February 8, 2008

The Chill Up Rhode Island's Spine

Justin Katz

Legislators — even those who are trying to sound conciliatory to RI businesses — are making some scary noises:

Stephen D. Alves, chairman of the Senate Finance Committee, suggested yesterday that lawmakers may raise business taxes to balance the state budget.

The remarks, at the Greater Providence Chamber of Commerce's high-profile legislative luncheon, ran counter to what had appeared to be a growing consensus at the State House regarding personal and corporate income taxes.

"I think we have been fair to the business community," Alves, D-West Warwick, said. "The pain should be shared equally."

High on my list of priorities for this weekend is to roll out some research that (I think) prove that to be a very bad idea and even making the suggestion to be a detrimental action. But there are other possibilities that we have to watch out for:

Senate Majority Leader M. Teresa Paiva Weed, D-Newport, pledged to study consolidating school services, such as busing, student lunches and health insurance for teachers.

Paiva Weed also defended controversial limits on annual property tax increases. To help cities and towns cope, she said, the state plans to pay closer attention to spending by local school departments.

Consolidating health insurance under the watch of the union-controlled state government is tantamount to protecting the benefit from the gravity of the private sector's reality. They'll just try to shuffle the money around a bit less visibly. And "closer attention to spending by local school departments"? I'm sure I'm not alone in my utter lack of confidence that the state would be any better than the local school committees at promoting the correct priorities; they'll just be less reachable by the taxpayers.

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Great. This will be the nail in MY employer's Rhode Island coffin. The move to the midwest will be an easy one if this goes through.

Posted by: Greg at February 8, 2008 12:02 PM

Relax. A corporate lobbyist fanboy like Alves will never vote to raise business taxes. He's just trying to make some populist noise to fool the more restive voters in his district.
That's how these guys stay in office. Toss a little chum out there, then yank it back at the appropriate time.

Posted by: rhody at February 8, 2008 1:51 PM

Alves is from the Senate and the Senate is jv. The jv does what they're told to do by the varsity aka the House. What is troubling though is why On The Rochs Alves doesn't seem to realize it's bad for business and the state's image to even talk this way. Naturally he chose the Chamber of Commerce as his audience. lol Idiot!

Posted by: Tim at February 8, 2008 7:29 PM

As to why Senator Alves took this apparently illogical tack, see "Scrushy, Richard: Defense Strategy" and the sub-heading "Tainting Jury Pool Ahead of Trial."

If nothing else, it provides a coherent explanation of Alves' behavior, if you assume he fully expects to be indicted this year.

Posted by: John at February 8, 2008 9:10 PM

"Of the 45,840 corporations registered in Rhode Island, 94 percent pay only $500 in annual corporate income taxes to the state, Alves said. "

Well, yeah, thats what LLCs and Subchapter S businesses are all about. They are small businesses, the type that grow new jobs rather than moving them around while shopping the most concessions between states. As a Sub S business owner, I wouldn't look favorably on jacking this franchise tax up and neither would my wife for her Sub S. We get no value from this fee that we can see.
Just back from FL, where we closed on a second home. We'll see what the State House posse does - could be the last year of residency for us if they follow through with some of the more egregious proposals.

Posted by: chuckR at February 8, 2008 10:51 PM

>>We'll see what the State House posse does - could be the last year of residency for us if they follow through with some of the more egregious proposals.

Why wait? You know what they're going to do, this fiscal year or the next (or more likely, this fiscal year and the next and the next ...)

If you can get out of Rhode Island, you should. While this state has tremendous potential, it'll never realize it, at least not for several decades, because of Democrat political corruption (with no end in sight) and that political party's "ownership" by public sector unions & the welfare industry (with no end in sight).

This state is toast.

Posted by: Tom W at February 9, 2008 1:22 AM
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