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State House Report: Sales Tax, Transparency & Good Time Laws

Saturday, May 26, 2012


Although this week’s news cycle was dominated by the headlines of massive layoffs at the state's now defunct video game maker 38 Studios, there were numerous important legislative decisions made that affect a wide variety of Rhode Islanders. Not only did the General Assembly take on “good time” laws for criminals, but it also tackled the lack of accountability when it comes to quasi-public institutions. Additionally, lawmakers looked to rectify last year's enormous power outage debacle by creating a new hurricane insurance law. Lastly, a pair of tax exemption bills, which aim to stimulate the local economy, were examined.

House OKs Changes to ‘Good Time’ Law

On Thursday, the House of Representatives approved a pair of bills designed to prevent inmates serving time for serious crimes from earning time off their sentences for good behavior. Sponsored by Sen. V. Susan Sosnowski (D) and Rep. Teresa Tanzi (D), the legislation was initiated in response to last year’s case involving Michael Woodmansee, the man convicted of killing a 5-year old boy in 1975 that was able to reduce his 40 year sentence by 12 years due to the “good time” law.

The legislation (2012-H 7112A, 2012-S 2179A) would prohibit individuals convicted of murder, attempted murder, first-degree sexual assault and second-degree child molestation sexual assault and kidnapping of a minor from participating in the “good time” program. The current law allows criminals to reduce their sentence by as much as 10 days for every month spent in prison without an incident.

Rather than giving criminals time off for simply being in jail, the new proposal aims to ensure that individuals convicted of heinous crimes pay their debt to society. According to Sen. Sosnowski, “Murderers, rapists and kidnappers should not be able to earn good time for simply not getting into any more trouble in prison. They have committed serious crimes, and it’s dishonest to tell their victims and their families that they will be serving a lengthy term, only to let them out much earlier, sometimes by many years, for no other reason than that they didn’t break any more rules. Sentences for serious crimes should mean something.”

The legislation will now be forwarded to the Senate for final approval. Sen. Sosnowski’s bill was already approved by the Senate, but must return for approval since the House amended it.

Hurricane Insurance Bill Signed Into Law

Although hurricane season is not generally associated with Rhode Island, last year’s Hurricane Irene left more than half of the state’s 1 million residents without power. With that in mind, Gov. Lincoln Chafee has just signed into law legislation approved by the General Assembly, which presents additional protections to local homeowners with hurricane insurance policies. The legislation will take effect on January 1, 2013 and will apply to policies issued or renewed on and/or after January 1, 2013. Rep. Brian Patrick Kennedy (D) sponsored the House bill (2012-H7484A), while the Senate proposal was sponsored by Sen. Joshua Miller (D).

The legislation limits a homeowner’s deductible to only once per hurricane season, which ensures that Rhode Islanders will not be forced to sustain a second deductible in the event of a second hurricane. Secondly, the legislation also limits de minimus surcharges against a homeowner’s policy. This provision was added because numerous homeowners were hit with $500 rate increases after submitting claims for $400 in food losses in the aftermath of Hurricane Irene.

In March 2012, the National Oceanic and Atmospheric Administration (NOAA) concluded that Hurricane Irene was the costliest Category One storm ever to hit America. In total, Irene caused approximately $15.8 billion in damage, primarily the result of inland flooding.

Senate Passes Bill to Restore Sales Tax Exemption on Packaged Tours

In an attempt to revitalize Rhode Island’s travel and tourism industry, the Senate has passed legislation that restores the sales tax exemption on scenic tour and transportation services. The legislation, sponsored by Sen. M. Teresa Paiva Weed, was drafted last August in response to the 2011 budget, which placed a 7 percent sales tax on the state’s package tours and transportation services. Sen. Paiva Weed, along with other state lawmakers argued that instituting a sales tax to the tourism industry put Rhode Island at a competitive disadvantage.

“This revenue helped to close the budget gap and was one of many very difficult decisions. But in the months since its enactment we have heard from many in the tourism industry about the unintended consequences of this provision. This legislation removes a potential impediment to our vital tourism industry,” said Sen. Paiva Weed.

The Senator went on to say, “Travel and tourism represent five percent of Rhode Island’s gross domestic product and 9.2 percent of total employment. More than 42,000 jobs were created directly and indirectly by travel and tourism, according to a Global Insight tourism study. We should be doing everything we can to support this vital industry. Instituting a tax detrimental to tourism makes no sense.”

According to a study by Global Insight, each visitor to Rhode Island generates $134 in tax receipts, $78 of which goes to state and local authorities. It takes only 185 visitors to pay for one RI public school student for one year.

If enacted, Rhode Island would join Connecticut, Maine and New Hampshire as the New England states which do not levy a sales tax on packaged tours. Massachusetts and Vermont levy a tax of 5 percent and 6 percent respectively.

Tax Exemptions for Artists in RI

It’s no secret that Rhode Island is well known for its diverse arts community. Whether it’s musicians performing at local venues or artists showcasing their work at one of Providence’s many galleries, Rhode Island has long been a blossoming arts district. In order to continue to facilitate the growth of creativity statewide, the government provides tax exemption for local artists. Although there are currently tax exemptions for Providence, Pawtucket and Warwick, not all cities and towns in Rhode Island offer the same incentive.

In an attempt to further advance the arts movement throughout the state, the House has just proposed legislation that would give tax exemptions to artists in North Kingston.

Sponsored by Rep. Laurence W. Ehrhardt, the proposal would give tax exemptions to multiple art project including sculptures, theatre, musicals, paintings, traditional and fine crafts, film, dance performances and various forms of writing.

 Quasi-Public Corporations & State Purchases Transparency Bill 

Lastly this week is bill that looks to hold the state’s quasi-public agencies accountable for their actions. Quasi-public corporations are entities established and empowered by state law, which would be nonexistent if not for their relationship with the state. Although such corporations are established by the state, they do not currently have to abide by any of the same rules, as would the state’s public institutions.

The legislation (2012-H 8190), proposed by Rep. Stephen R. Ucci, would make the budgets and decisions of quasi-public institutions entirely transparent to the public. According to Ucci, making said institutions more transparent would increase levels of accountability and cultivate a more effective government. Presently, the majority of Rhode Island’s quasi-public bodies are exempt from any public oversight, such as budgetary review. In order to promote transparency, governance committees will be established for oversight purposes and audits will be performed every three years for each particular quasi-public corporation.


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