Though diminished in size, manufacturing still exhibits a strong presence in the regional economy and in the job-growth policies of political leaders.
Even with many business subsidies facing scrutiny, Democratic leaders in the Rhode Island House this year want to create a new tax-incentive program aimed at large manufacturers willing to expand here.
The Manufacturing Industry Revitalization Act, part of House Speaker Gordon D. Fox’s economic-development agenda, would provide a $500 per-worker corporate income tax credit to companies who build new facilities and hire at least 100 new employees.
Only large manufacturers would be able to take advantage of the program as the minimum capital investment to qualify is $10 million.
But supporters of the proposal say it is necessary if Rhode Island is going to stay competitive with other states that offer similar and even more-generous tax breaks.
“I think it is something that could benefit manufacturers,” said Bill McCourt, executive director of the Rhode Island Manufacturers Association. “Most manufacturers understand that if they are going to grow, they have to make capital investments. And if they invest, in equipment or facilities, it will reduce the chance they will relocate.”
McCourt would like to see the bill as a starting point for a program eventually expanded by lowering the minimum investment size and making it available to smaller firms and pass-through companies that don’t pay corporate tax.
But while support for manufacturing may be broad, many are questioning whether a new layer of narrowly targeted tax breaks is the best long-term economic-development strategy.
They include Gov. Lincoln D. Chafee, who’s made his distaste for subsidies and special deals known since his 2010 campaign and in proposals to scale back or eliminate the Jobs Development Act, the largest tax-incentive program.
While Chafee hasn’t indicated whether he would veto the Manufacturing Revitalization Act if it passes, spokeswoman Christine Hunsinger said the idea of creating new tax credits, especially those that only apply to a small number of companies, is a concern.
“In the past he has been hesitant to support tax credits that benefit only a handful of companies,” Hunsinger said.
PBN is now accepting applications for its newest award program and event for RI & Bristol County to celebrate the Manufacturing Renaissance that is evolving regionally and across the country. The deadline for applications is March 20th.
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.