When the state fails to balance its budget, it has developed a new strategy of kicking the problem down to cities and towns, which have the fewest options to absorb the shockwave. When it comes to our local budget problems, we all know the financial difficulties facing South Kingstown and Narragansett and the limited alternatives available at the local level. I say limited because there are specifically only two responses to the cuts for any city or town.
1. Raising property taxes and fees, both of which have a disproportionate impact on the middle and working-class families,
2. Cutting programs, jobs or services - including our schools, police and fire, and other critical services.
The lack of leadership from the Governor and the General Assembly in addressing these increasingly common budget problems has forced the difficult decisions on all of us in South County and communities throughout the state; school committees, town councils, and community members are all struggling to pick up the pieces.
The General Assembly has repeatedly voted to cut aid to education, deny reimbursement of the Motor Vehicle excise tax exemption for cars under $6,000 and cut or eliminate other aid to cities and towns, while simultaneously ignoring opportunities for fair tax policy to preserve the fabric of our community.
These lost opportunities are many. Firstly, we have a tax break called the “alternative flat tax” which benefits only 0.17% of the state’s tax filers (just 19 filers in South Kingstown and 18 in Narragansett), and almost two-thirds of flat tax beneficiaries live out of state. Since its enactment in 2007, the state has lost $85 million. How many times have your property taxes increased since 2007 so that that handful of our residents could reap the rewards of the flat tax?
Secondly, 23 other states have enacted a tax policy called “combined corporate reporting” which ends the shell game that multi-state corporations use to avoid paying state income taxes. Adopting this piece of the revenue puzzle would actually level the playing field for smaller local companies, and help Rhode Island’s small business owners recover more quickly.
A third opportunity is for the legislature to follow up on its mandate that the Department of Revenue open the books and review all 211 tax expenditures (88 of which are not found in any other New England state), a mandate with which the Carcieri administration has refused to comply. Not all of these expenditures are per-se ineffective, there are some that the middle class rely upon and make sound fiscal policy. But a very large proportion of the tax expenditures, like the motion picture tax cut, are of questionable value, and the state’s failure to comply with the reporting statute ensures that lawmakers cannot accurately evaluate their cost or effectiveness. This must all change, and soon.
Let’s be honest about what is happening here. The General Assembly is shifting the responsibility of paying for services onto the cities and towns, and avoiding the politically difficult decisions themselves. Our lawmakers and leaders must answer the question of how they got all of us into this mess, and how they plan on getting us out of it without dismantling our schools or the quality of life in our communities.
(Printed in the Narragansett Times, April 28 and the South County Independent, April 29)