What did the rest of us get while the top 1 percent benefited from this largess? Did our political leaders "hold the line" on our property taxes? Did they "hold the line" on cigarette taxes? On fees at the Division of Motor Vehicles? On tuition at state colleges? Of course not - 99 percent of us have been squeezed further so that large businesses and high-income individuals can feel "welcome" in this state.

But which businesses feel welcomed by our crumbling public schools, terrible roads and suffering health-care infrastructure? All of these problems are the result of tax and spending cuts enacted by our leaders, especially in the last five years.

Read entire letter here.

Opponents disagree with Carcieri's approach.

"We're looking at the wrong tax. The reality for Rhode Island is for a couple of decades now we've had a significant over-reliance on the property tax. That hurts not only our business people, particularly our smaller business people, but it also hurts our middle-income and moderate-income families," said Karen Malcolm of Ocean State Action.

And she says the proposed cuts will decrease investment in the very infrastructure businesses look for.

Democrats who dominate the General Assembly have said they are worried about massive budget deficits that could grow larger if the tax cuts pass.

See video coverage here. 

PROVIDENCE — The budget decisions that will be made this year, particularly on his proposals to reform the corporate, income and estate taxes “are probably going to be the most important and consequential of the last four decades, maybe, in truth, in our state’s history,” Gov. Donald Carcieri told the House Finance Committee Thursday. . .

Karen Malcolm, executive director of Ocean State Action said, "if we are really going to take economic development seriously, then we would say no to the governor's policies, or certain pieces of the governor's policies.

"The biggest single problem for the state of Rhode Island is the high cost of doing business, but that high cost of doing business when we look at our tax structure is related not to the corporate income tax, but the property taxes that businesses pay."

Quoting the accounting firm Ernst & Young, Malcolm said "business property taxes account for 51 percent of business taxes as compared to the national average of 35 percent. The corporate income tax, she said, accounts for only 6.2 percent of business taxes.

"We are looking in the wrong place," Malcolm asserted. "We have made significant tax policy changes and adjustment over the past 10 to 15 years. They haven't worked. We still have a significant problem.
Malcolm said, "We do need to dramatically change our climate. We have to make sure our bridges aren't closed down to the trucking industry so our businesses can get their goods to and from. We need to make sure we raise the literacy level of our workforce by investing in education, including higher education.

"The policies we have adopted have not brought promised jobs," Malcolm concluded.

Read entire article here.

Opponents said the state cannot afford Carcieri's proposals, especially given Rhode Island's budget problems.

Karen Malcolm, executive director of Ocean State Action, a coalition of labor unions and advocacy groups, said previous state tax cuts have not worked. "The policies we've been following have not brought the promised jobs," she said.

Instead of phasing out the corporate income tax, for example, Rhode Island should instead seek changes to local property taxes, which represent the single greatest tax burden for business, she said.

And to improve Rhode Island's overall business climate, the state should focus on other areas, such as fixing crumbling roads and bridges, she said.

Rick Harris, executive director of the Rhode Island chapter of the National Association of Social Workers, said Carcieri's proposals would drain away tax revenue at a time when it is most needed for education, health care and other programs. "If you're taking more money out of the system, how are we going to meet this need?" he said.

Read entire article here.

PROVIDENCE –– Governor Carcieri’s ambitious plan to cut taxes in the midst of the worst economic downturn since World War II met fierce opposition yesterday, as skeptical lawmakers began to review policies that would reshape Rhode Island’s tax system for thousands of businesses and hundreds of thousands of individual taxpayers. . .

“As Rhode Island is facing perhaps its greatest budgetary crisis in recent history … the governor has reached a new level of recklessness by proposing to cut taxes for large corporations and the rich,” said Karen Malcolm, executive director of Ocean State Action, a coalition of labor unions and advocacy groups.

Malcolm was among a throng of lobbyists packed into the stuffy Senate Finance Committee hearing room yesterday, stern-faced reminders of the high stakes at hand. For every dollar given up in tax cuts, state leaders will have to find another dollar by raising taxes elsewhere or cutting spending.

There is already talk of slicing millions of dollars from cash-strapped local communities, trimming more from struggling community hospitals, changing the pension system for thousands of state workers and teachers, and dipping into subsidized health-care programs for poor, disabled and elderly Rhode Islanders.

Read entire article here.

PROVIDENCE –– Rhode Island government’s budget deficits have grown by $200 million over the last six months, a massive jump that exacerbates an already-staggering budget hole and intensifies pressure on the General Assembly to raise taxes or slash state spending across a host of popular programs. . .

“We are paying the price not only for national and international economic factors, but also for years of misguided decisions by our policymakers that have cut taxes for those who need cuts the least, while increasing the pressure on the rest of us,” Peter Asen, spokesman for the labor-backed advocacy group Ocean State Action, said in a statement.

The governor’s office, which recently proposed new tax cuts for businesses and high earners, is ready for a fight.

PROVIDENCE - With the deadline to file federal income tax returns just hours away, some Rhode Islanders plan to mark the day with dueling demonstrations over government spending priorities.

Taxpayers have until midnight tonight to file their income tax returns or request an extension with the Internal Revenue Service. The IRS says it expects to get more than 20 million tax returns this week, in addition to the roughly 102 million it had received through the end of last week, according to The Associated Press.

Unlike in prior years, Providence's main post office on Corliss Street will close at 9 p.m. tonight rather than stay open until midnight for last-minute filers. But a postal spokeswoman said individuals who drop their returns in the blue mailbox will still have them postmarked April 15.

Two groups with different views on how those tax dollars should and should not be used will hold demonstrations in the city today.

From 10 a.m. to 8 p.m., a group of activists plan to greet tax filers at the Corliss Street post office to protest the cost of the war in Iraq and the defense budget. The groups that will be represented include the American Friends Service Committee, Ocean State Action, Declaration of Peace Campaign Rhode Island, and the Rhode Island Mobilization Committee to End War and Occupation.

"Rhode Islanders have spent billions of dollars on the war in Iraq and continue to do so," Martha Yager of the Friends Service Committee said in a statement. "The military budget, bloated with funding outdated weapons systems and 300 percent cost overruns that would be completely unacceptable in any other part of government, continues to suck up over half of our nation's discretionary spending."

"With that money, we could have avoided the state's deficit, funded Head Start, health care and education, and have been ready to help families hit hard by the state's recession," she added.

Tom Sgouros, long-time friend of Ocean State Action and at-large board member, and publisher of the Rhode Island Policy Reporter, had this guest column in the ProJo.

W.C. FIELDS had it that “Comedy is tragedy happening to someone else.”

And in truth, what can you say about the Rhode Island budget farce whose curtain went up this month? If I lived in another state, I’d be laughing. . .

How can he manage such fiscal legerdemain? Easy: by sticking it to the cities and towns. Between this year and next, we’re looking at around $110 million cut from state contributions to the non-school side of municipal aid, and $31 million restored by the federal government, through the stimulus package. General revenue sharing with municipal budgets will be a thing of the past, and the education cuts are deep and dramatic, too, unless you’re running a charter school (up 20 percent since 2008). . .

The governor also plans to take the advice of his “blue-ribbon” commission on taxes, and proposes to cut taxes still further for the wealthiest individuals in the state. Who will take up that slack? A bit more than half of the taxpayers who earn $30,000 to $100,000 or so. (Do you itemize deductions now? If so, you’re among them.)

The commission also recommended the complete elimination of the corporate-income tax, but in typical dishonest tax-cutting fashion, the budget proposed to phase it out over a few years beginning in 2011, so it will be someone else’s problem, not this governor’s. And no, he proposes no program cuts to pay for it.

This is no ordinary economic downturn.  What makes it worse is a level of inequality that we haven't seen since the last Great Depression 80 years ago.  Here in Rhode Island, income inequality has grown for some time, making the current crisis even more dire for many.

Between 1990 and 2006, Rhode Island had the country’s fifth-highest increase in wage inequality. Between 2000 and 2006, we were the only state in New England where the median family wage declined while income for those earning above $200,000 soared far in excess of the national average.

Rhode Island’s inequality gap is perpetuated by policy choices made on Smith Hill.