What’s interesting about Rhode Island politics is that if our politicians can make a wrong decision they usually do. Think about 38 Studios or electing Lincoln Chafee Governor. Whenever we’re faced with a problem or a concern it’s almost as if we run to select whatever option is the least beneficial to us all.
I’m not trying to be cynical here nor whiny, but observing what I believe is a nearly quantifiable characteristic of the Rhode Island electorate – we simply make bad decisions again and again. On Monday, Governor Raimondo along with House Speaker Mattiello and Senate President Paiva-Weed announced programs to “make it easier to do business in Rhode Island." Raimondo is quoted as saying, “We have moved quickly to create programs to attract and grow business here and jumpstart our economy...by making it easier to for companies to add jobs and to put shovels in the ground, we will be creating opportunities for everyone to make it in Rhode Island.”
Sounds like good news right? If it was 2008 and I was still bright eyed, filled with hope in “change we can believe in," and thinking “Yes We Can!” perhaps I’d be less skeptical believing that Raimondo and crew could actually bring business to Rhode Island.
But it’s not 2008 and I’ve lived through a Lincoln Chafee governorship and almost eight years of an Obama administration so you’ll have to excuse my skepticism.
We Need Good Ideas
Having said that, there’s a small (more likely large) part of me that is rooting for the Governor, Mattiello, and Paiva-Weed that they can be successful in bringing business to Rhode Island. From a partisan perspective that sounds moronic, but as readers of me are well aware I believe good ideas are good ideas no matter the letter next to someone’s name. We need more business here in Rhode Island so that the everyday taxpayer like you and I take on less of the financial burden of our state and we don’t have to move or travel at least hundred miles a day going to and from work like I do.
The program Raimondo et al. announced isn’t anything earth shattering to move the economic needle significantly - rather relatively small tax credits for businesses that move to Rhode Island and create jobs – but I hope it might signal that Rhode Island is serious about attracting and keeping businesses here in Rhode Island. Maybe I haven’t lost all hope and I am going to give Raimondo a chance to prove that her Wall Street savvy can translate into new jobs in Rhode Island.
What’s the worst that could happen? She gives 75 million dollars to an unproven and risky business that leaves Rhode Islanders with a bill to pay? Been there, done that, and have the t-shirt. Rhode Island leaders, whatever their partisan color, have been unable to truly put the RI economy in a position to be successful.
That’s the past and many of those leaders (saying hi to Mattiello and Paiva-Weed) are still in power. But, I don’t know about you, but I don’t like sitting around and complaining. Looking for the positive and potential bright side, I’m willing to give Raimondo a chance to succeed where everyone else has failed.
Don Roach is still a "Young Republican". Please check out his Facebook page.
Related Slideshow: Raimondo’s Budget - Winners and Losers
Acknowledging one of Speaker Mattiello's top priorities for the legislative session -- cutting taxes on social security benefits -- Raimondo's budget proposal exempts Social Security benefits from state personal income tax for single filers with Federal Adjusted Gross Income less than $50,000 and for married filers with Federal AGI less than $60,000. "This proposal would place Rhode Island on an equal footing with Connecticut," said Raimondo's office -- adding that the proposal is "estimated to reduce the final payments component of personal income tax by $3.9 million in FY 2016."
Says Raimondo, "revenue options were specifically chosen to minimize impact on working Rhode Islanders." The Governor proposed establishing a statewide property tax for non-owner occupied residences (i.e., vacation homes, second residences) and vacant residential land valued at greater than $1.0 million. This effort would provide $11.8 million through a "relatively small number of wealthy taxpayers," said Raimondo. And some disagreed with the approach. "Her proposal for increasing taxes, whether on health insurance plans, on a new, statewide property tax on second homes valued at over a million dollars, on cigarettes or on anything else, is a complete non-starter," said Monique Chartier with RI Taxpayer. "Rhode Island has a spending problem, not a revenue problem, as evidenced by some of the highest taxes in the country and it is surprising that the governor, with her financial background, does not recognize this."
The Governor’s budget includes an additional $20.0 million from state debt refinancing proceeds to create a capital fund to help address school facility needs -- and establishes a School Building Authority within RIDE to oversee distribution of school modernization funds, targeting facilities in greatest need. Lifting the school construction moratorium, the budget proposal sets the annual construction aid appropriation at $80.0 million starting in FY 2017. According to Raimondo, this will "create fiscal stability with predictable funding and allows for projects to be prioritized." In addition, a non-school package of real estate tax incentives is intended to "encourage construction of job-producing projects, with a focus on development near transit hubs and historic structures."
The Governor’s budget proposed a number of additional revenues, including increasing the state’s cigarette excise tax by $0.25 per pack, from $3.50 to $3.75 per pack. "This increase will raise $7.1 million in FY 2016 while discouraging smoking and improving health outcomes," said Raimondo. According to the Tax Foundation, Rhode Island had the third highest cigarette tax in the country in 2014.
Raimondo touted launching the state's first web-based budget tool - and good-government watchdogs Common Cause weighed in on the development. Said Executive Director John Marion,"The state budget is the most important document produced by our government every year and until now that document has been trapped inside clunky PDF documents. With the new interactive budget Rhode Island now has a tool that makes those hundreds of pages much more accessible. Two key features stand out; the ability to look at how individual line items have grown or shrunk going back until 2008, and the ability to look at how the Governor's budget stands up to what the General Assembly eventually enacts. That second feature, if updated in real time, will empower citizens and journalists to much more easily follow the General Assembly's budget deliberations than they have been able to in the past. By extension that means we can more easily hold both the Governor and the legislature accountable for the hundreds of decisions made in the budget. Finally, by freeing the budget from PDFs, and providing the raw file for download, the democratization of data has reached Rhode Island's shores. Now anyone who is interested can build their own tool to analyze the choices reflected in the state budget.
The Governor's budget proposal recommends requiring providers of unlicensed rentals of lodging accommodations, such as Airbnb, to be subject to all state lodging taxes. According to Raimondo's office, this proposal is anticipated to enhance sales and use tax revenues by $851,512 in FY 2016.
The Governor’s budget modifies the distribution of lodging tax dollars to provide a greater share to statewide tourism efforts to support a major state tourism marketing campaign -- but it comes at a cost. "To provide sufficient resources for this initiative, the Governor’s budget establishes new revenue sources dedicated to tourism promotion. The budget proposes expanding sales and lodging taxes to online resellers of lodging accommodations, who currently pay no taxes on their markup over the wholesale prices. The budget also closes an existing loophole that exempts vacation houses and small bed and breakfasts from paying the sales and lodging taxes. Finally, the budget would apply sales and local lodging taxes to unlicensed rentals, which have increasingly become an alternative to hotels, bed and breakfasts and other licensed lodging. Further, the Governor proposes redirecting a greater portion of the state hotel tax to dedicate more funds to statewide tourism, marketing, and economic development at the Commerce Corporation. The net effect of changes to the tourism funding formula and new revenue sources is an additional $6.4 million annually."
The Governor’s budget proposes achieving savings of $22.0 million related to personnel and employee benefits. "Administration officials will work with state employees and their representatives to find the savings while avoiding significant layoffs," said Raimondo -- who volunteered to do her part for cost savings by announcing Thursday evening that she would be taking a 5% paycut herself.
At the same time the State expands access to pre-K classes, some communities still do not offer full-day kindergarten. "The Governor has noted the importance of providing quality full-day kindergarten in all of our communities. Her budget includes an additional $1.4 million to expand full-day kindergarten to children in every city and town by August 2016. Finally, to ensure that our teachers reflect the growing diversity of Rhode Island’s children, the budget includes $250,000 in grant funding to recruit and train more diverse teachers," wrote the Raimondo office.
For DHS, the Governor recommends reinstituting the hospital licensing fee at 5.703 percent on FY 2013 net patient revenues to increase FY 2016 licenses and fees revenues by $156.1 million.
