As the General Assembly begins debating the governor’s budget proposal and bills are filed, RIPEC brings you an update on public policy in the Ocean State.
RIPEC on Public Policy
- In a Boston Globe Op-Ed, RIPEC President and CEO Michael DiBiase urged “leadership to step up at every level” to fix Rhode Island’s K-12 school system. Offering a set of “achievable solutions to help us move forward”—including reforms to the state’s education funding formula, its education governance structure, and teacher training and supports—DiBiase argued that “Rhode Island students can’t afford to wait.” RIPEC first released a set of policy solutions and priorities in its road map to education reform report.
- The Key Performance Indicators Briefing for the fourth quarter of 2022—released by RIPEC in partnership with Bryant University’s Center for Global and Regional Economic Studies—showed that Rhode Island’s economic growth stalled after several quarters of increase, with a rising unemployment rate and no major changes in the remaining three of four economic indicators. The Ocean State continues to lag the New England region and the United States in several indicators of economic growth.
- Providence Business News, “RIPEC: R.I. economy stalled in Q4”
- GoLocal Prov, “Rhode Island’s Economic Growth Stalls in Q4, Lags Region and Nation”
- RIPEC released a policy brief analyzing Rhode Island’s ranking of 42nd highest (9th lowest) among states on the 2023 Tax Foundation Business Tax Competitiveness Index. “As other states have enacted reforms to make their business tax systems more competitive in the last few years, Rhode Island has stood still,” said Michael DiBiase, adding that the state is currently “in a favorable position to make its tax structure more competitive.” Among RIPEC’s recommendations to make Rhode Island more competitive are a partial phaseout of the tangible personal property tax and reforms to the corporate income tax structure.
- Boston Globe, “R.I. falls to bottom 10 for business tax competitiveness”
- Providence Business News, “RIPEC: Rhode Island has not kept pace with other states on tax reforms”
- GoLocal Prov, “Double Trouble Economic News in RI – Slowing Economy and Less Competitive Tax Climate”
- WPRO News, “Michael DiBiase, RIPEC – RI business tax climate”
- Michael DiBiase appeared on The Public Radio’s Political Roundtable to discuss education and tax reform, the projected budget surplus, and more. “I was gratified to see that the governor . . . will be proposing an increase in the rainy day fund,” he said, while adding that the state should look to spend one-time funds on “larger high-impact” investments like job training and school improvement.
- Michael DiBiase spoke with Providence Business News about what budget issues to look out for in the 2023 legislative session. Arguing for greater accountability for school district spending of federal pandemic relief funds, DiBiase also said there is need to reform the state’s education funding formula to better account for Rhode Island’s “problematic” reliance on property tax revenue.
Inside Insights
- The Rhode Island Department of Revenue released estimates last week through December, projecting lower state revenues for the current fiscal year than estimated at the November Revenue Estimating Conference. The $46.1 million (1.9 percent) estimated revenue decline is in large part driven by a projected decrease in personal income tax revenues of $63.9 million (6.8 percent).
What to Look for in February
- Now that Governor Daniel J. McKee’s proposed budget for fiscal year 2024 has been introduced, the General Assembly will begin debating budget items, including proposals to cut the state sales tax rate from 7.0 to 6.85 percent, increase the rainy day fund from 5.0 to 6.0 percent of general revenues, and a number of education funding alterations, such as the creation of glidepath funding to smooth district costs related to student enrollment in charter public schools.
