Guest MINDSETTER™ Rep. Morgan: Rhode Islanders Deserve Better

Wednesday, July 13, 2016

 

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Patricia Morgan

Once a year, the General Assembly has the opportunity to set Rhode Island's financial course. We pass a budget. That budget indicates the priorities of those in power. Unfortunately, this year, despite all the self-praise and pacifying words from the majority about 'laser focus on jobs and the economy', the priority seems to be protecting the status quo and using your tax dollars to do it.

Average Rhode Islanders have to ask themselves, is the status quo really serving their best interests? Without including the $45million toll tax, the budget increased $275 million over the past year’s enacted budget. That budgetary increase did not help our job climate as the state lost 3,900 jobs in the past two months.

The Budget Debate

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During the course of the budget debate, Republicans proposed many amendments that would have helped reignite our sluggish economy. We proposed middle class tax relief in the form of phasing out the car tax. That money in the hands of Rhode Islanders would be spent here and fuel economic activity.

We proposed income tax relief for all retirees. It is unfortunate that the high tax burden has cost some grandparents the opportunity to stay and live near their children and grandchildren.

We fought for other proposals. The common thread is that they will make state government more effective and efficient. If the legislation had been passed, we would be on the way to making government a help, instead of a hindrance to economic activity. And instead of increasing spending and taxes ever year, our political class might actually give average taxpayers some relief. Here are a few of the changes we wanted.

We fought once again for the RI Convention Center Authority to be brought under control. In the last two years, their spending has increased 20%. Despite our study and recommendations, the Authority has not ignited the engine of efficiency, but continues to burn taxpayer money at a unquenchable pace. Republicans tried to obtain answers for taxpayers by proposing an independent investigation of 38 Studios. We tried to strengthen transparency and accountability for community service grants and to abolish legislative grants.

Our leaders failed to fund the lean government initiative that works to make government more effective, more efficient and less costly. Very little is more important to our jobs climate than effective government that works well and interacts with the public in a timely, professional and cost efficient manner. We sought to not only to keep the initiative, but increase the funding to $300,000.

For all the words about helping our children maximize their learning and increase our workforce skillscapacity, a 'funding formula' was included the budget that will strangle public charter schools. These innovative schools are able to fill the unique learning needs of students from very poor neighborhoods and help those children thrive and break the cycle of poverty. Within a $9 billion budget, the question isn't whether to raise taxes or sacrifice some children at the expense of others. The answer is to put real  effort into finding a solution that is best for all. Their futures, our futures, our economy, depend on finding a path to success.

Sadly, our colleagues on the other side of the aisle defeated our proposals.

This Year's Budget

This year our budget will spend $8.9 billion. That's 3.2% over last year’s enacted budget and a bigger increase than most of us have seen in our household budgets. Many will defend the few tax cuts and business subsidies as good measures. And they are good small steps, but here's the problem. Our state has had a sluggish economy for almost 8 years. Family income is down about 12% and the cost-of-living continues to climb. Rhode Islanders aged 25 to 45 are the largest group leaving the state. Recently, we heard the state has shed 3,900 jobs in the last two months. With these troubling statistics on the table, we need to do better than a mediocre budget that pacifies people with cheaper beach fees.

The budget tells us what our leaders priorities are and what they are not. We rejected the budget because it is a document that preserves a status quo that is failing hardworking Rhode Islanders. You deserve better. 

 

Related Slideshow: FY17 House Budget—Winners and Losers

The House Budget is passed and there were some last minute and controversial surprises.

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Winner

National Grid

When controversial Article 18 got pulled from the budget on Tuesday, critics had lauded the removal of the provision, which appeared to benefit a single wind farm - and the substantial political donor who owned it. But the real winner here is National Grid, the company owned by the British Energy Conglomerate, who would have had to force electric rate payers to pay millions more to connect renewable energy projects to the power grid and pay a greater share.

The battle is not over, however; Speaker Mattiello said that after having received feedback on Article18 and that he "reached the conclusion there are pieces of the article that do not need to be in the budget."  Given the level of scrutiny is it highly unlikely the measure will see light of day as a stand-alone measure before the session adjourns, but it can't be ruled out. 
 

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Loser

Statewide Tourism Campaign

There was no last minute relief for the Commerce Corp. The often controversial agency is taking a cut.

Following the ill-fated rollout of the statewide tourism campaign this year, House Finance opted to give money back to the regional tourism bureaus that had been slated to go to the centralized effort.

Mattiello said that the House finance budget is taking $1 to $2 million from the $5 million for next year from the statewide tourism office and giving it back to the regional tourism bureaus. “We had a snafu in the effort. We’ll rely on the locals for the year, and then it will transfer back to state initiative,” said Mattiello. 

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Winner

Medical Marijuana Growers, Patients

One of the biggest battles of the 2016 General Assembly session started when Governor Raimondo proposed a tagging fee on medical marijuana plants -- to major pushback. 

The tax as proposed in the Governor's 2017 budget would have imposed a $150 per plant charge on patients lawfully growing marijuana for medical purposes, and a $350 per plant charge for caregivers, for a projected total of $8.5 million in new revenue. 

House finance scaled back the fee-per-plant to $25, to cover the costs of regulating the marketplace. 

“Advocacy works. We listened to folks, no one really liked the proposal we received,” said Mattiello. “[As far as] the need of regulations, we’re probably on the low end of that. But we didn’t want to enhance revenues on prescription medications.”

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Winner

ProvPort

A surprise amendment that resussciated a dead proposal.

A late session effort by the City of Providence to get a $20 million bond question on the ballot for ProvPort in November initiatially hadfallen flat as a line item in the budget. 

Legislation introduced by Senate Majority Leader Dominick Ruggerio in late May and now a budget article add-on for a bond referendum of $20,000,000 to fund the acquisition, expansion and infrastructure improvement of up to approximately 25 acres of land and facilities located between Allens Avenue in Providence and the Providence River by ProvPort, Inc. 

While it appears to be a House Finance budget “loser” the battle is not over yet for the year, as Mattiello said there is still ongoing discussions. 

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Winner

Business Owners

Mattiello touted in his “pro-business, pro-economy” budget lowering the minimum corporate tax from $450 to $400. This comes a year after the General Assembly lowered it from $500 to $450 last year, taking away at that time the dubious distinction for Rhode Island being the state with the highest corporate minimum tax.  

“There are no new taxes or fees,” said Mattiello of the House Finance FY17 budget (apart from the $25 medical marijuana tax).

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Loser

School Infrastructure

Raimondo had called for a $40 million school construction and renovation bond to be put on the November ballot, but Mattiello said during a media briefing that the state should wait for the completion of a study expected to show what exactly the construction needs are for the state’s schools.

Mattiello said that there is still funding in the budget for school construction needs, as Raimondo had also proposed an $80 million appropriation for construction and renovation, including of $9.1 million for the school building authority -- but the dedicated bond question that would have increased resources by 50% -- was off the table in the House Finance budget. 

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Winner

Smokers and Mini-Marts

After years of steady increases in the state’s cigarette tax, smokers got a reprieve in House Budget when the committee rejected Raimondo’s proposal to raise the cigarette tax twenty-five cents from $3.75 to $4 a pack.

Make no mistake about it, this is just as much about the convenience stores not wanting the additional tax on their golden goose -  and New England Convenience Store Association lobbyist Brian Goldman just got vetted by Senate Judiciary for his nomination from Raimondo to replace Associate Judge Frank Cenerini, who retired in October 2014.

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Loser

Raimondo’s Minimum Wage Hike

Governor Raimondo once again pushed for an increase in the state’s minimum wage, and it appears she will be once again denied by the legislature.

Speaker Mattiello said that Raimondo’s effort to boost the minimum wage from $9.60 to $10.10 an hour would be a no-go. So while it falls in the loss category for those who were pushing for it, it could have been labeled as a win for business owners who have said they couldn’t incur such a mandatory increase. 

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Winner

Retirees (Pensioners)

“We are giving pension relief to everyone who receives some type of pension income, whether it’s public employees, private, or veterans,” said Mattiello.

Mattiello noted that the tax deduction “will be income tested, [and] you have to be Social Security age to qualify.” The tax exemption is slated to apply to the first $15,000 in retirement income, for those qualifying individuals with incomes of $80,000 or less, and couples up to $100,000.

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Loser

Solar and Wind

While the removal of Article 18 was championed as a win against crony capitalism, there was more at stake than just one developer with strong political ties.  While the article appeared as of Tuesday looked to be gone from the budget, that did not mean the legislative proposal could not stand alone. EcoRI was quick to point out however all that the article did for provide for a number alternative energy incentives including: 
Article 18...would allow loans for projects using net metering and virtual net metering, as well as those priced through the Renewable Energy Growth Program.

Article 18 also includes a five-year extension of the state Renewable Energy Fund, which provides grants for small- and medium-sized solar projects. The funds are collected through a monthly surcharge on electric bills and the pool of funds, currently about $6 million, is distributed to solar developers and installers through the Rhode Island Commerce Corporation.


Article 18 also exempts residential and commercial manufacturers from paying local property taxes. It also establishes a statewide property tax rate for commercial renewable-energy systems. The new tax rate will be determined by the Office of Energy Resources.
 

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Winner

Beach Visitors

Beachgoers get a win.

Everyone who loves the beach gets a win with the the House budget. Speaker Mattiello touting that “beach fees are reduced to the 2011 level” for the coming year.

A season pass for residents would be slashed from $60 to $30, non-residents from $120 to $60, and Rhode Island senior citizens from $30 to $15. Plus,  one-time entrance fees would be lowered for residents from $10 to $6 (and senior citizens, down to $3).

 
 

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