R.I. Business Coalition Prepares for the 2016 Assembly Session

Under the leadership of RISCPA President Bob Mancini, the Society has been an active member of the Rhode Island Business Coalition since it was formed two years ago.  The group of business associations

 has worked consistently in pursuit of public policies that will improve economic competitiveness and the overall business climate of the state. To achieve those goals the Coalition established a number of policy priorities, including:

  • Reducing the Cost-of-Doing Business; 
  • Improving Access-to-Capital; 
  • Regulatory Reform; 
  • Labor issues, and;
  • Fiscal Stability and Economic Development Policy

The Coalition has enjoyed a number of successes, including lowering the state’s corporate income tax rate, increasing the estate tax exemption while eliminating the “cliff” and a major overhaul of the state’s Career and Technical Education system. As the 2016 legislative session approaches, the Coalition will continue to focus on reforms that will assist businesses. The group is considering the following initiatives as part of their legislative package:

Property Tax Reform:  Rhode Island’s property tax system is not competitive and negatively impacts our economic growth. Ten years ago the General Assembly passed S. 3050, limiting annual growth in municipal property tax levies to 4 percent. However, property taxes continue to be burdensome to businesses and property owners. To explore other options, the House established a permanent commission on property taxation designed to consider property tax related issues including, the revaluation process and statistical study, exemptions and classifications, uniform depreciation rates, the use and impact of the tax classification system, and the process of valuation appeals. The Coalition is committed to working with the commission in order to make these reforms a reality.

Tangible Property Tax Reform: State law requires that tangible personal property be reported annually to the municipal assessors’ offices. (Tangible personal property is business property other than real estate that has value by itself.  Examples include furniture, fixtures, machinery, tools, etc.). Each municipality has its own tangible personal property rate, some of which exceed residential and commercial rates by a large margin. The Coalition supports reforms that would eliminate the tangible personal property tax rate or cap it at the same level as either the residential or commercial rates. 

UI and TDI/TCI: Two programs administered through the R.I. Department of Labor and Training (DLT) merit review and possible reform. Rhode Island’s unemployment insurance (UI) program is ranked 49th in the Tax Foundation’s 2015 State Business Tax Climate Index. To address this, the rate, wage base, experience formula, and benefit structure must be reviewed.  Further, the Temporary Disability Insurance (TDI) and Temporary Caregivers Insurance (TCI) programs are also unusual compared to other states. While Rhode Island’s TDI program has been in effect for several years, the TCI program is relatively new (enacted in 2013), and it should be monitored for use and cost. The Coalition would support the formation of a legislative commission to review these systems and pursue necessary reforms.

Energy Policy: As reliable, low-cost energy - largely due to new-found supplies of natural gas – becomes available, the state must adapt its energy policies to take advantage. One limiting factor is the inadequate natural gas pipeline capacity that serves Rhode Island, and all of New England, for the delivery of natural gas from where it is produced elsewhere in the United States and Canada. The Coalition will support improvements to pipeline capacity for the region.

Expanded Estate Tax Reform: Rhode Island increased its estate tax exemption amount in 2014 from $921,655 to $1.5 million and indexed the exemption for inflation. These reforms also eliminated “the cliff”, ensuring that the estate tax does not go into effect until the $1.5 million exemption limit is reached.  The Coalition will consider similar reforms, including possible exemptions to the estate tax for small family businesses. Ultimately, the Coalition would like to see Rhode Island’s estate tax be in alignment with the federal estate tax. 

There is much more to be done, but the Rhode Island Business Coalition has proven to be an effective advocate for many of the policy changes that will help turn Rhode Island around.