Progressives had mixed reactions to the budget bill passed by the House Judiciary Committee late Thursday night, expressing disappointment with the lack of focus on the revenue side of the ledger. While there are few new cuts in this year’s spending proposal, and a few restorations, it didn’t include tax-the-rich revenue enhancers that organized labor and community activists lobbied for all session long.
“If this budget is passed as is, the wealthiest Rhode Islanders will skate by again while lower and middle-income Rhode Islanders get stuck with the bill,” said George Nee, president of the AFL-CIO who took an active role with Working RI, a group that led the charge for taxing the rich.
While legislative leadership and the local media widely predicted income tax equity reform wouldn’t pass this year, the fight isn’t over yet. Progressive lawmakers are expected to offer an income tax amendment to the budget bill when it hits the House floor next week. Rep. Maria Cimini, a progressive Democrat from the Elmhust area of Providence, led the charge in the House this year, could be the one to offer the amendment. She’s a rising star to the liberal left and an increasing thorn-in-the-side of the more moderate House leadership.
Her bill would have raised the income tax rate on those who make more than $250,000 from 5.99 percent to 9.99 percent, what the rate was before former Gov. Don Carcieri cut taxes to the rich. It also included a job creator incentive that would have lowered the proposed increase by 1 percent for every 1 percent the state’ unemployment rate dropped.
But Rep. Larry Valencia, a progressive Democrat from Richmond, also could offer the amendment. He sponsored a similar bill for the second consecutive year that doesn’t include the job creator incentive, which he said would make the budget more volatile.
“You can tell by the kinds of bills I’ve introduced that I would have preferred some changes to a more progressive tax code,” Valencia said, right after voting for the bill Thursday night. While he was hoping for income tax reform, he said he was happy it included some new sales taxes and glad it didn’t increase the meals and hotel tax – which would have hurt the the local tourism economy, one of the state’s strongest sectors.
Rep. Scott Guthrie, a populist Democrat from Coventry, has sponsored several income tax reform bills during the past two sessions also could offer an amendment.
House leadership has communicated to progressive legislators that it doesn’t want an amendment to come up on the floor. Income tax reform is expected to be used as a campaign issue this summer and fall, as voters seem to support it more than politicians. A Flemming Associates poll showed that 68 percent of Rhode Islanders support a more progressive income tax code, and many conservative legislators don’t want to be put on the record as supporting tax breaks for the wealthy.