Rhode Island news
Carcieri renews call to abolish corporate tax
11:31 AM EDT on Friday, October 16, 2009
PROVIDENCE — Governor Carcieri told a roomful of businessmen and women that his plan for extricating the state from its fiscal quagmire will focus heavily on local aid, but beyond that, “we need a game changer as far as I am concerned … to be a lot more competitive than we are right now on the tax front.”
Speaking at the Rhode Island Public Expenditure Council annual dinner on Thursday night, he did not spell out specifics of his tax-and-budget cutting plans, and when asked to elaborate as he sped out of the Providence Marriott to make his next speaking engagement in Massachusetts before a group that shares his opposition to same-sex marriage, he said: “No comment.”
But his spokeswoman Amy Kempe said Carcieri was signaling his intent to renew his drive for the phaseout of the state’s corporate income tax, a dramatic proposal first unveiled last winter that has not yet won the endorsement of any of the state’s Democratic leaders.
Extra
Read the speeches to RIPEC by Hasbro chairman Alfred Verrecchia and Senate President M. Teresa Paiva Weed
With Rhode Island facing a potential $150-million deficit this year, and the state’s unemployment rate reaching 13 percent, Carcieri’s remarks drew polite applause.
On the local-aid front he said: “My message tonight is that inevitably…when there is no money and there isn’t any money right now, it means the pressure is going to be on local aid.”
He did the math: $1 billion of the $3-billion state-funded portion of the state budget goes to the 39 cities and towns, to supplement the $2 billion they raise from their own property taxes. He said something has to give, and after reaching an “unprecedented” agreement with state employee unions that trades a temporary 3-percent pay cut for a two-year no-layoff promise, he said: “Frankly, there is not a whole lot more we can do” at the state government level to cut spending.
He was followed soon after at the podium by House Speaker William J. Murphy, D-West Warwick, and Senate President M. Teresa Paiva Weed, D-Newport, who both promised 2010 would be the year state lawmakers adopt what Murphy called “a fair and equitable school funding formula.”
But it can’t end there, Paiva Weed said. “We have a proud record of being a national leader in investing in education…Yet, student performance ranks in the middle of the pack nationally, and our scores are the lowest in New England. We must do better.”
Neither mentioned Carcieri’s renewed call for the phaseout of the corporate tax and other unspecified “game-changing” moves. But Murphy agreed Rhode Island has “to be competitive with our neighbors to the north and to the south so the [state’s economic development agency] can go to Boston and steal some of those businesses.”
And Paiva Weed said, “When Forbes ranks us 50th in terms of regulatory burdens, it is clear that a dramatic intervention is required.”
The business-backed RIPEC describes itself as an “independent, nonpartisan voice and catalyst for effective, efficient and equitable government in Rhode Island.” Its annual dinner often provides a platform for the state’s top-level politicians to float their big-picture ideas.
The keynote speaker, Hasbro chairman Alfred J. Verrecchia, was harsh in his assessment of where the state stands.
“We’re viewed as having one of the poorest business climates in the nation — if not the poorest. … Our work force doesn’t have the skills necessary to compete in the new economy. Our support for higher education continues to decline … the regulatory and permitting process is burdensome, inefficient and in some cases, obstructionist. We are spending far more than we can afford and most importantly, we have a negative attitude about our state.”
He said the state needs to “stop being hesitant … stop being satisfied with incremental change and … stop thinking that just being competitive with the neighboring states of Massachusetts and Connecticut is good enough.” And he said he is “not convinced the collective leadership of the state is willing to make the tough decisions.”
“There’s an old saying — everyone wants to go to heaven, but no one wants to die,” he said. “They’ve not been willing to look to the greater good,” he said. “Too often, it’s ‘all about me.’ ”
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