RI State Report: Bad News for Moreau, Plastic Bags and Sales Taxes

Saturday, February 16, 2013


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This week’s State Report centers around the sentencing of a former Central Falls Mayor found guilty of corruption and the potential elimination of plastic bags and the state's sales tax.

This week's State Report centers on two stories sure to interest the average Rhode Islander. First, Rep. Jan Malik is calling for an end to the state's sales tax, which would provide consumers with some much-needed monetary relief. Also, Rep. Deborah Ruggerio is looking to give citizens a 25 percent tax break on renewable energy systems by reinstating Rhode Island's renewable energy tax credit.

Also on the docket this week is an update on the state purchase of Rocky Point Amusement Park and a proposed ban on plastic bags at the checkout counter. And lastly, former Central Falls Charles Moreau has been sentenced for his role in a corruption scheme. Keep reading to find out the details.

Malik wants to eliminate state sales tax

On Tuesday, Rep. Jan P. Malik (D-Dist. 67, Barrington, Warren) introduced legislation that looks to repeal the state’s seven-percent sales tax. The bill, (2013-H5365) proposes ending the sales tax by October 1, 2013. Aside from sales tax, Rep. Malik’s bill would also eliminate the local meals and beverage tax

“Our sales tax is killing small businesses, especially those in border communities,” Malik said. “I am one of the small business owners getting hammered because, at least in terms of sales tax, I cannot compete with my nearby Massachusetts competitors. I am down 20 percent in business over the past two years, and it doesn’t matter if we have low prices at my liquor store or not. People just don’t want to pay a sales tax when they can drive a few miles to Massachusetts where there is no sales tax on liquor.”

Speaking of Massachusetts, the Bay State is currently considering lowering its 6.25 percent sales to tax to 4.5 percent.

Although opponents of eliminating the sales tax say it would create a void in revenue, Rep. Malik argues it would stimulate economic activity.

“Any growth in economic activity in this state should be seen as a major plus, because business owners live in the state and pay income and local taxes, and the people they employ live in the state and pay taxes, and the other companies that support these small businesses will also grow in volume,” he said.

Five states do not impose a statewide sales tax: Alaska, Delaware, New Hampshire and Oregon. Alaska and Montana, however, allow localities to charge local sales taxes.

Ruggerio proposes renewable energy tax credit

Renewable energy installations are a great way for homeowners to produce pollution-free energy at little or no-cost. The only problem is that renewable energy systems can cost tens of thousands of dollars. With this in mind, Rep. Deborah Ruggerio (D-Dist. 74, Jamestown, Middletown) has proposed reinstating the state’s renewable energy tax credit.

“The renewable energy tax credit is an investment with many returns. It helps environmentally concerned Rhode Islanders invest in green energy for their home while creating jobs for renewable energy small businesses in our state. It’s an investment that keeps money in Rhode Island by supporting the environmental building trades and the jobs within them while creating home-grown power, resulting in a cleaner environment,” Ruggerio said.

Ruggerio is looking to restore a tax credit for 25 percent off the cost of renewable energy systems, which was offered for five years. The tax credit was eliminated in 2010 as part of a streamlining program that ended various tax breaks.

A 2011 report by the Small Business Renewable Energy Task Force found that eliminating the tax credit led to a slowdown in solar installations. The report also concluded that reinstating the renewable energy tax credit would make solar energy projects more affordable for homeowners, make their homes more energy-efficient, generate income tax revenue for the state and create jobs.

State purchase of Rocky Point approved

Rhode Island’s vision of transforming the former Rocky Point amusement park into a publication recreation site has just overcome its final major obstacle. On Wednesday, the purchase-and-sale agreement between the Rhode Island Department of Environmental Management and the U.S. Small Business Administration (SBA) was approved in federal court in Providence.

The purchase will cost the state roughly $9.65 million, which is the majority of a $10 million open space bond approved by voters in 2010.

The SBA is currently the court-appointed receiver for Moneta Capital, which owned Rocky Point before it went into receivership.

Opened in 1847, Rocky Point Park was a New England amusement park located in Warwick. The popular attraction featured such notable rides as the Skyliner, Corkscrew Loop Roller Coaster, the Freefall and the Log Flume. The park also featured the famous Shore Dinner Hall, which is best remembered for its clamcakes, steamers, lobsters and New England Clam Chowder.

Cimini proposes a ban on plastic bags

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Photo: Flikr/katerha. Rhode Island may soon eliminate impose a ban on plastic bags.

Plastic bags at the checkout counter may soon be a thing of the past. On Tuesday, Rep. Maria Cimini (D-Dist. 7, Providence) introduced legislation that would prohibit retailers from handing out plastic bags. It would be the first state-enacted ban in the country.

“Banning plastic bags is a simple, effective way to eliminate pollution,” said Rep. Cimini. “As the Ocean State, Rhode Island should be a leader on this issue.”

Rep. Cimini’s proposal comes one year after Barrington became the first Rhode Island town to impose a ban on plastic bags. Aside from Barrington, numerous cities like San Francisco, Los Angeles, Seattle and Westport, Conn., have all issued bans.

Plastic bags are prohibited throughout Hawaii, because they have been banned by every county and not due to a state-enacted ban.

Former Central Falls mayor sentenced to prison

On Tuesday, former Central Falls mayor Charles D. Moreau and longtime friend and supporter Michael G. Bouthillette were sentenced in U.S. District Court in Providence on corruption charges.

Moreau, who served nine years as mayor, was sentenced to two years in prison for his role in a corruption scheme in which the mayor received gifts from Bouthillette in exchange for a lucrative no-bid contract to board up houses in Central Falls. Bouthillette was ordered to pay $160,000 to the Rhode Island Foundation to establish a charitable fund for the residents of Central Falls.

Assistant U.S. Attorney Terrance P. Donnelly and Rhode Island Assistant Attorney General J. Patrick Youngs prosecuted the case.

The ex-mayor must report to a yet to be named prison on March 4. Moreau joins Vincent “Buddy” Cianci (Providence) and Brian J. Sarault (Pawtucket), as the third former Rhode Island mayor to be sent off to federal prison.


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