carcieri

PROVIDENCE — House Speaker William J. Murphy will not rule out tax increases as a way to help balance the state’s budget deficit amid a global economic downturn.

In a brief but far-ranging address before the Greater Providence Chamber of Commerce’s annual meeting Monday night, Murphy praised the way the business community mobilized earlier this year to help defeat a proposal for a tax increase that had emerged in the General Assembly.

He also recalled the Greater Providence Chamber of Commerce’s annual legislative luncheon earlier this year, at which legislators pledged that they would not increase broad-based state taxes this year — a pledge they stuck to.

“Unfortunately, this year, everything is on the table,” he said, referring to the General Assembly session that starts in January.

“We hope to hold the line on taxes,” he said. However, “we do not have the problem solved.” As a result, “everything is on the table” this time around with respect to spending cuts, increases and revenues, he said.

Murphy’s comments came amid significant budget problems for the state for the current and coming fiscal years. The state’s budget deficit will be at least $357 million for the year that will end June 30, and about $486 million for the year that will begin July 1, state budget officials have said.

In his address, Murphy listed a number of tax-related measures that were previously approved by the General Assembly.

They include the flat-tax system, which essentially gives taxpayers the option to use a single tax rate, instead of a range of tax rates, to calculate their individual Rhode Island income tax.

They also include a measure that generally lets someone donate to Rhode Island charities without being considered a Rhode Island resident for state tax purposes.

Murphy said he wants to make Rhode Island more competitive with neighboring states from a tax standpoint.

“We have to make ourselves tax competitive with our neighbors,” he said. However, he cautioned that the process toward that goal will not happen overnight.

He also indicated that Rhode Island cities and towns will have to tighten their belts further in response to the economic downturn and the state’s budget problems, a theme to which Governor Carcieri referred in his address to the group Monday night.

Rhode Island “felt this recession early and hard,” Carcieri said. In response, the state cut its payroll and took other steps to rein in spending and balance the budget, he said.

This time around, state revenues will be down nearly 10 percent from what budget officials had expected, he said.

One result is that cities and towns will have to take steps to be more efficient, he said. “We have tough choices. … It puts a lot of pressure on cities and towns,” he said.

Cities and towns “have to find a way to be more efficient at the municipal level,” Carcieri said.

Carcieri and Murphy were among several speakers to address the Chamber of Commerce dinner meeting held at the Rhode Island Convention Center in Providence.

It is one of the largest gatherings of the year for the state’s business community. About 740 business leaders, government officials and others attended, said Laurie White, president of the Greater Providence Chamber of Commerce.

Also at the meeting:

•Murphy and Senate Majority Leader M. Teresa Paiva Weed, D-Newport, urged business leaders to offer ideas to legislators early in the coming General Assembly session so that those ideas can be incorporated into hearings throughout the session.

•Several speakers recalled how Rhode Island has survived previous recessions. “This recession is a national problem. We will get out of it,” Murphy said. When that happens, he said he hopes that Rhode Island will emerge as competitive as “any state on the Eastern Seaboard.”

•Murphy said that federal help is on the way to Rhode Island. “We know that federal relief will be coming sometime next year,” he said. He also said it may be time for Rhode Island to start its own public-works program to help “put people to work.” (Rhode Island is tied with Michigan for the nation’s highest unemployment rate, at 9.3 percent.)

•Paiva Weed and Murphy both emphasized the need to give small business a boost in Rhode Island, especially amid the current downturn. The state “needs to address the needs of small business, [and their] ability to secure credit,” she said.

•Murphy urged those attending to donate five hours of their time to charitable work between now and Jan. 1. Ellen Alemany, chief executive officer of RBS Americas and Citizens Financial Group, struck a somewhat similar note, telling business leaders, “We are partners in progress. Help a business in need if you can. Equally important, don’t give up your own. We can survive and we can be even stronger.”

•Paiva Weed noted that a panel appointed by Carcieri earlier this year is in the process of putting together sets of recommendations about the reform of state tax policy. She also said that the state Department of Revenue is in the process of completing a new report in response to legislation she helped to shepherd through the General Assembly earlier this year that deals with greater transparency and accountability when it comes to tax credits for businesses and other tax breaks.

ndowning@projo.com