Guthrie calls for hiking tax rate on income over $250K, restoring general revenue sharing
STATE HOUSE – Rep. Scott J. Guthrie (D-Dist. 28, Coventry) has introduced legislation calling for a restoration of general revenue sharing, funding the program with the added revenue that would result from hiking the tax rate on high-income earners.
The Guthrie bill, 2014-H 7245, would increase from 5.99 percent to 7.99 percent the tax rate of Rhode Islanders’ personal income over $250,000. It is estimated such a tax rate increase would generate about $60 million dollars, money Representative Guthrie wants the state to share with cities and towns beginning with the FY2015 fiscal year.
“The arguments that we should not expect the wealthy to pay a fair share come not from people in my income bracket, or those of most of my neighbors – regular Rhode Islanders who struggle to make ends meet,” he said. “Seeking more from those who have prospered – many of them as a result of the labors of lower-income workers – is not going to send the rich running from the state. It will, instead, mean that the very poor get more support than they receive now and that the middle class can, perhaps, stop staggering under the mounting tax load.”
The tax rate hike would only apply to any income over $250,000. In other words, an individual with personal income of $250,000 or less would be taxed at the current rate of 5.99 percent. An individual making $300,000, for instance, would be taxed at 5.99 percent on the first $250,000 and at 7.99 percent for the remaining $50,000.
Additional revenue generated by the proposed tax rate hike would be distributed to cities and towns on the same bases as the original enactment of general revenue sharing in FY2009.
“All communities in our state could use a little extra funding help,” said Representative Guthrie. “Eliminating general revenue sharing may have been beneficial to the state’s overall bottom line, but it was and continues to be a fiscal blow to our communities, and that means an added burden for the taxpayers in those communities.”
“I applaud the state’s efforts over the past few years to make Rhode Island more attractive to business, but we have moved to a tax policy that ensures the super-rich get the benefits of government while the rest of us pay a higher and higher bill,” he said. “We need a shift back to a more fair tax policy.”
The Guthrie bill has been referred to the House Committee on Finance. It is co-sponsored by Rep. Larry Valencia (D-Dist. 39, Hopkinton, Exeter, Richmond) and Rep. Maria A. Cimini (D-Dist. 7, Providence).
In an effort to address educational funding in Rhode Island and what he calls “a major and growing cost for our cities and towns,” Representative Guthrie has introduced a resolution calling for a legislative commission to examine funding elementary and secondary education through the state income tax.
The legislation, 2014-H 7246, would establish a 17-member study commission that would report its findings and recommendations to the General Assembly next January. The commission would be composed of five members of the House of Representatives, three members of the Senate, the president of the Rhode Island League of Cities and Towns, the president of the Rhode Island Association of School Committees, the president of the Rhode Island School Superintendents Association, the president of the RI Chapter of the American Federation of Teachers, the president of the RI chapter of the National Education Association, the president of the Rhode Island Independent School Association, and two members of the public.
“Education is one of the most expensive propositions for states and local communities,” said Representative Guthrie. “I am one of many who question the method we now use to fund education, and I think it would be appropriate to study and determine if funding education through the income tax would be a more equitable and dependable way of doing it.”
That bill also has been referred to the House Committee on Finance. Co-sponsors include Representatives Valencia and Cimini as well as Rep. Gregg Amore (D-Dist. 65, East Providence) and Rep. Lisa P. Tomasso (D-Dist. 29, Coventry, West Greenwich).
For more information, contact:
Randall T. Szyba, Publicist
State House Room 20
Providence, RI 02903