House Finance Committee approves nearly $9B state budget

PROVIDENCE — The House Finance Committee approved a nearly $9 billion budget late Tuesday for the fiscal year that begins in July, one that incorporates several key changes to the measure proposed by Gov. Gina M. Raimondo.
The fiscal 2017 budget, which now advances to a full House vote next week, was amended by legislators to reduce certain fees, including a scaled back tax on medical marijuana and the elimination of a proposed 25-cent increase in the cigarette tax.
It recommends moving several bond measures before voters in November, including up to $50 million for pier rehabilitation at Quonset Point and $50 million for affordable housing construction and renovation. It does not include a late-session request for a $20 million expansion of the Port of Providence.
In other business-related measures, the House panel recommends a further reduction of $50 in the mandatory business tax, which had been reduced in the current budget as well. If approved by the General Assembly, as expected, the tax would be $400.
The proposed budget would, as proposed by Raimondo, restructure unemployment taxes paid by employers, for an estimated savings of $30 million. The program will cut the average cost per-worker to $631, from $708. Eligibility will not change.
In economic-development measures, the budget retains several of the requests made by the governor, and adds $2 million to her initial budget for the First Wave Closing Fund, an incentive that can be used at the discretion of the Rhode Island Commerce Corp. to help attract new businesses and encourage existing businesses to expand. The fund in the next budget year would receive a total of $7 million.
The budget also retains Raimondo’s proposed $20 million bond to create an innovation center, but restricts the funds to one center affiliated with the University of Rhode Island. The governor had proposed a competition for funds, based on proposals that could have been established anywhere in the Ocean State.
In statements, House Speaker Nicholas A. Mattiello said the budget contains no new taxes or fees for the general public, and includes reduced fees and tax relief for senior citizens, low-income Rhode Islanders and small businesses.
“It’s a pro-business, pro-jobs, pro-economy budget, one that is the result of many, many hours of listening, thoughtful negotiating and consideration,” he said in a news release. “I believe the citizens of our state will be happy with this budget.”
In its deliberations, the House panel added a new proposal to the budget that would provide a state income tax exemption to all retirees who have reached the full Social Security retirement age. This would exempt the first $15,000 of income from state income taxes for individuals earning up to $80,000 who file as single filers. Couples who file jointly could earn up to $100,000 and receive the tax break.
The measure applies to income derived from public and private pensions and is expected to benefit more than 61,000 residents. It will cost the state $14 million by 2018.

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