A Not So Handy Bill
House Bill H7950, sponsored by Representative Arthur Handy (D-Cranston) and quizzically entitled “Economic Growth and Fairness Act”, will be heard tomorrow at the rise of the House. There is a rumor also of a rally against the bill at 4:00 in the Capitol Rotunda.
Rep. Handy issued a press release (h/t Dan Yorke) today detailing the substance and merits of his bill. Below are two statements from it.
It will give tax relief to 90 percent of Rhode Islanders
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Under the plan, the state would net an estimated $161.2 million to $185.2 million in new revenue
With apologies to the representative, these two assertions simply are not credible. Regardless of all the nice-sounding statements in the press release, even if they had gone on for twenty pages instead of two, what matters is the juxtaposition of these two suppositions about the same bill. It is a prima facie non-starter that 90% of Rhode Islanders will have a lower overall tax bill while $161,000,000 in new revenue is created.
In addition to a credibility problem, the macro approach of the bill is wrong. Rhode Island’s ranking as the fourth highest taxed has still left the state with an annual deficit of around $400,000,000. Clearly, revenue is not the problem. Nor was the deficit itself an unforeseen bolt from the blue. Rather, it was deliberately created through an over-emphasis on the spending side of the budget. And that solely is where it must be addressed. Broad-based, yes – spending cuts, not tax targets.
So sayth also the House Republicans, who issued this letter today:
Dear Speaker Murphy and Chair Costantino:
On Wednesday, March 26th the House Finance Committee has scheduled a hearing for 2008-H 7950, a bill that would raise taxes and fees to extricate the state from the projected $350 million budget deficit. We do not believe that the solution to Rhode Island’s budget deficit lies in increasing taxes. Rather, we must focus on reducing the amount of money spent.
We see no utility in beginning a dialogue on increasing taxes or fees in Rhode Island. It is well known that Rhode Island is already among one of the highest taxed states in the nation that harbors the most hostile business climate in the United States.
We are opposed to 2008-H 7950, or any other legislation, which would raise taxes or fees in our state.