Democratic State Representative from District 23, Warwick, and Chair of the House Committee on Labor
Related Slideshow: Rhode Island’s Most Unemployed Cities and Towns
Below are the unemployment rates for Rhode Island's 39 cities and towns from August 2013.
The statewide average for the month was 9.1% -- the third highest rate in the country.
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#39 Narragansett
Latest Unemployment Rate: 6.0
Labor Force: 9,244
Employed: 8,688
Highest Rate in Last Two Years: 9.0 (January 2012)
Lowest Rate in Last Two Years: 5.6 (September 2012, June 2013)
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#37 (Tie) Jamestown
Latest Unemployment Rate: 6.5
Labor Force: 3,014
Employed: 2,818
Highest Rate in Last Two Years: 9.5 (February 2012)
Lowest Rate in Last Two Years: 5.7 (June 2013)
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#37 (Tie) New Shoreham
Latest Unemployment Rate: 6.5
Labor Force: 1,507
Employed: 1,409
Highest Rate in Last Two Years: 30.9 (February 2012)
Lowest Rate in Last Two Years: 5.0 (August 2011)
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#36 Barrington
Latest Unemployment Rate: 6.8
Labor Force: 8,211
Employed: 7,651
Highest Rate in Last Two Years: 8.8 (August 2011)
Lowest Rate in Last Two Years: 6.4 (April, May, July 2013)
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#35 Richmond
Latest Unemployment Rate: 6.9
Labor Force: 4,316
Employed: 4,018
Highest Rate in Last Two Years: 8.5 (February 2012)
Lowest Rate in Last Two Years: 5.2 (May 2013)
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#34 Glocester
Latest Unemployment Rate: 7.2
Labor Force: 5,893
Employed: 5,470
Highest Rate in Last Two Years: 10.7 (February 2012)
Lowest Rate in Last Two Years: 6.4 (June 2013)
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#33 North Kingstown
Latest Unemployment Rate: 7.3
Labor Force: 15,033
Employed: 13,939
Highest Rate in Last Two Years: 10.5 (January, February 2012)
Lowest Rate in Last Two Years: 6.6 (June 2013)
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#32 Little Compton
Latest Unemployment Rate: 7.4
Labor Force: 1,904
Employed: 1,763
Highest Rate in Last Two Years: 12.4 (January 2012)
Lowest Rate in Last Two Years: 6.9 (April 2013)
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#31 Middletown
Latest Unemployment Rate: 7.5
Labor Force: 7,917
Employed: 7,325
Highest Rate in Last Two Years: 13.5 (January 2012)
Lowest Rate in Last Two Years: 7.1 (June 2013)
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#30 Portsmouth
Latest Unemployment Rate: 7.6
Labor Force: 9,362
Employed: 8,651
Highest Rate in Last Two Years: 11.5 (January 2012)
Lowest Rate in Last Two Years: 6.6 (June 2013)
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#28 (Tie) Bristol
Latest Unemployment Rate: 8.0
Labor Force: 12,455
Employed: 11,457
Highest Rate in Last Two Years: 10.6 (January 2012)
Lowest Rate in Last Two Years: 6.6 (June 2013)
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#28 (Tie) Westerly
Latest Unemployment Rate: 8.0
Labor Force: 11,917
Employed: 10,961
Highest Rate in Last Two Years: 11.2 (February 2012)
Lowest Rate in Last Two Years: 6.8 (September 2012)
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#27 Smithfield
Latest Unemployment Rate: 8.3
Labor Force: 11,781
Employed: 10,799
Highest Rate in Last Two Years: 10.4 (August 2011, February 2012)
Lowest Rate in Last Two Years: 5.7 (June 2013)
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#25 (Tie) Foster
Latest Unemployment Rate: 8.4
Labor Force: 2,701
Employed: 2,475
Highest Rate in Last Two Years: 13.4 (February 2012)
Lowest Rate in Last Two Years: 7.9 (June 2012)
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#25 (Tie) N. Smithfield
Latest Unemployment Rate: 8.4
Labor Force: 3,014
Employed: 2,818
Highest Rate in Last Two Years: 9.8 (August 2012)
Lowest Rate in Last Two Years: 7.4 (December 2012)
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#23 (Tie) Coventry
Latest Unemployment Rate: 8.6
Labor Force: 20,279
Employed: 18,537
Highest Rate in Last Two Years: 11.1 (August 2011, February 2012)
Lowest Rate in Last Two Years: 7.1 (June 2013)
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#23 (Tie) Cumberland
Latest Unemployment Rate: 8.6
Labor Force: 19,055
Employed: 17,422
Highest Rate in Last Two Years: 10.4 (August 2011, July 2012)
Lowest Rate in Last Two Years: 7.4 (June 2013)
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#20 (Tie) Newport
Latest Unemployment Rate: 8.7
Labor Force: 12,885
Employed: 11,763
Highest Rate in Last Two Years: 14.1 (January 2012)
Lowest Rate in Last Two Years: 7.2 (September 2012)
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#20 (Tie) Warwick
Latest Unemployment Rate: 8.7
Labor Force: 46,308
Employed: 42,297
Highest Rate in Last Two Years: 9.5 (February 2012)
Lowest Rate in Last Two Years: 10.4 (August 2011)
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#20 (Tie) West Greenwich
Latest Unemployment Rate: 8.7
Labor Force: 3,678
Employed: 3,359
Highest Rate in Last Two Years: 11.7 (February 2012)
Lowest Rate in Last Two Years: 6.6 (June 2013)
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#19 East Greenwich
Latest Unemployment Rate: 8.9
Labor Force: 6,784
Employed: 6,178
Highest Rate in Last Two Years: 11.0 (February 2012)
Lowest Rate in Last Two Years: 7.5 (June 2013)
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#15 (Tie) Charlestown
Latest Unemployment Rate: 9.0
Labor Force: 4,506
Employed: 4,099
Highest Rate in Last Two Years: 14.2 (January 2012)
Lowest Rate in Last Two Years: 7.1 (June 2013)
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#15 (Tie) Lincoln
Latest Unemployment Rate: 9.0
Labor Force: 11,781
Employed: 10,717
Highest Rate in Last Two Years: 10.4 (February 2012)
Lowest Rate in Last Two Years: 7.9 (November 2012, June 2013)
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#15 (Tie) South Kingstown
Latest Unemployment Rate: 9.0
Labor Force: 16,455
Employed: 14,982
Highest Rate in Last Two Years: 10.6 (January 2012)
Lowest Rate in Last Two Years: 7.8 (September 2012)
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#15 (Tie) Warren
Latest Unemployment Rate: 9.0
Labor Force: 5,908
Employed: 5,377
Highest Rate in Last Two Years: 12.0 (February 2012)
Lowest Rate in Last Two Years: 7.6 (June 2013)
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#14 Exeter
Latest Unemployment Rate: 9.2
Labor Force: 3,865
Employed: 3,509
Highest Rate in Last Two Years: 11.7 (March 2012)
Lowest Rate in Last Two Years: 7.6 (September 2011)
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#13 Tiverton
Latest Unemployment Rate: 9.3
Labor Force: 8,882
Employed: 8,058
Highest Rate in Last Two Years: 12.0 (January, February 2012)
Lowest Rate in Last Two Years: 7.4 (June 2013)
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#10 (Tie) Cranston
Latest Unemployment Rate: 9.5
Labor Force: 41,657
Employed: 37,682
Highest Rate in Last Two Years: 11.3 (July 2012)
Lowest Rate in Last Two Years: 8.8 (April 2013)
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#10 (Tie) East Providence
Latest Unemployment Rate: 9.5
Labor Force: 24,677
Employed: 22,339
Highest Rate in Last Two Years: 12.6 (January, February 2012)
Lowest Rate in Last Two Years: 8.7 (June 2013)
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#10 (Tie) West Warwick
Latest Unemployment Rate: 9.5
Labor Force: 16,240
Employed: 14,693
Highest Rate in Last Two Years: 12.9 (February 2012)
Lowest Rate in Last Two Years: 8.4 (June 2013)
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#8 (Tie) Hopkinton
Latest Unemployment Rate: 9.8
Labor Force: 4,888
Employed: 4,411
Highest Rate in Last Two Years: 11.2 (February 2012)
Lowest Rate in Last Two Years: 6.6 (June 2012)
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#8 (Tie) North Providence
Latest Unemployment Rate: 9.8
Labor Force: 18,130
Employed: 16,347
Highest Rate in Last Two Years: 11.3 (August 2011)
Lowest Rate in Last Two Years: 8.5 (April 2013)
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#7 Burrillville
Latest Unemployment Rate: 10.0
Labor Force: 9,526
Employed: 8,570
Highest Rate in Last Two Years: 11.6 (February 2012)
Lowest Rate in Last Two Years: 8.0 (June 2013)
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#6 Scituate
Latest Unemployment Rate: 10.4
Labor Force: 6,166
Employed: 5,527
Highest Rate in Last Two Years: 11.2 (July 2012)
Lowest Rate in Last Two Years: 8.4 (June 2013)
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#5 Johnston
Latest Unemployment Rate: 10.5
Labor Force: 15,645
Employed: 14,004
Highest Rate in Last Two Years: 12.9 (February 2012)
Lowest Rate in Last Two Years: 9.2 (June 2013)
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#4 Pawtucket
Latest Unemployment Rate: 11.1
Labor Force: 36,412
Employed: 32,378
Highest Rate in Last Two Years: 13.7 (July 2012)
Lowest Rate in Last Two Years: 10.2 (June 2013)
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#3 Woonsocket
Latest Unemployment Rate: 11.2
Labor Force: 20,730
Employed: 18,409
Highest Rate in Last Two Years: 13.6 (January 2012)
Lowest Rate in Last Two Years: 10.7 (June 2013)
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#2 Providence
Latest Unemployment Rate: 11.5
Labor Force: 80,605
Employed: 71,362
Highest Rate in Last Two Years: 14.3 (August 2011)
Lowest Rate in Last Two Years: 10.4 (May 2013)
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#1 Central Falls
Latest Unemployment Rate: 12.1
Labor Force: 8,348
Employed: 7,341
Highest Rate in Last Two Years: 15.3 (January, February 2012)
Lowest Rate in Last Two Years: 11.4 (April 2013)
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