Projo 7 to 7 News Blog

PROVIDENCE, R.I. -- The General Assembly introduced a budget plan Wednesday afternoon that would raise Rhode Island's 31-cent gas tax by 2 cents, rejects the majority of the governor's tax-cut proposals, and eliminates a tax break enacted in recent years for capital gains.

The gas tax increase, which would take effect July 1 if ultimately approved by the entire legislature, would generate $4.5 million for the troubled Rhode Island Public Transit Authority.

The annual state budget proposal also rejects Governor Carcieri's plans to cut the state's corporate income tax. The plan, while embraced by local businesses, would have cost the state $14.5 million in lost tax revenue as state officials struggle to close a budget hole estimated at $590 million.

The legislature's budget, which is being released by the House Finance Committee, also rejects the governor's proposed income tax changes. The Assembly agreed to increase the value of estates subject to Rhode Island's estate tax to $850,000, a number that would be adjusted in accordance with the consumer price index each year.

Despite an intense lobbying effort by interest groups and some rank-and-file members, the Assembly's current spending plan does not change Rhode Island's flat tax alternative, a tax break for high earners that costs the state millions in lost revenue each year.

And finally, the plan includes something dubbed the "Amazon tax," which would force many people to pay taxes on Internet sales. Following New York's lead, the provision generally forces retailers such as Amazon to collect Rhode Island's 7-percent sales tax.

Acknowledging there is a legal challenge to New York's law, lawmakers aren't expecting the proposal to generate any new revenue in the coming year.

 Tags  economy Rhode Island

Comments

Annita Santagata said:

I guess the general assembly doesn't think gas prices are high enough!

Link | June 17, 2009 2:31 PM
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EricDalnas said:

Our representatives are supposed to be the voices of the people. In what bizzaro world could any of them conjure up a scenario in which a we, the Rhode Island people, we in favor of raising taxes in this economic environment. The Gasoline tax also places a higher burden on lower income people, so all you democrat voters out there, is this really what you want?

Link | June 17, 2009 2:59 PM
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