Almond Unveils Fiscal Year 1998 Budget
Proposes Tax Relief for Families and Businesses, Proposes Increased Education Aid
Calling his proposed budget a tool to continue Rebuilding and Investing in Rhode Island, Governor Lincoln Almond today unveiled his spending plan for the next fiscal year, which includes aggressive tax initiatives, increased aid to education and a major asset protection plan to fund the repair of the State's roads and buildings.
Highlighting Almond's budget plan is a nearly 10 percent reduction in the State income tax over the next five years that would reduce the tax rate from 27.5 percent to 25 percent. Almond's budget proposes a reduction in the sales tax from 7 percent to 6.5 percent, beginning in 1998 if revenue collections remain strong.
Noting that December and January collections were 5.5 percent higher than they were a year ago, he said if revenues increase by at least $10 million over those included in the FY' 98 budget, then a sales tax reduction is very possible.
"Let me just say that given our improving economy I am very hopeful those revenues will be there," said Almond. "I know that the General Assembly joins me in the hopes that the revenues will continue to be on the rise so we can move ahead with reducing the sales tax."
Almond cautioned that without excess DEPCO revenues, there will be sharp budget cuts and that his tax relief efforts could be jeopardized. "I don't believe this is what Rhode Islanders want. It is certainly not helpful to our economy," said Almond.
In his budget plan, Almond calls for a sharp increase in the Investment Tax Credit and the Research and Development Tax Credit, making them some of the most aggressive tax credits in the country. These tax incentives will encourage businesses to invest in technology, machinery and equipment, which will in turn boost the economy and create more job opportunities.
On the issue of schools, Almond proposed an additional $13.3 million in funding for elementary and secondary education, and $4.3 million more than last year's enacted budget for Higher Education, including $1 million earmarked for scholarship aid.
Almond said he is also proposing a new school aid formula that will give all schools at least as much as they received last year, and will give urban schools even more.
Also included in the education budget is $50,000 start-up funding for charter schools and $500,000 for improving computer technology in the State's schools.
To rebuild Rhode Island's roads, Almond recommended a transfer of one penny from the gas tax to the Department of Transportation each year for the next five years. This would result in an additional $24 million for roads and bridges. And, in an effort to repair many of the State's deteriorating buildings, Almond proposed a $90 million asset protection program to repair and renovate many structures throughout the State, including the Misquamicut Beach facilities, and the State's commercial fishing piers in Galilee and Newport.
Highlighting other areas of the budget, Almond recommended an $800,000 increase in the PILOT program and a $700,000 increase in the General Revenue Sharing program for cities and towns.
Finally, regarding social services, Almond proposed $389,000 to assist legal immigrants in becoming citizens; a $250,000 grant for the Rhode Island Community Food Bank; and an additional $1.35 million to help provide better housing for low-income Rhode Islanders.
"For two years we have struggled through some tough times to make ends meet," said Almond. "Due to many of the changes we have implemented, our economy is on the way up. We must take this opportunity to invest in our future.
"Together we can rebuild Rhode Island into a State where both families and business can prosper. Let's work together to provide the jobs, education and quality of life Rhode Islanders want and deserve," said Almond.