State Didn’t Raise Taxes, Cities and Towns Will
Despite this year’s budget deficit, the State Legislature commendably held the line on tax policy and forsake any marked increases. However, rather than look for deeper cuts in spending, they have decided to push off–or trickle down, if you will–the expense to the cities and towns that had, unfortunately, become accustomed to a regular increase in state aid, year after year. As a result, citizens need to re-focus on city hall as the source for higher taxes. And here they come:
•Video service tax: This proposal would apply a 3.5-percent tax on all charges for cable and satellite subscribers. At least 48 other states already have such a tax, according to Dan Beardsley, executive director of the Rhode Island League of Cities and Towns.
The tax would amount to an additional $1.75 for a customer with a $50 monthly cable bill. And it would provide hundreds of thousands of dollars to municipalities each quarter after being distributed based on population proportion…
•Real estate conveyance tax: This proposal would raise the tax paid by homebuyers.
Currently, they pay $2 per $500 of the sale price of the home. The amendment would boost that rate to $3.
•Water rates: Two municipal water-related bills could raise water rates for some 150,000 customers in the state.
One allows the five municipal water systems regulated by the Public Utilities Commission to earn a “reasonable rate of return” — essentially a profit — of at least 8 percent of its annual revenues. The other would prohibit municipal water providers from charging rental fees for fire hydrants to cities and towns.
I’m sure that’s only the beginning. Of course, all of this is being done to prevent “cuts”.
Warwick Mayor Scott Avedesian said that communities would use the money to rescue services now on the chopping block. “Unless we want to say, ‘OK, there will be no more recreation department, or we’re going to close our pools, or we’re not going to have ice rinks,’ you get to that point where something has to give.”
And it’s always the stuff the kids use, ain’t it? What about personnel? Or how about, in the future, “flat-budgeting” so that “flat-funding” doesn’t hurt so much? Unsurprisingly, RIPEC and the Guv aren’t so cool with this:
“It doesn’t guarantee property tax relief,” said Gary Sasse, who heads the business-backed Rhode Island Public Expenditure Council. “And this doesn’t guarantee a penny will go to schools.”
“There are many ways that municipalities can balance their budget, such as controlling spending and attracting businesses into their community. However, plugging budget holes by using the General Assembly for special bills that increase taxes is not the way to solve the problems,” Governor Carcieri’s deputy chief of staff, John R. Pagliarini, wrote in a letter to Alves yesterday.
Then there is the ever-present temptation to turn to gambling to bail us out:
Meanwhile, the governor’s office acknowledged discussions had taken place in recent weeks about allowing the state’s gambling facilities, Twin River and Newport Grand, to stay open 24 hours. Legislators briefed on the proposal said the move could generate between $25 million and $30 million in new state revenue.
What’s more addictive: gambling or the (potential) revenue it generates?