News Column

House to take up $8.7 billion budget plan

June 12, 2014

By Randal Edgar, The Providence Journal, R.I.

June 12--PROVIDENCE, R.I. -- The House is expected to vote Thursday on an $8.7 billion budget that lowers the corporate tax, raises the threshold for the estate tax and averts tolls on the Sakonnet River Bridge, instead creating a new transportation infrastructure fund that will pay for road and bridge maintenance across the state.

If approved, the tax and spending plan also provides $12.3 million for the next payment due to the investors in the failed 38 Studios video-game venture and a $34 million increase in education aid, as called for by the state's education funding formula.

But it provides no state dollars for a redevelopment of the so-called Superman building at 111 Westminster St. in downtown Providence, nor does it provide money for raises Governor Chafee's administration negotiated with state employees. Legislative leaders say state departments and agencies will pay for the raises by finding savings and leaving open positions unfilled.

The transportation infrastructure plan calls for increased vehicle inspection fees, increased court fees for motorists who contest fines, and next year, the first of what are planned as recurring increases in the state's gasoline tax. Starting July 1, vehicle inspection fees would rise from $39 to $55, and the court fee motorists pay to contest fines for traffic violations would rise from $25 to $50. Then, on July 1, 2015, the plan also raises the state's gasoline tax by an estimated 1 cent, to 34 cents per gallon.

The corporate tax cut lowers the rate from 9 percent to 7 percent starting in tax year 2015, and it comes with a companion plan that allows the state to consider the income some corporations are making in other states when calculating the tax owed in Rhode Island.

The budget plan raises the threshold for the estate tax from $921,655, to $1.5 million and eliminates the so-called cliff that allows the tax to cover every dollar of an estate that exceeds the threshold.

The budget also eliminates $9.89 million from the state's budget for community mental health services for adults, a move mental-health advocates say will force community mental-health organizations to scale back services to at least 1,000 clients who are not eligible for Medicaid.

The House debate is scheduled to begin at 2 p.m.


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Source: Providence Journal (RI)

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