Donna Walsh gets economic advancement measures written into the budget

There’s more than one way to get the job done

By Will Collette

Saving family farms, promoting the arts and helping people find jobs

For the past several years, Rep. Donna Walsh has been trying to get a change to the state estate tax law passed that it crucial to saving family farms. Under current law, when the owners of a farm die and the property goes to probate, the land value is calculated based on its worth as a commercial or residential development, not as a farm.

The result is a crushing – and unfair – estate tax bill on the surviving family members that often results in a self-fulfilling prophecy where the only way to pay the bill is to put the farm up for development. For example, an average Rhode Island family farm is about 50 acres and might be worth about $650,000 as a working farm. But if it is valuated as house lots, it could be worth around $5 million, costing the heirs about $500,000 in inheritance taxes.

Working with the RI Farm Bureau, Donna has been trying to get legislation enacted that would have farms be valued as farms when it comes to Rhode Island’s estate tax.

This year, that bill wasn’t going to pass as a free-standing bill. But unlike earlier years, this change to the estate tax has been written into the state budget and has been passed by the General Assembly and signed by the Governor.

This is a good example of how experience can pay off and how an experienced legislator like Donna can figure out different ways to make this happen.

Two other economic development initiatives of Donna’s have also been written into the budget and will become law.

In an effort to boost tourism and our growing arts community, Donna had tried to get sales tax-free zones for Cross Mills and for Block Island, without success. So this year, Donna introduced legislation to eliminate the state’s 7% sales tax on all original art work across the board.

Studies show that such tax-free measures not only benefit the artists, but also the entire arts community and the closely related tourism industry. Framers, suppliers, galleries and other ancillary businesses all get a bump. A 2011 study by the Rhode Island Foundation for the Arts showed a big “multiplier effect” where every dollar spent on art generates about $2.10 in economic activity.

As a free-standing bill, this was not going to get passed. However, this measure was adopted as one of the package of economic development measures supported by the legislative leadership and, like the family farm estate tax measure, it was folded into the budget, passed and sent on to the Governor.

The changes to tax policy on how farm land is valuated for estate tax purposes and the elimination of sales tax on original art work are included in this new notice from the RI Division of Taxation (click here). The elimination of sales tax on original art takes effect on December 1. The changes to estate taxes and farms went into effect on July 3. 

Donna also got another program written into the budget. This is the Jobs Match program that she and her co-chair of the Joint Commission on Economic Development, Sen. James Sheehan, advanced. 

This program sets up a computerized system to match up workers with employers based on job skills and to also identify skills gaps in our workforce, which is essential for future planning for vocational education and training.

I doubt if anyone would describe this year’s General Assembly session as smooth or pretty. There was a lot of bad blood over whether or not to pay off the holders of the bonds for the failed 38 Studios. 

None of our local communities are going to be happy with the pittance in state aid to our schools and municipalities.

Donna and many of our other South County legislators (e.g. Teresa Tanzi, Larry Valencia and Bob Craven) stood up to the leadership over the state’s moral obligation to make the scheduled $12.9 million payment into the public pension fund. Larry Valencia made the direct tie between our duty to pensioners and 38 Studio bondholders.

This year, there was a departure from the common wisdom that unless you vote the way the leadership tells you, you get shut out and none of your bills pass or priorities get addressed. Donna, Larry and Teresa not only acted on their convictions but also got an impressive amount of work done.