FY 2016 House Budget Winners and Losers

Wednesday, June 10, 2015

Speaker Mattiello at Budget Briefing

The Rhode Island House Finance Committee approved its $8.7 billion state budget bill on Tuesday that reflects the newly approved pension settlement, jobs development initiatives, and eliminates state income tax on Social Security benefits for more Rhode Islanders than had been included in Governor Gina Raimondo's budget proposal. The budget was approved unanimously by both Democrats and Republicans.

Calling the House budget proposal pro-business, and pro-economy, Speaker of the House of Representatives Nicholas Mattiello helped unveil a budget that is $37 million more than Raimondo proposed back in March, due in large part to a recent change in revenue forecast for the state.

SLIDES: See Winners and Losers BELOW

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“This is a budget that is pro-business and pro-jobs that will move our state forward. This budget will serve as a catalyst for existing businesses to grow and prosper, in addition to attracting new businesses looking to locate here. That momentum began last year when we reduced the corporate tax rate to the lowest in the Northeast and raised the exemption on the estate tax and eliminated the cliff. This year, top priorities were to exempt businesses from paying sales tax on energy costs and reducing the annual fee paid by small businesses,” said Speaker Mattiello.

The budget as passed did not include the so-called Taylor Swift tax, nor did it provide funding for the proposed PawSox stadium in Providence. The budget also failed to include the truck toll provision pushed by Raimondo to support infrastructure improvements.

Related Slideshow: FY 2016 House Budget Winners and Losers

The 2016 Fiscal Year House Budget has some significant winners and losers. The budget passed on Tuesday night by the House Finance Committee now goes to the full House.

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Winner

All Day Kindergarten

The new law of the land will make all-day kindergarten the standard for both wealthy communities and economically under-performing.

This was a campaign promise of Governor Gina Raimondo and has long been advocated by education reform advocates.

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Loser

Superman Building and Job Creation in Providence

The effort to rehab the vacant Superman building and lure Citizens Bank to relocate's post-IPO corporate HQ to the City of Providence's Financial District took a big hit with the House Budget capping the real estate tax credit at $15 million per project.

Will this spark Citizens to move to Boston or Hartford?

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Loser

Regional Tourism Councils

The budget strips the regional tourism councils of their state funding and consolidates the dollars at the state level with the Commerce Corp. For Discover Newport and Providence-Warwick Convention and Visitor's Bureau will take massive budget cuts (as will the smaller regional groups).

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Winner

HealthSource

Rhode Island's Obamacare state health exchange looked dead back in January. Speaker Mattiello hinted that he wanted to disband the new structure, but like Houdini the health insurance program received funding from a new employer tax and state funding.

HealthSource lives.

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Winner

Small Businesses

The House budget reduces the corporate minimum tax from $500 to $450, making Rhode Island "now between Massachusetts and Connecticut," said Mattiello.

The Finance Committee also sped up the Raimondo’s proposal to phase out the sales tax that all nonmanufacturing businesses pay on their electric, natural gas and heating fuel bills. The original proposal would have phased out the tax over a five-year period, but the committee chose to eliminate the tax all in one year. The cost to the state will be $20 million in FY 2016 instead of $4.9 million as originally proposed.

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Winner

Working Families

The Earned Income Tax Credit was increased to 12% from 10.5% of the federal poverty level. .

The issues was a major focal point of the Economic Progress Institute.

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Winner

195 Commission

Governor's Raimondo got her wish for $25 million to develop 195 land in Providence as it was fully funded. This is a win for the new Governor and her newly appointed members of the Commission.

This funding will allow the Commission the flexibility to support proposed projects and potential tenants.