Helio Melo says RI income tax policy has hit the rich, helped the state


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From 2012 House Finance Committee budget consideration.
From 2012 House Finance Committee budget consideration.

House Finance Committee Chairman Helio Melo said the oft-debated restructuring of Rhode Island’s income tax code under Governor Don Carcieri has resulted in more annual revenue, and that the wealthy are paying more than they did prior to the changes.

“I don’t think we cut income tax on the wealthy,” he told me last night, before sitting down for the first evening of the legislative session. “I think they actually pay more than they have in the past. We took away a lot of exemptions when we did that.”

He also said the changes top-down changes have resulted in more revenue, too.

“I think we are seeing more money coming in with personal income tax so if we just look at it that way I would say yes. Does it mean we are getting more jobs? I’m not too sure about that…”

You can listen to our conversation here, including voter ID (Melo: “I don’t have a problem with it.”) and later today I’ll be post my conversation with Rep. Maria Cimini about tax equity and her contrasting thoughts on it:

Projo Botches Facts in Editorial on Legislative Races


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How can we trust their opinions if they can’t even get the basic facts right?

The Projo editorial board was so overzealous in its attempt to slam organized labor and the candidates that support them in an editorial on General Assembly campaigns today, it botched several facts.

Here’s the list I could come up with, if you can find any more please add them in the comments below:

  • House Finance Committee Chairman Helio Melo is actually running unopposed.  John Rossi never ended up filing all the required paperwork needed to get on the ballot.
  • Also related to Helio Melo. His last name is spelled “Melo” not “Melio” as the Projo wrote. (Though that would be a pretty fun name to say if it was Helio Melio!)
  • Speaking of spelling errors, they also misspelled Leo Medina’s name. The writer/writers could have simply referenced their own front page from last week for the correct spelling. It’s not like Medina isn’t a known quantity in newsrooms around Rhode Island as of late.
  • Robert Flaherty is not running for reelection this year. While the editorial doesn’t explicitly say he is running for office this year, it is an editorial advocating for which candidates voters should support this year. In the spirit of Politifacting, we rate this statement as half pants on fire because it seemed like a wanton effort to besmirch Flaherty’s name.
  • Update: an astute reader reminds me that, of course, John McCauley is not running for reelection either…

From my vantage point, it frequently seems as if the Projo editorial writers are more interested in trafficking in ideological talking points rather than informing its readers. As a fellow opinion writer, it’s important to do both … but the former doesn’t carry a lot of water until you can get the latter down pat.

Clothing, Cigarette Taxes Considered for Budget


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With the proposed budget expected to restore some funds cut last year, several revenue sources first identified in Gov. Chafee’s budget proposal may be used to pay for them.

House Finance Committee Chairman Helio Melo, who has been tight-lipped about the budget he has been crafting with staff for the last several weeks, said, “Revenues are always a good way to pay for expenditures.”

He added, “We’re still working on it.”

But lawmakers from both the House and Senate said ideas being strongly considered include: a new tax on expensive clothing, an increase in the cigarette tax and a tax amnesty proposal. All three proposals were first identified in Chafee’s budget proposal released much earlier this year.

The proposed tobacco tax increase of $.04 per tax could generate more than $4 million, according to Chafee’s budget. A tax amnesty is when people who owe back taxes are allowed to pay their delinquent bills without penalty.

Chafee proposed the tax on high-end clothing kick in at any item over $175 and is expected to generate more than $11 million. The House is inclined to start the tax at $175 or $200. Senators would rather see it start higher; one mentioned $250.

After a meeting with Speaker Gordon Fox late in the day Wednesday, Senate President Teresa Paiva Weed said a clothing tax would benefit big box stores that could avoid paying it. She also said it would take away Rhode Island’s competitive advatage over Massachusetts, which already taxes clothing more expensive than $175.

“Whatever we do in the budget on any area of revenue needs to maintain our competitive advantage,” she said. “It’s important that we remain competitive with our neighbors in Massachusetts.”

Paiva Weed Pushes for Reversing Cuts to Disabled


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Senate President Teresa Paiva Weed said she is pushing for restoring funds to programs for the developmentally disabled in this year’s budget.

“From an overall policy perspective we believe decisions in last year’s budget resulted in a negative impact on the community,” she said. “The senate has consistently made restoration of funding for the developmentally disabled a priority.”

Last year, funding for the developmentally disabled were cut by $24 million. Only about $12 million was cut from the state budget; the other half comes in federal matching funds.

Paiva Weed said Senate Finance Committee Chair Daniel DaPonte and House Finance Committee Chair Helio Melo, both East Providence Democrats, are working together to see how much of the approximately $12 million in local cuts can be restored.

“At this point finance chairs have been negotiating,” she said. “Hopefully they will resolve it all soon.”

During the last week or so, the finance committee chairs, among others, have been busy putting together the budget proposal behind closed doors. When I caught Melo opening the door of his office (after his secretary told me he wasn’t in there) he was tight-lipped about what might be in the much-anticipated proposal. “We are looking at it,” he said. “We are looking at everything.”

As a result of the cuts last year, programs were scaled back, even though they weren’t supposed to be, and several hundred low-income wage earners had their hours cut.

House Finance Committee member Rep. Larry Valencia, a progressive Democrat from Richmond, said, “It’s important to see what we can do about reversing the cuts from last year,” he said, noting that pay cuts to low-wage employees has a significant effect on the state’s economy.

Sen. Lou DiPalma, a Middletown Democrat who is the deputy chair of both the finance committee and the human services committee, is also pushing for funds to be reinstated.

“We need to see how to move needle from where it was last year,” he said. “The cuts last year went much too far.”

Advocates for what’s known as DD funding were successful this session at drawing attention to the cuts. The biggest crowd at the State House this session was for a rally to raise awareness to the cuts – it drew close to a 1,000 people I would estimate. And several labor unions affected by the wage cuts either staged one-day strikes earlier in the session.