Report outlines $200M in ‘pork spending’ to pay for tax cuts

The Rhode Island Center for Freedom & Prosperity on Tuesday published a report outlining specific ways the state can trim $200 million in non-essential spending to fund tax cuts in the fiscal year 2015 state budget. More

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public policy

Report outlines $200M in ‘pork spending’ to pay for tax cuts

Posted 2/25/14

PROVIDENCE – The Rhode Island Center for Freedom & Prosperity on Tuesday published a report outlining specific ways the state can trim $200 million in non-essential spending – more than enough to fund tax cuts in the fiscal year 2015 state budget.

“This report clearly demonstrates that there is more than enough pork in our budget that can be trimmed,” said Mike Stenhouse, CEO of the Center for Freedom & Prosperity. “When it comes to cutting the sales tax, there is no longer any legitimate excuse for not moving forward with sales tax cuts that will save money for every Rhode Island family and business and create thousands of new jobs.”

The Center for Freedom & Prosperity advocates eliminating the state’s 7 percent sales tax, or reducing the sales tax to 3 percent. A study published by the center in December showed that a 3 percent sales tax rate could produce as many as 14,000 new jobs in the state.

The $200 million in proposed spending cuts cited in the report represented “excessive and often wasteful spending for projects that produce little or no benefit to the average resident,” according to the report. Making these cuts would more than accommodate the reduction of the sales tax to 3 percent, which the center said would require only $48 million in budget savings, without cutting essential services such as education, public assistance programs, aid to cities and towns, or infrastructure investments.

Among the actions recommended in the report was transferring HealthSource RI over to federal government management, which would eliminate about $23 million needed to run the exchange and $15 million for the Unified Health Infrastructure Project that seeks to apply the technology of the exchange to other Rhode Island social service agencies.

The report also suggested saving $26 million by privatizing the R.I. Convention Center Authority, which oversees the Dunkin’ Donuts Center, the convention center and Veterans Memorial Auditorium; cutting $14 million for higher education capital projects; and forgoing the $12 million fiscal year 2015 payment of the 38 Studios LLC moral obligation bond.

“We can continue to over-spend and plod along with a failed economy, or we can be more prudent with how we spend taxpayer money and provide tax relief that will provide a sorely needed boost,” said Stenhouse. “Lawmakers have an opportunity to both reduce the structural deficits we are projected to face and to grow our state’s economy; it’s time to move in this direction.”

Other potential savings opportunities highlighted in the report included:

  • $9 million in “corporate welfare” handouts.

  • $8 million in “often crony spending” from the Governor’s Workforce Board.

  • $8 million in Community Service Grants awarded by the General Assembly.

  • $5 million in “waste and fraud” from the Supplemental Nutrition Assistance Program.

  • $3 million from the state’s facilities management budget.

  • $2.5 million for a sailing center.

  • $1 million in legislative grants.

While Stenhouse could not immediately provide detailed source data on each of the proposed cuts, the center will fully footnote each of its recommendations in the final study, to be released next month.

Wednesday’s report offered a preview the study, in which the Center for Freedom & Prosperity in collaboration with the Taxpayers Protection Alliance will outline an additional $100 million in potential spending cuts from state operations and overtime compensation, occupational licensing management costs, non-vital commissions and other bureaucratic entities, historical preservation projects, arts and culture subsidies and film incentives, and other areas.

The study will also recommend the creation of a fully empowered “Office of the Inspector General” and an “Office of the Repealer,” which would be responsible for making recommendations to the General Assembly in areas of government waste, duplication and out-of-date regulations that should be removed from the state law.

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