PROVIDENCE – Gov. Gina M. Raimondo signed the nearly $10 billion fiscal 2020 state budget Friday, but in her transmission letter to House Speaker Nicholas A. Mattiello, D-Cranston, she criticized legislative changes to her budget that she said will cut the effectiveness of job-creation programs.
The governor cited a cut to the Real Jobs Rhode Island program, which she created in 2015 to retrain state residents for high-demand, high-pay jobs, and a new credit reduction in the Qualified Jobs Tax Credit program, which reimburses employers who create jobs in the state that pay above the median salary.
The legislative budget puts a new cap on the amount of tax credit that eligible employers can receive under the Qualified Jobs program, up to 75 percent of the W-2 withholding received by the state for each newly created, eligible job under the program. In the past, companies received full reimbursement, up to a maximum of $7,500 per job, per year.
In the letter, released to the media Friday, Raimondo also blasts a new program that the legislature has said is aimed at small business, but which she said will primarily benefit out-of-state investors.
Of the Qualified Jobs and Real Jobs cuts, Raimondo said the changes will weaken their effectiveness.
“Too many Rhode Islanders will be denied their opportunity at a better job because of the cuts to the Real Jobs Rhode Island job training program,” she wrote. “Short-sighted changes will also threaten the Qualified Jobs program, which has generated more than 3,000 jobs at an average salary of $65,000.”
The legislative budget retroactively decreased state spending on the Real Jobs Rhode Island program by $1.5 million. In the last few years it had resulted in 3,106 new placements and skills improvement for 2,946 employed residents, according to the R.I. Department of Labor and Training.
Weakening the two programs will put the state economic momentum at risk, she wrote.
As for the new tax incentive program that was granted $42 million in the General Assembly-approved budget, Raimondo said it could “put $42 million of taxpayer money at risk and increase our structural deficit. Four years ago, we created a new way of investing in economic development – with taxpayer protections, transparent processes and professional evaluation. This new program does not do this, and I am concerned it returns us to the old way of doing things.”
In a joint statement, issued in response to her transmission notification, Mattiello and Senate President Dominick Ruggerio, D-Providence, said the budget respects the limits of Rhode Island taxpayers.
In additional to fully funding a previous commitment to phase out the auto excise tax “something the governor attempted to slow down,” the budget removes several taxes on businesses that Raimondo had proposed, the leaders said.
“In particular, the budget is responsive to concerns that the economic development policies of the last four years have not done enough to help home-grown small businesses,” they said.
Mary MacDonald is a staff writer for the PBN. Contact her at macdonald@pbn.com.
