Is the Rhode Island Small Business Development Fund approved by the General Assembly a good use of state tax credits?

State Sen. William J. Conley Jr., D-East Providence, left, and state Rep. Joseph J. Solomon Jr., D-Warwick, introduced legislation as part of the fiscal 2020 budget that created a small business loan and tax credit program that is designed to help small businesses gain access to capital they could not get previously. The legislation was passed as part of the budget. / COURTESY R.I. GENERAL ASSEMBLY
State Sen. William J. Conley Jr., D-East Providence, left, and state Rep. Joseph J. Solomon Jr., D-Warwick, introduced legislation as part of the fiscal 2020 budget that created a small business loan and tax credit program that is designed to help small businesses gain access to capital they could not get previously. The legislation was passed as part of the budget. / COURTESY R.I. GENERAL ASSEMBLY
At the last minute of its 2019 session, the General Assembly created the Rhode Island Small Business Development Fund to encourage private investment in businesses with fewer than 250 employees or those with net income of less than $15 million per year. Combined with a decrease in funding for the Rebuild Rhode Island tax credit…

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1 COMMENT

  1. The $42 million in tax credits go to the investment companies not the small businesses. The investment companies get 64% of the amount they invest in small businesses in state tax credits over five years. Plus they get the return on their investment plus their initial investment back from the small businesses. So they get 164% of their principal back plus a return on their investments. This is huge windfall for these investment companies and a horrific use of state tax credits. Similar programs have been exposed for what they are in other states – a give away to a small group of investment companies.