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By NEIL DOWNING PROVIDENCE -- State tax collections plunged over the last four months, yet another sign that Rhode Island's economy is going nowhere fast. The state Division of Taxation presented figures at a State House conference on Wednesday which showed the amount of money the state collected in tax revenue for the four months ended Oct. 31 fell in several key categories when compared with the same period last year. Sales tax revenue, a prime barometer, dropped by nearly $20 million. That number alone suggests that Rhode Islanders made $282 million less in taxable purchases -- of items such as computers, appliances, TV sets and jewelry -- during the last four months than in the same period a year ago. And last year was not exactly a boom time, said Mark Higgins, dean of the University of Rhode Island's College of Business Administration. "People aren't going out and buying plasma TV's" and other such taxable items to the extent they did a year ago, Higgins said in a telephone interview after Wednesday afternoon's meeting. "If you've got high unemployment, your sales tax [collections are] going to go down," he said. "There's less disposable income in the economy." (The state's seasonally adjusted unemployment rate for September was 13 percent.) Russell Dannecker, former state Senate fiscal advisor, who attended Wednesday's meeting, said that, overall, state tax revenue figures are "down considerably" compared with a year ago. "It's just a reflection of the downturn" in the economy, said Dannecker, now fiscal policy analyst for the Poverty Institute at Rhode Island College, which analyzes tax and budget policies on behalf of low-income people. As a result, "You're obviously going to have more pressure on [the state] budget. There'll be more pressure to cut. There'll be more pressure to raise taxes," he said. Among the highlights of Wednesday's presentation regarding tax revenue in the last four months: * Collections in the state's business corporation tax plunged to $4.5 million from $14.8 million in the same period a year earlier, a $10.3-million drop. * Sales tax collections dropped by $19.77 million, or 6.6 percent, to about $278.6 million. * Net receipts from personal income-tax collections (after refunds and other adjustments) fell by $14.3 million, or 4.5 percent, to $307.8 million. Paul Dion, chief of the state Office of Revenue Analysis, said, "Nobody can be surprised that we're down [in revenues], given the state of the economy." State Tax Administrator David M. Sullivan said, "I don't think we're in any different shape [than] any other state." A conference of state budget officials will now analyze the revenue figures, and other data, as it prepares a final report in the days ahead. State Budget Officer Rosemary Booth Gallogly, who chairs the conference, stressed that the group has not completed its work, and that figures presented Wednesday are preliminary. But she found a glimmer of hope. "It's still bad," but there are signs of a possible bottom, she said. Dion said that while the sales tax revenue figure in particular "does not look good," certain revenue figures, involving the personal income tax, picked up a bit. "It bears watching," he said. Overall, Dion said, "I think we're starting to find a bottom somewhere here," probably over the next six months or so. Higgins said that the drop in overall tax revenue "signals, to me, that we need to figure out a way to change our tax structure . . . to create more jobs." The state must find "innovative ways to raise revenue so that we are not [as] subject to these economic swings," he said. CommentsLeave a commentPlease be civil. Vicious comments, personal attacks and profanity won't be published. Name and email are required; email address will not publish. |
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Thank God that our Rep's were in session last week to tackle theses issues. It will be only a matter of time before their hard work from last week will get us out of this. I also want to personally thank my local Rep. Pat Serpa for addressing the "Pressing Issues" that they voted on.
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Samo old stuff: ""The state must find "innovative ways to raise revenue so that we are not [as] subject to these economic swings," he said."" Gotta love (NOT!) that bureaucrat mentality... What about finding innovative, or just plain old, ways for the state to reduce waste and spending?
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the general assembly could care less about the real problems in this state
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Gotta love it - they mention "raise taxes" as if that will help. Heck, that will only force more people to move or stop spending. Or perhaps folks will just start buying everything in neighboring MA or CT.
This state needs a complete financial collapse to clean out the deadwood. I don't think we have long to wait!
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The G.A. had far more important issues to worry about than revenue--the name of the state and girls "working indoors."
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Unemployment is close to 14%; foreclosures are up throughout the state; property values are declining; were ranked last in the nation for a favorable business environment; and to top all this off, our property taxes remain the same and we continue to tax people's cars each year. I don't see improvement until we rid the state house of incumbents and get our state back to fiscal responsibility.
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The state, (the democrats) know what to do as far as tax structure go, but helping private businesses doesn't help them. Lower taxes to help the private sector takes revenue away from the public trough. Democrats are kept afloat by the public sector unions. How would lowering taxes possibly help them? This is begining to sound like a broken record every time tax revenue falls below expectations.
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Bottom Line here as to why Sales Tax Revenue is down???
The Rocket Scientists in the Legislature have not yet figured out that "LESS IS MORE!"
In other words if our Sales Tax Rate, which is one of the highest in the Country, were lowered (AND NOT ALSO BROADENED AT THE SAME TIME)RI Citizens would not be spending the amounts of money that they out of State, especially in Massachusetts!
That includes, especially gasoline, wherein on any given day if one were to go across the line into South Attleboro, North Attleboro, Wrentham, Franklin, Blackstone, Bellingham, etc., etc. you will see more cars with RI Plates then MA buying gas!
Then add in alcohol, cigarettes, more items that RI rips off users of with high taxes - and the answer should be obvious!
How many people take the 1-hour ride on Rt. 495 to Nashua or Salem, NH Malls to buy big ticket items wherein they pay NO SALES TAX?
As I said this is not Rocket Scientist stuff here! People, today, have less money then ever before and need to make those dollars go as far as they can...as such they are not going to spend any more of it then need be on items in RI wherein they are going to be whacked with a 7% sales tax.... when they can save that money for food and other necessities, by shopping elsewhere!
Check the parking lots of all of the stores on Rt. 1 in North Attleboro, especially the Emerald Sq. Mall and the new Super Wal Mart...at least 75% RI Plates!
And, then we have RI's highly convoluted and oft misinterpreted "Prepared Food Tax" (something many Rogue;s islanders do not even know exists) from markets such as Shaw's, Daves, Stop and Shop.... wherein RI hits you with a 7% sales tax and then an additional 1% "Meals Tax!"
I am not talking restaurants here, I am talking the prepared foods (Tuna Salad, Chicken Salad, Potato Salad, Roasted Chicken, etc.) that you buy in the market's delis, etc., etc....which have that tax on them - that, again, the majority of people don't even realize they are paying as it is buried on your receipt with the items that you always knew were taxable! Soap, toilet paper, paper towels, etc.
Until this State and the IDIOTS in our Legislature wake up and realize the harm they are causing with the highly regressive sales tax we have in this State to raise money, it is going to get much worse before it gets better!
I am talking the money, from our taxes, that is unnecessarily spent and wasted on Bleeding Heart Liberal Do-Gooder programs and for creating jobs for cronies, RI Citizens are going to spend as little money in this State as they can...which, as can be figured out by anyone with 1/2 of a brain...means less revenue!
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Who has money to spend when people are struggling to pay their basic, household expenses? In fact, there are many people who can't meet these expenses and that's a problem. The people who do have money aren't spending it. Instead, they are saving it.
In addition, RI has a shrinking economy while state and local governments must still provide services to its citizens. There will come a point when government won't be able to cut anymore services without hindering the general welfare of people. Government services will eventually operate at a minimum.
It's government's responsibility to get industries and employers to come to RI.
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"People aren't going out and buying plasma TV's" and other such taxable items to the extent they did a year ago, Higgins said.
"If you've got high unemployment, your sales tax [collections are] going to go down," he said. "There's less disposable income in the economy."
NO $HIT!!! My dog could have figured that one out!
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!Sunbum, I agree!
I work for the State, and the amount of waste due lack of proper investment in technology is a huge problem. I previously worked in private industry. My department is just beginning to do things technology wise, that I could do at my desk 10 years ago in private industry! The issue is filling high paying jobs for the governor's friends, as opposed to spending the money on things that would save millions! We waste more paper on a daily basis! A simple investment in software to email reports instead of printing them would be a HUGE start! But instead the Bureau of Audits has one chief and three deputy chiefs for a department of 8 people! Why? Well we all know the answer...
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I bought a plasma television last month. There was no way I was going to pay an extra 2% sales tax just for "living" in Rhode Island.
Come Xmas time, even though my purchases will be scaled back a bit, I am still not going to spend a dollar in Rhode Island.
Heck, I haven't bought a full tank gas tank in Rhode Isalnd for about 4 years. They might get me for a cup of coffee once in a while but that's just as I am leaving the state heading to work, or Emerald Square.
This state will always be at the bottom of the barrel until it changes it's sales tax. (even then)
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