PROVIDENCE – Gov. Daniel J. McKee on Tuesday said he opposes legislation in the General Assembly that would raise personal income taxes on the state’s high-income earners.
“I don’t see a need to raise taxes right now,” said McKee at his biweekly press conference at the Statehouse.
Four pieces of legislation proposed in the General Assembly would add an income tax bracket for the purposes of state income taxation.
One bill sponsored by Sen. Tiara Mack, D-Providence, would add a new bracket with a rate of 10.99% on taxable income over $475.000, effective Jan. 1, 2022. A similar proposal sponsored by Sen. Melissa A. Murray, D-Woonsocket, is also being considered.
On the House side, Rep. Karen Alzate, D-Pawtucket, sponsored legislation that would create a tax bracket with a rate of 8.99% on taxable income greater than $475,000, effective Jan. 1, 2022. Her colleague, Rep. Gregg Amore, D-East Providence, is sponsoring legislation for a new income tax bracket of 6.99% on taxable income over $500,000.
McKee said these proposals were initially intended to fill what at one time was estimated to be a $329 million budget deficit for fiscal 2022. However, the state is now in a much better financial position, due in part to the Office of Management and Budget projecting a $416 million surplus for the fiscal year ending on June 30.
The state will also be receiving $1.1 billion in new federal stimulus funding, per passage of the American Rescue Plan. McKee said the state is still awaiting guidance on how that money can be spent.
McKee noted that the proposed income tax hikes were not included as part of his proposed $11.17 billion fiscal 2022 budget in March.
Over 20 organizations in the business community sent a letter to the General Assembly on Monday voicing their displeasure with the proposed legislation to tax high-income earners.
Business groups have also opposed McKee’s plan to tax Paycheck Protection Program loans greater than $150,000. On Tuesday he continued to advocate for that proposal, which is a part of his fiscal 2022 spending plan lawmakers are now considering.
“I always try to remind people that with the PPP [taxation proposal] we did protect 90% of the small business in the state of Rhode Island,” he said. McKee has claimed in the past that his PPP taxation proposal would impact fewer than 1% of for-profit businesses in the state in 2020, and fewer than 15% in 2021.
Cassius Shuman is a PBN staff writer. Contact him at Shuman@PBN.com.
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