State House Report: Gambling Revenues, Student Loan Rates & the Ban on Tanning
Saturday, March 17, 2012
This week the General Assembly tackled the state’s deficit crunch through a series of proactive bills. The GA's latest proposals were aimed at generating additional revenue through increased taxes on the wealthy and by giving tax breaks to small businesses. Additionally, legislation designed to provide much needed relief for newly graduating college students was also on the docket. Aside from multiple deficit-oriented policies, the GA also confronted the controversial topic of underage tanning, which begs the question of whether the government should play the role of parent to the youth in RI.
Senate Bill No. 2737 - Proposal to Add Gaming Revenue to Education
It seems that casino gambling in the Ocean State has been a hot topic in the General Assembly nearly every week as of late. This past week was no different, as Sen. Harold M. Metts (D) unveiled his plans on what the state should do with additional revenue earned by adding table games to Newport Grand and Twin River. Although RI voters will ultimately decide whether gambling expansion occurs in the state, Sen. Metts has introduced legislation just in case.
According to Sen. Metts additional funds should go straight to education and the children of Rhode Island. “An educated work force is key to our economic recovery and growth, and in order for this to occur, we need to make sure our education system is well funded,” said Sen. Metts.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTSen. Metts’ bill indicates that all additional gambling proceeds will be deposited directly into an account for elementary and secondary education. With that said, there is no clear determinant of how much supplementary income will be created by casino gambling in RI. Expanded RI casinos will have to compete with three proposed full casinos and one slot parlor in Massachusetts. Reports indicate that the Bay State’s upcoming casinos could cost RI upwards of $100 million per year, if the state does not expand its two slot parlors.
Senate Bill No. 2322 - Underage Tanning Ban
On Tuesday, the Senate approved legislation that would ban anyone under the age of 18 from using a tanning facility. Sponsored by Senate Health and Human Services Committee Chairwoman Rhoda E. Perry (D), the legislation was introduced to curtail the exposure of children to cancer-causing radiation linked to tanning beds.
“For all the same reasons we don’t allow kids to buy cigarettes, and more, we shouldn’t let them in tanning booths,” said Sen. Perry. “Young people are the most at-risk population of people who use indoor tanning facilities, because UV exposure at an early age has been linked to much higher incidences of skin cancer. Cancer is a public health crisis. As if it’s not bad enough that it causes pain and death to individuals, it also costs our health care system billions of dollars every year. From that standpoint, it makes no sense to allow children – who we know are the most at risk and who are not legally old enough to make decisions about their health – to roast their skin with cancer-causing UV rays in tanning beds.”
If approved by the House, the law will go into effect on Jan. 1 2013. Rhode Island would become the second state to prohibit underage tanning, after California barred it on Jan. 1 2012. Teens desiring a golden tan are likely to head to neighboring Massachusetts, where underage tanning is legal with parental consent.
House Bill No. 7644 - New Tax Incentives for Small Businesses
In an attempt to help spur small business growth in the Ocean State, Rep. Robert Phillips (D) introduced legislation this week to create new tax incentives for businesses. Rhode Island businesses that hire and retain at least two employees will qualify for the proposed tax credit. Dubbed the Job Creation Incentive Act, the bill would provide a 50 percent tax deduction for a business in its first three years and a 25 percent tax deduction for its next three years in operation.
“This bill is going to help businesses of all sizes recoup startup costs,” said Rep. Phillips. “We’re sending the message to the world that yes, Rhode Island is open for business. But we can’t do that if people aren’t taking chances and moving forward with their business plans. People are afraid of the economy right now. What many don’t realize is that the fear to innovate and create is one of the things holding us back achieving a more stable economic climate.”
In order to qualify for the incentive, businesses must file with the state tax administrator within 30 days of hiring its second employee. The bill stipulates that new employees cannot be relatives of a current shareholder or managers of the company. Once a business qualifies for the Job Creation Incentive Act it is not eligible for any additional tax credit incentives. “There’s no double-dipping allowed here,” Rep. Phillips said. “This is simply a way to give business owners the push they need.”
House Bill Nos. 7305, 7379, 7381 and 7382 – Increased Taxes on the Wealthy
Aside from being a highly debated issue on the national landscape, asking the wealthiest citizens to pay more in taxes is presently being considered in Rhode Island. Rep. Scott J. Guthrie (D) has introduced four bills designed to raise additional revenues and ease the state’s deficit by increasing taxes on the rich. Rep. Guthrie’s first proposal would give an additional $37.9 million to the state general fund for fiscal years 2013 and 2014. His second proposal would add $66.8 million over a two-year period, while the third plan nets roughly $76.6 million. Lastly, Guthrie’s fourth piece of legislation rakes in an extra $134.5 million over the same time period.
Each bill calls for a fourth tax bracket, which would establish different percentages of tax increase to different levels of income. Rep. Guthrie argues that “By instituting a fourth tax bracket we could solve many of our immediate budget problems, the ones that include deciding if we should cut more services for the needy or force classroom teachers, first responders and other public servants to take pay cuts and layoffs in order to balance budgets.”
Rep Guthrie went on to add: “As the state budget deficit continues to loom large, for yet another year, one phrase continues to remain popular from elected officials – shared sacrifice. Well, I see municipalities sacrificing, as well as many of the residents of those communities. I see sacrifices from the poorest and neediest in Rhode Island, the results of continued trimming in the social services funding. What I don’t see is sacrifice from the wealthiest members of our society who could most easily afford to give a little more to help their many neighbors and fellow citizens who are suffering.”
It is worth noting is that Rhode Island was ranked 44th in terms of adjusted average income in 2011. Average adjusted income considers state taxes, unemployment rates and cost of living.
House Bill No. 7934 – Rhode Island Student Loan Authority Interest Rates
Drafted by Rep. Lisa Baldelli-Hunt, this legislation would set a maximum interest rate on student loans at 4 percent per annum. The act would take effect immediately upon passing and would be repealed and reviewed after two years by the House and Senate Finance Committees. RISLA’s current 2012/2013-interest rate for immediate repayment is 6.39 percent over the standard 10-year term. The 6.39 percent rate is noticeably lower than 7.9 percent Federal PLUS Loan average.
A recent study from the Project on Student Debt indicate that 67 percent of Rhode Island student graduating from four-year colleges and universities in the 2010 school year had an average debt of $26,300. Additionally, just 54 percent of young Americans ages 18-24 are currently employed, according to the Labor Department. This is the lowest percentage ever recorded since the Labor Department began tracking the data in 1948. Translation: recent college grads need all the help they can get.
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