By TRACEY O'NEILL
Special to the Standard
The State Senate passed an $8.1 billion budget on Monday, sending the fiscal spending plan on to Governor Chafee for signature. Passed by the House after its own marathon session ended at 3:37 a.m. last Friday, the budget includes increased spending for education to local schools in excess of $30 million as well as a boost for the developmentally disable--both areas effected by prior cuts.
Affordable housing will also see an increase of $25 million if approved by referendum in November, with lack of affordable housing an immediate concern across the state.
The vote, 30-7, imposes taxes on previously untaxed items such as premium clothing costing more than $250, pet grooming services and taxi cab fares. The 7 percent tax, an unwelcome burden for small businesses, brought eleventh hour pleas from the business community. Owners of car washes throughout the state escaped the sales tax in this yearâ€™s budget after mounting a vocal public campaign.
Rep. Doreen Costa, (R-31), who posted live into the early morning hours of the House debate last Friday, was hopeful that the Senate would make a move to eliminate more taxation for financially stressed Rhode Islanders. Keeping her constituents and online followers informed, Costa wrote, â€śThe Senate passed the budget. I had a little hope that it would fail. Maybe a small glimmer of hope.â€ť
Speaking after leaving another overnight session at the State House, Costa was adamant that increased taxation was not the answer to solving the stateâ€™s financial problems. â€śWe canâ€™t ask people to pay more taxes. Families are struggling. People are being taxed to death.â€ť
Also struck down was the imposition of a 2 percent hike in the state meals tax originally proposed by the governor. Opposed by small business and the hospitality industry, the increase was seen as another financial burden imposed on citizens, businesses and the tourism industry upon which many Rhode Islanders rely for financial security.
Sen. James Sheehan, (D-36), who has been opposed to the meal tax since inception applauded its elimination in the budget. â€śThere comes a time where the effort to raise funds through higher taxes reaches a tipping point. Raise taxes too high on a lunch at a local restaurant and fewer people will eat lunch there, and fewer taxes will be collected, and more restaurants will suffer,â€ť Sheehan said.
Giving a nod to local business owners dependent on tourism and growth, Sheehan praised the efforts of the House Finance Committee in eliminating the increase in tax.
â€śI am sure that every restaurant, bed-and-breakfast and vacation rental property-owner in the state-and many of them are located in my communities-breathed a sigh of relief learning that these tax increases will not be implemented. Going from 8 to 10 percent on the meal tax, specifically, could have kept many patrons away and it could have caused many businesses to shut their doors. The efforts of those of us who fought this proposed tax hike have reached a successful conclusion.â€ť
Slated to take effect July 1, the budget awaits approval and signature by the governor.