PROVIDENCE – Rhode Island’s five general officers and the chairmen of two influential legislative committees are opposed to raising broad-based and sales taxes to get through the state’s fiscal crisis, they all said today during the 2009 Rhode Island Economic Summit sponsored by the district office of the U.S. Small Business Administration.

Gov. Donald L. Carcieri won a round of applause from the audience of nearly 200 small business owners and advocates when he once again – as he has several times in recent weeks, most recently during his televised address Wednesday night (READ MORE) - insisted that the state cannot afford the long-term ramifications of raising either income or sales taxes.

“To tax our way out of the problem,” Carcieri said, “would be putting the nail in the coffin of our economy.”

He made his comments as a member of a special state panel addressing attendees at the daylong summit, held at the Culinary Archives & Museum of Johnson & Wales University.

All chairs were taken and it was standing-room-only at the plenary session. Mark S. Hayward, director of the SBA’s Rhode Island office, said the turnout was higher than in previous years and 48 people were turned away due to lack of space, reflecting the business community’s intense concern about the economy. Media covering the event included CNN and The New York Times.

Others on the panel with the governor were Lt. Gov. Elizabeth H. Roberts, General Treasurer Frank Caprio, Secretary of State A. Ralph Mollis, Attorney General Patrick C. Lynch, House Corporations Committee Chairman Brian Patrick Kennedy and newly named Senate Corporations Committee Chairman Josh Miller, a Providence businessman who owns Local 121 and Trinity Brewhouse.

Hayward, in what seemed an only half-joking manner, suggested at one point that the General Assembly corporations committees be renamed “small business and corporations.” “It would be more inclusive,” he said.

Like Carcieri, none of the other six elected officials spoke in favor of raising broad-based and sales taxes. Molllis expressed concern that the state – by cutting local and school aid – could be passing its problems on to the cities and towns, just as the federal government often does to the states. It would help no one to see property taxes hiked, he said.

Carcieri noted that his fiscal 2009 supplemental budget – introduced this Wednesday and now before the legislature – includes at least 15 elements designed to give local communities relief from state mandates, such as allowing them to eliminate school bus monitors and ending minimum staffing requirements for public safety departments.

Miller responded that “nobody wants to raise taxes, but everybody has to be honest about the repercussions that will happen.” He said he has heard from the principal of a Providence school about the potentially dangerous ramifications of eliminating school bus monitors.

Carcieri then pointed out that his proposal simply abolishes the mandate. “It leaves it up to cities and towns [to hire school bus monitors] based on what their bus routes are,” the governor said.

“Everything is on the table,” Kennedy agreed, adding that Assembly leaders are opposed to raising taxes. One idea the legislature is considering is lowering the sales tax from 7 percent to 5 percent, but abolishing the many exemptions that now remove the tax from such purchases as newspapers or dry cleaning bills, he said.

Roberts held out hope that raising taxes will not be necessary, as local and state officials begin to contemplate the idea of sharing services, a step toward regionalization. “All those things you’ve heard talked about for decades are starting to happen,” she said, as a result of “fiscal austerity.”

Summit attendees submitted a total of 61 questions for state officials to answer, but they had time to field only about half a dozen queries.

Questioned about the status of the small business economic stimulus package Carcieri announced last month, the state officials said they expect the General Assembly to act on it soon. House Finance Committee hearings are scheduled to begin Tuesday, Kennedy noted. Some of the lenders who have agreed to participate are waiting until the legislative components are formally approved before making capital available, Hayward said. The local banking community has pledged to provide more than $170 million to small and mid-sized businesses in the form of loans.

On the topic of regulations, Sen. Leonidas P. Raptakis, who owns a Coventry pizza parlor, affixed to a wall of the summit room copies of all state and local permits he is required to obtain for his small business. Taped end to end, the permits extended more than 6 feet up the wall – and Raptakis told the Providence Business News there were two others he forgot to bring.

After the event ended, Hayward said that the next step will see the SBA’s committees – on energy, health care, education, taxes and the budget, regulations – begin working on a report for presentation to the General Assembly. He said his office also will sponsor breakfast meetings in the months ahead – to keep the small business community informed of progress – and assured summit participants that they will receive lots of e-mail from him.

Last year, according to Philip M. Papoojian, managing director of Mereco and chairman of the SBA’s health care committee, 80 percent of the panel’s proposals “ended up in some form of legislation. … Not everything passed, but at least it’s on the table,” he said.

In preparation for the summit, the Rhode Island SBA office distributed questionnaires to those who were planning to attend, asking their opinions on the state and economy. Some 45 percent, or 85 people, returned the questionnaires.

The survey found that 44 percent cited the state tax burden as the greatest challenge facing small business today, with the availability and cost of capital coming in second at 19 percent, and health insurance was third at 14 percent.

Some 37 percent said their businesses have been affected by the credit crunch and international financial meltdown, with 40 percent reporting no effect and 23 percent saying the question does not apply to them.

A majority of respondents cited health insurance, regulatory requirements, taxes and energy costs as affecting the growth of their businesses. Yet, 79 percent were hopeful and said, given the current economic situation, they will go forward with plans to grow or sustain their businesses.

For additional information about the U.S. Small Business Administration and its programs, call the SBA’s Rhode Island district office at 528-4561 or visit www.sba.gov.