Ocean State Action released a report, “Solutions That Work for Main Street: Progressive Guidelines for Closing Recessionary State Budget Gaps” that outlines the essential connection between progressive fiscal policy and the twin goals of state budget repair and economic recovery.

OSA co-released the report with its national partners from United for a Fair Economy’s Tax Fairness Organizing Collaborative (TFOC). The report offers guidelines that delineate optimal fiscal policy during a budget crisis caused by recession, for states seeking recovery, ongoing stability, and more widely shared prosperity.

Key points of the Guidelines:

- Make money available through progressive tax reform, strategic borrowing, and the timely use of rainy day funds.

- Make tax increases and tax reform one and the same, including by repealing unworthy tax expenditures.

- Encourage federal-state revenue sharing.

Rhode Island, just like virtually every state, is groping for solutions to budget gaps of historic proportions. OSA is leading efforts in Rhode Island to promote a package of tax reform proposals that conform to the report’s guidelines.

Ocean State Action’s reform package consists of: repealing the “alternative flat tax,” a massive tax break that benefits less than ½ of 1% of Rhode Island’s highest-earning residents; eliminating ineffective tax expenditures (credits, deductions, and exemptions), which are a form of hidden spending written into our tax code; broadening our sales tax base and modestly lowering the rate; and enacting combined corporate reporting, which would close a loophole large corporations use to avoid paying taxes in Rhode Island.

Ocean State Action’s proposals would responsibly generate new revenue and counter the state’s worsening over-reliance on property taxes, which hit families and small businesses hardest. Governor Carcieri has proposed counterproductive measures that would exacerbate this over-reliance in order to preserve tax breaks for the few.