Guest MINDSETTER™ Ruggiero: Raimondo’s Budget Has New Taxes, Fees at Every Turn
Friday, March 22, 2019
In the 10 years that I’ve served in the House, six of which were as a member of the Finance Committee, I’ve analyzed a lot of state budgets. This year’s proposal seems to have a new tax or fee hitting business or the average Rhode Islander at every turn. It’s true that broad-based tax rates such as income tax, sales tax, and the corporate tax won’t change, but your Netflix bill and beach fees will.
Department of Environmental Management budget cuts have reduced staffing to a level where parks and beach facilities have not been adequately maintained. I support funding DEM, but not on citizens’ backs through increased beach and camping fees.
I also have never supported the transfer of unspent funds from quasi-public agencies (RI Housing, the Turnpike, and Bridge Authority or RI Resource Recovery) that a governor can “scoop” into the General Fund to balance the budget. This must stop.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTArticle 5 in the governor’s budget expands sales tax on digital downloads of video, e-books, and music. It also includes interior design as a taxable service as well as landscape services and government lobbying. Even the American Civil Liberties Union is concerned about the tax on lobbying saying it’s “a levy on the exercise of political speech, a quintessential First Amendment activity.”
I’ve heard from a number of constituents on the new tax on guns and ammunition. The federal government already taxes guns and ammunition as part of the Pittman-Robertson Act of 1937. The money from that tax has always been used for wildlife restoration. People tell me they understand they have to pay taxes, but want to make sure their money is making a difference, not going into the general fund.
The proposal would legalize both online gambling and recreational marijuana. Gambling is Rhode Island’s third-highest revenue source at about $400 million. The assembly has already passed online gambling, so as long as they are located in Rhode Island (verifiable through IP addresses and geo-fencing), people will be able to set up an account at Twin River and bet on their phone. As I said on the House floor, this is worrisome because it makes gambling so easy, but gambling is already here, and we cannot legislate common sense.
However, I plan to write consumer protection and gambling addiction legislation similar to legislation I sponsored in 2014 barring casinos from attaching a lien on someone’s home. Prior to that, Foxwoods and Mohegan Sun were using real estate as collateral for credit. There were cases of spouses being unaware there was a lien on their property until they tried to refinance or sell.
Legalizing recreational marijuana brings health, public safety, and workforce issues, but marijuana can be bought just over our border in Massachusetts, and may soon be legalized in Connecticut. Without legalization here, Rhode Island will develop all of the societal problems without any of the revenues. Article 20 prohibits home-growing unlike Maine, Vermont, and Massachusetts, but how will this be enforced?
New retail marijuana shops could be licensed as early as next year. This article requires municipalities to enact local zoning and use ordinances by January 2020.
Cities and towns can hold a local referendum to opt out of allowing retail pot shops, but doing so would require a costly special election. This article should be amended so that communities opt in instead. There must be more detail around operating agreements, fees, and revenues between the state and host communities based on the impact to that community.
This budget is reminiscent of Governor Chafee’s 2011 budget, which tried to expand the tax base to services, repairs, and entertainment. That budget was dead on arrival. The House and Senate Finance committees will evaluate every article in this budget, and in some instances rewrite them, or tear them up.
Rep. Deborah Ruggiero (D-Dist. 74) serves Jamestown and Middletown.
Related Slideshow: PHOTOS: General Assembly Opening Session - January 1, 2019
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