House panel backs budget that curbs corporate, estate taxes
RHODE ISLAND'S House Finance Committee has approved an $8.7 billion budget bill that reduces corporate and estate taxes, eliminates tolls on the Sakonnet River Bridge and $52 million in new state historic tax credits, and provides $12.3 million for repaying the 38 Studios moral obligation bonds.
PROVIDENCE – The House Finance Committee late Thursday night passed an $8.7 billion state budget bill unveiled by Democratic leadership that would lower the state’s corporate tax rate and cut estate taxes, while raising the gas tax and motor vehicle fees.
The gas-tax and vehicle-fee increases in the budget were part of an agreement reached with Senate leadership to eliminate tolls on the Sakonnet River Bridge.
As promised, House leadership included $12.3 million toward repaying the 38 Studios bonds.
The spending plan closes a $67 million budget gap in part by not funding $24.3 million in raises for state workers negotiated by Gov. Lincoln D. Chafee’s administration this spring. To pay for the raises, state departments will need to find operational savings within their existing appropriations, according to a news release from the House speaker’s office.
And it would authorize the state to borrow $45 million to build a parking garage on lots next to the Garrahy Judicial complex in Providence. The parking garage could not be financed until at least three parcels in the adjacent I-195 land are under contract, under a provision in the budget. It would also put a referendum before voters to borrow another $35 million to create bus hubs at Garrahy and the Providence train station.
A $125 million bond to build a new engineering school building on the University of Rhode Island campus in South Kingstown would also go before voters.
The budget’s reduction in the corporate tax rate is accompanied by a move to “combined reporting,” which requires the subsidiaries of multistate and multinational corporations to file as a single entity in Rhode Island.
On the estate tax, the budget raises the taxation threshold from $921,655 to $1.5 million and makes only the assets above that threshold subject to taxation.
To pay for maintenance of highways and bridges like the Sakonnet, the budget would hike the gas tax 1 cent starting July 1, 2015, and index it to inflation every two years.
In addition, the budget would transfer all vehicle-related fees, including those being increased, to a new infrastructure fund.
Under the budget bill, the vehicle-inspection fee would rise from $39 to $55 and the fee for dismissing a violation from an otherwise clean driving record would rise from $35 to $60 starting July 1.
The House Finance committee endorsed the budget on a 14-to-2 vote.