Raimondo proposes auto-tax reduction, new scholarship in State of the State speech

GOV. GINA M. RAIMONDO in her 2017 State of the State Address on Tuesday focused on efforts to help support middle-class Rhode Islanders, through reduction of automobile taxes and a new scholarship aimed at students attending state colleges and universities. / PBN FILE PHOTO/RUPERT WHITELEY
GOV. GINA M. RAIMONDO in her 2017 State of the State Address on Tuesday focused on efforts to help support middle-class Rhode Islanders, through reduction of automobile taxes and a new scholarship aimed at students attending state colleges and universities. / PBN FILE PHOTO/RUPERT WHITELEY

(Updated 7:05 p.m.)
PROVIDENCE – Gov. Gina M. Raimondo in her 2017 State of the State Address on Tuesday called for a series of new programs that will help support middle-class Rhode Islanders, through reduction of automobile taxes and a new scholarship aimed at students attending state colleges and universities.

Additional priorities she referenced, and is expected to include this week in her budget proposal for fiscal 2018, involve state training programs aimed at Rhode Islanders who lack a college degree, efforts to help working families achieve greater financial stability and a pledge to double the number of workers in the ‘green economy’ by 2020.

The investments and new initiatives are directed at moving the state forward, and preparing residents for the jobs now being created, she told an audience of elected and appointed officials in the House chamber.

“As we continue to invest in Rhode Island, we need to realize that our economy has changed in ways that are causing real challenges. How we meet those challenges will determine our future,” she said.

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Among other initiatives, she announced her intention to continue or expand state investments in training programs for manufacturing careers. Her fiscal 2018 budget is expected to include $4.1 million to support Davies Career and Technical High School, through two manufacturing programs. In addition, she plans to invest another $1.2 million in high school-level P-Tech programs that pair students with manufacturers.

She said she will propose a program to help smaller manufacturers invest in new equipment, through a tax credit, and another program will help the state expand its Real Jobs Rhode Island effort to support training for manufacturing employees.

In her pledge to double the workers in environmentally sustainable industries, Raimondo identified the number of jobs involved – 20,000 by 2020 — but did not explain which jobs these could include or the method the state could use to reach that level.

In a broader reform, Raimondo is advocating for a reduction in the auto excise tax, by moving to a statewide application of an average “trade-in” value for vehicles in each community.

This would provide $55 million in tax relief by fiscal 2019, according to the governor’s office, but would not disproportionately favor those communities, mostly cities, that now tax vehicles most heavily.

In her address, she said it would effectively cut the car tax by at least 30 percent.

House Speaker Nicholas A. Mattiello has spoken of another option, a five-year phase-out of the car tax altogether. Raimondo on Tuesday said she would work with the General Assembly on something that’s fair and economically sound. “Rhode Islanders want car-tax relief, so let’s work together to get it done.”

In other initiatives, Raimondo in her upcoming budget will propose an increase in the minimum hourly wage, to $10.50, beginning Oct. 1. The current hourly minimum wage of $9.60 was itself an increase, up 60 cents as of Jan. 1, 2016. Nevertheless, it is not competitive with Connecticut and Massachusetts.

As of Jan. 1, the minimum wage in the Bay State increased to $11 an hour. The minimum wage in Connecticut is now $10.10, and has been increased for the past four consecutive years.

While business owners and organizations consistently have argued that increases in the minimum wage are too costly for small business, housing advocates say many working poor find it difficult to pay for basic necessities, including their rent. In Rhode Island, the National Low Income Housing Coalition, a Washington-based nonprofit, found that a two-bedroom apartment that would not cost-burden a household would require $39,639 in annual income.

That would equal a $19.06-an-hour wage. In Rhode Island, 40 percent of the residents are renters, the coalition reported.

Raimondo, in her address, said the state needs to commit to working Rhode Islanders.
“No one working full time should live in poverty,” she said.

With respect to working families, she also pledged a ‘common-sense’ law that would allow hourly employees to earn sick leave, a program recently approved in Massachusetts.

Although she did not specify the details, Raimondo said it would make sure people have a day off if they’re sick, or their children are ill, or a parent. “Our neighbors across most of New England and in states across the country, states run by Democrats and Republicans, have passed or introduced modern, common-sense paid sick leave laws. Let’s do the same thing here in Rhode Island.”

The proposal for a universal college-scholarship program, revealed by Raimondo on Monday, would enable all students, regardless of income, to obtain a scholarship covering tuition and fees at a state college or university for two years. The program, called Rhode Island’s Promise, is aimed at making college more affordable for families, as well as more attainable for students who are paying their own way.

Raimondo, in a statement from her address, said the state has to invest in the education of its residents to compete effectively. “The reality is that most jobs being created now in Rhode Island will require some degree or certificate beyond a high school diploma.”

The scholarship would be extended to all high school seniors, starting with the Class of 2017, who are accepted to Rhode Island College, University of Rhode Island or the Community College of Rhode Island. The students would have to maintain a 2.0 GPA, and be enrolled full time, to be eligible.

The funding will pay a maximum of two years, at any of the state-supported institutions, with students at URI and RIC becoming eligible in their last two years.

The cost is expected to start at $18 million in the fiscal 2018 budget, then increase over four years to a full implementation of $30 million a year starting in fiscal 2021, according to a program overview.

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