Tuesday February 11, 2014

What’s happening at the RI State House

Hearings in both the House and Senate Finance Committees regarding Governor Chafee’s proposed budget are underway. Your Chamber of Commerce Coalition has been tracking each article (the term used for “chapters” of the budget) and has offered testimony as needed. As with each year, the articles that are of most interest to the Chamber Coalition and the business community involve tax proposals. (Reducing the corporate tax rate, strengthening the Historic Tax Credit program, eliminating the sales tax on non-manufacturer’s gas and electricity, etc.) The House and Senate Finance Committees have already held hearings on the budget proposal to create a statewide taskforce on employee misclassification. The Chamber Coalition is supportive of the budget article. Further components of the proposed budget include:

• No increases in any broad based taxes and no new taxes created
• A reduction of the corporate tax rate from 9% to 6% (Contingent upon Congressional passage of the Marketplace Fairness Act)
• $1.8 million designated to support workforce development
• Expanding Historic Tax Credits by providing access to an additional $52 million in credits
• A statewide bridge repair and replacement program estimated at $80 million over five years
• $275 million in General Obligation Bond (to be decided by voters in November of this year) requests
• $38 million in additional school aid to fully fund the 2010 General Education Aid formula

The Chamber Coalition is very closely monitoring two issues of concern involving the Department of Labor and Training. One is a piece of legislation that we opposed on the House side and that will be heard on the Senate side when the legislation is finalized. The proposal would require an increase in the minimum wage next January 1^st to $9.00 per hour, (even though it was just raised to $8.00 per hour this past January 1^st) $10.00 per hour on January 1, 2016 and require that starting January 1, 2017, the wage be increased automatically each year based on a cost of living index that DLT would produce annually. The second item is the proper funding of the state’s unemployment insurance fund run by DLT and the “pay-off” of our federal loan obligation for money the state borrowed from the federal government to help pay for RI unemployment insurance claims in the past five years. (See more below for summary) As of 2012, when a state has an outstanding loan balance due to the federal government for money the state borrowed to help pay unemployment insurance claims, penalties are charged to the employer community (.06% of payroll up to $7.00 for each employee – this is included in FUTA) until the state pays the loan balance off. The State of RI owes approximately $119 million as of the end of January.


Below is a link to Article 11 of the proposed state budget. This is an article that COULD authorize a diversion of workforce development funds to other –non workforce development/workforce training- areas of state government. The House Finance Committee held a hearing on this article last Thursday afternoon. Your Chamber Coalition is on record with our concerns. Namely, that workforce development dollars (which are paid for by an employer tax) should be used for workforce development/workforce training purposes and not other purposes.

ARTICLE 11

RELATING TO EMPLOYMENT SECURITY JOB DEVELOPMENT FUND ASSESSMENT

http://webserver.rilin.state.ri.us/BillText14/HouseText14/Article-011.pdf

Your Chamber Coalition will be sure to keep you up to date on developments regarding this and all above issues.

Where will your Chamber Coalition be at the State House this week?

(Schedule to date)

Remember: The Chamber of Commerce Coalition is your voice at the Rhode Island State House. If you have any concerns, questions or comments, please feel free to contact David Carlin, Vice President of Government Affairs for the Northern RI Chamber of Commerce and lobbyist for the Chamber Coalition at (401) 334-1000 ext. 107 or by email at dcarlin@nrichamber.com.