2014-01-30 / Front Page

Paiva Weed, Ruggiero mull Gov. Chafee’s spending plan

Island representative sits on House Finance Committee
By Ken Shane

In his fourth and final spending plan, Gov. Lincoln Chafee has proposed an $8.5 billion budget for the upcoming fiscal year. Highlights include millions of dollars for public works projects and a freeze on tuition at state colleges.

“By nearly every measure, Rhode Island is steadily moving forward,” said Chafee, who announced in September that he wouldn’t seek re-election. “Our economy is picking up steam and households are on better footing than they were three years ago. This is good news, but we must keep up the momentum.”

Chafee’s proposed $35 million bond issue to raise money for upgrades to arts facilities, including museums, theaters and historic sites, garnered national headlines. The bond must be approved by the General Assembly before going on the ballot in November.

Jamestown’s legislative delegation of Sen. President Teresa Paiva Weed and Rep. Deb Ruggiero expressed strong support for the governor’s arts proposal.

“I am very supportive of the arts initiative contained in the governor’s budget,” Paiva Weed said. “One of the few areas that we’ve seen job growth over the last five years has been in the creative industries.”

Ruggiero agreed, saying the arts are a big economic engine when it comes to economic development.

“It’s important to our culture and to who we are,” she said. “I’m hopeful that the voters will approve what will be Question No. 2.”

Paiva Weed pointed to last year’s passage of the sales tax exemption for original works of art as the first step. The new proposal, she said, continues the concept and advocates for something she believes in.

Ruggiero, who sits on the House Finance Committee, pointed out Chafee’s budget includes $275 million worth of bond issues, the second highest in the state’s history.

The federal Marketplace Fairness Act, which would allow states to collect sales tax from online retailers, is currently being considered in Congress. If Congress passes the act, the law would lower Rhode Island’s corporate tax rate from 9 percent to 6.5. In his budget proposal, the governor proposed an even steeper cut to 6 percent.

Paiva Weed said she supports a reduction in the tax rate, but is unsure what the rate should be. While 6 percent would give the state the lowest corporate tax rate in New England, the senator feels there are things to be considered. For example, what impact would a reduction in the estate tax or sales tax have on the economy?

“We need to have an extensive tax policy discussion,” she said. “It might be better to be at 6.5 percent and be competitive with our neighboring states, and address the estate tax as well, or even the sales tax on clothing, for example.”

Paiva Weed applauded Chafee for proposing not to spend any of the additional revenue to balance the budget if Congress passes the Marketplace Fairness Acts. He has instead proposed a tax reduction.

Ruggiero said she was surprised the state budget is so dependent on the actions of Congress. While the fairness act has already passed the U.S. Senate, it now has to be passed by the House, where there has not been much agreement in recent years.

“That has me a little worried,” she says. “Only if it passes on Capitol Hill will Rhode Island see the $45 million to $68 million in Internet sales tax revenue.”

Paiva Weed has been a longtime champion of the historic tax credit, and was pleased that the governor proposed a $52 million extension for the program.

“It’s a sure way to invest in Rhode Island’s economy,” she said. “We saw the success of the initial program last year. There’s a clear demand for the program, and it puts people back to work while simultaneously improving our infrastructure in the state.”

Moreover, she added, it comes at a time when borrowing costs remain low.

Ruggiero said she is a proponent of the program and co-sponsored the bill in the House last year. She was happy to see the program in the spending plan, but as a member of the House Finance Committee, she wants to know where the money will come from.

Paiva Weed was happy with the additional $400,000 that Chafee proposed for workforce development, and his continued investment in education. In addition to freezing tuition at the state’s colleges, he has proposed $38 million to fully fund a formula for school aid.

“I’m pleased that the governor has made education a part of his budget,” agreed Ruggiero. “I suspect that it’s going to be part of his legacy. We need to change cur- riculum in the schools beginning in the elementary grades so that students understand the importance of STEM as career paths. In the next five years in Rhode Island, there will be 20,000 jobs in these fields.”

STEM is an acronym for science, technology, engineering and mathematics.

With Narragansett Bay a focal point of the state, marine activities are an important part of the local economy. Paiva Weed said she was happy the governor has set aside funds for the Volvo Ocean Race, which will have its only North American stopover in Newport next year. The $100,000 will be dedicated to marketing Rhode Island’s agriculture and seafood.

After improving the piers at Fort Adams as the first part of a threeyear plan to improve the facility, Chafee proposed the construction of a sailing education center. Paiva Weed supports the call.

“I completely support the improvements to Fort Adams. I believe that sailing can be a real economic engine for our state,” she said.

The governor’s budget did not include any mention of the toll increase on the Sakonnet River Bridge that is scheduled to go into effect on April 1. Legislation based on recommendations from a joint task force is expected to come in the next few weeks. Both Paiva Weed and Ruggiero said that they would not support any toll increase on the Newport Bridge.

“The people of Newport, Jamestown and North Kingstown have been paying on the Pell Bridge for the people of Portsmouth, Bristol and Tiverton to use the Mount Hope Bridge for zero for many years,” Ruggiero said. “To me, it’s a much larger issue of funding that’s needed for all of the state’s bridges and roads. The infrastructure is so critical to the economy of this state.”

Ruggiero and the House Finance Committee met for the first time on Wednesday to begin budget considerations.

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