Summit eyes protection of R.I. gambling revenue

For the first time since the event began six years ago, the revenue the state receives from gambling at Twin River Casino and Newport Grand Slots will be a targeted topic of discussion when the U.S. Small Business Administration’s Rhode Island Economic Summit convenes Jan. 27.
Grafton H. “Cap” Willey IV, chairman of the taxes-and-budget standing committee for the summit, said the goal of the gambling discussion will be neither to endorse nor reject the expansion of either site to full casinos, but rather to protect the revenue stream that the state relies on in light of threatened competition from neighboring states.
“To ignore what Massachusetts is doing would be risky,” Willey said of the Bay State’s tentative plans for casinos as close as Foxboro and the New Bedford-Fall River area. “The loss of that revenue stream would have a great impact on small-business taxation and services.”
Starting with registration at 7:30 a.m. and continuing to 1:30 p.m., the annual summit at the Johnson & Wales Culinary Archives and Museum on the Harborside Campus is expected to draw about 150 small-business representatives, along with officeholders and other economic- development specialists.
Twenty-nine members, including leaders of the General Assembly, have confirmed their attendance, along with Gov. Lincoln D. Chafee and Lt. Gov. Elizabeth H. Roberts, according to the Providence SBA office. Six standing committees, such as that led by Willey, will host breakout sessions on individual topics, complemented by a plenary session that all attend.
The summit “provides an outlet for small business to tell representatives, senators and general officers what they need to succeed,” said Mark S. Hayward, director of the SBA regional office in Rhode Island. He made a point of noting that paid lobbyists are not part of the program. The summit usually results in a formal legislative package of proposals for the General Assembly.
Willey’s concern about protecting gambling revenue stems from the fact that a large chunk – approximately $300 million – of the state’s $7.7 billion budget comes from that source.
According to Paul L. Dion, chief of the office of revenue analysis at the state Department of Revenue, the state in fiscal 2011 received $270.4 million from Twin River and $31 million from Newport Grand. In the current fiscal year, official estimates are that Twin River will provide $285.2 million and Newport Grand, $29.5 million. In fiscal 2013, estimates are $297.2 million from Twin River and $27.9 million from Newport Grand. Dion noted these figures assume no change in the gambling environment in nearby Massachusetts and Connecticut.
Willey’s committee also will address municipal pension reform, recommending that no municipal plan have different rules and benefit structures than the state plan. The fiscal assumptions used to set the reformed state plan, “or more conservative estimates,” should be used to craft municipal reform, Willey said.
Changes in the estate tax and the corporate tax will also be proposed to make them more competitive with neighboring states. A longtime advocate of small business, Willey is a principal of CBIZ Tofias and Mayer Hoffman McCann PC, an accounting firm with offices in Providence, Newport and Boston.
Mark S. Deion, president of Deion Associates & Strategies Inc. in Warwick, chairs the economic-development committee and said his panel is working on the following key issues in preparation for the summit:
• As has been proposed in the past, re-instatement of the tax credit to reimburse small-business applicants for fees paid on SBA-guaranteed loans, which can range from 2 percent to 3.5 percent of the sum guaranteed. So, for instance, a loan with $300,000 guaranteed results in a $6,000 fee.
• Recommend that the general treasurer “research and review” the use of $5 million to $10 million in state pension funds for small-business loans of no more than $150,000, rather than invest the money in Wall Street, Deion said.
• Recommend that the $12 million raised annually by the job-development tax on employers be used for job development or the tax be eliminated. Deion said most funds, about 60 percent, now go to the unemployment fund.
Gary Ezovski, president of Lincoln Environmental Properties in North Smithfield, is in charge of the regulations committee that will recommend a statewide building-permit process, an idea that died in the General Assembly last year, and a system that allows routine tracking of building and other permits, as well as utility service requests. “We can track a package shipped to us from Malaysia every step of the way,” he noted. •

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