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RIPR is a (paper) newsletter that looks at local, state and federal policy issues that affect life here in the Ocean State. Each issue focuses on particular policy areas of interest. Future issues will examine controversial aspects of environmental policy, health care, state tax reform, and education spending. The intention is to look at action rather than talk. RIPR also issues a weekly column about public policy, carried by ten of Rhode Island's finer newspapers. See here for an archive of recent columns. If you'd like to help, please contribute an item, suggest an issue topic, or buy a subscription. If you can, buy two or three (subscribe here). Search this siteAvailable Back Issues:
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Links:Links pageRSSRIPR is primarily a print publication (yikes! how 20th century!), and the work it represents is supported by its subscribers. Feel free to use this link to an RSS feed for the blog, but the real meat is in the newsletter, so come back and subscribe when you have a chance. Responsibility: Tom Sgouros
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Tue, 13 May 2008
An article here points out that a properly done cap-and-trade carbon policy would have a progressive (in the technical sense of tax policy) effect. It also points out that doing things John McCain's way might be as effective in the environmental sense, but have a regressive effect, and provide a windfall to electric producers and oil companies. More later.
10:37 - 13 May 2008 [/y8/my] link
Sat, 10 May 2008
I was reviewing some statistics about state tax revenues last week, and looked at business taxes. Along with the income tax and sales tax, business taxes were once the third important leg of funding state operations, but no longer. Between 1996 and 2006, income tax collections rose by 76%, sales tax collections by 97% and business taxes by -- wait for it -- 14%, far less than inflation over that decade.
Why have business tax revenue declined so much? The economy has suffered recently, but not for all of that decade. The biggest reason for the decline is a nearly endless stream of special tax breaks. We offer businesses several different investment tax credits, an R&D credit, a credit for wages paid in an Enterprise Zone, a jobs development credit, a job training credit, a biotechnology tax credit, an "innovation and growth" tax credit, and much more. Some of these are worth millions of dollars. For others, we simply don't know what the effect is on the state budget. But the result is that 94% of the businesses in our state pay the minimum corporate tax of $500.
16:40 - 10 May 2008 [/y8/cols] link
Highlights from the Supplemental Budget Follies
As expected, the supplemental budget passed the Senate last week, though it nearly ran off the rails in the Senate Finance Committee where a majority of the committee voted against it.
What's that? It lost in committee? Then how did it pass? Let's call it some extraordinary parliamentary maneuvering.
In an official sense, the Senate President and the Majority and Minority leaders sit on all the committees of the Senate, though they almost never attend or vote on committee matters. But last week, six of the ten Finance Committee members decided to vote against the budget, which forced all three of the ex officio members to interrupt whatever else they were doing, and show up at the Finance committee to cast their votes for the budget, in order to get the bill out of committee, 7-6.
The joke hiding here is not just that it took this much work to provide for a budget that slashes RIte Care, including for some legal immigrants, accelerates a few thousand retirement decisions among state employees, cuts money from all the cities and towns in the state for the current fiscal year, imposes a tax on bottled water, and cuts income taxes for the wealthiest taxpayers. The joke is also that it took two extra Democrats and one extra Republican to do it. The Republican was voting for his Governor's budget. What were the Democrats doing?
16:33 - 10 May 2008 [/y8/cols] link
Sun, 04 May 2008
The House of Representatives last week approved the Governor's supplemental budget for this current year. They approved of the plan to take back $12.5 million from all the cities and towns before the end of June, throwing 39 municipal budgets into chaos. This plan also cuts 2700 immigrant children from RIte Care -- including more than a thousand who are here legally -- and forces state employees to take six furlough days. There are some minor deviations from the Governor's original proposal, but they are nothing compared to the agreement.
My favorite: cutting $26 million from Rhode Island Housing. This agency gets its money from federal housing grants and from borrowing. Using their money to balance the budget means we are using either borrowed money or federal housing grants. I report, you decide which is worse.
The sad truth is that the Governor and the leadership of both houses of the Assembly are reading from the same script. The Assembly leadership team call themselves Democrats, but so what? They are for slashing pensions and health care for state and municipal workers and ending important (and cost-saving) social programs. All the while, they are cutting taxes for rich people, while the upward pressure on local property taxes remains as bad as ever. In what meaningful way is this a Democratic agenda? Maybe they mean that the program cuts cause them more pain than they cause Republicans.
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