The House Finance Committee last week unveiled – and quickly approved – its version of the state budget for fiscal 2007, and overall, we found it did a good job of balancing competing interests.
We were glad to see the start of a reduction in the top personal income-tax rate, even though the initial cut, from 9.9 to 8 percent, with no deductions, is more modest than originally planned. We hope to see a continued phaseout in the coming years.
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
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The budget also rightfully expands property-tax relief for the poor and elderly and continues the phaseout of the car tax – both important because the biggest tax bills most Rhode Islanders get come from their municipalities, not the state.
And legislators chose to keep the historic tax credit, a huge economic-development driver, intact at 30 percent of the value of projects. We still worry, however, that the credit will remain at risk until bitter disagreements over its cost are resolved. Let’s get that done soon.
Lastly, we were struck by two other big changes to Gov. Donald L. Carcieri’s budget. One was a bad move: Legislators killed proposed state personnel reforms that we believe are crucial, and instead they’re expecting the governor to eliminate jobs. So there will be fewer people to do the state’s work, but they’ll keep their benefits.
On the positive side, legislators restored RIte Care eligibility to parents with incomes between 133 and 185 percent of the federal poverty line and to illegal immigrants’ children. We know RIte Care is expensive, but we’re glad to see this cut reversed. Too many Rhode Islanders are already uninsured, and RIte Care is a crucial safety net.
Don’t forget about health reforms
Speaking of health care, we’re still eagerly awaiting action on proposals to create new, lower-cost health plans for small businesses.
The governor and Health Insurance Commissioner Christopher F. Koller have come up with the “SelectCare” program, which would define what constitutes acceptable basic health insurance coverage and require insurers to offer it, with state subsidies for small employers with particularly low-income workers.
Lt. Gov. Charles J. Fogarty, for his part, wants to create a health insurance buying pool for individuals and certain small businesses, with a state-run reinsurance program to protect health plans from major losses and help keep premiums low. New York has such a program.
We like both concepts, and would be happy to see either, or a hybrid, become law. Let’s get on this soon, and do it openly. Small businesses deserve to have a say in the outcome.
