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The Budget Address, Vape Lounges, and Stiffer Drunk Driving Penalties - This Week at the State House

Saturday, March 14, 2015


The Governor presented a combined General Assembly with her new budget, and legislation was introduced regulating marijuana vapor lounges, enacting stiffer drunk driving penalties, and campaign finance reform. See below for what's been happening this week at the State House.

General Assembly receives governor’s budget address

Governor Raimondo addresses a joint session of the General Assembly. Photo by Richard McCaffrey

Members of the General Assembly this week gathered for the inaugural budget address presented by Gov. Gina M. Raimondo. Also in attendance for the address — which touched on jobs, healthcare, education and other issues — were the other General Officers, members of the Judiciary, heads of state departments and agencies, state education officials, municipal officials and other guests.
Senate hosts annual economic summit

The annual Rhode Island Senate Economic Summit was held at Rhode Island College with this year’s theme “Connecting Workforce and Higher Education.” Members of the legislative chamber participated in a panel discussion that featured several prominent state business leaders and heard keynote presentations from nationally renowned leaders in higher education. 

Majority Leader Ruggerio sponsors bill to regulate ‘vape lounges’

With the increasing popularity of vaping, whether the substance being imbibed is tobacco or medical marijuana, Senate Majority Leader Dominick J. Ruggerio (D-Providence, North Providence) has introduced legislation to establish registration procedures for “vaping lounges” and to set minimum oversight, reporting and safety requirements for the operation of such establishments. The bill defines “marijuana vaping lounge” and sets penalties for license/regulation violations.
Sen. Pichardo legislation would give housing priority to veterans

Sen. Juan M. Pichardo (D-Providence) has submitted legislation that would give homeless veterans an edge when seeking public housing assistance. The bill would give veterans a priority for housing rental subsidy and housing retention assistance by amending the Rhode Island Housing Resource Act.

Rep. Craven bill requires separate account for campaign funds

Rep. Robert E. Craven (D-North Kingstown) has introduced legislation to require candidates for office, officeholders and political action committees to maintain separate campaign bank/credit union accounts exclusively for campaign funds. The bill expressly prohibits the comingling of a candidate’s personal or business funds with campaign funds. Sen. Michael J. McCaffrey (D-Warwick) has introduced similar legislation.

Sen. Nesselbush calls for labeling of genetically modified products

Senator Donna Nesselbush

Sen. Donna M. Nesselbush (D-Pawtucket, North Providence) has introduced a bill calling for labeling of food products that contain genetically modified ingredients (referred to as GMOs, for genetically modified organisms). Similar legislation has been submitted by Sen. William A.Walaska (D-Warwick), Rep. Dennis M. Canario (D-Portsmouth, Little Compton, Tiverton) and Rep. Raymond A. Hull (D-Providence, North Providence)

Rep. Ucci bills offer incentives to investors in RI businesses

Rep. Stephen R. Ucci (D-Johnston, Cranston) has introduced a package of bills intent on growing business and creating jobs in Rhode Island by attracting investor money into the state. The bills provide various kinds of tax incentives to manufacturers, to venture capitalists and to “angel investors,” a term referring to individuals, groups or networks of people who provide capital for a business start-up or who consult or mentor new businesses.

Legislation would increase penalties for DUI resulting in death

Several bills dealing with driving while under the influence have been introduced at the behest of Attorney General Peter Kilmartin. The bills, introduced by Rep. Gregg Amore (D-East Providence) and Sen. V. Susan Sosnowski (D-South Kingstown, New Shoreham), would increase the “look back” period on repeat alcohol-related offenses from five to 10 years. Another bill sponsored by Senator Sosnowski would increase penalties for anyone convicted of driving under the influence resulting in serious bodily injury from a maximum of 10 years to 20 years. A separate act sponsored by Senator Sosnowski proposes creating a criminal offense of driving under the influence resulting in injury. 

Sen. Jabour calls for freeze on electricity sales tax at pre-rate hike level

Senator Paul Jabour

Sen. Paul V. Jabour (D-Providence), in response to the recent large rate hike granted to National Grid by the Public Utilities Commission, has introduced legislation that would freeze the sales tax on the utility service at the rate that was in effect on Dec.31, 2014, after which the increase went into effect. The bill ensures that ratepayers do not pay any state tax on the recent increase as well as any future rate hikes.

Sen. Sosnowski bills address high cost of energy

Sen. V. Susan Sosnowski (D-South Kingstown, New Shoreham) has submitted three bills to promote renewable energy, energy efficiency, and ensure that National Grid’s profits are set in a transparent process. The first (would extend Rhode Island’s Renewable Energy Standard (RES), which is set to expire in 2019, to 2035. The second would authorize the Public Utilities Commission to conduct a more comprehensive review when determining a utility’s profit. The third would require the Office of Energy Resources to assemble a task force to promote the development of markets for alternative renewable home heating and transportation fuel.


Related Slideshow: Raimondo’s Budget - Winners and Losers

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Lower-Income Senior Citizens

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."

Photo: Neil Moralee/Flickr

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Million Dollar Second Home Owners

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."

Image: Andrew_Writer/Flickr

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Construction Workers

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."

Photo: Alan Kotok/Flickr

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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.   

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Open Government

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.

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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. 

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Tourism Industry

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."

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State Workers

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. 

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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.  

Photo: woodleywonderworks/Flickr

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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. 


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