“Collecting more taxes than is absolutely necessary is legalized robbery.” – Calvin Coolidge
While many people debate which taxes are absolutely necessary, few can argue that government waste, fraud, and incompetence utilizing taxpayers’ money is indeed theft.
A 2018 study of best and worst states to be a taxpayer by WalletHub ranked Rhode Island the 5th highest for effective total state & local tax rates. Rhode Islanders pay 27.26% more than the United States average which equals $8,697 annually for the median state household. Rhode Island also has the 10th highest Real Estate taxes and the highest Vehicle excise tax in the country.
Not accounted for in this study are all of the taxes disguised as “fees” which Rhode Islander’s routinely pay: DMV fees and car inspection fees have increased significantly, there are 911 fees on your phone bill, you pay a fee to go to the beach, and many additional fees you pay that you are completely unaware of. Do these fees go to support the services they are associated with? Of course not, they all end up in the general fund and supplement the bloated budget that can’t be sustained by our tax burden alone.
With effective tax rates so high, one would think that residents in our little state would be treated to the best roads in the country, beautiful schools and municipal buildings, and an excess of government services. Instead, our reality is just the opposite: we have the worst roads and bridges in the country, schools and municipal buildings are falling apart and full of mold, and few municipal services to account for the premium we are paying.
My solution for lowering our taxes is a function of the issues I will discuss below. By improving our overall business climate, ending the handouts to politically connected corporations, regularly auditing the state budget to reduce waste and fraud, giving the Governor the line item veto to hold our legislators accountable, and capitalizing on our coastal resources to attract out-of-state spending in Rhode Island, there is ample opportunity for us to reduce and ultimately eliminate many of the personal tax burdens in our state.
Fight for Small Business
“Entrepreneurs and their small enterprises are responsible for almost all the economic growth in the United States.” – Ronald Regan
Most businesses in Rhode Island have fewer than 100 employees. 52.7% of Rhode Island employees work for these small businesses which makes small businesses the largest employer in our state.
Due to years of unchecked single-party governance, Rhode Island has earned the reputation of being one of the least business-friendly states in the country. According to CNBC’s 2018 Top States for Business rankings, Rhode Island ranks 44th for Cost of Doing Business, 38th for Business Friendliness, 43rd for Access to Capital, for an overall ranking of 45th – making Rhode Island the sixth worst state for business in the country.
Much like Rhode Island’s personal tax burden, Rhode Island’s corporate tax burden is among the highest in the country. In addition, business has to pay numerous hidden fees – and now tolls – up and down the supply chain. Taxes, onerous regulations, and hidden fees add to the cost of doing business which prevents businesses from reinvesting in their employees, increasing wages, and expanding their workforce. Things like mandatory professional licensing, boiler inspections, business licenses, annual report filing fees, etc. do little to protect the consumer but make it difficult for small businesses to start and operate in our state. And if you think the revenue collected gets reinvested back into the industries they are siphoned from, you are wrong – all of the revenue collected goes straight to the general fund and are consumed by our ravenous budget.
I commit to fight for small business and reduce the red tape and regulations that prevent entrepreneurs from starting or growing businesses in our state. As businesses grow our entire state will prosper as demand for labor will increase wages organically. Growing businesses invest in their communities and infrastructure to support their own growth. New ancillary businesses are attracted and grow as well to support established businesses which work to compounds the success.
As more and more businesses open in Rhode Island and our economy continues to grow we will have the ability to significantly lower and eliminate the corporate taxes. Lower taxes will attract even more growth and result in even more prosperity in our state. This free market solution is the only proven method as well as being the most efficient and effective way to provide the greatest benefit to every single Rhode Island resident.
End Corporate Welfare
“I will cut every penny of corporate welfare before I touch one penny of the social safety net.” – Rand Paul
Millions of dollars are given away every year to businesses in Rhode Island: qualified jobs incentive tax credits, rebuild RI tax credits, tax increment financing, historic tax credits, sales/use tax credits, moral obligation bonds, revenue bonds – if you don’t understand how many of these programs operate don’t feel too bad. Just visit the RI Commerce Corporation and an entire bureaucracy of highly-compensated state employees will tell you how your business can get your hands on our taxpayer dollars to subsidize your commercially UN-viable boondoggle.
The RI Commerce Corporation will tell you that they are “promoting economic growth that would not otherwise happen without their intervention.” In reality, they are merely treating the symptoms of Rhode Island’s terrible business climate instead of focusing on the root causes. At best, local businesses will start and remain viable until the benefits run out. More commonly, out-of-state businesses move a small office and transferable personnel to Rhode Island and bleed us dry. At worst, political insiders and special interests receive special dispensation as a reward for campaign contributions and political favors.
Instead of creating a Rube Goldberg machine to promote economic growth, wouldn’t it be easier to simply shut down the Commerce Corporation and allocate the entire budget towards lowering the tax burden for all Rhode Island businesses equally? The role of government is not to create or grow businesses, the role of government is to ensure that there is a level playing field so the best businesses and the best ideas prosper in the free market.
The sad truth is the millions of dollars given away by our state to corporations take away from social services for the individuals who are actually in need. Organic small business growth, incentivised by a business-friendly environment, will have a much greater impact to create more jobs and help struggling Rhode Islanders than the one-off economic development programs sponsored by the state. What better way is there to lift people out of poverty and government dependence than to give them the opportunity to start or work for a small business growing in our state?
Rhode Island has a terrible track record subsidizing businesses in our state. For every splashy headline touting an out of state company bringing jobs to Rhode Island, there are many more businesses who fail to meet projections, fail to repay loans, and drag our economy down in perpetuity. I promise to vote against any new corporate welfare schemes introduced to the legislature and will work to eliminate the RI Commerce Corporation so they are no longer able to make closed-door deals away from the light of public scrutiny.
Audit the State Budget
“Accountability breeds response-ability” Stephen Covey
Rhode Island’s budget is out of control. It has ballooned 22 percent since 2010 – growing from $7.8 billion to $9.6 billion for 2018-19. That is over $9,000 for every resident in this state. In FY 2017-18 we had the 10th highest budget per capita in the country – the 2nd highest in New England.
For comparison, Delaware’s budget is only $4.27 billion and they are roughly the same size and have a similar population. Their per capita budget is only $4,300 for each resident.
How can our state leaders justify this? The truth is they don’t really have to: one of the many pitfalls of having one-party dominance in our state is lack of accountability – there are no checks and no balances. That has resulted in a runaway budget that is inefficient and full of waste.
My solution is to do a complete audit of the state budget and every state agency. The purpose of this audit will be to identify where taxpayers’ dollars are being spent, identify how and why department budgets have grown over time, and to identify opportunities for consolidation and greater efficiencies.
Further, I will introduce legislation to require Zero-Based Budgeting (ZBB) for every state agency. ZBB requires all expenses to be justified for each new budget period. Budgets should be built around actual future needs, not historical needs – regardless of whether the new budget is higher or lower than the previous one.
Without ZBB, budgets ONLY grow year after year because each department doesn’t want to lose money next year if they don’t use every dollar budgeted to them this year. If their budget is $100 million this year and they only need/spend $50 million, they fear they will only get $50 million next year. Instead, they spend all of their $100 million (whether they need to or not) and then ask for $110 million next year – hoping that they end up with $105 million.
Rhode Island has a spending problem and it is time to stop the waste and fraud.
Support Line Item Veto
Regarding the governor’s current veto power: “[it’s] something of a sledgehammer and not a scalpel.” – James Sheehan
Imagine a surgeon trying to remove a tumor with a sledgehammer. With the wrong tool, that surgeon could either do nothing or cause more harm to the patient than good. The same is true for the governor and the rank-and-file legislators when passing the state budget.
When the final budget is put up for a vote in the general assembly or to be ratified by the governor, it is a take-it-or-leave-it proposition. No matter how bad that budget is, no matter how much waste is included, once the final budget is proposed there is little anyone can do to stop its momentum without scraping the entire budget and shutting down the state government.
By providing Rhode Island’s governor with the same power that 44 other governors currently have, they could use the line item veto to remove specific questionable articles from the overall budget. This tool provides a much-needed check and balance to control wasteful spending. Even if the governor exercised their line item veto powers, our legislators would still have the ability to override that veto if they felt the expenditure was necessary.
The end result is that our elected officials can be held responsible for irresponsible spending. The governor can be held accountable if they didn’t exercise their veto powers on questionable spending. Constituents will be able to see which legislators voted yes or no on vetoed budget articles if they choose to override that veto.
During our past legislative session, District 68’s Representative Kenneth Marshall co-chaired a commission to study the line item veto and make a recommendation on the merits of a ballot referendum in 2018. Rep. Marshall and the rest of the hand-picked commission voted to deny Rhode Islanders the opportunity to vote on this measure despite overwhelming public support. I promise to work hard to ensure this measure is put on the ballot in 2020.
Promote and Preserve Our Coastal Resources
“We are tied to the ocean. And when we go back to the sea, whether it is to sail or to watch – we are going back from whence we came.” – John F. Kennedy
Rhode Island’s state constitution promises that: “the people shall continue to enjoy and freely exercise all the rights of fishery, and the privileges of the shore, to which they have been heretofore entitled under the charter and usages of this state.”
Rhode Island’s founding fathers understood the importance of our coastlines and waterways and enshrined the people’s rights to access this important resource in our constitution. Today, many Rhode Islanders take their constitutional rights for granted. We have become accustomed to having the access to our waterways limited by our legislature – all in the name of increasing revenue. Parking and beach access fees make enjoying our privilege unaffordable. Recreational saltwater fishing licenses limit our rights to our fishery. Overdevelopment of our coastlines further restricts our access and places public lands in private hands.
Every restriction, every fee, every barrier that has been put in place to separate us from our shorelines does nothing to improve the service or preserve our greatest resource. All of the money collected goes straight to the general fund and we can’t even figure out how to collect beachgoers garbage. Let’s do a better job for our residents and provide a better product for out tourists.
It is time for Rhode Islanders to take our beaches and oceans back! I promise to work to eliminate the need for recreational saltwater fishing licenses so kids and families can enjoy their rights without having to pay a fee. I will work to remove all state-imposed beach access and parking fees so people can enjoy unfettered access to the shore. I promise to promote our state as a destination welcoming to the tourists that stay in our hotels, spend money in our restaurants and shops, and help to grow our economy.