Guest MINDSETTER™ Sen. James C. Sheehan: RI’s Most Business Friendly Budget in Decades
Wednesday, July 15, 2015
It is with no small amount of pride that I took part in the vote that brought Rhode Island the most business-friendly budget it’s seen in decades.
For years, we’ve all rightly heard — and all complained — about the fact that doing business in Rhode Island is more difficult and more expensive than in other places throughout the country. We’ve lamented our high unemployment rate. And year after year, we have been impotent in our efforts to improve that economic climate.
Now, that is changing. Speaking as one voice, the General Assembly and governor have given us a budget that takes a step — make that a leap — in the direction of making Rhode Island a good place to do business. Instead of just talking about what we should be doing, we’ve actually done something concrete. And that’s worth taking note.
Most notably, the Jobs Incentive initiative, for which I have labored with Rep. Joseph Shekarchi these past three years, has been included in the budget. If our number one priority is to get Rhode Islanders back to work, then this is the way to do it. And I am grateful that Senate and House leadership, along with all my legislative colleagues and the governor, agreed to make it happen.
The initiative provides tax credits to eligible businesses that create new jobs through 2020 and will encourage the creation of high-quality jobs in priority industries and areas. Additional incentives may be provided to communities most in need and areas located in transit hubs. The tax credits will range from $2500 to $7500. The credit will not exceed the amount of state income taxes generated by the position.
New, good-paying jobs mean employees paying income tax and buying homes, contributing to charities and spending money at Rhode Island establishments. And the money companies save as a result of the incentive is money these firms can reinvest, so they can continue to grow and continue to hire. Most importantly, it means better paying jobs for residents who want to continue to call Rhode Island their home.
But we didn’t stop there. We took another swipe at the expense of doing business in this state by eliminating the sales tax we used to charge businesses for electricity and heating fuel — giving them a significant savings. We cut the minimum corporate tax down to $450 to give businesses some further relief (I had pushed legislation to eliminate it outright). We created a $25-million I-195 "development fund" and $60 million in real-estate development tax credits over the next five years, with a $15 million-per-project cap. Lastly, we also provided an estimated $9.3 million in tax relief in the second half of the new budget year to elderly Rhode Islanders by exempting Social Security income from state taxes for individuals with incomes up to $80,000, $100,000 for joint filers.
While no budget is ever perfect, this year we’ve truly done something concrete to improve the business climate in Rhode Island. But, this is just the beginning of what we must do to make our state a place where people want to come to do business. We must not lose the momentum we started this year. When we return for our next session, job creation and pro-business legislation must continue to be our number one priority.
I look forward to continuing the fight to make the OceanState a more business-friendly state.
The author, James C. Sheehan represents District 36, including the towns of Narragansett and North Kingstown, in the Rhode Island State Senate. He resides in North Kingstown.
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