Advocates hoping Sasse will examine tax breaks

A group that called on Gov. Donald L. Carcieri to “take the mask off” Rhode Island’s tax expenditure budget may see its wishes start to be realized with the governor’s nomination of Gary S. Sasse as director of the newly created R.I. Department of Revenue.
Carcieri announced last week the nomination of Sasse, an East Greenwich resident who for 30 years has served as executive director of the Rhode Island Public Expenditure Council, a business-funded organization that advocates responsible governmental spending.
His appointment, which is subject to approval by the state Senate, would fill the vacancy in the Department of Revenue, which was created in 2005 and has since been headed on an interim basis by R.I. Department of Administration Director Beverly Najarian.
The department oversees a number of functions of state government, including the R.I. Division of Taxation, the R.I. Division of Lottery, the R.I. Division of Motor Vehicles, the Division of Property Evaluation and the Office of Revenue Analysis. Sasse’s experience, which includes a background in state finance in Tennessee in addition to his three decades at RIPEC, makes him a great fit the job, Carcieri said in a news release.
“As the longtime chief of the Rhode Island Public Expenditure Council, Gary Sasse is the perfect person to head up the new Department of Revenue,” Carcieri said. “Over the last 30 years, Gary has worked with governors and legislators from both sides of the political aisle to address Rhode Island’s fiscal problems. Like me, Gary is devoted to making sure that state government is operated on a sustainable basis, and that it is a benefit, not a burden, to Rhode Island taxpayers.”
The announcement came days after a State House rally held by an alliance called the Campaign for Rhode Island’s Priorities that includes social advocacy groups, unions and other interested parties. The campaign urged Carcieri to, among other things, staff the Office of Revenue Analysis, which falls under the new department.
Karen Malcolm, executive director of Ocean State Action and the campaign’s coordinator, said last week that the Campaign for Rhode Island’s Priorities is concerned about what it sees as a lack of analysis being done on the state’s tax expenditures.
Those expenditures include tax credits, exemptions and preferential treatments that are provided to a number of individuals and corporations, often in hopes of spurring economic development.
According to the R.I. Division of Taxation’s 2006 Tax Expenditure Report, only about 40 percent of those tax programs had been assessed. The cost of the 40 percent that had been tracked: $1.4 billion, a figure higher than the combined totals of money allocated for education ($770 million), the R.I. Department of Children, Youth and Families ($232 million) and the R.I. Department of Health ($125 million).
The group’s ultimate desire is to have the state critically examine what tax expenditure programs are working best for Rhode Island’s citizens and whether agreements made with companies, such as job creation numbers and average wage levels, are being met.
The issue is crucial, Malcolm said, particularly because of the state’s looming budget deficit in fiscal 2009.
“The state does not scrutinize our tax expenditures budget,” Malcolm said. “We call it the ‘hidden budget.’ ”
Jeff Neal, Carcieri’s press secretary, said that the appointment of Sasse will begin the process of staffing the revenue analysis department. The governor had held off on staffing the Department of Revenue until a director was onboard to add input to the process, he said.
“Now that Gary Sasse is on board, I know that he has already begun the process of filling those positions,” Neal said, adding that Sasse plans “to ensure that issues are vigorously reviewed.”
Malcolm said that the group is hopeful that Sasse will improve the analysis of the state’s tax expenditure program.
“The real urgency of the deficit makes it incumbent upon the administration to get the Office of Revenue Analysis started, so at least there’s some good things in place for when Gary walks in the door,” Malcolm said. •