Thank you, Nick Mattiello

The 5 worst things in the House budget

By Samuel Bell in Rhode Island’s Future

Budget reflects the policies of new right-wing Speaker

The Rhode Island House of Representatives has put together a new budget, and there is a lot not to like.  Here are my top five:

5.   Slashing the corporate income tax from 9% to 7%.

New House Speaker Mattiello, a very conservative Democrat from Cranston, has been championing this idea ever since he rose to power.  Naturally, progressives would prefer to see these funds spent on jobs programs like infrastructure spending.  But what is perhaps most disappointing about this cut is how it hands a big break to the businesses that least need the help, not the ones that need it most. 


At the federal level, we have a progressive corporate income tax, so businesses with smaller profits pay a lower rate, which helps increase competition.   But in Rhode Island, every business pays the same rate, regardless of the size of the profits.  

We could change that.  We could also eliminate the $500 minimum tax, which unfairly discriminates against small, struggling businesses.  If we are going to go down the unwise road of cutting corporate income taxes, instead of spending that money on jobs, helping out small businesses would be a better way to go.

4.   Slashing the estate tax.

In Capital and the Twenty-First Century, one of the most exciting works of economic research in recent years, Thomas Piketty lays out a bleak picture of accelerating wealth inequality increasingly dominated, not by earned wealth, but by inherited wealth–a threat that strikes at the core of the American Dream.  

It is not an understatement to say that this thesis has revolutionized the way the national Democratic Party looks at inequality.  Now, more than ever, the party is committed to addressing wealth inequality.  Yet in Rhode Island, where the Democratic leadership of the General Assembly tends to side with the national Republican Party on issues, we are moving in the other direction and slashing our state’s estate tax, which disproportionately affects the wealthy.

3.   Refusing to fund negotiated raises.

Former Speaker Gordon Fox was no friend to working people, but new Speaker Nick Mattiello is striking an even more aggressively anti-labor profile.  Although the Governor negotiated a modest $25 million in raises for state workers, Mattiello’s budget brazenly refuses to fund them.  The precedent this sets is chilling.

2.   Raising taxes on the poor and the middle class.

Instead of one big tax hike on working people, like the proposed Sakonnet River Bridge tolls, the Mattiello budget opts for a range of regressive tax hikes.*  The gas tax, which is very regressive, is going up.  So are the vehicle inspection fee and the good driving fee.  The property tax circuit-breaker relief program, which helps low-income Rhode Islanders, will be axed.  Repealing the 2006 income tax cuts for the rich, naturally, was off the table.

1.   Banning minimum wage increases in any city or town.

Borrowing an idea from Oklahoma’s Tea Party government, the House Democratic leadership is banning cities and towns from raising the minimum wage.  This is a not so subtle attempt to block the inspiring campaign fighting for a living wage for hotel workers in Providence.

*It is an interesting question whether these new tax hikes are more damaging than the tolls.  While they are probably more regressive, they are also probably more effective at driving environmentally and socially responsible transportation usage.

Samuel Bell is the Rhode Island State Coordinator for the Progressive Democrats of America. My primary interest is Rhode Island's economy and what we can do to fix it.

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