East Providence Rep. Melo gives early approval of governor's budget proposal


PROVIDENCE — Governor Lincoln Chafee, Wednesday, Jan. 16, introduced an $8.17 billion budget, key to which would reduce Rhode Island’s corporate tax rate over a period of three years and hopefully make it the lowest among the New England states while also giving some much needed additional assistance to municipalities.

Gov. Chafee’s proposal would slash the rate from its current nine percent to eight as of Jan. 1 of 2014. It would dip to 7.5 percent and then to seven by the first day of 2016.

To make up for some of the lost revenue, the governor has proposed the elimination of enterprise zone and jobs development tax credits, which could save the state approximately $3 million annually.

The governor is also proposing no new personal income tax or fee increases.

At first glance, House Finance Committee Chairman Helio Melo (D-Dist. 64, East Providence) gave the governor’s proposed budget a passing grade.

“It seems like a nice budget,” Rep. Melo said. “There are no new taxes in there. I’m glad to see that. And there are no new increases in fees. It’s good for Rhode Islanders. The governor has introduced some great incentives as far as education and infrastructure in our state and help to cities and towns.”

The Ocean State currently has the highest corporate taxes in the region, surpassing the Maine’s variable top rate 8.93 percent. According to the Tax Policy Center, Maine’s rate range begins at a paltry 3.5 percent. New Hampshire’s is a flat 8.5. Vermont’s variable rate ranges from 6.5 to 8. Massachusetts is eight across the board. Connecticut’s is 7.5 percent.

“The corporate tax proposal is realistic,” said Rep. Melo. “I think if we work hard enough we can come up with a good number. We have to be competitive with our neighboring states. This is the first time the governor has introduced a budget that did not have any tax increases and I think it’s easier for Rhode Islanders to accept.”

Of local interest, a couple of the key concepts the governor introduced deal with so-called “distressed communities” and schools. Gov. Chafee is proposing some $30 million in additional aid to schools and $5 million to distressed communities. He’s also earmarked some $10 towards improvements to roads, another need of East Providence. Overall spending in the Fiscal Year 2014 Budget, which would start on July 1 of this year, would increase by about $72 million.

Among the other highlights, the governor’s budget move up plans for $11 million-worth of “shovel-ready” state construction and renovation projects. Gov. Chafee is also proposing to add 145 state jobs, increase job training programs and give an additional $8.2 million to state colleges and universities.

Rep. Melo's House Finance Committee will have a significant say in the final FY14 Budget. From what he's seen and heard, Rep. Melo said his group and their counterparts in the State Senate, the committed chaired by East Providence's Daniel DaPonte (D-Dist. 14), have solid base upon which to work.

“The governor has come up with some great ideas, some great proposals. Now it’s a matter of going through the entire budget and seeing what we can afford,” Rep. Melo added.


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Jim McGaw

A lifelong Portsmouth resident, Jim graduated from Portsmouth High School in 1982 and earned a journalism degree from the University of Rhode Island in 1986. He's worked two different stints at East Bay Newspapers, for a total of 18 years with the company so far. When not running all over town bringing you the news from Portsmouth, Jim listens to lots and lots and lots of music, watches obscure silent films from the '20s and usually has three books going at once. He also loves to cook crazy New Orleans dishes for his wife of 25 years, Michelle, and their two sons, Jake and Max.