Raimondo’s Budget: Taxes and Fees on Netflix, Beachgoers and Marijuana, Spending Jumps to $9.9B

Friday, January 18, 2019

 

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A range of new taxes and fees are being proposed by Raimondo

Governor Gina Raimondo has unveiled a controversial budget that proposes increasing state spending by more than $300 million in the next fiscal year -- and slaps tax increases and fees on everyone from employers to beachgoers to Netflix viewers.

The new spending includes $10 million for the launch of the universal pre-kindergarten and $5.3 million to expand the “Rhode Island Promise” free tuition program to Rhode Island College.

All of these fees hit while the Rhode Island economy is supposed to be performing at a high level. On Thursday, Raimondo said, "In the last four years, we've changed the way we do economic development, invested in education and job training, and are finally fixing our roads and bridges. With more Rhode Island jobs than ever before, it's clear our approach is working. Now more than ever, we need to protect our progress and continue moving forward until our comeback reaches every Rhode Islander." 

The budget counts of an increase in revenue from sports betting from the proposed expansion to mobile betting. Raimondo’s budget expects $3 million in new revenue from mobile — but the Raimondo administration had previously promised $23.5 in the current fiscal year for sports betting and has had to downgrade it to just $11.5 million. On Thursday, Massachusetts Governor Charlie Baker announced that he would be pushing for approval of sports betting -- if approved it would greatly diminish Rhode Island's revenue stream.

And, the budget anticipates $6.5 million from the legalization of marijuana — a Raimondo administration proposal that has drawn questions from a range of interests.

The 2020 budget also proposes to “tweak” the phaseout of the car-tax — the initiative championed by Speaker of the House Nick Mattiello.

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Mattiello cool to Raimondo's "tweaking" of the car tax

Reaction from Legislative Leaders — Setting Up a Fight

Top House decision-makers were cool to Raimondo’s budget proposal.

House Finance Committee Chairman Marvin Abney on the Governor’s proposed budget said, “We have just received the budget and it looks like there are a lot of new fees and taxes to go along with the new programs.”

“The House Finance Committee will ensure that all of these proposals receive a thorough vetting with ample opportunity for feedback from all of those impacted by them. We will also be scrutinizing the state agencies’ adherence to their spending plans and the Governor’s requests for them,” added Abney.

Speaker Nicholas Mattiello on the Governor’s car tax proposal within the budget, “The phase-out of the car tax is currently set in law.  It is being counted on by the citizens of Rhode Island and it is a state promise that I take very seriously.  We will carefully analyze the Governor’s proposals in their entirety.”

Raimondo’s “tweaking” of Mattiello’s cherished legislation is the second shot across the bow at the Speaker in the first few weeks of the new year. In Raimondo’s inaugural address she acknowledged the Speaker’s attendance at the speech, but when reciting all of her accomplishments in her first-term never mentioned Mattiello again.

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Can't afford to go out, Raimondo is proposing a streaming tax on services like Netflix

Controversies Everywhere

Raimondo’s budget also looks to scoop from dedicated fee accounts again -- a technique her administration has used in the past.

The proposed budget has a significant Medicaid tax on large employers.

The League of Cities and Towns raised concerns about the state changing the car tax. “As the state continues to phase out the car tax, we strongly urge an early resolution to any possible changes so local assessors can provide on-time tax relief to residents,” said the League of Cities and Towns in a statement.

The league also raised concerns about the impact and cost of legalizing marijuana. “While we recognize that legalization of marijuana could have fiscal benefits to the state and municipalities, our city and town officials will face numerous implementation challenges and impacts in their communities. For that reason, further discussion will be necessary with public safety experts, local officials as well as our constituents on the details of this proposal.”

 

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