House Unanimously Approves $8.7 Billion FY 2016 Rhode Island Budget
Wednesday, June 17, 2015
The Rhode Island House of Representatives unanimously approved the state's Fiscal Year 2016 budget on Tuesday night - and while Democratic leadership is praising the $8.7 billion budget bill, taxpayer groups are blasting the effort.
The tax-and-spend legislation, which was approved in record time by the House, does away with the state income tax on Social Security benefits for many Rhode Islanders, eliminates taxes on utilities for businesses -- and reflects the recently approved pension settlement.
“We eliminated a tremendous cost to businesses large and small — the tax on their energy bills — and reduced the minimum corporate tax paid by 60,000 small businesses across the state. Consider that we also reduced the corporate tax rate last year to the lowest rate in the Northeast, and raised the exemption and eliminated the cliff in our estate tax, and you can see that we are making real progress eliminating the roadblocks to economic growth in Rhode Island,” said Speaker of the House Nicholas Mattiello.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTJustin Katz with the Center for Freedom and Prosperity, however, questioned the "tax reform" in this year's budget.
"Every year, Rhode Islanders are making the decision to leave their state because it does not appear to be getting any better. If they look at this budget, they see more debt (including municipal debt without voter approval), they see some refinancing wizardry, and they see one-time fixes," said Katz. "Meanwhile, the instances of tax reform are so targeted that they're practically special interest give-aways offset by tax increases elsewhere."
"Although the Center appreciates that some principles around taxation, regulation, and freedom that we support are at least shuffled into the deck in small ways, with this budget, it is overall a bad deal for Rhode Islanders," continued Katz. "The fact that it passed the House so quickly and with such little debate should be seen as terrifying, not encouraging."
Truck Tolls Not Included
The budget bill (2015-H 5900Aaa) approved Tuesday now goes to the Senate with no broad-based tax increases, a fully-funded education aid formula, and Governor Gina Raimondo’s structural changes to Medicaid, (with a smaller impact on hospitals and nursing homes than originally proposed).
The budget proposal does not include Raimondo's plan to toll large trucks to pay for highway and bridge repairs -- nor the House GOP's recently proposed alernative to address infrastructure needs in this year's budget, as opposed to tolls to support bonds.
Taxpayer advocacy group R.I. Taxpayers had "applauded" the unsuccessful plan put forward by the House Republican caucus to fund infrastructure repairs out of the budget rather than via tolls and bonding.
"While we supported certain aspects of Governor Raimondo's budget, her rushed, after-the-fact proposal to toll big trucks is a complete non-starter as tolls will absolutely not be limited to big trucks but will inevitably come to all trucks and cars in the state," said RI Taxpayers' Monique Chartier. "Republican legislators [were] also correct to cite with concern the hundreds of millions of dollars that would be squandered, over the course of decades, on interest and gantry costs associated with revenue bonds and tolling."
"The Republican's proposal of finding the money within the budget rather than borrowing against toll revenue - tolls that would never go away, by the governor's own admission - is exactly the solution that should be implemented to address the serious condition of Rhode Island's infrastructure," continued Chartier.
The General Assembly will now have the opportunity to take up stand-alone legislation for truck tolls in lieu of a budget line item.
Key Provisions
The House-approved budget on Tuesday fast-tracked Raimondo's proposal to phase out the sales tax non-manufacturing businesses pay on electric, natural gas and heating fuel bills -- the original proposal would have phased out the tax over a five-year period, but the House opted to eliminate the tax all in one year, for a cost to the state of $20 million in FY 2016 instead of $4.9 million as originally proposed.
Other key provisions included:
* The House Finance provision to cut the minimum corporate tax from $500 to $450.
* Rep. Joseph Shekarchi's proposal to provide tax credits to businesses in exchange for creating high-quality jobs was also added by the House. The credits range from $2,500 to $7,500 per added job.
* Continuing for a fifth consecutive year fully funding the education funding formula for cities and towns, an increase of $35.8 million over this year. The House budget agreed with the Governor’s plan to add $7.5 million for higher education.
Next Steps
The bill is scheduled for a vote in the Senate Finance Committee Wednesday at 3:30 p.m. in Room 211 on the second floor of the State House.
Related Slideshow: What to Watch in the FY16 RI House Budget
The Fiscal Year 2016 budget will be coming out of the Rhode Island House of Representatives Finance Committee, and here are some of the key elements to look for in the tax-and-spend proposal.
Related Articles
- Governor Raimondo to Launch Web-Based Open Budget Tool
- NEW: Raimondo Budget Preview Includes $10 Million in Low-Income Scholarships
- Governor Raimondo’s Budget Address, March 12, 2015
- Winners and Losers in Raimondo Budget Proposal
- Raimondo Budget Proposal Draws Praise - and Criticism
- Russell Moore: Raimondo’s Spot-On Budget Warning
- Raimondo Warns of Projected $500 Million Budget Deficit by FY19
- Raimondo to Present FY16 Budget to House on March 12
- RI Public Radio at the Crossroads: Leadership Void and Budgetary Challenges
- City Snow Budgets - See the Numbers
- Repeat Storms Maxing Out City Snow Budgets
- The Budget Address, Vape Lounges, and Stiffer Drunk Driving Penalties - This Week at the State House
- Russ Moore: 5 Things To Hate About Raimondo’s Budget
- Ten Things To Watch in the RI House Budget
- What to Look For in the FY16 RI House Budget
- NEW: Truck Tolls May Still be in the Budget
- NEW: No Stadium, No Tolls In Rhode Island House Budget
- FY 2016 House Budget Winners and Losers
- Gencarella: A Drop In The Proverbial Ocean State Budget
- Moore: Elorza’s Budget is a Bridge To Nowhere
- Horowitz: Raimondo’s Budget: Well-Constructed and Well-Packaged
- Langevin Opposes Republican Budget Plan
- Ten Things to Know About Elorza’s Providence Budget Address
- Elorza’s Budget Raises Questions
- Giannini: A New Spirit at the General Assembly, Budget Passes in Record Time