FOR IMMEDIATE RELEASE
March 13, 2015
2016 Proposed Budget Does Not Address Major Problems
No Game Changing Economic Ideas
Does Not Address Long Term Structural Deficits
Continued Special-Interest Spending
Providence, RI — Governor Gina Raimondo’s proposed FY-2016 budget plan provides no game-changing ideas to boost Rhode Island’s stagnant jobs market and overall economy and does little to improve the state’s poor-rated business climate or to address long-term structural budget deficits.
By shifting money from certain side funds to the general fund and by borrowing money from the future via risky re-financing schemes, the Center rates the plan as a temporary band-aid approach, instead of major steps towards a long-term solution.
“Despite years of Rhode Island experiencing negative results, this budget continues and expands the state’s practice of assuming that government knows best, and that a few insiders in back rooms can solve our problems better than the rest of us can,” said Justin Katz, research director for the Center. “From tens of millions of dollars in phantom ‘trust us’ savings to millions more poured into slush funds for centralized economic development to a scary new ‘statewide property tax,’ several back-flips backwards overwhelm the few positive policy steps forward.”
The plan’s government-centric approach toward economic development that favors specific industries is merely an extension of the same, failed public policy approach that is responsible for putting Rhode Island into its current economic rut. The Center, instead, recommends broad based tax and spending reductions as the primary means to boost the economy.
Other than vague goals to reduce Medicaid and state personnel costs, multi-hundred million dollar deficits are still projected in future out years.
OTHER OBSERVATIONS. The Center soon plans to publish a policy brief that will povide a more detailed analysis of the budget plan, but today also makes the following observations:
- The plan gives government more power in attempting to orchestrate economic development, and is a further departure from proven free-market principles
- The plan continues the practice of new special interest spending programs at the expense of the average Rhode Islander
- The new state property tax fee is a slippery slope that could lead to this tax being applied to lower valued properties in the future
- The increased hospital fee and health insurance premium fees will likely result in more costs being passed down to consumers and will likely also lead to health insurance premium hikes
- The vendor/supplier corporate tax credit idea is a handout to special interest big corporations
- New pre-K, full-day K, and construction spending ideas are handouts to special interest unions
- The new rental taxes will be a drag on our state’s vital tourism industry, especially harming smaller entrepreneurs
- The higher cigarette tax will likely lead to even greater “black market” activity, with the state is unlikely to meet the increased $7+million revenue expectations
- The increased town tipping fees to RI Resource Recovery could lead to increased property taxes in those towns