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Speaker Mattiello Withdraws Controversial Budget Article

Wednesday, June 15, 2016


The battle over the controversial budget article -- ARTICLE 18 "AN ACT RELATING TO RENEWABLE ENERGY PROGRAMS" -- is over for this year. The article provided provisions to expand access for renewable wind and solar projects, but was strongly opposed by the British Energy conglomerate National Grid. Aspects of the article came under fire this week.

“Our House Rules require the budget to sit on the desk for seven days to gather input from our House members and the public.  Over the past several days, I have received feedback on Article 18 and have reached the conclusion there are pieces of the article that do not need to be in the budget.  I do not want any distraction to deter from our focus on an excellent budget that offers significant tax relief and is laser-focused on jobs and the economy.  For these reasons, we will be removing Article 18 in its entirety from the budget,” said Speaker Nick Mattiello in a statement to GoLocal on Tuesday afternoon.

On Monday, RI Center for Freedom and Prosperity's CEO, Mike Stenhouse said in opposition to the article, ""Our state's self-destructive energy policies represent an extraordinarily poor value for ratepayers, taxpayers and for our state's economy," commented Mike Stenhouse, CEO for the Center. "To make matters worse, like so many other big-government programs, insider developers are poised to profit off the backs of the average family and small business owner."

Provisions in the article are being tied to one wind project whose executives have been major donors to Governor Gina Raimondo and members of the General Assembly.


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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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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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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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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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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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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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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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.

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The budget raises the per pack tax by $0.25. The tax is now $3.75 per pack and it is anticipated to generate $7.1 million in new revenue.

Rhode Island's tax will be the second highest in the United States - behind only New York.

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Budget Process

Despite promises by Governor Raimondo and Speaker Mattiello, the budget process is as cloaked and chaotic as ever.

Documents not printed.

Lack of commitment to timelines.

Little opportunity for review and discuss.

The salvation was the budget bill has the full support of both Democrats and Republicans on the House Finance Committee.


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