From the State House
It’s an honor to serve as your state representative and on the House Finance Committee, which analyzes and makes recommendations to the state budget. My priorities for this legislative session are economic development, enhancing the business climate and workforce development.
Gov. Chafee’s budget submission to the General Assembly is the earliest that any governor has submitted it in the past 20 years. One of the governor’s budget highlights includes reducing the state’s corporate tax from 9 percent to 7 percent over the next three years. This would make our state more economically competitive for a business to relocate here and help absorb the $8 million loss of revenues in 2014 if we lowered the rate to 8 percent. Reducing the corporate income tax would help shore up existing businesses that continue to employ our neighbors and pay taxes. Economic development is very much about keeping Rhode Island businesses here.
The governor is recommending lowering the Jobs Development Act rate reduction for companies that create 50 jobs or more a year. Currently, the Jobs Development Act costs the state $15 million annually and there are only eight companies in Rhode Island taking advantage of the credit. Seven companies are splitting $1 million, while one company, CVS, takes the additional $14 million. The credit is in perpetuity, which means CVS gets the tax credit every year after they create the 50 jobs.
We have to be aware of what our neighbors in Massachusetts are doing. Gov. Deval Patrick is proposing to raise his state’s income tax from 5.25 percent to 6.25 percent. (Rhode Island lowered the state income tax from 9.9 percent to 5.9 percent in 2010.) He’s also looking to reduce the sales tax from 6 percent to 4.5 percent, but word on Beacon Hill is that his proposal faces an uphill battle.
Jamestown will benefit from Gov. Chafee’s plan to allocate $10 million in municipal aid to encourage funding municipal retirement plans. Jamestown’s retirement plan is funded well over 100 percent, and that puts us on track to receive $51,406 in additional revenue. There is good news regarding education aid because Gov. Chafee plans to fully fund the education formula for grades K though 12. (Jamestown‘s education aid is a little over $363,000.) He’s including an additional $30 million in education aid to cities and towns with $6 million going to higher education to freeze tuition. College debt is becoming the next housing crisis. Many students graduate owing hundreds of thousands of dollars in college loans over the next 30 years. Think of it as making a mortgage payment and not owning a house.
This brings us to workforce development. We have a work-skills gap problem in our state. Half the jobs in Rhode Island are considered middle-skill jobs, yet only 37 percent of the workforce has the skills to fill these jobs in such important areas as healthcare, information technology and marine trades. The truth is that technology and globalization are wiping out lower-skilled jobs and raising the skill level required for new jobs. The $3 million the governor is putting into workforce development is commendable.
I always enjoy hearing your perspective and value your input. Please call me at 423-0444 or email me at rep-ruggiero@rilin. state.ri.us.
“The struggle of today is not altogether for today, but for a vast future.” — Abraham Lincoln’s address to Congress in 1860
Rep. Deb Ruggiero serves District 74 (Jamestown and Middletown) in the state House of Representatives.