An Update from the State House

Governor Raimondo Releases Budget

While Punxsutawney Phil predicted an early spring, Governor Gina Raimondo predicted that Rhode Island is getting stronger.  In her State of the State Address last week, Governor Raimondo proudly noted that Rhode Island realized an increase of more than 8000 jobs last year and its unemployment rate dropped more than any other state in the nation.   The Governor used one of Rhode Island’s favorite past times to make her point.  “If we want to grow high wage jobs, we need to skate to where the puck will be.”  Her FY2017 budget proposal includes an expansion of Research and Development grants to encourage businesses to invest in research and development, as well as to partner with universities to achieve innovation.  Raimondo pointed out that today 40% of the population has some advanced education, but the economy is expected to need 70% of the population to have additional education. 

Finally, to continue building a healthy business climate the Governor included three specific proposals: 1. Expand on-line permitting for projects;  2. Target waste and fraud in the TDI system; and 3. Lower the unemployment insurance tax.  Rhode Island ranks 49^th highest in the unemployment tax rate.  The budget calls for reducing the tax rate (from schedule I to Schedule H - with some tweaking of the tax brackets) without cutting benefits, thus saving Rhode Island companies $30 million in the next year alone.  This would be the first time since 1992 that Rhode Island has moved off of the highest tax bracket.

The Governor said that her proposed budget includes:

·         An increase in the Earned Income Tax credit to help more than 85,000 people

·         An increase in the minimum wage to $10.10 per hour

·         A continuation of the student loan payment program known as “Wavemaker” (students that graduate from a Rhode Island college/university with a B+ average in certain programs are eligible for loan assistance if they stay in Rhode Island.)

·         A bond initiative to build an innovation center in the state where inventions can be turned into businesses and jobs

·         Free SATs for all high school students that wish to take the exam

·         A plan to prepare the state for climate change challenges

The Governor closed her remarks for the evening by saying “We may not always agree, but we are bound by our commitment to Rhode Island.”

The Chamber is currently reviewing the actual budget proposal and will be reporting specific provisions to you in future editions of Under the Dome.

Toll Bills Heard by House and Senate Finance Committee

While the House and Senate Finance Committees were listening to testimony concerning the tolling proposal, Your Chamber was sifting through the data in the RI Public Expenditure Council (RIPEC) report released Wednesday afternoon.  RIPEC received actual data from the state outlining its expectation of yearly expenditures necessary to complete the RI Works initiative of fixing bridges in Rhode Island.  RIPEC gathered income data as well, along with costs associated with installing, administering and maintaining tolling gantries.  With all of the data in hand, RIPEC then performed a cash flow analysis of the tolling proposal as presented in the legislation, an analysis of the RI Works program with no tolls, and an analysis of smaller tolling initiatives. 

To review the entire report go to http://www.ripec.org/publications/RIPEC-Analysis:-Truck-Tolling-Proposal-and-the-RhodeWorks-Infrastructure-Improvement-Program

The major findings were as follows:

1.      If the state chooses not to toll, the bond necessary to complete the RI Works projects will ultimately cost the state $797 million in interest and principal over 20 years.

2.      If the state chooses to toll at the level proposed in the House and Senate bills (raise $45 million a year), the bond necessary will cost the state $489 million in interest and principal over 15 years and will also, starting in 2023, bring in more revenue than needed to complete the RI Works projects. Additional revenue ranges from $3.1 million to $186 million, with an average of $86 million in extra revenue per year from 2023-2032.

3.      RIPEC looked at two additional scenarios that included tolling at lower levels.  One included a $435 million bond with toll collections of $20 million a year.  This scenario would result in an ultimate cost of $651 million over 15 years and potential additional revenue averaging $39 million a year.  The second scenario proposed included a $400 million bond with toll collections of $30 million a year.  This scenario would result in an ultimate cost of $581 million over 15 years and potential additional revenue averaging $52 million a year; but also stretches out the bridge work over a few additional years.

Both the House and Senate Finance Committees held the bills for further study.  The committees may vote on the bills next week.

It is clear Rhode Island, which is nationally known for its deficient roads and bridges, must address the condition of its infrastructure - a problem that will cost nearly $800 million without a dedicated revenue source.  At the time of publication of this edition of Under the Dome, Your Chamber has taken a neutral position on the bills, as it continues to analyze the data and share information with decision makers.

 *However, the following was sent to Senators Raptakis and Gee as well as Representative Giarrusso*

The East Greenwich Chamber of Commerce opposes H.7409 and S.2246 as it believes that that the proposed tolling legislation will not achieve its intended purpose of adequate funding for infrastructure improvement and will impose an undue financial burden on Rhode Island businesses.

http://webserver.rilin.state.ri.us/BillText/BillText16/HouseText16/H7409.pdf

http://webserver.rilin.state.ri.us/BillText/BillText16/SenateText16/S2246.pdf

House HEW Committee to Hear Food Labeling Bills

On Tuesday, February 9^th at approximately 4:30pm, the House HEW Committee will be taking testimony on three bills requiring labelling food – raw or packaged food that are made with ingredients that are genetically engineered.  H.7082 provides an exemption for foods prepared for immediate consumption at restaurants (but not prepared food packaged for retail sale).  http://webserver.rilin.state.ri.us/BillText/BillText16/HouseText16/H7082.pdf   H.7255 exempts restaurants with gross sales over $500,000 to post a sign informing customers that all food products are made with modified organisms unless labeled otherwise.  http://webserver.rilin.state.ri.us/BillText/BillText16/HouseText16/H7255.pdf

H.7274 requires labelling of all foods genetically engineered.  http://webserver.rilin.state.ri.us/BillText/BillText16/HouseText16/H7274.pdf

Below is a list of new legislation that was filed this week.  The list contains bill numbers, links to the legislation, and summary explanations. 

House Bill No. 7438, AN ACT RELATING TO INSURANCE - PRESCRIPTION DRUG BENEFITS (Regulates business relationship between pharmacy services providers/group health insurers/health service organizations with department of health oversight.)

House Bill No. 7456, AN ACT RELATING TO TOWNS AND CITIES - ZONING ORDINANCES (Includes family members who are 62 years or older as a reasonable accommodation in an accessory family dwelling unit.)

House Bill No. 7465, AN ACT RELATING TO HOLIDAYS AND DAYS OF SPECIAL OBSERVANCE (Eliminates the director's discretion in identifying employers exempted from requirements imposed when an employee works on holidays or Sundays.)

House Bill No. 7472, AN ACT RELATING TO MOTOR AND OTHER VEHICLES - TRUCK WEIGHT LIMITS (Prohibits commercial motor trucks or tractors with a gross weight exceeding four (4) tons from traveling on that portion of Route 116 known as Smith Avenue in the town of Smithfield.)