When Lt. Gov. Charles J. Fogarty and several legislators tried to create a state tax policy and research office earlier this year, Gov. Donald L. Carcieri’s team successfully argued to wait for a year and spend $100,000 analyzing the state’s current capabilities on that front.
So when Carcieri created a new Office of Tax Research and Analysis this month, by executive order, it surprised some – though Fogarty, for example, hailed it as “excellent news.”
But the concept, in Carcieri’s hands, has taken a slightly different path.
The Poverty Institute at Rhode Island College, for example, has long argued for a close look at tax incentives for businesses, especially those with few potential beneficiaries. In a news release about the new office, however, Carcieri emphasized another goal:
“The work of this office will form the basis for how we move forward in lowering taxes and create new tax policies that encourage businesses to locate and expand here and provide Rhode Islanders with a lower tax burden,” he said.
“I am committed to reducing the tax burden for all Rhode Islanders,” he said. “Taxes in Rhode Island have been too high for too long, and it puts our state at an economic disadvantage. The Office of Tax Research and Analysis will provide a means to examine our current tax structure. How does it impact our citizens and businesses? How will future changes to the tax system impact our state? Our goal is to create a system that is simplified, fair and more equitable, for everyone who lives and works here.”
Carcieri also chose to put the tax research office directly under the state director of administration, rather than within the Division of Taxation. And rather than a full budget, the office is starting with only the $100,000 set aside for the study.
Jeffrey M. Grybowski, Carcieri’s deputy chief of staff, said the governor had decided it was best to hire an executive director first, and let him or her lead the way.
“We could’ve tried to do this informally and come up with a plan first, but we thought we’d generate more momentum if we had someone working on it full time who had some expertise in the area,” Grybowski said. The new director – whose salary is still undetermined – has until Dec. 1 to submit a budget, a staffing plan and a plan for the technology to be used to gather and analyze tax data. Even the basic setup of the office is up in the air, Grybowski acknowledged. “A number of states have this capacity already,” he said. “There are different models out there, and we need someone to help us determine which is best for us.”
Asked how strong an emphasis there would be on cutting taxes, Grybowski said it’s one of “two independent priorities.”
“The state needs the capacity to analyze tax ideas, regardless of where they’re coming from,” Grybowski said. “On the other hand, the governor very much thinks that we need to lower the overall tax burden on Rhode Islanders, and this office will certainly play a role in analyzing ideas to reduce taxes, help the governor structure his own ideas on tax reduction, and later on analyze whether those ideas were effective.”
A job description for the new executive director is in the works, Grybowski said, and the goal is to hire someone by mid-October to late November. The governor is scheduled to submit his budget proposal for 2006-07 in January, and the new hire will likely be asked for input, he said.
