2010 General Assembly session shows RI is open for business
Monday, July 26, 2010
This year, Rhode Island sent a strong signal to the business community that we are working to help them thrive and create jobs. The General Assembly passed the most significant reform to the income tax code in 40 years. We took action to make it easy to do business in Rhode Island by cutting government red tape, putting systems in place to improve the skills of the workforce, and making it easier for small business to access the capital they need to grow their facilities and to grow jobs here in Rhode Island.
These are among the highlights of a historic 2010 session of the General Assembly which included significant action to improve the economy and foster job creation in Rhode Island.
Laurie White, President of the Greater Providence Chamber of Commerce, described the 2010 session as follows: “This is probably the most significant year in the last decade in terms of helping small business.” Mark Hayward, director of the U.S. Small Business Administration, observed that we have, “concentrated on building up small business in Rhode Island.”
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe single biggest step the Legislature took this session to make Rhode Island more economically competitive was a major overhaul of the state’s income tax structure. The new and simple tax code is divided into three income tax brackets instead of five. The top marginal rate of 9.9 percent has been reduced to 5.99 percent, removing what was perceived as a black eye on the state. This will help companies attract and retain top talent, and make the state more attractive to companies looking to remain here or locate here.
While we took many practical steps to make it easy to do business in Rhode Island this session, the tax code reform helps correct a perception problem that turns Rhode Island’s image as a high tax state around on a national scale.
The new tax code is more than business friendly. It retains Rhode Island’s progressive income tax structure, and the vast majority of Rhode Islanders will pay less or the same under the new code.
Funding Formula for Schools
Another major achievement of the session was passage of a fair funding formula for distributing state aid to education. Rhode Island has been without an education aid formula for 15 years. Both legislative chambers had identified a funding formula as a top priority.
This session, success was achieved through passage of a formula that begins with the number of students in a district and takes into account both economically disadvantaged students and a community’s relative wealth. The new formula gives communities time to adjust to the new level of funding through a gradual phase-in.
A funding formula will benefit students and improve education outcomes, and also treat property taxpayers across the state equitably. Perhaps the most important aspect of enacting a formula is the predictability which it provides. Communities are in a better position to plan their budgets.
The funding formula is also important for Rhode Island’s efforts to secure federal Race To The Top grant funding to improve educational outcomes at all of our schools.
A legislative session is comprised of action in a variety of areas, and this session we took important steps to improve public safety, the justice system, health care, long-term care, quality of life, education, consumer protection, the way government operates, and much more.
Budget and Jobs Were Focus of Session
Our overarching focus, however, was passage of a responsible, balanced budget and on legislation to improve the economy and help companies grow jobs.
The budget is a reflection of the difficult choices required in difficult times. It contains no broad-based tax increases, $29.2 million in pension reform, and restoration of some of the cuts that had been proposed, such as funding for the Neighborhood Opportunities Program for affordable housing. It restored $48.6 million in property tax relief by including the third quarter and half of the fourth quarter motor vehicle tax reimbursements for Fiscal Year 2010, which had been proposed to be cut, and it granted increased municipal flexibility regarding local contributions to schools, and a statewide school purchasing program.
The state is positioned more competitively today because of the actions taken this session in the budget and through legislation geared towards making it easy to do business in Rhode Island.
On June 29, we joined Governor Carcieri at a news conference to sign into law a package of legislation known as “making it easy to do business in Rhode Island.” These new laws consist of three elements: cutting red tape, workforce development and ensuring access to capital. More information can be found on these initiatives at www.MakingBusinessEasyRI.com.
The series of bills to cut red tape include major reforms in the implementation of the state fire code to achieve speedier approvals and uniform enforcement. Also within the package of bills was the creation of a new Office of Regulatory Reform within the Economic Development Corporation. The budget includes $250,000 for the Secretary of State to launch a master application system to make it easier to start a business here, like a welcome center for new businesses.
The bills to improve workforce development include making better use of the Community College of Rhode Island and the state’s Human Resources Investment Council to align worker’s skills with industry needs. The state budget includes $240,000 recommended by the CCRI 21st Century Workforce Development Commission to help the college fulfill its workforce development role. These efforts will help to match workers and job skills with the actual needs of our businesses.
At the bill signing on June 29, we put into place the final piece of the puzzle - access to capital. This initiative includes $125 million in loan guarantees for knowledge and technology sectors. Already, a Massachusetts video game company is seeking to take advantage of this legislation to bring 400 new jobs to Rhode Island. A separate initiative provides state guarantees for $60 million in loans through the Industr
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