June 9, 2014 – RI Future

June 9, 2014June 9, 2014

Low income RIers pay for estate tax exemption

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The budget as proposed benefits wealthy heirs at the expense of low-income Rhode Islanders, according to an Economic Progress Institute analysis of the House Finance Committee’s revenue and spending plan released late last week.

The proposed budget would increase the exemption on the estate tax from $921,655 to $1.5 million while eliminating $3.9 million in tax breaks to low and moderate income Rhode Islanders. The budget lowers the Earned Income Tax Credit and eliminates a property tax refund.

“The clear winners are a small number of wealthy taxpayers whose estates will pay less in taxes and in many cases, nothing at all starting next year,” according to this factsheet put together by EPI. “The clear losers are tens of thousands of low- and modest-income Rhode Islanders who will pay more in taxes next year. Unemployed homeowners and renters are among the biggest losers, because they will no longer qualify for property tax assistance and are not eligible for the earned income tax credit. Many of the lowest-wage workers will also be negatively impacted by the loss of the property tax refund, even with an eventual boost in the EITC.”

According to EPI, if you are a Rhode Island taxpayer who dies with a million dollars, your heirs will owe $30,555 of their inheritance to the state. The proposed budget would eliminate the estate tax for everyone who dies with less than $2 million. Those heirs would owe $35,200.

On the other hand, the proposed budget would reduce the Earned Income Tax Credit overall. According to EPI: “Lawmakers are reforming the credit by reducing it to equal 10 percent of the federal EITC and making it fully refundable. This change is likely to result in larger refunds for some of the lowest-wage workers in our state, and some workers who did not receive a refund will now get to keep more of what they earn come tax time. Still, many modest-income EITC filers with relatively higher income tax liability will pay more in taxes as the credit is reduced.”

The budget plan also eliminates what is known as the “property tax circuit breaker.” This tax refund is for Rhode Islanders who earn less than $30,000 a year whose property tax rate is more than 3 percent of their household income. 40,000 renters and homeowners took advantage of this deduction last year for an average refund of $272, according to EPI.

“The $4 million being taken directly out of the pockets of low- income taxpayers is money that would have been spent right here in the Ocean State at local businesses,” said EPI Executive Director Kate Brewster. “On the other hand, high-income households don’t need to spend every dollar they have to meet their basic needs and are more likely to save their tax cut.”

June 9, 2014June 9, 2014

Bill equates carpooling with prostitutes to sex trafficking

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What a difference a word can make. Or, in the case of Senate Bill 2602, three words. The proposal, said co-sponsor Sen. Gayle Goldin, was originally worded to target sex traffickers. But by changing the phrase “in order to commit” to “or” the legislation would also target sex workers, too.

Goldin was the only member of the Senate to vote against the bill last week and is urging her House colleagues to similarly reject it when they consider it on Tuesday.

“On its surface, it may appear that this law is necessary to catch more of the bad guys,” she said. “In reality, the wording of this bill conflates sex trafficking with prostitution.”

The amendment to state law 11-67-3 initially read, “Trafficking of persons for forced labor or commercial sexual activity” read (with added emphasis on altered phrase): “Whoever knowingly … Recruits, entices, harbors, transports, provides, or obtains by any means, or attempts to recruit, entice, harbor, transport provide, or obtain by any means, another person, intending or knowing that the person will be subjected to forced labor in order to commit a commercial sexual activity…”

Steve Brown said the ACLU thinks the bill casts an overly broad net. “It’s not just prostitutes,” he said. “What if a prostitute uses a particular cab driver.” He said the bill as written could mean that cab driver is guilty of sex trafficking.

The language change was suggested by Attorney General Peter Kilmartin “to clarify that trafficking applies to both forced labor and commercial sexual activity,” said spokeswoman Amy Kempe.

“Currently, the section provides that in order to prove trafficking, the State would have to provide that the person trafficked another knowing that they would be subject to forced labor in order to commit commercial sexual activity,” Kempe said. “Forced labor and commercial sexual activity are two distinct acts under that chapter and should be treated as such.”

But Goldin said the slight change has fouled the intent of the legislation.

It “would mean that the penalties intended specifically for the traffickers could also be used to penalize sex workers themselves,” she told me in an email. “If this bill makes it to the Governor’s desk, instead of protecting the sex workers who are being victimized by these horrendous acts of trafficking and ensuring they receive the level of intensive services they need, we will potentially prosecute them. Rhode Island’s human trafficking law was the result of careful, deliberate work to determine a way to strengthen protections for anyone in our state who is being forced into performing labor of any type, including sexual activity. This bill’s change to the law undermines the very intention of the statute.”

The House is scheduled to vote HB 7612 Tuesday.

June 9, 2014

Rally at the State House Tuesday to oppose state ban on city minimum wages

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Working women and men in Providence are no longer fighting for fair and just wages, they are now fighting for the ability to petition their government. In an effort to prevent Providence area hotel workers from asking the Providence City Council for a $15 an hour minimum wage, Representative Raymond Gallison under the leadership of Speaker Nicholas Mattiello has introduced a bill that would prevent local municipalities from establishing their own minimum wage laws.

Quickly realizing that this lordly example of legislative overreach would face a tough challenge from an outraged public that largely supports raising the minimum wage and from local officials outraged over the General Assembly’s naked power grab, Gallison decided to insert his bill into the proposed state budget, where I suppose he hoped no one would notice. (Hint: It’s on page 122 .)

That’s why there is going to be a large gathering at the Rhode Island State House Tuesday night at 5:15pm to let the General Assembly know that working mothers and working families are suffering. They are working in conditions of grinding poverty and they have had enough. What does the present budget have in it for them, except for the proviso that strips them of the only political power they have?

Take from the poor and give to the rich, whether it be money or power, that is the way of politics in Rhode Island.

“Representative Gallison’s proposal is an attack on all RI cities and towns,” said Providence City Councillor Carmen Castillo, “it will strip us of our power to represent our communities. What power will they try to take from us next? The right to decide if we should have a casino in our town? The right to set our own budgets?”

“House leadership is moving to jail us in poverty,” said Santa Brito, a housekeeper at the Renaissance Hotel. “We are hard working mothers and the backbone of the Providence tourism industry, fighting to send our kids from Head Start to Harvard.”

The “new leadership” in the House is starting to smell an awful lot like the old leadership. This tactic of burying unpopular or politically contentious pieces of legislation into the state budget is a classic way for cowardly legislators to undermine and circumvent the will of the people.

Have you had enough? Can you show up Tuesday night at 5:15 pm at the State House to let the General Assembly know that the people have had enough and that the time has come for bold, progressive politics that puts people before corporate interests?

June 9, 2014June 9, 2014

Wingmen agree! Cutting sales tax better than estate tax

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When it comes to reducing revenue, Justin Katz and I agree that it would be better to slash the sales tax than the estate tax exemption, in contrast to what the House Finance Committee thinks is the best course for Rhode Island.

But that’s about as close to agreeing on the proposed budget – or anything to do with government, for that matter – that we were able to reach on this week’s NBC 10 Wingmen segment.

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June 9, 2014June 10, 2014

Sailing with Governor Chafee

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Friday afternoon was the kind of weather that lets Rhode Island lay claim to some of the best sailing on the planet. It was warm but not hot. It was mostly sunny but ample clouds for shade. And and there was a good, stiff breeze blowing in from the north. And although the House Finance Committee had unveiled and passed its budget proposal less than 24 hours earlier, Governor Linc Chafee was not at the State House. He was heeling his sailboat, Swift, up Narragansett Bay into a 10-knot headwind.

Chafee isn’t running for reelection, and doesn’t seem to regret the decision. In election years, “the boat stays ‘on the hard’ as they say,” he told me as he took me for a cruise aboard his 33-foot J100. While we sailed he said repeatedly that he’s staying focused on his final months as governor, but he mentioned maybe hiring a headhunter once he’s out of office, and said he isn’t opposed to doing something overseas. I told him he should help bring the America’s Cup back to Newport. He’s got not only the money and the name recognition, but few love the water as much as Linc Chafee.

Chafee lives in the beach community of Potowomut and his home is right next to a CRMC public right-of-way and popular neighborhood beach on Greenwich Bay, where he can often be seen paddleboarding in the early mornings. He keeps his sailboat – a bigger version of one of the most popular racing sailboats ever built, the J24 – in Dutch Harbor, the mooring field on the west side of Jamestown that can be seen when looking south from the bridge. The cove is flanked by colonial era farms and pastures, a beach or two, several salt marshes and Dutch Island. I once asked Chafee to go surfing with me, but because we agree that Dutch Harbor is just about the most beautiful place in New England, we decided to go sailing instead.

We talked a lot about the highlights of being governor. Chafee boasted of making the state more tolerant and of leading Rhode Island out of a long recession. He said he feels vindicated that the House budget suggests lowering the corporate tax and implementing combined reporting, “bold” moves he suggested in 2012. Central Falls’ recovery, he said, was his highlight as governor.

When I asked him to define his legacy in one word he said:

Several times we discussed his relationship with the media, he seems to have strong feelings about it. He made a point of saying there’s been a lack of media support for social justice issues.

Chafee’s 61 years old, and has been a city councilor, a mayor, a senator and now the governor. He wouldn’t say he was done with politics, and seemed to like the idea of perhaps running for Warwick school committee some day. He told me he may make an endorsement in the governor’s campaign, but didn’t tell me for whom. Instead of pressing him, I asked what young Linc Chafee was like.

When we got back to his mooring in Dutch Harbor, I asked him if he might be interested in buying the Providence Journal.