The House and Senate have passed a budget blueprint for the
state for FY 2015. The plan calls for spending $8.7 billion up from $7.7
billion in FY 2013. The budget is actually combines state and federal spending and the total funded by Rhode
Islanders — $3.9 billion – indicates the extent to which the state is
dependent on the federal government.
The budget included a reduction in the corporate tax rate
from 9% to 7%, and a reduction in the estate tax by increasing the exemption
from $922,000 to $1.5 million. Another provision eliminated the toll on the
Sakonnet River Bridge and froze tolls on other bridges while funding road and
bridge construction. Finally, the budget banned local minimum wages, which
could have resulted in a crazy quilt of wage laws within a small state. In a
memo to state lawmakers, NFIB praised the progress on the tax front and the
attention paid to the state’s business climate, but called for more focus on
tax relief for small businesses in 2015. NFIB suggested putting the minimum
business corporation tax, the sales tax, energy taxes, and the gas tax on the
table as those assessments directly impact small business costs and the state’s
job growth.
In other action, the state appears set to increase the
minimum wage for the third time in three years to $9 per hour – much higher
than anticipated a few weeks ago. NFIB stressed the impact of increased labor
costs on job creation, especially in small businesses. Also, any increase in
the minimum wage makes the preemption of local wage regulation absolutely
critical.
